chapter 11: ‘organisation design’ · • contrast mechanistic and organic structures. ... •...
TRANSCRIPT
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Chapter 11: ‘Organisation Design’
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Learning Objectives
After completing this chapter, students will be able to:
• Describe six key elements in organisational design.
• Contrast mechanistic and organic structures.
• Discuss the contingency factors that favour either the
mechanistic model or the organic model of
organisational design.
• Describe traditional organisational design options.
• Discuss organising flexibility in the 21st century.
• Develop your skill at acquiring and using power.
• Know how to stay connected and “in the loop” when
working remotely.
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Elements of Organisational Design
• Organising: management function that involves
arranging and structuring work to accomplish the
organisation’s goals
• Organisational structure: the formal arrangement of
jobs within an organisation
• Organisational chart: the visual representation of an
organisation’s structure
• Organisational design: creating or changing an
organisation’s structure
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Purposes of Organising
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Work specialisation
• Work specialisation: dividing work activities into
separate job tasks
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Economies and Diseconomies of Work
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Departmentalisation
• Departmentalisation: the basis by which jobs are
grouped together
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The Five Common Forms of
Departmentalisation (1 of 3)
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The Five Common Forms of
Departmentalisation (2 of 3)
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The Five Common Forms of
Departmentalisation (3 of 3)
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Cross-Functional Team
• Cross-functional team: a work team composed of
individuals from various functional specialties
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Chain of Command
• Chain of command: the line of authority extending from
upper organisational levels to the lowest levels, which
clarifies who reports to whom
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Authority
• Authority: the line of authority extending from upper
organisational levels to the lowest levels, which clarifies
who reports to whom
• Line authority: authority that entitles a manager to
direct the work of an employee
• Staff authority: positions with some authority that have
been created to support, assist, and advise those
holding line authority
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Responsibility
• Responsibility: the obligation or expectation to perform
any assigned duties
• Unity of command: the management principle that
each person should report to only one manager
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Span of Control
• Span of control: the number of employees a manager
can efficiently and effectively manage
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Contrasting spans of controls
If one organisation has a span of four and the other a span of eight, the organisation
with the wider span will have two fewer levels and approximately 800 fewer managers.
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“Centralisation” and “Decentralisation”
• Centralisation: the degree to which decision making is
concentrated at upper levels of the organisation
• Decentralisation: the degree to which lower-level
employees provide input or actually make decisions
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Factors that affect an organisation’s use of
“Centralisation” and “Decentralisation”
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Employee Empowerment
• Employee empowerment: giving employees more
authority (power) to make decisions
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Formalisation
• Formalisation: how standardised an organisation’s
jobs are and the extent to which employee behaviour is
guided by rules and procedures
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Mechanistic and Organic Structures
• Mechanistic organisation: an organisational design that
is rigid and tightly controlled
• Organic organisation: an organisational design that is
highly adaptive and flexible
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Mechanistic vs. Organic Organisations
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Strategy and Structure
• An organisation’s structure should facilitate goal
achievement. Because goals are an important part of
the organisation’s strategies, it is only logical that
strategy and structure are closely linked.
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Size and Structure
• There is considerable evidence that an organisation’s
size affects its structure, but once an organisation grows
past a certain size, size has less influence on structure.
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Technology and Structure
• Unit production: the production of items in units or
small batches
• Mass production: the production of items in large
batches
• Process production: the production of items in
continuous processes
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Mechanistic vs. Organic Organisations
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Environmental Uncertainty and Structure
• In stable and simple environments, mechanistic designs
can be more effective.
• The greater the uncertainty, the more an organisation
needs the flexibility of an organic design.
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Traditional Organisational Design Options
• Simple structure: an organisational design with little
departmentalisation, wide spans of control, centralised
authority, and little formalisation
• Functional structure: an organisational design that
groups together similar or related occupational
specialties
• Divisional structure: an organisational structure made
up of separate, semiautonomous units or divisions
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Traditional Organisational Designs – Strength
and Weaknesses
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Team Structures
• Team structure: an organisational structure in which
the entire organisation is made up of work teams
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Matrix and Project Structures
• Matrix structure: an organisational structure that
assigns specialists from different functional departments
to work on one or more projects
• Project structure: an organisational structure in which
employees continuously work on projects
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Example of a Matrix Organisation
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The Boundaryless Organisation
• Boundaryless organisation: an organisation whose
design is not defined by, or limited to, the horizontal,
vertical, or external boundaries imposed by a predefined
structure
• Virtual organisation: an organisation that consists of a
small core of full-time employees and outside specialists
temporarily hired as needed to work on projects
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Task Forces
• Task force (or ad hoc committee): a temporary
committee or team formed to tackle a specific short-term
problem affecting several departments
• Open innovation: opening up the search for new ideas
beyond the organisation’s boundaries and allowing
innovations to easily transfer inward and outward
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Benefits and Drawbacks of Open Innovation
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Telecommuting
• Telecommuting: a work arrangement in which
employees work at home and are linked to the
workplace by computer
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Compressed Workweeks, Flextime, and Job
Sharing
• Compressed workweek: a workweek where
employees work longer hours per day but fewer days
per week
• Flextime (or flexible work hours): a scheduling
system in which employees are required to work a
specific number of hours a week but are free to vary
those hours within certain limits
• Job sharing: the practice of having two or more people
split a full-time job
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The Contingent Workforce
• Contingent workers: temporary, freelance, or contract
workers whose employment is contingent on demand
for their services
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Review Learning Objective 11.1
Describe six key elements in organisational design:
1. Work specialisation
2. Departmentalisation
3. Chain of command
4. Span of control
5. Centralisation / decentralisation
6. Formalisation
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Review Learning Objective 11.2
Contrast mechanistic and organic structures:
• Mechanistic structure: rigid, tightly controlled
• Organic structure: highly adaptable, flexible
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Review Learning Objective 11.3
Discuss the contingency factors that favour either the
mechanistic model or the organic model of
organisational design:
• An organisation’s structure should support the strategy.
• Structure can be affected by size and technology.
• Organic structure is most effective with unit production
and process production technology.
• Mechanistic structure is most effective with mass
production technology.
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Review Learning Objective 11.4
Describe traditional organisational design options:
• Simple structure: little departmentalisation, wide spans
of control, authority centralised in one person, and little
formalisation.
• Functional structure
• Divisional structure
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Review Learning Objective 11.5
Discuss organising for flexibility in the twenty-first
century:
• Structures:
▪ Team
▪ Matrix
▪ Project
• Boundaryless organisation
• Virtual organisation
• Compressed workweeks, flextime, job sharing
• Contingent workforce