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WEBER'S BUREAUCRACY. DIVISION OF LABORHORIZONTAL SPECIALIZATIONHIRARCHY OF AUTHORITYVERTICAL SPECIALIZATION RULES
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1. ORGANIZATIONAL STRUCTURE SIX DIMENSIONS WORK SPECIALIZATION (Division of Labor)
To what degree are activities subdivided into separate jobs?
DEPARTMENTALIZATION
On what basis are jobs grouped together?
CHAIN OF COMMAND (Hierarchy of Authority)
To whom do individuals and groups report?
SPAN OF CONTROL
How many workers can a manager efficiently & effectively direct?
CENTRALIZATION / DECENTRALIZATION
Where does discretionary (exceptional) decision making authority lie?
FORMALIZATION
To what degree are written rules, regulations & procedures established?
2. WEBER’S BUREAUCRACY DIVISION OF LABOR
HORIZONTAL SPECIALIZATION
HIRARCHY OF AUTHORITY
VERTICAL SPECIALIZATION
RULES & PROCEDURES
ESTABLISHED & ENFORCED
TECHNICAL COMPETENCE
SELECTION & PROMOTION CRITERIA
IMPERSONAL TREATMENT
NO FAVORITISM
CENTRALIZED DECISION-MAKING
UNIFORM CONTROL
FORMALIZATION
WRITTEN, COMPILED & DOCUMENTED
3. “PRINCIPLES” BASED ON AUTHORITY(FAYOL) PARITY PRINCIPLE
Authority and Responsibility must coincide
UNITY OF COMMAND
Workers should have only one immediate supervisor to report to
SCALAR PRINCIPLE (Chain of Command)
When exceptions are encountered, one should communicate through the chain of command, one link (level) at a time
SPAN OF CONTROL
The number of subordinates a manager can effectively supervise
FACTORS WHICH AFFECT THE SPAN OF CONTROL:
JOB COMPLEXITY NARROWS SPAN
VARIETY OF TASKS NARROWS SPAN
PROXIMITY WIDENS SPAN
QUALITY OF SUBORDINATES WIDENS SPAN
ABILITY OF THE MANAGER WIDENS SPAN
4. WORK DESIGN DECISIONS WHAT ARE THE TASKS TO BE PERFORMED?
HOW SHOULD THEY BE COMBINED INTO JOBS?
HOW SHOULD THE JOBS BE PERFORMED?
ANALYSIS & DESIGN OF WORK METHODS
STANDARDS OF PERFORMANCE
HOW SHOULD PEOPLE RESPOND TO THE JOB?
ATTITUDES
JOB SATISFACTION
MOTIVATION
HOW TO STRUCTURE THE JOBS TO BE EFFICIENT & SATISFYING?
5. JOB REDESIGN POSSIBILITIES MAKING THE WORK LESS BORING & MORE INTERESTING
JOB DESIGN JOB SCOPE JOB DEPTH
APPROACH (VARIETY) (AUTONOMY)
JOB SPECIALIZATION LOW LOW
JOB ROTATION INCREASES LOW
JOB ENLARGEMENT INCREASES LOW
AUTOMATION LOW INCREASES
JOB ENRICHMENT INCREASES INCREASES
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
WALKER & GUEST (52) SATISFACTION ON THE ASSEMBLY LINE
SATISFIED WITH: DISSATISFIED WITH:
PAY MECHANICAL PACING OF THE LINE
WORKING CONDITIONS REPETITIVE NATURE OF THE WORK
QUALITY OF SUPERVISION LOW SKILL REQMTS & DEMANDS
LIMITED SOCIAL INTERACTION
NO CONTROL OVER TOOLS, ETC
ONLY SEES A SMALL PART OF WORK
6. SPECIALIZATION (Division of Labor) ADVANTAGES
FEWER SKILLS REQUIRED PER PERSON
EASIER TO STAFF POSITIONS & TRAIN WORKERS
JOBS CAN BE MASTERED IN LESS TIME
PRODUCTIVITY & WORK OUTCOMES CAN BE INCREASED
PRODUCTS & SERVICES ARE MORE UNIFORM
MANAGERS CAN SUPERVISE A LARGER NUMBER OF WORKERS
DISADVANTAGES
OVERSIMPLIFIED JOBS ARE REPETITIVE, BORING, STRESSFUL, FRUSTRATING
SKILL DEVELOPMENT IS NOT ENHANCED --- NO CHALLENGES
LEADS TO PRODUCTIVITY DECLINES, ABSENTEEISM, POOR QUALITY WORK
7. ALTERNATIVES TO JOB SPECIALIZATION Job Rotation
Systematically moving employees from one job to another. Most frequent use today is as a training device for skills and flexibility.
