Chapter Ten

1. Chapter Ten Managing Organizational Structure and Culture

2. Organizational Structure Organizational Architecture The organizational structure, control systems, culture, and human resource management systems that together determine how efficiently and effectively organizational resources are used. Mngt 443

3. Designing Organizational Structure Organizing The process by which managers establish working relationships among employees to achieve goals. Organizational Structure Formal system of task and reporting relationships showing how workers use resources.

4. Factors Affecting Organizational Structure Figure 10.1

5. The Organizational Environment The way an organization’s structure works depends on the choices managers make about: How to group tasks into individual jobs How to group jobs into functions and divisions How to allocate authority and coordinate functions and divisions

6. Job Design Job Design The process by which managers decide how to divide tasks into specific jobs. The appropriate division of labor results in an effective and efficient workforce.

7. Job Design Job Simplification The process of reducing the tasks each worker performs. Job Enlargement Increasing the number of different tasks in a given job by changing the division of labor Job Enrichment Increasing the degree of responsibility a worker has over a job

8. The Job Characteristics Model Figure 10.2

9. Grouping Jobs into Functions Functional Structure An organizational structure composed of all the departments that an organization requires to produce its goods or services.

10. Functional Structure Advantages Encourages learning from others doing similar jobs. Easy for managers to monitor and evaluate workers. Allows managers to create the set of functions they need in order to scan and monitor the competitive environment

11. Functional Structure Disadvantages Difficult for departments to communicate with others. Preoccupation with own department and losing sight of organizational goals.

12. Divisional Structures Divisional Structure Managers create a series of business units to produce a specific kind of product for a specific kind of customer Product, market, geographic

13. Product, Market, and Geographic Structures Figure 10.4

14. Types of Divisional Structures Product Structure Managers place each distinct product line or business in its own self-contained division Divisional managers have the responsibility for devising an appropriate business-level strategy to allow the division to compete effectively in its industry

15. Types of Divisional Structures Geographic Structure Divisions are broken down by geographic location Global geographic structure Managers locate different divisions in each of the world regions where the organization operates. Generally, occurs when managers are pursuing a multi-domestic strategy

16. Types of Divisional Structures Market Structure Groups divisions according to the particular kinds of customers they serve Allows managers to be responsive to the needs of their customers and act flexibly in making decisions in response to customers’ changing needs

17. Matrix Design Structure Matrix Structure An organizational structure that simultaneously groups people and resources by function and product. The structure is very flexible and can respond rapidly to the need for change. Each employee has two bosses

18. Matrix Structure Figure 10.6

19. Product Team Design Structure Product Team Structure Does away with dual reporting relationships and two-boss managers Functional employees are permanently assigned to a cross-functional team that is empowered to bring a new or redesigned product to work

20. Product Team Structure Figure 10.6

21. Hybrid Structures Hybrid Structure The structure of a large organization that has many divisions and simultaneously uses many different organizational structures Figure 10.7

22. Coordinating Functions:Allocating Authority Authority The power vested in a manager to make decisions and use resources to achieve organizational goals by virtue of his position in an organization

23. Allocating Authority Line Manager Someone in the direct line or chain of command who has formal authority over people and resources Line function is directly involved in production of good/service Staff Manager Managers who are functional-area specialists that give advice to line managers. Clarification re: p. 362: staff managers DO have formal authority over people and resources, i.e., staff function (accounting and finance, HR, etc.)

24. Tall and Flat Organizations Tall structures have many levels of authority and narrow spans of control. As hierarchy levels increase, communication gets difficult creating delays in the time being taken to implement decisions. Communications can also become distorted as it is repeated through the firm. Can become expensive

25. Tall Organizations Figure 10.9

26. Tall and Flat Organizations Flat structures have fewer levels and wide spans of control. Structure results in quick communications but can lead to overworked managers. Figure 10.9

27. Centralization and Decentralization of Authority Decentralizing authority giving lower-level managers and non-managerial employees the right to make important decisions about how to use organizational resources

28. Integrating Mechanisms Figure 10.10

29. Sources of an Organization’s Culture Figure 10.11

30. Employment Relationship Human resource policies: Can influence how hard employees will work to achieve the organization’s goals, How attached they will be to it Whether or not they will buy into its values and norms

31. Strong, Adaptive Cultures Versus Weak, Inert Cultures Adaptive cultures values and norms help an organization to build momentum and to grow and change as needed to achieve its goals and be effective Inert cultures Those that lead to values and norms that fail to motivate or inspire employees Lead to stagnation and often failure over time