8e daft chapter 10

8/8/2019 8e Daft Chapter 10

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Designing Adaptive OrganizationsDesigning Adaptive Organizations

CHAPTER 10CHAPTER 10


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Copyright 2008 by South-Western, a division of Thomson Learning. All rights reserved.2

Learning ObjectivesLearning Objectives

Discuss the fundamental characteristics of organizing,

including such concepts as work specialization, chain of

command, span of management, and centralization

versus decentralization.

Describe functional and divisional approaches tostructure.

Explain the matrix approach to structure and its

application to both domestic and international

organizations.

Describe the contemporary team and virtual networkstructures and why they are being adopted by

organizations.


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Learning Objectives (contd.)Learning Objectives (contd.)

Explain why organizations need coordinationacross departments and hierarchical levels, anddescribe mechanisms for achieving

coordination. Identify how structure can be used to achieve

an organizations strategic goals.

Illustrate how organization structure can bedesigned to fit environmental uncertainty.

Define production technology (manufacturing,service, and digital) and explain how itinfluences organizational structure.


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OrganizingOrganizing

Organization is the deployment of resources to

achieve strategic goals.

It is reflected in Division of labor into specific departments & jobs

Formal lines of authority

Mechanisms for coordinating diverse organizational

tasks


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Organization StructureOrganization Structure

Defines how tasks are divided, resourcesare deployed, and departments arecoordinated

Set of formal tasks assignedFormal reporting relationships

The design of systems to ensure effectivecoordination of employees acrossdepartments


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The Organization ChartThe Organization Chart

Visual representation

Set of formal tasks

Formal reporting relationships

Framework for vertical control


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Work SpecializationWork Specialization

Tasks are subdivided into individual

jobs Employees perform only the tasks

relevant to their specialized function

Jobs tend to be small, but they can be

performed efficiently

Division of labor concept

Degree to which


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Chain of CommandChain of Command

Unbroken line of authority that links

all persons in an organization

Shows who reports to whom

Associated with two underlying

principles

Unity of Command Scalar Principle

Unbroken line of authority that links

all persons in an organization

Shows who reports to whom

Associated with two underlying

principles

Unity of Command Scalar Principle


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AuthorityAuthority

Formal and legitimate right of a manager tomake decisions and issue orders

Allocate resources to achieve organizationallydesired outcomes

Authority is distinguished by threecharacteristics Authority is vested in organizational positions, not

people

Authority is accepted by subordinates Authority flows down the vertical hierarchy

Formal and legitimate right of a manager tomake decisions and issue orders

Allocate resources to achieve organizationallydesired outcomes

Authority is distinguished by threecharacteristics Authority is vested in organizational positions, not

people

Authority is accepted by subordinates Authority flows down the vertical hierarchy


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ResponsibilityResponsibility

The duty to perform the task or

activity an employee has been

assigned

Managers are assigned authority

commensurate with responsibility

Flip side of the authority coin


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AccountabilityAccountability

Mechanism through which authority

and responsibility are brought into

alignment

People are subject to reporting and

justifying task outcomes to those

above them in the chain of command

Can be built into the organization

structure


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DelegationDelegation

Process managers use to transfer

authority and responsibility

Organizations encouragemanagers to delegate authority to

lowest possible level


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Line and Staff AuthorityLine and Staff Authority

Line Authority = individuals in

management positions have the formal

power to direct and control immediate

subordinates

Staff Authority = granted to staff

specialists in their area of expertise


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Span of Management/Span of Control

Span of Management/Span of Control

Number of employees who report to asupervisor Traditional view = seven subordinates per manager

Lean organizations today = 30+ subordinates

Supervisor Involvement must be closely involved with subordinates, the

span should be small

need little involvement with subordinates, it can belarge


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Factors Associated With Less SupervisorInvolvement