Job Enlargement
An increase in the total number of tasks performed.
Increases training costs, unions want workers paid more pay for doing more tasks, and work may still be dull and routine.
Job Enrichment
Increasing both the number of tasks the worker does and the control the worker has over the job.
8. ALTERNATIVES TO SPECIALIZATION - 2 Job Characteristics Approach (HACKMAN & OLDHAM, 76)
Core Dimensions
Skill variety—the number of tasks a person does in a job.
Task identity—the extent to which the worker does a complete or identifiable portion of the total job.
Task significance—the perceived importance of the task.
Autonomy—the degree of control the worker has over how the work is performed.
Feedback— the extent to which the worker knows how well the job is being performed.
Growth-Need Strength
The desire of some people to grow, develop, and expand their capabilities that is their response to the core dimensions.
Autonomous Work Teams
An alternative to job specialization that allows the entire group to design the work system it will use.
9. TWO-FACTOR THEORYHERZBERG (59) ASSUMPTIONS
TWO DIFFERENT TYPES OF FACTORS INFLUENCE US…HYGIENES & MOTIVATORS
THE OPPOSITE OF SATISFACTION IS “NO SATISFACTION”
THE OPPOSITE OF DISSATISFACTION IS “NO DISSATISFACTION”
ONLY MOTIVATING FACTORS LEAD TO SATISFACTION
HYGIENES AT BEST LEAD TO NO DISSATISFACTION
HYGIENES (EXTRINSIC) MOTIVATORS (INTRINSIC)
WORKING CONDITIONS RESPONSIBILITY
COMPANY POLICIES CHALLENGE OF WORK
SUPERVISIOR MEANINGFUL WORK
COWORKERS ACHIEVEMENT
SALARY & BENEFITS ACCOMPLISHMENT
STATUS SYMBOLS GROWTH OPPORTUNITIES
IMPLICATIONS
ABUNDANT HYGIENES DO NOT MOTIVATE WORKERS, THEY ONLY PREVENT DISSATISFACTION
ENRICH JOBS TO PROVIDE MOTIVATING, CHALLENGING WORK AND HIGH SATISFACTION
WEAKNESSES
RESEARCH METHODOLOGY IS FLAWED
DOESN’T RECOGNIZE INDIVIDUAL NEED DIFFERENCES…NOT EVERYONE WANTS ENRICHED JOBS
OVEREMPHASIZES JOB SATISFACTION
10. JOB DESIGN THEORYHACKMAN & OLDHAM (76) JOB CHARACTERISTICS MODEL
FIVE JOB DIMENSIONS PSYCHOLOGICAL STATES
SKILL VARIETY
TASK IDENTITY ? MEANINGFULNESS
TASK SIGNIFICANCE (Leads to high internal work motivation)
AUTONOMY ? PERSONAL RESPONSIBILITY
(Leads to high quality work & satisfaction)
FEEDBACK ? KNOWLEDGE OF RESULTS
(Leads to high satisfaction & low turnover)
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
EFFECTIVENESS IS MODERATED BY EMPLOYEE GROWTH-NEED STRENGTH
CALCULATE THE MOTIVATING POTENTIAL SCORE TO DETERMINE IF THE JOB NEEDS TO BE REDESIGNED
ARE YOUR WORKERS MOTIVATED BY INTRINSIC WORK FACTORS AND A STRONG NEED FOR ACHIEVEMENT (AN ENRICHED JOB)?
