Organizational Structure

1. Organizational Structure The vertical and horizontal configuration of departments, authority, and jobs within a company. Organizational Process The collection of activities that transform inputs into outputs that customers value. Organizational Structure

2. Functional Product Customer Geographic Matrix Departmentalization 1

3. Functional Departmentalization 1.1

4. Work done by highly skilled specialists Lowers costs through reduced duplication Communication and coordination problems are lessened Advantages Disadvantages Functional Departmentalization • Cross-department coordination can be difficult • May lead to slower decision making • Produces managers with narrow experiences 1.1

5. United Technologies Carrier Chubb Hamilton Sundstrand Otis Pratt & Whitney Sikorsky --Administrative services --Communication & public relations--Customer service & support --E-Business--Engineering--etc… UTC Power Adapted from Exhibit 9.4 Product Departmentalization 1.2

6. Managers specialize, but have broader experiences Easier to assess work-unit performance Decision-making is faster Advantages Disadvantages Product Departmentalization • Duplication of activities • Difficult to coordinate across departments 1.2

7. SprintCorporation BusinessSolutions ConsumerSolutions SprintNorth Supply Local TelecomDivision U.S. Businesses LocalService Supply Chain Integration Local Service InternationalBusinesses Long-DistanceService LogisticsNetwork Long-DistanceService Solutions WirelessServices DistributionCenters Wireline &WirelessServices (Partial Listing) Customer Departmentalization 1.3 Adapted from Exhibit 9.5

8. Focuses on customer needs Products and services tailored to customer needs Advantages Disadvantages Customer Departmentalization • Duplication of resources • Difficult to coordinate across departments • Efforts to please customers may hurt the company 1.3

9. Geographic Departmentalization Coca-Cola EnterprisesTerritories of Operation 1.4 Exhibit 9.6

10. Responsive to the demands of different market areas Unique resources located close to the customer Advantages Disadvantages Geographic Departmentalization • Duplication of resources • Difficult to coordinate across departments 1.4

11. CitiGroup International North America (excludingMexico) Europe,Middle East, Africa Asia Pacific Global Consumer Country Managers inSpain, UAE, Kenya, etc. Global Corporate &Investment Bank Global InvestmentManagement Country Managers inChina, Australia, etc. Smith Barney Adapted from Exhibit 9.7 Matrix Departmentalization 1.5

12. Efficiently manage large, complex tasks Pool of available resources Advantages Disadvantages Matrix Departmentalization • Requires high levels of coordination • Conflict between bosses • Requires high levels of management skills 1.5

13. Chain ofCommand Line versusStaff Authority Delegationof Authority Degree of Centralization Organizational Authority 2

14. Chain of Command • The vertical line of authority in an organization • Clarifies who reports to whom • Unity of command • workers report to only one boss • matrix organizations violate this principle 2.1

15. Line versus Staff Authority • Line authority • the right to command immediate subordinates in the chain of command • Staff authority • the right to advise but not command others versus 2.2

16. Delegation of Authority The assignment of direct authority and responsibility to a subordinate to complete tasks for which the manager is normally responsible. Delegation of Authority 2.3

17. Delegation of Authority 2.3 Adapted from Exhibit 9.8

18. How to be a More Effective Delegator • Trust your staff to be a good job • Avoid seeing perfection • Give effective job instructions • Know your true interests • Follow up on progress. • Praise the efforts of your staff. • Don’t wait to the last minute to delegate. • Ask questions, expect answers, assist employees. • Provide the resources you would provide if doing the assignment yourself. • Delegate to the lowest possible level. 2.3 Adapted from Exhibit 9.9

19. Degree of Centralization • Centralization of authority • primary authority is held by upper management • Decentralization • significant authority is found in lower levels of the organization • Standardization • solving problems by applying rules, procedures, and processes 2.4

20. SpecializedJobs Job Rotation, Enlargement, Enrichment JobCharacteristicsModel Job Design 3

21. Job Specialization • A job that is a small part of a larger task or process • Jobs are simple, easy to learn, and economical • Can lead to low satisfaction, high absenteeism, & employee turnover 3.1

22. Job Rotation, Enlargement, and Enrichment • Job Rotation • periodically moving workers from one specialized job to another • Job Enlargement • increasing the number of tasks performed by a worker • Job Enrichment • adding more tasks and authority to an employee’s job 3.2

23. Job Characteristics Model • A job redesign approach that seeks to increase employee motivation • Emphasizes internal motivation • experience work as meaningful • experience responsibility for work outcomes • knowledge of results 3.3

24. Job Characteristics Model 3.3 Exhibit 9.10

25. Redesigning Jobs Combining Tasks Forming Natural Work Units Establishing Client Relationships Vertically Loading the Job Opening Feedback Channels Job Redesign Techniques 3.3 Adapted from Exhibit 9.10

26. Reengineering Empowerment BehavioralInformality Intraorganizational Processes 4

27. Reengineering • The fundamental rethinking and radical redesign of business processes • Intended to achieve dramatic improvements in performance • Change the orientation from vertical to horizontal • Changes task interdependence 4.1

28. Reengineering and Task Interdependence 4.1 Exhibit 9.11

29. EmpoweringWorkers Permanently passing decision-makingauthority and responsibilities frommanagers to workers by giving themthe information and resources they need to make good decisions Empowerment • A feeling of intrinsic motivation • Workers perceive meaning in their work • Employees are capable of self-determination 4.2

30. Behavioral Informality Behavioral Formality Behavioral Informality • Spontaneity • Casualness • Interpersonal familiarity • Routine & regimen • Specific behavior rules • Impersonal detachment 4.3

31. Behavioral Informality Popular ways to increase behavioral informality Casual Dress and Open Offices

32. Do the Right Thing • Don’t Scavenge That Office If Somebody Is Still in It • It’s roadkill in the animal kingdom: coworkers scavenge for office leftovers…often before an employee leaves • Do the right thing by maintaining the dignityof departing coworkers: wait until the office is empty DOING THE RIGHT THING 4.3

33. Modular Organizations VirtualOrganizations Interorganizational Processes 5

34. Modular Organizations 5.1 Exhibit 9.13

35. Advantages Disadvantages Modular Organizations • can cost less to run thantraditional organizations • lets organizations focuson core competencies • loss of control from outsourcing • may reduce their competitive advantage 5.1

36. Virtual Organizations 5.2 Exhibit 9.14

37. Advantages Disadvantages Web Link http://www.agileweb.com Virtual Organizations • let companies share costs • fast and flexible • being the “best” shouldprovide better products • difficult to control the quality of partners • requires tremendous management skills 5.2