Chapter 6 - Differentiating between positions

Part 1 Org Structure.mp4 - Google Drive 1. Job/Work Specialization (Division of Labor)

Part 2 Org Structure.mp4 - Google Drive - The degree to which the overall task of the
organization is broken down and divided into smaller
Organization Structure and Design component parts.

Benefits of Specialization
- workers can become proficient at a task.
- transfer time between tasks is decreased
- specialized equipment can be more easily
developed
- employee replacement becomes easier

Limitations of Specialization
- employee boredom and dissatisfaction with
mundane tasks
- higher absenteeism and lower quality of work
- overspecialization
Organizing

Managing the basic frameworks that organizations use

to get work done is a fundamental management
process.

Organizing = third function of management

- Making sure that necessary human and physical
resources are available to carry out a plan to achieve
organizational goal.

- ensuring that tasks have been assigned and

structure of relationships created meeting
organizational goals.
Alternatives to Job Specialization
The Basic Elements of Organizing
Job Rotation
Organizational Structure
- Moving employees from one job to another
- the formal arrangement of jobs within an
organization Job Enlargement
- the vertical and horizontal configuration of - Increases the total number of tasks that workers
departments, authority, and jobs within a company perform
- is concerned with questions such as “who reports
Job Enrichment
to whom?,” “ what does what?” and “where is the
- Increasing both the number of tasks and the
work done?”
control the worker has over the job
Organization Structure and Design
Work Teams
- the overall set of structural elements that can be
- Allows an entire group to design the work system it
used to configure the total organization
will use to perform an interrelated set of tasks
- a means to implement strategies and plans to
achieve organizational goals Job Characteristics Approach
- the formal arrangement of jobs within an - Jobs should be diagnosed and improved along 5
organization dimensions, considering the work system and
employee preferences
***Once the manager has formulated it’s strategies and
plans, then it has to be implemented. How? By Job Characteristics: Core Dimensions
identifying resources or human resources and assigning
tasks to these people, and assigning budget or Skill Variety
allocation of resources in order to perform the different - the number of things/tasks a person does in a job
tasks so that the mission or objectives of organization is Task Identity
achieved.*** - the extent to which the worker does a complete or
The Basic Elements of Organizing identifiable portion of the total job

- Job Specialization (Designing Jobs) Task Significance

- Departmentalization (Grouping Jobs) - the perceived importance of the task by the worker
- Establishing reporting techniques (Chain of Autonomy
Command) - the degree of control the worker has over the work
- Distributing Authority is performed
- Coordinating Activities
 Feedback Product Departmentalization
- the extent to which the worker knows how well the
The grouping of activities around products or product
job is being performed
groups
Growth Need Strength
Advantages
- the desire for people to grow, develop, and expand
- All activities associated with one product can be
their capabilities that is their response to the core
integrated and coordinated
dimensions
- Enhanced speed and effectiveness of decision
2. Departmentalization (Grouping Jobs) making
- Performance of individual products of product
Departmentalization
group can be assessed
- the process of grouping jobs according to some
logical arrangement Disadvantages
- the process of subdividing work into departments - Managers may focus on their product to the
exclusion of the rest of the organization
Rationale for Departmentalization
- Administrative costs may increase due to each
- Organizational growth exceeds the owner-
department having its own functional-area experts
manager’s capacity to personally supervise all of the
organization Customer Departmentalization
- Additional managers are employed and assigned - The grouping of activities to respond to and interact
specific employees to supervise with specific customers and customer groups

Advantage
- Skilled specialist can deal with unique customers
or customer groups

Disadvantage
- A large administrative staff is needed to integrate
activities of various departments
- Duplication of resources; difficulty in coordination
across different departments
- Workers might please customers but hurt
business