11. HERZBERG’S VERTICAL LOADING FACTORS
(ACHIEVEMENT, GROWTH, RECOGNITION, RESPONSIBILITY)
ACCOUNTABILITY—Held responsible for performance
ACHIEVEMENT---Doing something worthwhile (Meaningful)
FEEDBACK---Gets direct performance information
WORK PACE---Able to set own work speed and rhythm
CONTROL OVER RESOURCES---Controls how and when to do the job
PERSONAL GROWTH & DEVELOPMENT---Opportunity to learn new skills
HACKMAN’S IMPLEMENTING CONCEPTS
(Create a sense of MEANINGFULNESS, RESPONSIBILITY, & KNOWLEDGE)
COMBINE TASKS SKILL VARIETY
FORM NATURAL WORK UNITS TASK IDENTITY
ESTABLISH CLIENT RELATIONSHIPS TASK SIGNIFICANCE
VERTICAL LOADING AUTONOMY
OPEN FEEDBACK CHANNELS FEEDBACK
SUCCESS IS MODERATED BY THE INDIVIDUAL’S “GROWTH-NEED” STRENGTH
DOES THE INDIVIDUAL WANT AN “ENRICHED JOB?” ARE THEY HIGH “N-ACH?”
12. CRITICISMS OF JOB ENRICHMENT(JOB REDESIGN) HIGH COSTS
TRAINING, DUPLICATE EQUIPMENT, PLANT REDESIGN
SOME JOBS ARE ELIMINATED
FEWER OPERATIVES, SUPERVISORS NEEDED
ASSUMES WORKERS WANT RESPONSIBILITY, ETC.
WHAT ABOUT WORKERS WITH LOW “N-ACH?”
ENRICHMENT IS RELATIVE--EFFECTS MAY BE TEMPORARY
DO WE NEED OCCASIONAL “BOOSTER SHOTS” TO KEEP GOING?
SOME JOBS CAN’T BE ENRICHED
WHAT DO WE DO TO AVOID JEALOUSY?
USED AS A QUICK FIX FOR IMMEDIATE PROBLEMS
HAVE WE REALLY CHANGED OUR PHILOSOPHY OF MGMT?
IMPLEMENTED CHANGES ARE OFTEN WEAK & MODEST
COMPROMISES FROM WHAT WAS PLANNED
INNOVATIONS ARE ERODED & VANISH OVER TIME
13. WHEN MIGHT REDESIGN WORK? WHEN NEW UNITS ARE FIRST ESTABLISHED
NO PAST HISTORY TO DEAL WITH
NEW FACILITIES AND WORKERS
WHEN THE SYSTEM BECOMES UNSTABLE
(Seizing the opportunity!)
TECHNOLOGICAL CHANGE
CHANGE IN SENIOR MANAGEMENT
NEW PRODUCT OR SERVICE INTRODUCED
LEGISLATIVE OR REGULATORY CHANGES
FLUCTUATIONS IN THE ECONOMY OR ENVIRONMENT
3. WHEN THE IMMEDIATE MANAGER WANTS IT
LOCAL CHANGES (JUST WITHIN THE DEPARTMENT)
MICRO REDESIGN
MANAGEMENT MUST BE COMMITTED TO A NEW PHILOSOPHY
14. FLEXIBILITY & WORKER CONTROL WORK SCHEDULE FLEXIBILITY
1. COMPRESSED WORK WEEK
WORKER FATIGUE
ISSUE OF OVERTIME
DIFFICULTIES IN WORK SCHEDULING
2. FLEXTIME
SUPERVISION & COORDINATION IS MORE DIFFICULT
ADEQUATE COVERATE OF WORK---HOW TO SCHEDULE?
