Chapter 13 Organizational Structure and CultureIntegrated Portfolio at FedExFedEx OrganizationOrganizational Structure and CultureKnowledge ObjectivesFundamental Elements of Organizational StructureStructural CharacteristicsSpan of ControlFunctional OrganizationDivisional OrganizationStructuring CharacteristicsThe Modern OrganizationFreedomFactors Affecting StructureDiversification Strategy and StructureBusiness StrategyIDEO and Differentiation StrategyEnvironment and Basic StructureEnvironment and IntegrationAlternative Lateral ProcessesTechnology and StructureSlide 22Organizations and TechnologyGoogle Culture Attracts High-Quality AssociatesDeveloping Organizational CultureOrganizational CultureCultural SocializationCultural AuditFinding a Fit at Home DepotPerson-Organization FitTypes of Personal ValuesThe Strategic LensQuestions13-1Michael A. HittC. Chet MillerAdrienne ColellaChapter 13 Organizational Organizational Structure Structure and Cultureand CultureSlides by Ralph R. Braithwaite13-2Integrated Portfolio at FedExIntegrated Portfolio at FedExExploring Behavior in ActionWith all the acquisitions by FedEx, there was a need to change their structure. It adopted a multi-divisional structure. Corporate provides strategic direction and consolidated financial reporting. Significant authority has been delegated to the divisions. Each division manages its own specialized network of services.Do you know of other companies that operate in a similar fashion?Is this a good model for organizations to follow as they grow and develop?13-3FedExFreightFedExSupplyChainFedExKinko’sServicesFedExExpressFedExFedExCorp.Corp.FedExCustomCriticalFedExTradeNetworkFedExGroundFedEx OrganizationFedEx Organization13-4Organizational Structure and Organizational Structure and CultureCultureOrganizationalStructureOrganizationalCultureThe formal system of work roles andauthority relationships that governhow associates and managersinteract with one another.Involves the values and normsshared by managers and associatesthat influence behavior. It is apowerful force in organizations.13-5Knowledge ObjectivesKnowledge Objectives1. Define key elements of organizational structure, including both structural and structuring dimensions.2. Explain how corporate and business strategies relate to structure.3. Explain how environment, technology, and size relate to structure.4. Define organizational culture, and discuss the competing-values cultural framework.5. Discuss socialization.6. Describe cultural audits and subcultures.7. Explain the importance of a fit between individual values and organizational culture.13-6Fundamental Elements of Fundamental Elements of Organizational StructureOrganizational StructureStructural CharacteristicsStructuring CharacteristicsHierarchy13-7Structural CharacteristicsStructural CharacteristicsSpan of ControlHeightDepartmentation13-8Span of ControlSpan of ControlAdapted from Exhibit 13-1: Average Span of Control: Effects on Height of the HierarchyAverage span of Four Average span of TenHighestLowestOrganizational Level1000100101Associates250631741Associates100013-9Functional OrganizationFunctional OrganizationAdapted from Exhibit 13-2: Simplified Functional OrganizationVPResearch andDevelopmentVPResearch andDevelopmentVPOperationsVPHumanResourcesVPFinanceVPMarketingCEO13-10Divisional OrganizationDivisional OrganizationAdapted from Exhibit 13-3: Simplified Divisional OrganizationCEOHead of OperationsHead of R&DHead of Human ResourcesHead of FinanceHead of MarketingV.P. Product/Service Area 1Head of OperationsHead of R&DHead of Human ResourcesHead of FinanceHead of MarketingV.P. Product/Service Area 1Head of OperationsHead of R&DHead of Human ResourcesHead of FinanceHead of MarketingV.P. Product/Service Area 113-11Structuring CharacteristicsStructuring CharacteristicsCentralizationStandardizationFormalization Specialization13-12The Modern OrganizationThe Modern OrganizationFlexible empowering type of structureOrganicLearningBoundarylessMechanisticNon-LearningTraditionalFewer management levels, broader spans of control, less centralization, standardization, formalization and specialization.13-13FreedomFreedomSubstantial freedom may exist, but1. Freedom is not unlimited2. Alternative mechanisms are used to ensure that individuals are working for the good of the organization3. Values are shared4. Reward systems are used to promote appropriate behavior13-14Factors Affecting StructureFactors Affecting StructureCorporateStrategyGrowthDiversification13-15Diversification Strategy and Diversification Strategy and StructureStructureAdapted from Exhibit 13-4: Matches between Diversification Strategy and StructureHolding CompanyUnrelated productDivisionalUnrelated productDivisionalRelated productDivisionalDominant product (several products)FunctionalDominant product (few products)FunctionalSingle productStructureDiversification13-16Business StrategyBusiness Strategy•Low cost/low price•Product/service differentiation•Supporting structure including strategic business units – SBUsHow a firm competes for success against other organizations in a particular market.13-17ExperiencingStrategic OBIDEO and Differentiation StrategyIDEO and Differentiation StrategyIDEO demonstrates a differentiation strategy, highlights that occasionally organizations supplement their human capital, and they value teams with diverse members.Is this an effective approach to business?How can this approach help other businesses and organizations?What are your thoughts about IDEO’s approaches:•Form a diverse team•Team members brainstorm•Team members engage in rapid prototyping•Team members implement the fruits of their labors13-18Environment and Basic Environment and Basic StructureStructure•Effective organizations experiencing high environmental uncertainty tend to be more organic. •Effective organizations experiencing low environmental uncertainty tend to be less organic.Environmental uncertainty – the degree to which an environment is complex and changing; uncertain environments are difficult to monitor and understand.Jay W. LorschPaul R. Lawrence13-19Environment and IntegrationEnvironment and IntegrationAdapted from Exhibit 13-5: Integration in OrganizationsSlack ResourcesSelf-Contained TasksInformation TechnologyLateral RelationsIncreasing Implementation ComplexityIncreasing Richness of Information Processing13-20Alternative Lateral ProcessesAlternative Lateral ProcessesLiaison RolesDirect
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