CHAPTER 14

1. CHAPTER 14 • Typical Structures of Organizations

2. ** Elements of Organizational Structure ** **Defines how job tasks are formally divided, grouped and coordinated Division of labor Characterization of jobs Authority Spans of Control Decision making Creativity

3. Division of Labor * Division of labor principle — dividing a job into tasks and assigning these tasks to people. What do members do? What are their functions? How are functions grouped? What is the most value-added division of labor?

4. Characterization of Jobs Function - engineering, human resources, accounting, sales, operations Product - automotive, business machines, electrical, power tools Geography - sales responsible for southeast, mid-Atlantic, northeast, Midwest, southwest, west, and northwest Type of Customer – (Business to Business) J.C. Penney, Sears, Kmart, Wal-Mart, Circuit City Process - in molding it may be injection, bulk, transfer, centrifugal, spray-up

5. Authority Unity of command Establishes that a single source is the authority. In the chain-of-command, any one individual reports to only one manager. ** Chain of command The unbroken line of authority that extends from the top of the organization to the lowest echelon and clarifies who reports to whom.

6. Span of Control Span of Control Defines the number of people one person will supervise. There may be a narrow span or a wide span of control. Worker autonomy — working with little or no supervision.

7. Management Organizational Principles • Span of control • Exceptions to the rules — unusual or infrequent occurrences not covered by procedures. • Worker coordination — the degree of teamwork or orchestration required of a group. • Worker dispersion — the physical space between people.

8. Management Organizational Principles • Span of control • Task similarity — how alike tasks are. • Worker reassignment — frequent regrouping of people. • Manager planning — amount of planning or scheduling a manager must perform. • Manager capabilities — the experience, education, seniority, and proficiency a manager possesses.

9. Decision Making Centralization Decision making is concentrated at a single point. ** Decentralization Decision making is pushed down to the lowest possible level. Lower level personnel provide input or are actually given the discretion to make decisions

10. Structure Shapes and Design The Simple Organization Design The Bureaucracy The Matrix Design The Virtual Organization Team Organizations

11. Simple Structure Typical small business Not highly departmentalized Wide span of control Little formalization Authority centralized in a single person

12. The Organization Chart The graphic depiction of the simple structure . Positions Communication Lines

13. ** Bureaucracy Highly routine, specialized High formalization Centralized authority Narrow span of control Rigid chain of command

14. Organization Styles Bureaucracy structure

15. Matrix Structure Dual lines of authority Combines functional and product departmentalization

16. Organization Styles Matrix organization —functional departments and cross- functional teams.

17. ** The Virtual Organization Small core organization “Stripped” to “core competencies Focus on the essentials Outsourcing all non-essential Highly flexible

18. Organization Styles P r o d Virtual Organization — highly specialized firms that join with other firms to form whole, but virtual, corporations. S a L e s Mkt Dist.

19. Team Organizations Decentralized decision making. Improved communications through the removal of barriers between departments. Can require consensus. Requires additional time for decision making.

20. Organizational Styles • Departmentalization — the process of grouping human resources within an organization. cont.

21. Team Organizations Problem-Solving Self- Managed Cross-Functional

22. Organizational Models The Mechanistic model is characterized by substantial structure and high levels of control. Bureaucratic Narrow spans of control Centralization decision making High formalization

23. Organizational Models The Organic Model is characterized by high creativity and low structure. Cross-functional teams Free flow of information Wide spans of control Decentralization Low formalization

24. Why Are Structures Different Three factors play a major role in determining the type of structure that an organization will choose. Size Technology and External Influences Focus and Strategy

25. The Future Global environment – more mergers Greater diversity in all aspects of business Reengineering continues Teams in over 75 percent of companies More virtual organizations are certain Continued quality focus with greater customer satisfaction driving the process Greater long term focus will be required

26. Summary An organization’s internal structure contributes to explaining and predicting behavior. Structural designs effect performance and satisfaction and is moderated by employees’ individual preferences and culture norms.