JOBS THAT REQUIRE ALL TO BE PRESENT
3. JOB SHARING / PART-TIME WORK
COORDINATING WITH OTHER WORKERS
INCREASED COST OF BENEFITS
4. TELECOMMUTING
NO CONTACTS WITH OTHER WORKERS—NO COORDINATION
NO SUPERVISION—NOT EASY TO GET HELP WHEN NEEDED
HOW PRODUCTIVE ARE YOU WHEN WORKING AT HOME?
ISSUE OF LIABILITY WHEN WORK IS DONE AT HOME
15. CENTRALIZED DECISION MAKINGDISCRETIONARY AUTHORITY ONLY AT THE TOP ADVANTAGES
UNIFORM POLICIES & ACTIONS ARE MAINTAINED
TOP MANAGEMENT KNOWS EVERYTHING THAT’S GOING ON (Awareness)
CONTROL IS MAINTAINED OVER COSTLY/RISKY DECISIONS
ENVIRONMENTAL THREATS ARE HANDLED BY EXPERIENCED MANAGERS
STAFF EXPERTS ARE NEEDED TO ADVISE TOP MANAGEMENT
DISADVANTAGES
DECISIONS MAY BE SLOW IN COMING – MUST WAIT FOR AN ANSWER
TOP MANAGEMENT TOO INVOLVED IN DAY-TO-DAY DECISIONS
LOWER-LEVEL MANAGERS ARE NOT LEARNING HOW TO MAKE DECISIONS
INFLEXIBILITY – CHANGE IS VERY DIFFICULT AND SLOW
16. DELEGATION OF RESPONSIBILITY AND AUTHORITY ADVANTAGES
Communication time is shortened – faster company decisions and reactions
Decision makers are now “closer to the action,” thus better decisions result
Frees up top management’s time – allows them to focus on strategic matters
Develops skills of lower-level managers and personnel
CAUTIONS
Are levels of responsibility and authority clearly defined?
Is a reliable and accurate feedback system in place?Does the person have the ability and skills necessary to make these decisions?
Does the level of responsibility come with an appropriate level of authority to act?
Have exceptional situations been clarified as to how they are to be handled?
17. WHY DO MANAGERS RESIST DELEGATION? FEAR THAT SUBORDINATES WILL FAIL
If you want something done right --- do it yourself!!
BELIEF THAT IT’S EASIER TO DO THE TASK YOURSELF
It’s too time consuming to teach others how to do this task correctly
A FEAR THAT SUBORDINATES WILL LOOK “TOO GOOD”
The manager is insecure --- afraid the subordinate may take his/her job
MANAGERS LIKE THE POWER THEY WIELD
I enjoy the influence…when others must come to me for advice or help
WE LIKE DOING THE TASKS OURSELVES
The work itself is enjoyable…it’s fun for me!!
18. DEPARTMENTALIZATION HOW TO GROUP JOBS TOGETHER SO THE TASKS CAN BE COORDINATED
BY FUNCTION (or TASK)
MANUFACTURING, MARKETING, HUMAN RESOURCES, ACCOUNTING
BY GEOGRAPHY OR TERRITORY
WESTERN DIVISION, CANADIAN DIVISION, EUROPEAN DIVISION
BY PRODUCT OR BUSINESS LINE
BICYCLES, MUSICAL INSTRUMENTS, TABLEWARE, BUILDING SUPPLIES
BY PROCESS (Sequential)
CASTING, GRINDING, SANDING, FINISHING, PACKING
BY CUSTOMER
RETAIL, WHOLESALE, GOVERNMENT, INDUSTRIAL
WITHIN A SINGLE COMPANY, SEVERAL DIFFERENT APPROACHES TO DEPARTMENTALIZATION MAY CO-EXIST…FOR EXAMPLE:
Accounting is functionally organized, Marketing is by customer within territory, Manufacturing is by process, and Research & Development is by product.
