organization structure and design fundamentals of organizational behavior 2e andrew j. dubrin...
TRANSCRIPT
Organization StructureOrganization Structureand Designand Design
Fundamentals of Fundamentals of Organizational Behavior 2eOrganizational Behavior 2e
Andrew J. DuBrinAndrew J. DuBrin
PowerPoint Presentation by Charlie Cook
PowerPoint Presentation by Charlie Cook
ChapterChapter1212
A. J. DuBrin, Fundamentals of Organizational Behavior, Second Edition. Copyright © 2002 by South-Western. 12–2
Learning ObjectivesLearning Objectives
1.1. Identify and define the foundation concepts of Identify and define the foundation concepts of organization structure, including the informal organization structure, including the informal structure.structure.
2.2. Specify the basic features of the bureaucratic form Specify the basic features of the bureaucratic form of organization, including how it is divided into of organization, including how it is divided into departments.departments.
3.3. Describe key modifications of a bureaucratic Describe key modifications of a bureaucratic structure: matrix, flat, and outsourcing.structure: matrix, flat, and outsourcing.
4.4. Describe the two contemporary organizational Describe the two contemporary organizational designs referred to as horizontal organizations and designs referred to as horizontal organizations and network organizations.network organizations.
5.5. Understand why a new type of organization chart Understand why a new type of organization chart called an called an organigraphorganigraph can contribute to can contribute to understanding organization structure.understanding organization structure.
A. J. DuBrin, Fundamentals of Organizational Behavior, Second Edition. Copyright © 2002 by South-Western. 12–3
OrganizationsOrganizations
OrganizationOrganization Is a collection of people working together to achieve a Is a collection of people working together to achieve a
common purpose (or simply a big group).common purpose (or simply a big group).
Organization structureOrganization structure Is the arrangement of people and tasks to accomplish Is the arrangement of people and tasks to accomplish
organizational goals.organizational goals.
Organizational designOrganizational design Is the process of creating a structure that best fits a Is the process of creating a structure that best fits a
purpose, strategy, and environment.purpose, strategy, and environment.
A. J. DuBrin, Fundamentals of Organizational Behavior, Second Edition. Copyright © 2002 by South-Western. 12–4
Foundation Concepts of Foundation Concepts of Organizational StructureOrganizational Structure
Mechanistic versus OrganicMechanistic versus Organic Mechanistic organizations are hierarchical bureaucracies Mechanistic organizations are hierarchical bureaucracies
with an emphasis on specialization, control, and vertical with an emphasis on specialization, control, and vertical communications. They rely heavily on rules, policies, and communications. They rely heavily on rules, policies, and procedures. procedures.
Organic structures are laid out as networks and emphasize Organic structures are laid out as networks and emphasize horizontal specialization, personal coordination, and horizontal specialization, personal coordination, and extensive informal communications. They have loose rules, extensive informal communications. They have loose rules, policies, and procedures that allow for rapid responses to policies, and procedures that allow for rapid responses to changes in the environment.changes in the environment.
A. J. DuBrin, Fundamentals of Organizational Behavior, Second Edition. Copyright © 2002 by South-Western. 12–5
Foundation Concepts of Foundation Concepts of Organizational StructureOrganizational Structure
Formal versus Informal StructureFormal versus Informal Structure Formal organizational structureFormal organizational structure
Is an official statement of the reporting relationships, Is an official statement of the reporting relationships, rules, and regulations that guide and govern the conduct rules, and regulations that guide and govern the conduct of business by the organization.of business by the organization.
Informal organizational structureInformal organizational structure Is a set of unofficial working relationships providing the Is a set of unofficial working relationships providing the
flexibility that take care of events and transactions not flexibility that take care of events and transactions not covered by the formal structure.covered by the formal structure.
Is revealed using social network analysis to trace informal Is revealed using social network analysis to trace informal social relationships and communication channels.social relationships and communication channels.