Functional Departmentalization Location Departmentalization

- The grouping of jobs on the basis of defined
The grouping of jobs involving the same or similar
geographic sites or areas
activities
Advantage
Advantages
- Enables the organization to respond easily to
- Each department can be staffed by functional-
unique customer and environmental characteristics
area experts
- Supervision is facilitated in that managers only Disadvantage
need to familiar with a narrow ser of skills - Large administrative staff may be needed to keep
- Coordination inside each department is easier track of units scattered locations
- Efficiencies from putting together similar
3. Establishing Reporting Relationships (Chain of
specialties and people with common kills,
Command)
knowledge, and orientations
- Coordination within functional area Chain of Command
- In-depth specialization - the continuous line of authority that extends from
upper levels of an organization to the lowest levels
Disadvantages
of the organization and clarifies who reports to who
- Decision making becomes slow and bureaucratic
- a clear and distinct line of authority among the
- Employees narrow their focus to the department
positions in an organization
and lose sight of organizational goals
- Accountability and performance are difficult to
monitor
- Poor communication across functional areas
Unity of Command converted to flat structure-relatively few layers
- each person within an organization must have a - Too little hierarchy don’t get decisions made or are
clear reporting to one and only one boss made wrongly by employees who lack experience,
accountability, or motivation to do the work of the
Scalar Principle
missing managers
- there must be a clear and unbroken line of
authority that extends from the lowest to the 4. Distributing Authority
highest position in the organization
Authority
WHY DO WE HAVE TO REPORT ONLY TO ONE BOSS? - power that has been legitimized by the
organization
Span of Control
- establishing reporting relationships by determining Delegation
how many people will report to each manager. - the process by which a manager assigns a portion
of his or her total workload to others
Width of span is affected by:
- skills and abilities of the manager Reasons for Delegation:
- employee characteristics - to enable the manager to get more work done by
- characteristics of the work being done utilizing the skills and talents of subordinates
- similarities of tasks - to foster development of subordinates by having
- complexity of tasks them participate in decision making and problem
- physical proximity of subordinates solving
- standardization of tasks

Tall versus Flat Organizations

In recent years, managers have begun to focus attention

on the optimal number of layers in their organizational
hierarchy. Having more layers results in a taller
organization, whereas having fewer layers results in a
flatter organization.

Problems in Delegation

Manager
- reluctant to delegate
- disorganization prevents planning work in advance
- subordinate’s success threatens superior’s advances
Tall Organizations has more layers than Flat - lack of trust in the subordinate to do well
Organization
Subordinate
Establishing Reporting Relationships: Tall versus Flat - reluctant to accept delegation for fear of failure
Organizations - perceives no rewards for accepting additional
responsibility
Tall Organizations - prefers to avoid any risk and responsibility
- are more expensive because of the number of
managers involved WHY ARE MANAGERS RELUCTANT TO DELEGATE?
- foster more communication problems because of - because they might be overshadowed by the
the number of people through whom information subordinates that he is delegating responsibilities.
must pass. Because if the top managers see this subordinate
performs better than manager, it’s a threat to manager
Flat Organizations that he might lose his position.
- lead to higher levels of employee morale and
productivity Distributing Authority: Decentralization and
- less bureaucratic because fewer managers review Centralization
work of others and shorter chain of command
Decentralization
- create more administrative responsibility for the
- the process of systematically delegating power and
relatively few managers
authority throughout the organization to middle and
- create more supervisory responsibility for
lower level managers
managers due to wider spans of control
- organizations in which decision-making is pushed
Flat Structures down to the managers who are closest to the action
- Organization with many layers is sometimes
Centralization
- the process of systematically retaining power and
authority in the hands of higher-level managers
- organizations in which top managers make all the
decision and lower-level employees simple carry out
those orders

Pooled interdependence
- when units operate with little interaction; their
output is pooled at the organizational level

Sequential interdependence
- when the output of one unit becomes the input for
another in a sequential fashion

