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Basics of Structure and
DesignBusiness Organisation 2012
Robert Westwood
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Reading
Daft et al (2010) Chapter 3
n ngs, . rgan sa on. n . es woo .
Clegg (eds) Debating Organisation: Point-Counterpoint in
Organisation Studies. $p2%&'22. ford* Bla+well
-nro, R. (2003) Disorganisation. !n R. Westwood " #.
Clegg (eds) Debating Organisation: Point-Counterpoint in
Organisation Studies. $p23'2/%. ford* Bla+well
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ObjectivesAfter completing this module you should be able to:
8
Define and understand organisational structure8Appreciate and describe how structure affects processes
and behaviour
8now what type of factors help to determine and change
organisational structure8!nderstand the core elements of
organisational structure:
comple"ity# centralisation and formalisation
8now how some generic configurations of organisation are
formed
8Describe changes and trends in organisational forms and
configurations
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Organisation as $orld%&a'ing
rganisation is the +aring ot of order fro an
otherwise +haoti+, in+hoate world of fl and transien+e.
We ipose or ins+ribe order on disorder
We, literall, ae or world throgh the +onstr+tion
of order and organisation
Chia, Robert (2003a) ntolog* rganiation as 4World'-aing5. !n R.!.
Westwood and #. Clegg (eds) Debating Organization: Point-
Counterpoint in Organization Studies. $p. /'113. ford* Bla+well.
6ote the two readings also
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(ell: A )rotological Organisation
Circles of Hell in Dantes Inferno
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Defining and clarifying structure
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Organisational Structure
All organisations have to ma'e provision for the continuingactivities directed towards the achievement of aims*
Regularities in activities such as tas' allocation# supervision
and coordination are developed* +uch regularities constitute
the organisation,s structure# and the fact that these activitiescan be arranged in various ways means that organisations can
have differing structures
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Structure and Performance
An effective and appropriate structure is vital to
organisational performance and success*
Organisations need to adapt their structures asconditions change
An effective structure depends upon ma'ing the rightchoices and decisions and achieving an effectiveconfiguration
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Complexityvertical and horizontaldifferentiation, personnel ratios
Basic -lements of +tructure
Formalisation
Centralisation
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Differentiation and .ntegration
-"tent of hierarchical structure
+tructural /omple"ity
Degrees of specialisation of tas' or function
orms of departmentation
(ow much 3ob4tas' definition
-"tent and 5ature of .ntegration5ature and e"tent of interdependence betweenprocesses4units
!se of lin'ing devices
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he !xistence, !xtent an Deployment of "olicies,
"rocedures, and #ules $hich %uide, Direct and&or
ormalisation
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/entralisation
he degree to (hich formal authority to ma)ediscretionary choices is concentrated in an
individual, unit or level, thus permitting
employees minimum input into their (or)*
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he strategic choice of organisational
structure+
7 -anageent theor sggests that organisational str+tres are the
reslt of high'leel rationaldesign pro+esses, whi+h attept to best
match a parti+lar organisational str+tre to the contingencies that the
organisation fa+es.
7 Brns and #taler (1/81), for instan+e, is a +lassi+ tet in this regard,
whi+h arged that*
rganisational str+tres follow the enironent in whi+h the
operate. 9hose that operate in stable, +ertain, rotine enironents (shold)
adopt a mechanistic, or traditional brea+rati+, str+tre.
9hose that operate in nstable, n+ertain and dnai+ enironents
(shold) adopt a ore organic, fleible, flid or looser str+tre.
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A Reminder
Vertical
Structure
Horizontal
Structure
Mechanistic System
Paradigm
rgani+ #ste
$aradig
RoutineTasks
RigidCulture
Competitive
Strategy
Formal
Systems
AdaptiveCulture
EmpoweredRoles
CollaborativeStrategy
Shared
Information
Organizational Changein the service of
performance andsurvival
Stable !nvironment
!fficient "erformance
urbulent !nvironment
earning Organization
Source: Adapted from David K. Hurst, Crisis and Renewal: Meeting the Challenge of Organizational Change
(Boston, Mass.: Harvard Business School) 2001
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+i6e of
Organisation
External contingencies and their effect on choice of
organisational structure.
More professional orcreative workers may needand want greater autonomyand discretion: tightlybureaucratic structuresmay not suit.
Complexity increases withsize (numbers ofemployees) and requiresmore formalization,
standardization andformalization: so a morebureaucratic structuremay be needed.
#tr+tre 7echnology
-nvironment
7he natureof the
wor'force
Organizations with moreroutinized technologies aremore suited to bureaucraticstructures.
Stable, certain and predictableenvironments suit simple andbureaucratic structures,turbulent environments requiremore adaptable structures
such as matrix structures.
