7-1 chapter 8 and 9 organizational structure and managing change s. chan head, department of...
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7-1
Chapter 8 and 9
Organizational Structure and Managing Change
S. ChanHead, Department of Business Administration
http://home.chuhai.hk/~charmaine/charmaine@chuhai.edu.hk
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Designing Organizational Structure
• Organizing– The process by which managers establish the
structure of working relationships among employees to achieve goals
• Organizational Structure– Formal system of task and reporting relationships
that coordinates and motivates organizational members so that they work together to achieve organizational goals
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Factors Affecting Organizational Structure
Figure 7.1
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Job Design
Job Design The process by which managers decide how to
divide tasks into specific jobsJob Enlargement
Increasing the number of different tasks in a given job by changing the division of labor
Job Enrichment Increasing the degree of responsibility a worker
has over a job
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Departmentalization- by Function
Functional Structure An organizational structure composed of all the
departments that an organization requires to produce its goods or services
Advantages Encourages learning from others doing similar jobs Easy for managers to monitor and evaluate workers
Disadvantages Difficult for departments to communicate with others Preoccupation with own department and losing sight of
organizational goals
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Departmentalization: by Divisions
Divisional Structure An organizational structure composed of separate
business units within which are the functions that work together to produce a specific product for a specific customer
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Departmentalization: by Product Structure
Product Structure Each product line or business is handled by a self-
contained division
AdvantagesAllows functional managers to specialize in one product
areaDivision managers become experts in their areaRemoves need for direct supervision of division by
corporate managersDivisional management improves the use of resources
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Figure 7.4
Product, Market, and Geographic Structures
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Departmentalization: by Geographic
Geographic Structure Each region of a country or area of the world is
served by a self-contained divisionGlobal geographic structure
Managers locate different divisions in each of the world regions where the organization operates
Generally, occurs when managers are pursuing a multi-domestic strategy
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Departmentalization
Global Product Structure Each product division, not the country or regional
managers, takes responsibility for deciding where to manufacture its products and how to market them in foreign countries
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Global Geographic and Global Product Structures
Figure 7.5
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Departmentalization: By market
Market Structure Each kind of customer is served by a self-
contained division Also called customer structure
Matrix Structure An organizational structure that simultaneously
groups people and resources by function and product
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Matrix StructureFigure 7.6
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Product Team Structure
Product Team Structure Employees are permanently assigned to a cross-
functional team and report only to the product team manager or to one of his direct subordinates
Cross-functional team group of managers brought together from
different departments to perform organizational tasks
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Coordinating Functions and Divisions
Authority The power to hold people accountable for their
actions and to make decisions concerning the use of organizational resources
Hierarchy of Authority An organization’s chain of command, specifying
the relative authority of each manager
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Allocating Authority
Span of Control The number of subordinates that report directly to a
managerLine Manager
someone in the direct line or chain of command who has formal authority over people and resources
Staff Manager Someone responsible for managing a specialist
function, such as finance or marketing.
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Tall & Flat Organizations
Figure 7.9
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Tall & Flat Organizations
Figure 7.9
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Tall and Flat Organizations
Decentralizing authority giving lower-level managers and nonmanagerial
employees the right to make important decisions about how to use organizational resources.
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Organization Change
Organization Change Movement of an organization away from its present state and
toward some desired future state to increase its efficiency and effectiveness
Top-down change A fast, revolutionary approach to change in which top
managers identify what needs to be changed, decide what to do, and then move quickly to implement changes throughout the organization
Bottom-up change A gradual approach to change in which managers at all levels
work together to develop a plan for change
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Four Steps in the Organizational Change Process
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Description onOrganizational Change Process
1.Recognize the need for change: The change agent can use a variety of techniques to diagnose problems in need of changes to solve them.
2.Identify possible resistance to the change and plan how to overcome it: Follow the guidelines in step 1.
3.Plan the change interventions: Based on the diagnosis of the problem, the appropriate intervention must be selected.
4.Implement the change interventions: The change agent, or someone selected, conducts the intervention to bring about the desired change.
5.Control the change: Follow up to ensure that the change is implemented and maintained. Make sure the objective is met. If not, take corrective action.
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Resistance to Change and Ways to Overcome Resistance
Why employees resist change?
Uncertainty--- Fear of the unknown outcome of change
Learning anxiety--- Nervousness or fear of change that requires learning new ways of working
Self-interest--- People resist change that threatens their own self interest
Loss --- Lost job or change in salary/benefits
Control --- Change can also result in an actual or perceived loss of power, status, security and control, feeling that someone else is controlling their destiny
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Overcome Resistance to Change
Ways to overcome resistance to change: Develop a positive trust climate for change --- Develop and maintain good
human relations
Plan --- Take good planning. Identify the possible resistance to change and plan how to overcome it.
Communication ---Clearly state why the change is needed and how it will affect company or employees
Create a win-win situation --- Company should guarantee that employees will not lose jobs, pay or other loses, at least within a short period of time
Involve employees --- Employees who have participated in developing changes are more committed to them than those who have not
Provide support --- Give advance notice and providing training before the change take place.
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