Reciprocal interdependence
Factors that Influence the Amount of Centralization - when activities flow both ways between units
More Centralization Electronic Coordination Techniques
- environment is stable
- lower-level managers are not as capable or Electronic Information Technology
experienced at making decisions as upper level - e-mail and instant messaging
managers - electronic scheduling to coordinate arrangements
- lower-level managers do not want to have a say in for group meetings
decisions - local networks structures around a common web-
- decisions are relatively minor based communication system
- organization is facing a crisis on the risk of company - video-conferencing
failure - wireless networks
- company is large - social networks
- effective implementation of company strategies The Bureaucratic Model of Organization Design
depends on managers retaining say over what
happens. Bureaucracy
- a model of a logical, rational, and efficient
More Decentralization organization design based on a legitimate and formal
- environment is complex, uncertain system of authority
- lower-level managers are capable and experienced
at making decisions According to Weber, the ideal bureaucracy exhibits five
- lower-level managers want a voice in decisions basic characteristics:
- decisions are significant - The organization should adopt a distinct division of
- corporate culture is open to allowing managers to labor, and each position should be filled by an expert.
have say in what happens - The organization should develop a consistent set of
- company is geographically dispersed rules to ensure that task performance is uniform.
5. Coordinating Activities - The organization should establish a hierarchy of
positions or offices that creates a chain of command
Coordination from the top of the organization to the bottom.
- the process of linking the activities of the various - Managers should conduct business in an impersonal
departments of the organization way and maintain an appropriate social distance
The Need for Coordination: between themselves and their subordinates.
- the primary reason for coordination is that - Employment and advancement in the organization
departments and work groups are interdependent— should be based on technical expertise, and
they depend on one another for information and employees should be protected from arbitrary
resources to perform their respective activities. dismissal.
- the greater the interdependence between Bureaucratic Model
departments, the more coordination the
organization requires if departments are to be able Advantages
to perform effectively - efficiency in function
- prevention of favoritism
Three Major Forms of Interdependence - recognition of and requirement for expertise

Disadvantage
- organizational inflexibility and rigidity
 - neglect of social and human processes Predicted environmental factors have differential
- belief in “one best way” to design organizations effects on organizational units; affecting the overall
design of the organization.
The Situational influences on organization design (Part
1) - Differentiation, the extent an organization is broken
into subunits, is associated with stable environments
Situational view of organization design
- many subunits – highly differentiated (more
- based on the assumption that the optimal design
integration needed)
for any given organization depends on a set of
- few subunits – low level of differentiation
relevant situational factors
- Integration is the degree to which the various subunits
Core Technology
must work together in a coordinated fashion.
Technology
- conversion process used to transform inputs into The degree of differentiation and integration needed
outputs by an organization depends on the stability of the
Organization use multiple technologies, but an environments that its subunits face.
organization’s most important one is called its Core
* If the environment is unstable, the more there should
Technology
be integration/coordination among the subunits *
Three basic forms of technology were identified by
Effects of Size and Life Cycle
Joan Woodward.
Organizational Size and Life Cycle
1. Unit or small batch technology
– the product is custom made to customer Operational Size
specifications and produced in small quantities. - Defined as the total number of full-time of full-time
– least complex equivalent employees.
– organic – flexible and informal - Research findings:
- Small firms tend to focus on their core
2. Large batch or mass production technology
technology.
– the product is manufactured in assembly line
- Large firms have more job specialization,
fashion by combining components parts into another
standard operating procedures, more rules and
part or finished product.
regulations, and are more decentralized.
– more mechanistic structure
– formal Operational Life Cycle
- The progression of organizations as they grow and
3. Continuous process technology
mature – birth, youth, midlife, and maturity.
– raw materials are transformed to a finished
product by a series of machine Key challenge for managers is to avoid allowing mature
– most complex organization to begin to decline.
The Situational Influences on Organization Design (Part Basic Forms of Organization Design (Part 1)
2)
Functional or U-form (Unitary) Design
Environment - Organizational members and units are grouped into
functional departments
Mechanistic organization
- Most common organization design, used in simple
- Similar to the bureaucratic model, most frequently
companies or small organizations
found in stable environments
- Requires coordination across all departments
Organic organization
- Resembles functional departmentalization in its
- Very flexible and informal model of organization
advantages and disadvantages
design, most often found in unstable and
- Promotes a narrowing functional rather than
unpredictable environments
broader organizational focus
Environment–Organization Design (Burns and Stalker) - Tends to promoter centralization
- Is common in smaller organizations
Research focused on identifying extreme forms of the
organizational environment
- stable environments that remain constant over time
- instable environments subject to uncertainty and rapid
change