A. J. DuBrin, Fundamentals of Organizational Behavior, Second Edition. Copyright © 2002 by South-Western. 12–6
Foundation Concepts of Foundation Concepts of Organizational StructureOrganizational Structure
FormalizationFormalization Is the degree to which expectations regarding the methods Is the degree to which expectations regarding the methods
of work are specified, written down, and enforced.of work are specified, written down, and enforced. Produces an organization with highly specialized labor and Produces an organization with highly specialized labor and
high delegation of authority.high delegation of authority. Is associated with mechanistic (bureaucratic) organizations.Is associated with mechanistic (bureaucratic) organizations.
A. J. DuBrin, Fundamentals of Organizational Behavior, Second Edition. Copyright © 2002 by South-Western. 12–7
Foundation Concepts of Foundation Concepts of Organizational StructureOrganizational Structure
CentralizationCentralization Is the extent to which executives delegate authority to lower Is the extent to which executives delegate authority to lower
organizational units. Less delegation = more centralization.organizational units. Less delegation = more centralization. Strategic decisions are more likely to be centralized than Strategic decisions are more likely to be centralized than
operational decisions.operational decisions. The use of functional units is a feature of centralization.The use of functional units is a feature of centralization.
A. J. DuBrin, Fundamentals of Organizational Behavior, Second Edition. Copyright © 2002 by South-Western. 12–8
Foundation Concepts of Foundation Concepts of Organizational StructureOrganizational Structure
ComplexityComplexity Refers to the number of different job titles and Refers to the number of different job titles and
organizational units in an organization.organizational units in an organization. Increases the difficulty of managing an organization.Increases the difficulty of managing an organization. Typically increases with the size of the organization.Typically increases with the size of the organization.
DifferentiationDifferentiation A horizontally differentiated organization has many different A horizontally differentiated organization has many different
job titles.job titles. A vertically differentiated organization has many different A vertically differentiated organization has many different
levels.levels.
A. J. DuBrin, Fundamentals of Organizational Behavior, Second Edition. Copyright © 2002 by South-Western. 12–9
Foundation Concepts of Foundation Concepts of Organizational StructureOrganizational Structure
Tight versus Loose CouplingTight versus Loose Coupling Coupling is the extent to which organizational parts are Coupling is the extent to which organizational parts are
interdependent.interdependent. Tight coupling between parts is indicated if a minor change Tight coupling between parts is indicated if a minor change
in one part produces a large change in an associated part.in one part produces a large change in an associated part. The degree of coupling in businesses has increased due to The degree of coupling in businesses has increased due to
the increasing interdependence of the parts or subsystems the increasing interdependence of the parts or subsystems of organizations today.of organizations today.
Organizational design is influenced by coupling and the Organizational design is influenced by coupling and the increased necessity for flexibility to meet changing market increased necessity for flexibility to meet changing market conditions.conditions.
A. J. DuBrin, Fundamentals of Organizational Behavior, Second Edition. Copyright © 2002 by South-Western. 12–10
Weber’s Ideal Organization: Weber’s Ideal Organization: BureaucracyBureaucracy1.1. Rules and procedures controlling the organizational Rules and procedures controlling the organizational
structure.structure.
2.2. A high degree of differentiation among organizational A high degree of differentiation among organizational functions.functions.
3.3. A high degree of job specialization.A high degree of job specialization.
4.4. An organization of offices determined by hierarchy, with An organization of offices determined by hierarchy, with each unit reporting to a higher unit.each unit reporting to a higher unit.
5.5. A heavy emphasis on rules and norms to regulate behaviorA heavy emphasis on rules and norms to regulate behavior
6.6. Interpersonal relations characterized by impersonality in Interpersonal relations characterized by impersonality in place of favoritism.place of favoritism.
7.7. Selection and promotion based on merit.Selection and promotion based on merit.
8.8. All administrative actions recorded in writing.All administrative actions recorded in writing.
A. J. DuBrin, Fundamentals of Organizational Behavior, Second Edition. Copyright © 2002 by South-Western. 12–11
The Bureaucratic Form of The Bureaucratic Form of OrganizationOrganization Machine BureaucracyMachine Bureaucracy Uses standardized work processes and is efficient.Uses standardized work processes and is efficient. Best use is in large organizations.Best use is in large organizations.
