UGBA 105 Sections 102, 104, 106

1. UGBA 105Sections 102, 104, 106 Week 3: Organizational Structure

2. Ford names new CEO Struggling No. 2 automaker says Bill Ford Jr. will be succeeded as CEO by Alan Mulally, from Boeing. September 5 2006: 6:05 PM EDT NEW YORK (CNNMoney.com) -- Ford Motor Co. Tuesday surprised the auto industry by tapping senior Boeing executive Alan Mulally as its new chief executive officer, succeeding current CEO Bill Ford, who will stay on as chairman. Mulally, 61, who heads Boeing's commercial airplane unit, will become president and CEO of Ford immediately as the struggling automaker gets set to unveil a huge overhaul of its North American auto operations. In the news … “Asked why he chose someone from outside the organization, Ford said that wasn't one of the central criteria guiding his decision. “’It wasn't about inside versus outside. I was more focused on who was the best candidate,’ he told reporters. "Business skills are by and large transferable, especially with someone with an industrial background who's focused on the customer." Mulally was most recently executive vice president at Boeing (Charts). Shares of Ford (Charts) rose about 1.5 percent on the New York Stock Exchange Tuesday and surged another 2 percent or so in after-hours trading. The announcement came after the close of regular trading. Industry analysts said that Bill Ford, the 49-year-old great-grandson of company founder Henry Ford, was making a smart move but that more would be needed to halt the slide in market share for the nation's No. 2 automaker. "I think Bill Ford was under some pressure to bring in additional leadership," Tim Ghriskey at Solaris Asset Management, an investment firm, told Reuters. "He remains as executive chairman, still very much in control, but I think this step to bring in new management from outside the company is a smart, mature action ... to move the company on to the next step." Ghriskey noted that GM has made more headway in restructuring than has Ford. "My point with Ford is and always has been, they wouldn't be in this position if they didn't have these problems on the product side," Erich Merkle, analyst at IRN Inc., told the news agency. "What Ford has to do on the product side is to get back to an understanding of why people purchase cars and take more risks in terms of design." Bill Ford told employees just recently that the company needs a new business model and is considering turning to outside executives and making alliances with other carmakers, according to a Financial Times report on Sunday citing a memo it said was sent to staff.

3. Agenda • Review: Formal organization • Types of org structures • Allentown • Next week’s coming attractions • Team assignments

4. 1. Review: Formal org • Strategic grouping: How work is divided • Functional • Divisional • Matrix • Process • Network • Hybrid

5. 1. Review (cont.) • Strategic linking: How work is coordinated • Hierarchy • Mutual adjustment • Rules & standards • “Culture”

6. 1. Review (cont.) • How do you decide: Considerations • Task interdependence • Congruence! (environment, informal org, people, etc.)

7. 2. Types of structure

8. Functional grouping General Manager Human resources R&D Engineer- ing Manu- facturing Sales Product A Product B Product C

9. Product grouping CEO Cars Prefab Houses Electronics HR Mfg Mkt HR Mfg Mkt HR Mfg Mkt

10. Regional grouping CEO North America Europe Asia Pacific HR Mfg Mkt HR Mfg Mkt HR Mfg Mkt

11. Matrix organization General Manager Engineer- ing Manufac- turing Marketing Product Z manager Z Eng Z Mfg Z Mkt

12. Top Management Process Coordinators Team Team New product development process Process Coordinators Team Team Order fulfillment process Process Coordinators Team Team Procurement, logistics process

13. IT Services Producers IT Services Suppliers Designers HR Services Core Firm IT Services HR Services HR Services Brokers Designers Producers Designers Marketers Distributors Producers Managers Suppliers Distributors Suppliers Distributors Full Network Organization Full Vertical Integration Networked Firm

14. Managing process & network organizations • Abandonment of the “manager as engineer” (vertical, mechanistic) model • Less hierarchical command & control • Fewer rules, standards, and procedures • Less detailed and rigid division of labor • No more vertical career • Embrace of “manager as leader” (horizontal, organic) model • Teamwork (coordination through mutual adjustment) • Networking and political maneuvering • Leadership and culture • Entrepreneurial

15. 4. Allentown Materials

16. 5. Recap • Define and describe the different types of organizational structures • Understand the pros/cons and the tradeoffs made in each • Identify some of the considerations managers weigh when making decisions about structure

17. 5. Wrap-up/Next week • Did everyone sign in? • For next week, prep the case “The Team that Wasn’t” • Be sure you’re doing the readings

18. Team 1 Minette Jessica Vivian Richard Team 2 Katherine Eric Roger Melanie Team 3 Brandon Kevin Angela Alfonso Team 4 Angelo Stephanie Paul Yuet Team 5 DianaW Dean Kei Man Sepideh Team 6 Laura Margaretha Jennifer Michael Team 7 Anthony Jean Samuel Veronique TEAMS - 102

19. Team 1 Jennifer Keng Wai Alexander Ruoh-Wei Michael Team 2 Claudia Verena Sarah Sofia Ha Kyung Team 3 Jason Rosalva Angie Hannah Katherine Team 4 Claire Erick Hamed Josephine Ian Team 5 Danielle Seema Ramon Louise Joseph Team 6 Albert George Wing Yan Kazuma Wang TEAMS - 104 • Team 7 • Brian • Maryanne • Anton • Reilly • Erica • Team 8 • Terri • Nicholai • James • Edward • Zarina

20. Team 1 Samin Jennifer Kirstin Katya Team 2 Andy Ethan Christopher Brian Team 3 Ian Wayne David Jun Tracy Team 4 Cindy Alex F. Jonanthan Josephine Ben Team 5 Martine Alex H. Yaniv Jaime Cherie Team 6 Anthony Andrew Hamed Sagar Nicholas TEAMS - 106 • Team 7 • Douglas • Pav • Shirley • Yang • Jin • Team 8 • Maria • Priya • Elizabeth • Amy • Shiyuan

21. The Congruence Model Strategy (diversification innovation) All problems involve one or more disconnects, or incongruencies, between 4 major components of organizations: Informal Org (culture, politics leadership, networks) Input Environment (Competition, change) Resources (munificence) History (age, conditions at founding) Output Systems Unit Individual Formal Org (job titles, depts, reporting hierarchy, IT & HR systems) Tasks (technologies, work flows) People (ability, skills, motivation, biases) In turn, solutions involve the analytic - and creative - achievement of congruence.

22. Is information technology the answer? It facilitates teamwork and networking Email TeleconferencingGroupware Knowledge management ERP

23. Folklore: IT has made organizations flatter, leaner, more flexible, more virtual, more global, less integrated, empowered people, reduced need for rigid control systems Fact: The effects of IT have been complex & contradictory. It has also disempowered employees by intensifying surveillance, increased written communication and some forms of standardization, created information overloads and shortened attention spans IT and the manager’s job