19. SIMPLE STRUCTURES
20. SIMPLE STRUCTURES STRUCTURAL CHARACTERISTICS
Low specialization and departmentalization
Wide span of control and a flat structure
Centralized authority with little formalization
ADVANTAGES
Fast, flexible, inexpensive to maintain
Accountability is clear
Workers are generalists
DISADVANTAGES
Workers require guidance on a regular basis
No specialists or experts
Owner can become overloaded…too many things to decide daily
Works best if the firm is small --- and stays that way
21. Functional Design for aSmall Manufacturing Company
22. FUNCTIONAL ORGANIZATION
23. FUNCTIONAL ORGANIZATION CHARACTERISTICS
Specialization and formalized rules and regulations
A tall structure, grouped functionally, with narrow spans of control
Centralized authority and decision making that follows the chain
ADVANTAGES
Highly efficient and effective in a predictable, routine environment
Promotes skill specialization & career development within departments
Rules and procedures maintain consistency, only exceptions referred up
DISADVANTAGES
Develops experts (managers) in narrow fields, not generalist managers
If there’s no rule to follow, we don’t know what to do! (No discretion)
Doesn’t adapt well to change, or unexpected events in the environment
24. DIVISIONALIZED BY GEOGRAPHY OR TERRITORY
25. DIVISIONALIZED BY GEOGRAPHY OR TERRITORY DIVISIONALIZED BY TERRITORY OR LOCATION
ADVANTAGES
A “branch” location means faster, convenient service to customers
Each branch location is identical to the others – each has “full service”
De-emphasizes expertise & specialization – makes generalist managers
DISADVANTAGES
All functions are duplicated at each location (inefficient?)
Conflicts may arise between local and corporate objectives
Discretionary decisions may vary at each location – how to maintain uniform policies and actions?
26. DIVISIONALIZED BY PRODUCT, SERVICE OR CUSTOMER
27. DIVISIONALIZED BY PRODUCT, SERVICE OR CUSTOMER
DIVISIONALIZED BY PRODUCT OR SERVICE
ADVANTAGES
Allows greater product / service visibility and customer sensitivity
Develops managers who can think across functional lines
DISADVANTAGES
Difficult to coordinate across product or service lines (no similarity)
Resource allocation decisions become more political
DIVISIONALIZED BY CUSTOMER
ADVANTAGES
Skilled specialists can deal with unique customers or customer groups.
DISADVANTAGES
The number of salespeople appears to be excessive (inefficient)
A large administrative staff is needed to integrate activities of the various departments.
28. A Matrix Organization
29. MATRIX STRUCTURES ADVANTAGES
Uses functional experts on special projects ( both function & product)
Very flexible, adaptable to environmental changes
Emphasizes cooperation and coordination to get the job done
Reduces the amount of vertical communication needed within the firm
DISADVANTAGES
Violates the “Unity of Command” principle (one boss)
A costly, inefficient structure; with overlap, duplication and waste
Conflict potential is high due to power struggles between units
Workers can experience much stress with dual assignments & overloads
30. NETWORK (VIRTUAL) STRUCTURES
31. NETWORK (VIRTUAL) STRUCTURES CHARACTERISTICS
HIGHLY CENTRALIZED
LITTLE OR NO DEPARTMENTALIZATION
ADVANTAGES
Don’t have to actually own or operate all business functions
Outsources (contracts) with experts to provide cutting-edge services
Can focus your energy and capital at what you do best
Very flexible, can get in and /or out of business quickly
Can be very sensitive to cost and quality
DISADVANTAGES
No ability to expedite or control many of the key operations
Contracts must be negotiated – terms are not permanent
No managerial expertise is developed in managing contracted areas
Hard to identify where the organization is located
32. TEAM STRUCTURESHORIZONTAL, CROSS-FUNCTIONAL TEAMS
33. TEAM STRUCTURESHORIZONTAL, CROSS-FUNCTIONAL TEAMS ADVANTAGES
Experts from several areas assembled into one autonomous team
Able to respond quickly to customers – fast service (one-stop?)
