Organiza onal Structure BMGT 364 Managing People and Organizations Example Norris Company Central Plant Case The Missing Time Ques ons What s wrong with Chet the plant manager How can we improve the situa9on Copyright 2012 Copyright 2012 What is Organiza onal Structure Organiza onal Structure is A formal delinea9on of how tasks are divided grouped and coordinated within an organiza9on Key Facts Usually represented in a organiza onal chart Shows the basic repor ng rela onships and task ows Copyright 2012 Copyright 2012 Importance of Organiza onal Structure Directly in uences behaviors of individuals and groups in organiza ons By de ning the basic tasks and the task rela onships among individuals and groups A wrong or ine cient organiza onal structure constantly interrupts organiza onal func oning OFen become a main source of burnout and con icts between individuals or groups People are usually unaware of the source of the problems Key Design Elements 1 Specializa9on the degree to which tasks are subdivided into separate jobs under over specializa on It increase e ciency but reduces exibility and mo va on 2 Departmentaliza9on the basis by which jobs are primarily By func on product geography process and customer 3 Chain of Command linkages between individuals that de nes who reports to whom which extends from the top to the boQom of the organiza on Unity of command one person should have only one primary supervisor increases accountability Strong impact on organiza onal performance grouped together Copyright 2012 Copyright 2012 1 Contras ng Spans of Control Key Design Elements 4 Span of control the number of subordinates that a manager oversees Too small 4 costly too large 12 out of control 5 Centraliza9on decentraliza9on the degree to which decision making is concentrated at a single point in spread throughout the organiza on It increases control and accountability but slows decisions and reduces empowerment 6 Formaliza9on the degree to which jobs within the organiza on are standardized e g rules and policies It increases control and accountability but reduces exibility and empowerment Copyright 2012 Copyright 2012 Team Discussion Discuss this case with your team Develop specific recommendations to address the problems in the current organizational structure 10 min Be sure to apply the six key design elements Types of Organiza onal Structure 1 Mechanis c vs Organic Structure 2 Growth and Structures Simple Func onal Market oriented and Matrix 3 New Forms Virtual and Ambidextrous Organiza ons Copyright 2012 Copyright 2012 1 Mechanis c vs Organic Structures Environment Strategy and Structure Environment Stable Certain Dynamic Uncertain Innova on Hybrid Organic Strategy Cost e ciency Mechanis c Hybrid Copyright 2012 Copyright 2012 2 2 Growth and Structures Time Size 2 Growth and Structures Time Size Growth Strategy Structure Phase 1 Crea vity Simple Informal founder centered Crisis Leadership Growth Strategy Structure Phase 1 Phase 2 Crea vity Direc on Simple Informal founder centered Func onal Specialized formalized Crisis Leadership Autonomy Copyright 2012 Copyright 2012 2 Growth and Structures Time Size Growth Strategy Structure Simple Informal founder centered Func onal Specialized formalized Market oriented Decentralized 2 Growth and Structures Time Size Phase 4 Growth Strategy Structure Simple Informal founder centered Func onal Specialized formalized Market oriented Decentralized Matrix cross functional teams Phase 1 Phase 2 Phase 3 Phase 1 Phase 2 Phase 3 Crea vity Direc on Delega on Crea vity Direc on Delega on Coordina on Crisis Leadership Autonomy Control Crisis Leadership Autonomy Control Collaboration Copyright 2012 Copyright 2012 3 New Organiza onal Forms 3 New Organiza onal Forms Virtual Organiza on A small core organiza on that outsources its major business func ons Highly centralized with liQle or no departmentaliza on Coordinated by informa on technology Ambidextrous Organiza on Create segregated business units for exploring and developing breakthrough innova ons organic structure While keeping exis ng business units in tact to exploit the exis ng mature markets mechanis9c structure Execu ve leadership integrate both types of business units and manage the balance Execu ve Team Exis ng Units Emerging Units Copyright 2012 Copyright 2012 3
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