Professional BureaucracyProfessional Bureaucracy Standardizes skills for Standardizes skills for
coordination and is coordination and is composed of a core composed of a core of highly trained of highly trained professionals.professionals.
A. J. DuBrin, Fundamentals of Organizational Behavior, Second Edition. Copyright © 2002 by South-Western. 12–12
The Bureaucratic FormThe Bureaucratic Formof Organizationof Organization
Power andPower and
AuthorityAuthorityNumber ofNumber of
EmployeesEmployees
HighHigh
LowLow
FewFew
ManyMany
Top-
Level
Managers
Middle-Level
Managers
First-Level
Managers
Operative Employees
EXHIBITEXHIBIT12-112-1
A. J. DuBrin, Fundamentals of Organizational Behavior, Second Edition. Copyright © 2002 by South-Western. 12–13
The Bureaucratic Form of The Bureaucratic Form of OrganizationOrganization The Contribution of BureaucracyThe Contribution of Bureaucracy Makes possible large-scale accomplishments and Makes possible large-scale accomplishments and
accountability for results.accountability for results. Bureaucratic layers contain managers with precious skills Bureaucratic layers contain managers with precious skills
and expertise. If eliminated, the organization may suffer.and expertise. If eliminated, the organization may suffer. Restructuring may destroy valuable organizational memory.Restructuring may destroy valuable organizational memory.
Potential Dysfunctions of a BureaucracyPotential Dysfunctions of a Bureaucracy Carrying bureaucratic characteristics to extremes Carrying bureaucratic characteristics to extremes
suppresses innovation and decision making, lowers suppresses innovation and decision making, lowers productivity, and creates inconvenience and inefficiency.productivity, and creates inconvenience and inefficiency.
Workers experience high frustration and low satisfaction.Workers experience high frustration and low satisfaction.
A. J. DuBrin, Fundamentals of Organizational Behavior, Second Edition. Copyright © 2002 by South-Western. 12–14
Sources of Individual and Subunit Sources of Individual and Subunit PowerPower DepartmentalizationDepartmentalization Is advantageous in that it gives major attention to enhancing Is advantageous in that it gives major attention to enhancing
product growth or service to customers.product growth or service to customers. Is the process of subdividing work into specialized Is the process of subdividing work into specialized
departments.departments. Functional DepartmentalizationFunctional Departmentalization
Is grouping people according to their expertise.Is grouping people according to their expertise. Territorial DepartmentalizationTerritorial Departmentalization
Is grouping subunits according to the geographic Is grouping subunits according to the geographic areas that they serve.areas that they serve.
Internationalization of business has increased the need Internationalization of business has increased the need for organizing subunits territorially.for organizing subunits territorially.
A. J. DuBrin, Fundamentals of Organizational Behavior, Second Edition. Copyright © 2002 by South-Western. 12–15
Sources of Individual and Subunit Sources of Individual and Subunit PowerPower Departmentalization (cont’d)Departmentalization (cont’d) Product/Service DepartmentalizationProduct/Service Departmentalization
Is arranging units by the product or service they provide.Is arranging units by the product or service they provide. Customer DepartmentalizationCustomer Departmentalization
Creates a structure based on customer needs.Creates a structure based on customer needs.
Hybrid (or Mixed) Organization StructureHybrid (or Mixed) Organization Structure Combines the advantages of different organizational types.Combines the advantages of different organizational types.
Line versus StaffLine versus Staff Line groups are responsible for the primary purposes of the Line groups are responsible for the primary purposes of the
firm whereas staff groups are responsible for secondary firm whereas staff groups are responsible for secondary purposes.purposes.