Team selects its leader, delegates roles and makes its own decisions
Participative, free communication within, no hierarchies to follow
Strong sense of ownership, commitment
DISADVANTAGES
Specialists are cut off from their peers (isolated)
Inconsistencies in actions and policies across teams (no uniformity)
Difficult to coordinate and control from the top
ARE COORDINATING MECHANISMS NEEDED?
LIAISON ROLES -- informal contacts v. contact managers
TASK FORCES -- temporary problem-solving groups
COMMITTEES -- Ad Hoc v. Permanent standing committees
34. THE NEED FOR COORDINATION If departments and work groups are interdependent; the greater the need for coordination…especially if the departments are decentralized.
Pooled interdependence
When units operate with little interaction; their output is simply pooled at the organizational level.
Sequential interdependence
When the output of one unit becomes the input of another unit in sequential fashion.
Reciprocal interdependence
When activities flow both ways between units.
ARE STRUCTURAL COORDINATING MECHANISMS NEEDED?
Can we rely on the hierarchy, rules and procedures, and an occasional committee meeting to coordinate across these boundaries?
35. STRUCTURAL COORDINATING MECHANISMS The Managerial Hierarchy
Going up the hierarchy (chain of command) to find a manager with the authority to make the decisions that affect the interdependent units.
Rules and Procedures
Coordinating routine activities via rules and procedures that set priorities and guidelines for actions.
Liaison Roles
Designating a specific manager who will facilitate the flow of information to the interdependent units by acting as a common point of contact.
Task Forces (Temporary problem-solving groups)
Used with multiple units when coordination is complex requiring more than one individual and the need for coordination is acute.
Committees disbanded when the need for coordination has been met.
Integrating Committees (Permanent structures)
Permanent organizational units that maintain internal integration and coordination on an ongoing basis.
May have authority and budgetary controls.
36. ORGANIZATIONAL STRUCTURE IS STRONGLY INFLUENCED BY: ENVIRONMENTAL UNCERTAINTY
BURNS & STALKER (61)
THOMPSON (67)
DUNCAN (72)
ORGANIZATIONAL TECHNOLOGY
WOODWARD (65)
THOMPSON (67)
PERROW (67)
INTERNAL INFORMATION-PROCESSING NEEDS
LAWRENCE & LORSH (67)
GALBRAITH (73)
MANAGERIAL STRATEGY
CHANDLER (62)
ORGANIZATIONAL HISTORY & MATURITY
GREINER (72)
SCHWARTZ & DAVIS (81)
37. MECHANISTIC v. ORGANIC STRUCTURESBURNS & STALKER (61) IF ENVIRONMENT IS ? STABLE DYNAMIC
TASKS SPECIALIZED SHARED
INTEGRATING ROLES FEW MANY
AUTHORITY HIERARCHICAL EXPERTISE
RULES & PROCEDURES MANY, WRITTEN FEW
COMMUNICATION VERTICAL HORIZONTAL
CHAIN OF COMMAND CLEAR FREE
SPAN OF CONTROL NARROW WIDE
DECISION MAKING CENTRALIZED DECENTRALIZED
FORMALIZATION HIGH LOW
PRIMARY OBJECTIVE EFFICIENCY ADAPTABILITY
IDEAL STRUCTURE IS: MECHANISTIC ORGANIC
MAJOR PROBLEMS CAN’T ADAPT QUICKLY NOT EFFICIENT
