MODULE 14 ORGANIZATIONAL DESIGN AND CULTURE

1. MODULE 14ORGANIZATIONAL DESIGN AND CULTURE “Adaptability and values set the tone” • What are the trends in organizational design? • What is the nature of organizational culture?

2. ORGANIZATIONAL DESIGN AND CULTURETrends In Organizational DesignMODULE GUIDE 14.1 • Organizations are becoming flatter with fewer levels of management. • Organizations are increasing decentralization and reducing staff. • Organizations are increasing delegation and empowerment. • Organizations are becoming more horizontal and adaptive. • Organizations are using multiple means of subsystems integration. • Organizations are reengineering work processes for greater efficiency.

3. ORGANIZATIONAL DESIGN AND CULTURETrends In Organizational Design • Organizational Design • The process of configuring organizations to meet environmental challenges • Span of Control • The number of persons directly reporting to a manager

4. ORGANIZATIONAL DESIGN AND CULTURETrends In Organizational Design • Decentralization • Top management allows lower levels to make many decisions • Empowerment • Gives people the freedom to do their jobs as they think best • Delegation • The process of entrusting work to others Three Steps in Delegation 1. Assign responsibility—explain task and expectations to others. 2. Grant authority—allow others to act as needed to complete task. 3. Create accountability—require others to report back, complete task.

5. ORGANIZATIONAL DESIGN AND CULTURETrends In Organizational Design • Bureaucracy • Emphasizes formal authority, rules, order, fairness and efficiency • Mechanistic Designs • Are bureaucratic, using a centralized and vertical structure • perform best in stable environments with mostly routine and predictable tasks. • Organic Designs • are adaptive using a decentralized and horizontal structure • perform best in change environments requiring adaptation and flexibility.

6. ORGANIZATIONAL DESIGN AND CULTURETrends In Organizational Design

7. ORGANIZATIONAL DESIGN AND CULTURETrends In Organizational Design • Differentiation • The degree of difference between subsystems in an organization • Integration • The level of coordination between subsystems in an organization • Process Reengineering • Increase operating efficiency by reducing unnecessary work steps and streamlining work processes.

8. ORGANIZATIONAL DESIGN AND CULTURETrends In Organizational Design

9. ORGANIZATIONAL DESIGN AND CULTURENature of Organizational DesignMODUAL GUIDE 14.2 • Organizational culture is the personality of the organization. • Successful organizations tend to have strong and positive cultures. • The observable culture is what you see and hear as an employee or customer. • The core culture is found in the underlying values of the organization.

10. ORGANIZATIONAL DESIGN AND CULTURENature of Organizational Design • Organizational Culture • a system of shared values and beliefs that guides the behavior of members • Strong Cultures • Are clear, well defined and widely shared among members • Characteristics of Successful and Strong Organizational Cultures • Emphasize teamwork. • Allow and support risk taking. • Encourage innovation. • Make well-being of people a top management priority. • Strong cultures are clear, well defined, and widely shared among • members.

11. ORGANIZATIONAL DESIGN AND CULTURENature of Organizational Design • Core Culture • Beliefs and values shared by an organization • Value-based Management • communicates, models, and reinforces core values throughout the organization. • Core Values at KPMG • We lead by example. • We work together. • We respect the individual. • We seek the facts and provide insight. • We are open and honest in our communication. • We are committed to our communities. • Above all, we act with integrity.

12. ORGANIZATIONAL DESIGN AND CULTURENature of Organizational Design • Observable Culture • What you see and hear as you are walking around in an organization

13. MANAGEMENT TIPS • S C O R E S—How to read an organization’s culture • S - How tight or loose is the structure? • C - Are decisions change oriented or driven by the status quo? • O - What outcomes or results are most highly valued? • R - What is the climate for risk taking, innovation? • E - How widespread is empowerment, worker involvement? • S - What is the competitive style, internal and external?