Video Lecture: Leader as a Structural Architect IElements of Structure:-Work specialization: how specialized are you going to make work? Starting with scientific management, work has been specialized to gain efficiency; tasks have gotten more specific; easy to train people (drives down labor cost). But recently, this has caused more turnover, and less satisfaction if it is too specialized because people get bored. Therefore, work has been at times larger. If people see work as more meaningful they are more meaningful.-Chain of Command: historically, firms had very tight chain of command with unity (1 boss with clear hierarchy) of command; this has been changing more recently, however. (last 20 years has become flexible – coordinate specialist)-Span of Control: narrow (3-4 people reporting to a boss) to broad (7+ people reporting); as spans become broader, you need less levels of management (flatter structures); historically, there has been more narrow span of control in organizations; today, with need to be more flexible, and more innovative, we have seen a more broader span of control (de-layering of hierarchy, so pushing management down into teams/groups). -Centralization/Decentralization: where you put power in firm; if centralized, it is locatedin a few positions near top of hierarchy; historically, firms were more centralized; can getaway with this if there are few changes; in past 20-30 years, there has been a movement toward pushing power lower down in firm through decentralization; this allows for moreflexibility.-Formalization: how standardized jobs and tasks are; historically, we have seen highly formalized firms (common rules and procedures; it allows for high command of control); but if in a changing environment, formalized procedures break down and don’t apply to new things; so, there has been a movement away from formalization to a more flexible structure. -With these first 5 things, historically, they go together and reinforce efficiency and control and are like a bureaucracy. Recently, they have moved away from what they initially meant. -Departmentation: how you are going to group the task; how you will take your labor force and put it into meaningful groups. (Firms looking for new leaders with skills to operate new structures of flexibility)Departmentation by Function: HISTORICALLY Example: Plant Manager’s job is to manage disputes between Manager R&D, Manager Sales, Manager Production, and Manager Accounting. As you add products and services, the probability of conflict increases exponentially. Departmentation by Self-Contained Unit: Product (3 VP’s based on product – separate coordination with little conflict)President manages the vice president fuels, vice president chemicals, and vice president lubricants.VP Fuels manages R&D, Sales, and ProductionVP Chemicals manages R&D, Sales, and ProductionVP Lubricants manages R&D, Sales, and ProductionDepartmentation by Self-Contained Unit: Customer NOT HIT ON MUCHPresident manages Vice President Government Accounts, Vice President Retail Accounts, VP Wholesale Accounts.Departmentation by Self-Contained Unit: Geography NOT HIT ON MUCHPresident manages VP Asia, VP North Arctic, VP Europe, and VP South AmericaOrganization Designs:-Simple Structure-Bureaucracy-Matrix-Virtual-Boundaryless/HorizontalSimple Structure: like a small mom and pop store; start to all bureaucracy, dominant structure)-Authority is centralized in the owner (few specialized people who do everything (developing)-Informal/lack of structure-Benefits: -Inexpensive-Flexible-Costs:-Inefficient (highly)-Dependent on the ownerBureaucracy: (BECOMES when process of reducing costs over time)-Functional Departments-Standardized Tasks-High formalization and centralization-Benefits:-Efficiency (but not flexible)-Low labor costs-Costs:-Coordination problems-Rule boundMatrix Structure: combines two structures to gain their advantages -Functional and product departmentation (Possibility of conflict)-Two bosses – specialists fit area of need-Benefits: if is works (big “if”):-Coordination across multiple products/projects-Efficient allocation of specialists/professionals-Costs:-Confusion and power struggles-Leadership skills-StressUSC DEPARTMENT EXAMPLE: Undergrad, 5 MBA programs, Doctoral all have indiv. Specialist)Virtual Organization:-Small centralized core-Outsource major business function (determine what you do best as a company- EX: focus on marketing and outsource to companies who do other things better)-Benefits:-Gain scale without mass – don’t need many employees to be successful – big firms resist this structure because they like being in control-Flexible and adaptive-Can quickly access new markets-Costs:-Loss of Control-Hard to form and mange (Requires high managerial skill); requires trust (can I trust who I am outsourcing?)-Example: TelePad-They could sell anything/any product; nobody could outsell them. They wanted to make a handheld so they used outsourcing. They had GVO, Inc. make it; they used Intel engineering; they needed a battery maker to manufacture the batteries they had designed; they went to IBM plant manufacturing for help with assembling products. Boundaryless or Horizontal Organization: wants to take down boundaries-Organize around core/business processes—example: new product development, sales and order fulfillment, and customer support.-Use multi-disciplinary teams to manage processes (replace un-functional conflicts with teams and have specialists self manage with each other – de-layering management with flexibility)-Owner for each process-Reduce vertical and horizontal boundaries (reduce barriers between companies by forming alliances and cost effective, flexible structure)-Communication via networked computers-Benefits:-Highly flexible and business focused-Reduces control and coordination costs-Costs:-Difficult to implement-Requires new skills and methods-New information technologyDupont’s Horizontal Organization (look at graph on slide 28) –all have boundaries example with cross-functional teamsStructural Designs: SummaryMechanistic: High Formalization, High Centralization (Bureaucracy), High Specialization, Narrow Span of ControlOrganic: Low Formalization, High Decentralization (Simple Structure, Matrix Structure, Virtual Organization, Boundaryless/Horizontal Organization), informal and innovative, wider span and less specialization, team-based/Determinants of Structure:-Strategy (structure follows