NONPARTICIPATIVE HARD TO COORDINATE
38. ORGANIZATIONAL RATIONALITYTHOMPSON (67) Seal off (protect) the “core technology” from environmental influences
REDUCE UNCERTAINTY -- PROTECT THE “CORE”
Buffer the core technology by surrounding it with specialized input and output components
FORM DEPARTMENTS TO INTERFACE WITH THE ENVIRONMENT
(SO THE “CORE” DOESN’T HAVE TO DEAL WITH THE ENVIRONMENT)
Smooth out the input and output transactions
THE MORE INDEPENDENT THESE BUFFERS BECOME, THE GREATER THE
NEED TO DEVELOP COORDINATING MECHANISMS ACROSS DEPARTMENTS
Anticipate and adapt to environmental changes
THE ORGANIZATION MUST BE FLEXIBLE AND ADAPTABLE TO SURVIVE
39. THE MACRO ENVIRONMENT POLITICAL
Supports
Controls
Pending Legislation
ECONOMIC
Inflation
Unemployment
Productivity
Growth
SOCIO-CULTURAL
Geographic Location
Customs & Values
Demographics
TECHNOLOGICAL
Basic Research, New Knowledge
New Products, Processes, Services
40. THE TASK ENVIRONMENTINDUSTRY THE SPECIFIC ENVIRONMENT OF THE FIRM
THIS FIRM’S…
CUSTOMERS
SUPPLIERS
CREDITORS
COMPETITORS
GOVERNMENT AGENCIES
UNIONS
STOCKHOLDERS
COMMUNITIES
SPECIAL INTEREST GROUPS
41. ENVIRONMENTAL UNCERTAINTYDUNCAN (72) COMPLEXITY
SIMPLE COMPLEX
STATIC - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
LOW MODERATELY
UNCERTAINTY LOW
UNCERTAINTY
DYNAMISM - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
(CHANGE)
MODERATELY HIGH
HIGH UNCERTAINTY
UNCERTAINTY
DYNAMIC - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
COMPLEXITY = # of Entities the Firm must deal with?
DYNAMISM = How Frequently do these entities (or their demands) change?
42. ENVIRONMENTAL UNCERTAINTYSCHWAB (80) THREE ISSUES TO ADDRESS:
IMPORTANCE (Significance)
What is the impact of this environmental segment on the firm?
PREDICTABILITY
Can the firm anticipate pending shifts and changes in this segment?
CONTROL (Influence)
Can the firm manipulate or control this segment?
PREDICTABILITY
HIGH LOW
HIGH - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
LOW MODERATELY
UNCERTAINTY LOW
UNCERTAINTY
CONTROL - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
(INFLUENCE) MODERATELY HIGH
HIGH UNCERTAINTY
UNCERTAINTY
LOW - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
The Firm only concerns itself with Important segments of it’s task environment.
The most difficult environments are those which are Unpredictable and Uncontrollable
43. ENVIRONMENTAL UNCERTAINTY AND STRUCTURE
POSSIBLE “FITS” BETWEEN ENVIRONMENT AND STRUCTURE
LOW UNCERTAINTY MOD LOW UNCERTAINTY
SIMPLE FUNCTIONAL
FUNCTIONAL MECHANISTIC
MECHANISTIC DIVISIONALIZED
MOD HIGH UNCERTAINTY HIGH UNCERTAINTY
Mechanistic/Functional DIVISIONALIZED
DIVISIONALIZED MATRIX
MATRIX ORGANIC
ORGANIC
44. TECHNOLOGICAL DETERMINISM CAPITAL INTENSITY
WOODWARD (65) UNIT MASS PROCESS
HIERARCHICAL LEVELS 3 4 6
RATIO OF WORKERS/ADMINISTRATORS 9/1 4/1 1/1
NUMBER OF RULES Few Many Few
FIRST-LINE SPAN OF CONTROL 23 48 15
EXECUTIVE SPAN OF CONTROL 4 7 10
LABOR COSTS AS % OF TOTAL High Medium Low
