chapter9

Report
Chapter 9
Designing Adaptive
Organizations
MGMT
Chuck Williams
Designed & Prepared by
B-books, Ltd.
1
Copyright ©2008 Cengage Learning. All rights reserved
Organizational Structure
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.
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Organizational Structure
Process View of Microsoft’s Organization
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Designing Organizational
Structures
After reading these sections,
you should be able to:
1. describe the departmentalization approach to
organizational structure.
2. explain organizational authority.
3. discuss the different methods for job design.
4
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Departmentalization
Functional
Customer
Product
Geographic
Matrix
1
5
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Functional Departmentalization
1.1
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Functional Departmentalization
Advantages
Disadvantages
 Work done by highly
skilled specialists
 Lowers costs through
reduced duplication
 Communication and
coordination
problems are lessened
 Cross-department
coordination can be
difficult
 May lead to slower
decision making
 Produces managers
with narrow
experiences
1.1
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Product Departmentalization
United Technologies
1.2
Carrier
UTC Fire and
Security
Hamilton
Sundstrand
Otis
Pratt & Whitney
Sikorsky
--Administrative services
--Communication & public relations
--Customer service & support
--E-Business
--Engineering
--etc…
UTC Power
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Product Departmentalization
Advantages
Disadvantages
• Managers specialize,
but have broader
experiences
• Easier to assess workunit performance
• Decision-making is
faster
• Duplication of activities
• Difficult to coordinate
across departments
1.2
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Customer Departmentalization
1.3
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Customer Departmentalization
Advantages
• Focuses on customer
needs
• Products and services
tailored to customer
needs
Disadvantages
• Duplication of
resources
• Difficult to coordinate
across departments
• Efforts to please
customers may hurt the
company
1.3
11
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Coca-Cola Enterprises
Territories of Operation
Geographic Departmentalization
1.4
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Geographic Departmentalization
Advantages
• Responsive to the
demands of different
market areas
• Unique resources
located close to the
customer
Disadvantages
• Duplication of
resources
• Difficult to coordinate
across departments
1.4
13
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Matrix Departmentalization
Procter & Gamble
Baby Care,
Family Care
North
America
Beauty Care,
Feminine Care
Fabric & Home
Care
1.5
Snacks &
Beverages
Western
Europe
Asia, India,
Australia
Country
Managers in
Spain, UAE,
Kenya, etc.
Country
Managers in
India, South
Korea, etc.
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Matrix Departmentalization
Advantages
Disadvantages
• Efficiently manage
large, complex tasks
• Pool of available
resources
• Requires high levels
of coordination
• Conflict between
bosses
• Requires high levels of
management skills
1.5
15
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Organizational Authority
Chain of
Command
Line versus
Staff Authority
Delegation
of Authority
Degree of
Centralization
2
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Chain of Command
• The vertical line of authority in an
organization
• Clarifies who reports to whom
• Unity of command
– matrix organizations violate
this principle
– workers report to only one boss
2.1
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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
2.2
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Delegation of Authority
Delegation of Authority
The assignment of direct authority and
responsibility to a subordinate to complete
tasks for which the manager is normally
responsible.
2.3
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Delegation of Authority
2.3
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How to be a More
Effective Delegator
1.
Trust your staff to do a good job.
2.
3.
4.
5.
Avoid seeking perfection.
Give effective job instructions.
Know your true interests.
Follow up on progress.
6.
7.
8.
Praise the efforts of your staff.
Don’t wait to the last minute to delegate.
Ask questions, expect answers, assist employees.
9.
2.3
Provide the resources you would expect if doing the
assignment yourself.
10. Delegate to the lowest possible level.
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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
22
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Decentralization at
Whole Foods
Beyond the Book
• Operating decisions at Whole Foods—from what to
stock, what to charge for it, and whom to hire—are
made not from the top, but by individual work teams.
• Each team is in charge of a department, like wine or
seafood, or produce.
• New employees are assigned to a team for a 4-week
trial. At the end of 4 weeks, the new member must be
approved by 2/3 vote of the team to remain on it.
• Whole Foods believes that decisions should be made by
those most impacted by them.
Source: “Break Free!,” Fortune, 1 October 2007, 122-123.
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Job Design
Job
Specialization
Job Rotation,
Enlargement,
Enrichment
Job
Characteristics
Model
3
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Job Specialization



A job that is a small
part of a larger task or
process
Jobs are simple, easy
to learn, & economical
Can lead to low
satisfaction, high
absenteeism, &
employee turnover
3.1
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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
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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
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Motivation by Job Design: The JCM
• Job Characteristics Model (JCM)
– Hackman and Oldham’s concept that any job can
be described through five core job dimensions:
• Skill variety – Requirements for different tasks in
the job.
• Task identity – Completion of a whole piece of
work.
• Task significance – The job’s impact on others.
• Autonomy – Level of discretion in decision
making.
• Feedback – Amount of direct and clear
information on performance.
– The way elements in a job are organized (job design) impacts
motivation, satisfaction, and performance.
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The Job Characteristics Model
Employee growth-need strength moderates the relationships.
Source: J.R. Hackman and G.R. Oldham, Work Design (excerpted from pp. 78–80). © 1980 by Addison-Wesley Publishing Co., Inc. Reprinted by
permission of Addison-Wesley Longman, Inc.
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Guidelines for Enriching a Job
Source: J.R. Hackman and J.L. Suttle, eds., Improving Life at Work (Glenview, IL: Scott Foresman, 1977), p. 138.
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Designing Organizational
Processes
After reading these sections,
you should be able to:
4. explain the methods that companies are using
to redesign international organizational processes
(i.e., intraorganizational processes).
5. describe the methods that companies are using to
redesign external organizational processes
(i.e., interorganizational processes).
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Two Kinds of Organizational Designs
(Burns and Stalker)
Mechanistic
Organic
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Intraorganizational Processes
Reengineering
Empowerment
4
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Reengineering
 The fundamental rethinking and radical
redesign of business processes
 Intended to achieve dramatic improvements
in performance
 Change the orientation from vertical
to horizontal
 Change task interdependence
4.1
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Reengineering and
Task Interdependence
4.1
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Empowerment
Empowering
Workers
Permanently passing decision-making
authority and responsibilities from
managers to workers by giving them
the information and resources they
need to make good decisions
 A feeling of intrinsic motivation
 Workers perceive meaning in their work
 Employees are capable of self-determination
4.2
36
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Interorganizational Processes
Modular
Organizations
Virtual
Organizations
5
37
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Modular Organizations
5.1
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Modular Organizations
Advantages
Disadvantages
• can cost less to run than
traditional
organizations
• lets organizations focus
on core competencies
• loss of control from
outsourcing
• may reduce their
competitive advantage
5.1
39
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Virtual Organizations
5.2
40
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Virtual Organizations
Advantages
Disadvantages
• let companies share
costs
• fast and flexible
• being the best should
provide better products
• difficult to control the
quality of partners
• requires tremendous
management skills
5.2
41
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