A. J. DuBrin, Fundamentals of Organizational Behavior, Second Edition. Copyright © 2002 by South-Western. 12–16
Functional DepartmentalizationFunctional Departmentalization
President
Vice President
Finance and
Chief Financial
Officer
Vice President
Human
Resources
Vice President
Engineering
Vice President
Operations
Vice President
Marketing
EXHIBITEXHIBIT12-212-2
A. J. DuBrin, Fundamentals of Organizational Behavior, Second Edition. Copyright © 2002 by South-Western. 12–17
Product-ServiceProduct-ServiceDepartmentalizationDepartmentalization CEO
Vice President
Human
Resources
Vice President
Engineering
Vice President
Operations
Vice President
Marketing
Human ResourcesEngineeringOperationsMarketing
Small
Appliance
Division
Large
Appliance
Division
Real Estate
Development
Division
Airplane
Engines
Division
EXHIBITEXHIBIT12-312-3
A. J. DuBrin, Fundamentals of Organizational Behavior, Second Edition. Copyright © 2002 by South-Western. 12–18
HybridHybridOrganization Organization StructureStructure
CEO
Vice President
Palm-Size
Computers
Vice President
Printers
Vice President
Desktop
Computers
DomesticInternational
OperationsMarketing
and
Sales
Human
Resources
Manufacturing Logistics Compensation Training
and Development
EXHIBITEXHIBIT12-412-4
A. J. DuBrin, Fundamentals of Organizational Behavior, Second Edition. Copyright © 2002 by South-Western. 12–19
Mixed Organizing at Various Levels Mixed Organizing at Various Levels
CEO
Vice PresidentProduct Planning
Vice PresidentSales
SalesManagerSouth
SalesManagerWest
ExecutiveVice PresidentSales and Marketing
ExecutiveVice PresidentProduct Planning and Design
ExecutiveVice PresidentOperations
Vice PresidentMarketing Vice President
Manufacturing
Vice PresidentInformationSystems
SalesManagerEast
SalesManagerMidwest
ManagerSpecialProjects
ManagerAdvancedPlannning
ManagerEnvironmentalRegulations
ManagerCurrentProductPlanning
EXHIBITEXHIBIT12-4A12-4A
A. J. DuBrin, Fundamentals of Organizational Behavior, Second Edition. Copyright © 2002 by South-Western. 12–20
Key Modifications to the Bureaucratic Key Modifications to the Bureaucratic StructureStructure
Matrix OrganizationMatrix Organization Is a project structure superimposed on a functional Is a project structure superimposed on a functional
structure to take advantage of new opportunities and solve structure to take advantage of new opportunities and solve special problems.special problems.
Projects are temporary groups of specialists working under Projects are temporary groups of specialists working under one manager to accomplish a fixed objective such as one manager to accomplish a fixed objective such as launching a new product.launching a new product.
Matrix structure creates a dual reporting challenge—the Matrix structure creates a dual reporting challenge—the involved employees may have to report to two bosses.involved employees may have to report to two bosses.
A key advantage is to implement projects quickly.A key advantage is to implement projects quickly.
A. J. DuBrin, Fundamentals of Organizational Behavior, Second Edition. Copyright © 2002 by South-Western. 12–21
Matrix OrganizationMatrix Organizationin an Electrics in an Electrics CompanyCompany
Quality
Analyst
Information
Systems
Specialist
Marketing
Specialist
Operations
Technician
Electrical
Engineer
Laptop
Computer
Project
Quality
Analyst
Information
Systems
Specialist
Marketing
Specialist
Operations
Technician
Electrical
Engineer
Cellular
Phone
Project
Quality
Analyst
Information
Systems
Specialist
Marketing
Specialist
Operations
Technician
Ho
rizo
nta
l F
low
of
Pro
jec
t A
uth
ori
ty a
nd
Re
sp
on
sib
ilit
y
Electrical
Engineer
Personal
Digital
Assistant
Project
QualityInformation
SystemsMarketing
President or
General Manager
OperationsElectrical
Engineer
Vertical Flow of Functional Authority and ResponsibilityEXHIBITEXHIBIT
12-512-5
A. J. DuBrin, Fundamentals of Organizational Behavior, Second Edition. Copyright © 2002 by South-Western. 12–22
Flat Organizational Structures and Flat Organizational Structures and DownsizingDownsizing Flat OrganizationFlat Organization Has relatively few levels.Has relatively few levels. Is less bureaucratic because:Is less bureaucratic because:
There are few managers available to review decisions.There are few managers available to review decisions. Short chain-of-command creates less concern about Short chain-of-command creates less concern about
authority differences among people.authority differences among people. Are more efficient than tall organizations.Are more efficient than tall organizations. Requires that managers be conscious of the effects that Requires that managers be conscious of the effects that
downsizing to a flatter structure has on surviving downsizing to a flatter structure has on surviving employees.employees.