Organization Designs
- mechanistic organizations occur most frequently in
stable environments (stable)
- organic organizations are found in unstable and
unpredictable environments (higher level of
flexibility)
Conglomerate (H-Form) Design
Differentiation and Integration (Lawrence and Lorsch) - used by an organization made up of a set of
unrelated businesses
 - Organization consists of a set of unrelated
businesses with a general manager for each
business.
- Holding-company design is similar to product
departmentalization.
- Coordination is based on the allocation of
resources across companies in the portfolio.
- Design has produced only average to weak
financial performance; has been abandoned for
other approaches

SEARCH FOR COMPANIES AND PRODUCTS

“different departments, with different project
managers. Wherein some employees would be
reporting to under supervision of project manager at
the same time in the company"

Organization Design: Matrix Design

Advantages

- Enhances organizational flexibility.

Divisional (M-Form) Design - Fosters high motivation and increased
- Based on multiple businesses in related areas organizational commitment.
operating within a larger organizational framework; - Provide opportunity for team members to
following a strategy of related diversification. learn new skills.
- Is based on multiple businesses in related - Makes efficient use of human resources.
areas operating within a larger organizational - Allows team members to serve as bridges to
framework; following a strategy of related their departments.
diversification. - Is a useful vehicle for decentralization.
- Activities are decentralized down to the Disadvantages
divisional level; others are centralized at the
corporate level. - Employees are uncertain about reporting
- The largest advantages of the M-form design relationships.
are the opportunities for coordination and - Managers may view design as an anarchy in
sharing of resources. which they have unlimited freedom.
- The dynamics of group behavior may lead to
slower decision making, one-person
domination, compromise decisions, or a loss of
focus.
- More time may be required for coordinating
task-related activities.

Hybrid Design
- Is based on two or more organization design forms
“different hotels under one CEO”
such as a mixture of related divisions and a single
Matrix Design unrelated division.
- An organizational arrangement based on two - Most organizations use a modified form of
overlapping bases of departmentalization. organization design that permits them to have the
flexibility to make strategic adjustments.
- A set of product groups or temporary
- Combination of two designs
departments are superimposed across the
functional departments.
- Employees in the matrix become members of
both their departments and a project team
under a project manager.
- The matrix creates a multiple command
structure in which an employee reports to both
departmental and project managers.

Useful when:

- There is strong environmental pressure.

- There are large amounts of information to be
processed.
- There is pressure for shared resources.
The Future of Organization Design continually transforming itself to respond to changing
demands and needs

Characteristics of a learning organization:

- An open team-based organization design that
empowers employees
- Extensive and open information sharing
- Leadership that provides a shared vision of the
organization’s future, support and encouragement
- A strong culture of shared values, trust, openness,
and a sense of community

Today’s Organizational Design Challenges

Removing External Boundaries - Keeping Employees Connected
- Widely dispersed and mobile employees
Team Structures
- Building a Learning Organization
- The entire organization is made up of work groups or
- Managing Global Structural Issues
self-managed teams of empowered employees.
- Cultural implications of design elements
Advantages
- Employees are more involved and empowered.
- Reduced barriers among functional areas.

Disadvantages:
- No clear chain of command.
- Pressure on teams to perform.
- They are not under any line of authority, but
they are hired just to do certain responsibility.

Team organization
- An approach to organization design that relies almost
exclusively on project-type teams, with little or no
underlying hierarchy.
---
Virtual Organization
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- An organization that consists of a small core of full-
time employees and that temporarily hires specialists to
work on opportunities that arise.
- One that has little or no formal structure. Virtual, no
specific office to report to. They do not report regularly
to the office.

Network Organization
- A small core organization that outsources its
major businesses functions (e.g., manufacturing)
in order to concentrate what it does best.

Modular Organization
- A manufacturing organization that uses outside
suppliers to provide product components for its
final assembly operations.
- Mostly using outsourcing.

Boundaryless
- An flexible and unstructured organizational design that
is intended to break down external barriers between
the organization and its customers and suppliers.
- Removes internal (horizontal) boundaries.
- Eliminates the chain of command
- Has limitless spans of control
- Uses empowered teams rather than departments

Learning organization
- An organization that has developed the capacity to
continuously learn, adapt, and change through the
practice of knowledge management by employees
- One that works to facilitate the lifelong learning
and personal development of all its employees while