337 org structure
TRANSCRIPT
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Spring 2007 Organization Structure 1
Organization Structure
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Spring 2007 Organization Structure 2
Why Organizations Are Structured
Organizing:
The deployment and structuring of organizational resources
to achieve organizational goals
Dimensions Specialization / division of labor
Formal lines of authority
Mechanisms for coordination
Organization or structure is designed to: Facilitate accomplishment of organizational goals
Fit with technology and environment
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Specialization / Division of Labor
Adam Smith and the pins
Efficiency vs. effectiveness
Individuals perform well-defined tasks
Short training time
Individuals become expert
Individuals can perform tasks for which they are bestsuited
Problems
Lose sight of overall goal Boredom, fatigue, stress
Lack of flexibility
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Issues in Determining Division of Labor
Nature of the work Complexity of work
Task interdependency
Organization Goals (re-engineering)
Resources
Employees Abilities
Expectations
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Authority and Responsibility
Look back at Fayol, Weber
Chain of command
Unity of command
Scalar principle
Authority The right to make decisions, issue orders and allocate
resources
Does it exist if not accepted?
Responsibility
Accountability Unity of authority and responsibility
Delegation
Line and staff
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Span of Control
Tall vs. flat organizations Nature of work
Stability
Task similarity Location
Employees Preferences Skills
Organization Policies and procedures Support for managers
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Centralization vs. Decentralization
Where are decisions made?
Need for pooled resources
Speed and flexibility (environmentaluncertainty)
Consistency
Where is the knowledge? Who must implement decisions
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Formalization
Policies and procedures Bureaucracy Max Weber again
Pro Uniformity Less uncertainty
Con Less flexibility
Deciding Nature of the work Nature of the employees
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TeamsFree flow of information
Wide spans of controlDecentralizationLow formalization
Organic
Mechanistic vs. Organic Structures
High specialization
Rigid departmentalization
Clear chain of command
Narrow span of control
CentralizationHigh formalization
Mechanistic
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Departmentalization
Functional
Divisional Product
Customer
Geographical
Matrix
Project teams
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Functional Structures
Pro:
Specialization
Efficiency
Career progress for employees
High-quality problem solving
Con:
Poor communication between functions
May be too centralized
Employees have limited perspective on total organization
Where best used
Stable environment
Single product
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Spring 2007 Organization Structure 13
Functional Structure
VPSalesVP
Sales
VPManufacturing
VPManufacturing
VPFinance
VPFinance
CEOCEO
G/ LG/ L
TaxTax
BudgetBudget
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Divisional
Types Product Geographical Customer
Pro: Speed and flexibility of
response Cross-fertilization of ideas
Focus on product /customer / area
Emphasis onorganizational goals
Where best used Uncertain environment Diversified organization
Con: Resources duplicated
(inefficient) Less coordination
between divisions Competition for resources
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Sample Divisional Structure
VPCereal
VPCereal
VPDetergent
VPDetergent
VPPaperVP
Paper
CEOCEO
TissueTissue
DiapersDiapers
TowelsTowels
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ThyssenKrupp
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Sara Lee Structure
HouseholdProducts
Headquarters
Food andBeverage
Intimates andUnderwear
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University of Tennessee System
Board ofTrustees
UT- Martin UT - Knoxville
UT -
Chattanooga
Health ScienceCenter at Memphis
Space Instituteat Tullahoma
Institute ofAgriculture
Institute forPublic Service
http://www.utk.edu/system/http://www.utk.edu/system/ -
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Mixed Structure
VPAdmin
VPAdmin
VPManufacturing
VPManufacturing
VPSalesVP
Sales
CEOCEO
RetailRetail
WholesaleWholesale
InternationalInternational
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Unilever Structure
Home &
Personal Care
Africa, Middle East & Turkey
Bestfoods
Ice Cream and Frozen Foods
Latin America & Slim.fast
worldwide
Unilever Bestfoods Asia Unilever Bestfoods, Europe
Unilever Bestfoods, North
America
Unilever
Bestfoods
Africa, Middle East & Turkey
Home
Diverseyever
Home and Personal Care, Asia
Home & Personal Care, Europe
Home & Personal Care, North
America
Latin America
http://www.unilever.com/company/unilevertoday/businessgroups/default.asp?ComponentID=2176&SourcePageID=42#Why%20Organizations%20Are%20Structuredhttp://www.unilever.com/company/unilevertoday/businessgroups/default.asp?ComponentID=2176&SourcePageID=42#Why%20Organizations%20Are%20Structured -
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Matrix
Dual lines of authority
Examples
Pro:
Combines advantages of functional and divisionalstructures
Con:
Conflict may arise
Cost associated with grater need for coordination
Where best used: Extreme environmental pressure
Very large or geographically dispersed organizations
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Organizing Work Processes
Unit production
Mass production
Process production
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Technology, Structure and
Effectiveness
Characteristic Unit Mass ProcessVerticalDifferentiation
Low Moderate High
HorizontalDifferentiation
Low High Low
Formalization Low High Low
Structure Organic Mechanistic Organic