CAPITAL INVESTMENT IN EQUIPMENT Low Medium High
OPTIMAL STRUCTURE ORG MECH ORG
INTERDEPENDENCE
THOMPSON (67)
LONG-LINKED (Serial) -- Assembly Line X1 ? X2 ? X3 ? X4 ? X5
MEDIATING (Pooled) -- Bank C1 ? B ? C2
INTENSIVE (Reciprocal) -- Hospital (Phase 1) T ? X1 ? Dr
(Phase 2 ) T ? X1 ? Dr
(Phase 3) T ? X1 ? Dr, etc
45. TECHNOLOGYPERROW (67) KNOWLEDGE OR INFORMATION USED IN THE CONVERSION PROCESS
DIMENSIONS:
1. NUMBER OF UNFORSEEN PROBLEMS ENCOUNTERED (EXCEPTIONS)
2. AVAILABILITY OF READY ANSWERS OR SOLUTIONS (ANALYZABILITY)
# OF UNFORSEEN PROBLEMS
FEW MANY
-----------------------------------------------------------------------------------------------
DIFFICULT
EASE OF LOCATING CRAFT NON-ROUTINE
AN ACCEPTABLE ----------------------------------------------------------------------------------
SOLUTION ROUTINE ENGINEERING
EASY
----------------------------------------------------------------------------------------------
TECHNOLOGICAL DETERMINISM – TECHNOLOGY DETERMINES STRUCTURE
46. INFORMATION PROCESSINGGALBRAITH (73) TRADITIONAL COORDINATING MECHANISMS
INFORMAL CONTACT
RULES & PROCEDURES (Standard Operating Procedures)
HIERARCHY (Exceptions)
GOALS & TARGETS (Specify outcomes, not behaviors)
AS INFORMATION PROCESSING NEEDS INCREASE, THE ORGANIZATION MUST WORK HARDER TO STAY IN CONTACT WITH ITS VARIOUS UNITS.
STRATEGY 1 -- REDUCE THE AMOUNT OF INFORMATION PROCESSED
RELY ON SLACK
ESTABLISH SELF-CONTAINED UNITS
STRATEGY 2 -- INCREASE CAPACITY TO HANDLE MORE INFORMATION
INSTALL MORE VERTICAL INFORMATION SYSTEMS
STRUCTURE MORE LATERAL RELATIONSHIPS
SOME LATERAL COORDINATING MECHANISMS
LIAISON ROLES, TASK FORCES, STANDING COMMITTEES,
CROSS-FUNCTIONAL TEAMS, MATRIX STRUCTURES
47. FACTORS THAT AFFECT THE DIFFICULTY OF ACHIEVING INTEGRATIONLORSCH (77) THE DEGREE OF DIFFERENTIATION
THE NUMBER OF UNITS REQUIRING INTEGRATION
PATTERNS OF INTERDEPENDENCE BETWEEN THE UNITS
SEQUENTIAL
POOLED
RECIPROCAL
THE FREQUENCY OF INTERACTION REQUIRED AMONG THE UNITS
THE COMPLEXITY AND IMPORTANCE OF THE INFORMATION SHARED
48. STRATEGY DETERMINES STRUCTURECHANDLER (62) STRUCTURES ARE ENACTED BY MANAGEMENT
WHAT IS YOUR STRATEGIC OBJECTIVE?
INNOVATION
You need a loose structure, with low specialization, low formalization and decentralized decision making. ORGANIC STRUCTURE
COST MINIMIZATION
You need tight control, extensive work specialization, high formalization and high centralization. MECHANISTIC STRUCTURE
IMITATION
You need tight controls over current activities and looser controls for new undertakings. COMBINATION STRUCTURE
49. FORCES THAT SHAPE THE ORGANIZATIONGREINER (72) ORGANIZATIONAL AGE
ORGANIZATIONAL SIZE
GROWTH RATE OF THE INDUSTRY
STAGE OF EVOLUTION
CREATIVITY
DIRECTION
DELEGATION
COORDINATION
STAGE OF REVOLUTION (Current Crisis)
LEADERSHIP
AUTONOMY
CONTROL
RED TAPE
50. ORGANIZATIONAL “LIFE CYCLE” STAGESTANSIK (80)
STAGE STRATEGY STRUCTURE
BIRTH CONCENTRATION SIMPLE
GROWTH INTEGRATION FUNCTIONAL
MATURITY DIVERSIFICATION DIVISIONAL
DECLINE RETRENCHMENT CONSOLIDATION
DEATH LIQUIDATION DISMEMBERMENT