Factors Associated With Less SupervisorInvolvement

Work is stable and routine

Subordinates perform similar work tasks

Subordinates are concentrated in a single location

Subordinates are highly trained Rules and procedure defining task activities are

available

Support systems and personnel are available for the

manager

Little time is required in nonsupervisory activities

Managers preferences and styles favor a large span

Work is stable and routine

Subordinates perform similar work tasks

Subordinates are concentrated in a single location

Subordinates are highly trained Rules and procedure defining task activities are

available

Support systems and personnel are available for the

manager

Little time is required in nonsupervisory activities

Managers preferences and styles favor a large span


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Tall versus Flat StructureTall versus Flat Structure

Span of Control used in an organization

determines whether the structure is tall or flat

Tall structure has a narrow span and more

hierarchical levels

Flat structure has a wide span, is horizontally

dispersed and fewer hierarchical levels

The trend has been toward wider spans ofcontrol


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Centralization versus DecentralizationCentralization versus Decentralization

Centralization means that decision

authority is located near the top of the

organization. Decentralization means decision

authority is pushed downward to lower

organizational levels.


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DepartmentalizationThe basis on which individuals are grouped into departments

DepartmentalizationThe basis on which individuals are grouped into departments

Vertical functional structure. People aregrouped together in departments by commonskills.

Divisional structure. Grouped together basedon a common product, program, orgeographical region.

Matrix structure. Functional and divisionalchains of command. Some employees reportto two bosses.

Team-based structure. Created toaccomplish specific tasks.


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Virtual Network StructureVirtual Network Structure

An organizational structure that

disaggregates major functions to

separate companies that are brokeredby a small headquarters organization.


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Five Approaches to Structural DesignFive Approaches to Structural Design

Exhibit 10.3


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Five Approaches to Structural DesignSlide 2

Five Approaches to Structural DesignSlide 2

daft ch10 insert1.CLP

Exhibit 10.3


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Vertical Functional ApproachVertical Functional Approach

Grouping of positions into departmentsbased on similar skills, expertise, andresource use Information flows up and down

Chain of command converges at the top

Managers and employees are compatiblebecause of similar training and expertise

Rules and procedures governing duties and

responsibilities


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Divisional Structure AdvantagesDivisional Structure Advantages

Efficient use of resources

Skill specialization development

Top management control

Excellent coordination

Quality technical problem solving


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Divisional Structure DisadvantagesDivisional Structure Disadvantages

Poor communications

Slow response to external changes

Decisions concentrated at top

Pin pointing responsibility is difficult

Limited view of organizational goals by

employees


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Matrix Advantages

More efficient use of resources than

single hierarchy

Adaptable to changing environment

Development of both general and

specialists management skills

Expertise available to all divisions

Enlarged tasks for employees


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Dual Authority Structure in a Matrix OrganizationDual Authority Structure in a Matrix Organization

Exhibit 10.6


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Matrix Disadvantages

Dual chain of command

High conflict between two sides of

matrix

Many meetings to coordinate

activities

Need for human relations training

Power domination by one side of

matrix


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Team Advantages

Same advantages as functional

structure

Reduced barriers among

departments

Quicker response time

Better morale

Reduced administrative

overhead


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Team Disadvantages

Dual loyalties and conflict

Time and resources spent on

meetings

Unplanned decentralization


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Virtual Network Approach Advantages

Can draw on expertise worldwide

Work force flexibility

Reduced administrativeoverhead


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Network Approach Disadvantages

Lack of control, weak boundaries

Greater demands on managers

Employee loyalty weakened


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Task Forces, Teams, Project ManagementTask Forces, Teams, Project Management

Task Force = temporary team/committee

designed to solve a short-term problem

involving several departments

Project Manager= responsible for

coordinating activities of several

departments on a full-time basis for the

completion of a specific project


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ReengineeringReengineering

Radical redesign of business processes

to achieve dramatic improvements in

cost, quality, service, and speed

Process = organized group of relatedtasks and activities that work together to

transform inputs into outputs and create

value


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Factors Shaping StructureFactors Shaping Structure

Exhibit 10.13

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