A. J. DuBrin, Fundamentals of Organizational Behavior, Second Edition. Copyright © 2002 by South-Western. 12–23
Outsourcing as an Organizational Outsourcing as an Organizational ArrangementArrangement
OutsourcingOutsourcing Is having work done by other organizations.Is having work done by other organizations. Is a method of dividing the work between groups on the Is a method of dividing the work between groups on the
outside with groups on the inside.outside with groups on the inside. Reduces the need for employees and physical assets and Reduces the need for employees and physical assets and
reduces payroll costs.reduces payroll costs. Can create ethical dilemmas for companies who have no Can create ethical dilemmas for companies who have no
control over the actions of their outsourcing suppliers.control over the actions of their outsourcing suppliers.
A. J. DuBrin, Fundamentals of Organizational Behavior, Second Edition. Copyright © 2002 by South-Western. 12–24
Leading-Edge Organizational Leading-Edge Organizational StructuresStructures The Horizontal StructureThe Horizontal Structure Is the arrangement of work by teams that are responsible Is the arrangement of work by teams that are responsible
for accomplishing a process.for accomplishing a process. Is a structure in which employees take collective Is a structure in which employees take collective
responsibility for customers.responsibility for customers.
ReengineeringReengineering Is the radical redesign of work to achieve substantial Is the radical redesign of work to achieve substantial
improvements in performance.improvements in performance. Searches for the most efficient way to perform a task.Searches for the most efficient way to perform a task. Organizes work horizontally rather than vertically.Organizes work horizontally rather than vertically.
A. J. DuBrin, Fundamentals of Organizational Behavior, Second Edition. Copyright © 2002 by South-Western. 12–25
A Horizontal StructureA Horizontal Structure
Customer
Request
Order
FulfillmentOperations
Specialist
IT
Specialist
Finance
Specialist
Marketing
Specialist
EXHIBITEXHIBIT12-612-6
A. J. DuBrin, Fundamentals of Organizational Behavior, Second Edition. Copyright © 2002 by South-Western. 12–26
The Network StructureThe Network Structure
A Network Structure (or virtual organization)A Network Structure (or virtual organization) Is a temporary association of otherwise independent firms Is a temporary association of otherwise independent firms
that are linked by technology to share resources and that are linked by technology to share resources and markets.markets.
Is horizontally oriented.Is horizontally oriented. Requires that its members Requires that its members
trust one another.trust one another.
A. J. DuBrin, Fundamentals of Organizational Behavior, Second Edition. Copyright © 2002 by South-Western. 12–27
Organigraphs: Drawing How Companies Organigraphs: Drawing How Companies Really WorkReally Work
OrganigraphsOrganigraphs Maps that provides an overview of the company’s functions Maps that provides an overview of the company’s functions
and the way people organize themselves at work.and the way people organize themselves at work. Help understand organizational functioning.Help understand organizational functioning. Assist in expanding into new markets and opportunities.Assist in expanding into new markets and opportunities. Exhibit 12-7 in the textbook depicts the current Exhibit 12-7 in the textbook depicts the current
configuration of a bank and strategic options for altering the configuration of a bank and strategic options for altering the structure of the organization.structure of the organization.