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Organisational structure
and the shaping of the individual
Organisational structures have an immediateand direct impact on people in the organisation
Structures are constraining but also enabling
organisational structures can function in subtleways to change and shape the individuals who
.
Such that these individuals police and controlthemselves in the organisationally desired way.
McKinlay (2002), for example, provides an
excellent historical discussion of the ways thatthe a bureaucratic notion of career helped tochange bank workers in just such a way.
McKinlay, A. Dead Selves: The birth of the
modern career.Organization, 2002, 9, 595614.
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Organization Design 'lternatives9hree es indi+ators of organiation design
Re8uired wor' activities
Reporting relationships
% Functional grouping
- Divisional grouping
- Multi-focused grouping
- Horizontal grouping
- Virtual network grouping
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Departmental %rouping Options
Functional Divisional Multifocused
HorizontalGrouping
Virtual NetworkGrouping
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Functional vs* DivisionalStructure -!xample
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Functional Structure
+trengths
:llows e+onoies ofs+ales within fn+tional
$ea'nesses
#low response tie toenironental +hanges
epar en s ;nables in'depth
nowledge and silldeelopent
;nables organiations to
a++oplish fn+tionalgoals
!s best with onl one or afew prod+ts
a +ase e+ s ons opile on top, hierar+hoerload
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Divisional Structure
+trengths
#ited to fast +hange innstable enironent
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.ulti-Focused Structures
rganiing to eet needs of sers=+stoers b geograph, aret+hannel, aret segent.
-an ltinational +orporations are organied b +ontr or
aret
!t is also parti+lar +oon in large nonprofit organiations in
ters of geograph
>o+ses anagers and eploees on spe+ifi+ geographi+ regions or
aret +hannels or segents
#trengths and weanesses siilar to the standard diisional
organiation
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Matrix structure
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.atrix Structure
+trengths
:+hiees +oordination to eetdal deands
$ea'nesses
Dal athorit +ase+onfsion
e e s ar ng o an
resor+es a+ross prod+ts
#ited to +ople de+isions andnstable enironent
$roote fn+tional and prod+t
sill deelopent
Best in edi'siedorganiations with ltipleprod+ts
6eed good interpersonal sillsand etensie training
9ie +onsing
6eed +oon nderstanding
aong parti+ipants Re?ires great effort to
aintain power balan+e
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1. Restructuring and downsizing
2. Horizontal, Process & Re-engineering designs and
/ontemporary 7rends and orms
organ sa ons
High performance organisations
3. Boundarless and !irtual organisations
". #etwor$ed and %odular organisation
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/orizontal Structure
Organi6ation around core processes* ey characteristics:
' #tr+tre is +reated arond +ross'fn+tional pro+esses
' #e ' ire+te teas are t e asis o organiation esign an
perforan+e
' $ro+ess owners are responsible for entire pro+ess
' $eople on the tea are gien athorit for de+isions
' Can in+rease organiation5s fleibilit
' Cstoers drie the horiontal +orporation.' 9he +ltre prootes openness, trst and +ollaboration.
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/orizontal Structure
+trengths
$roote fleibilit and rapid
response to +hanges
$ea'nesses
Deterining +ore pro+esses
is diffi+lt and tie
>o+s on the prod+tion and
delier of ale
;a+h eploee has a broader
iew of organiation goals
$rootes a fo+s on teaworand +ollaboration
!proes ?alit of life for
eploees
+onsing
Re?ires an +hanges
9raditional anagers a
bal when the hae to gie
p power and athorit
Re?ires signifi+ant trainingof eploees
Can liit in'depth sill
deelopent
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Sample /orizontal&"rocess
Structure
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"rocess team design
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0irtual, Boundary-less or 1et(or)Structures
;tends the +on+ept ofhoriontal +oordination and+ollaboration beond thebondaries of the organiation.
9he irtal networorganiation seres as a +entralhb with +ontra+ted eperts
;nabled b new te+hnolog
@irtal in sense of a
+oni+ation networ for
@irtal in the sense of a
teporar +oales+en+e of
eleents to prse a proAe+t
sb+ontra+t ost of its aAorfn+tions to separate +opanies
Coon ariant is outsourcing
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0irtual, Boundary-less or 1et(or)Structures
+trengths
;nables organiations to
obtain talent and resor+es
$ea'nesses
-anagers do not hae
hands'on +ontrol oer anwi e wor wi e
ies a +opan iediates+ale and rea+h withot hge
inestents
;nables the organiation to
be highl fleible andresponsie to +hanging
needs
Red+es adinistratie +ost
a+tiities and eploees
Re?ires a great deal of tie
to anage relationships
Ris of organiational failre
;ploee loalt and
+orporate +ltre ight be
wea
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/ybrid Structure
rganiations often se a hbrid str+tre that+obines +hara+teristi+s of arios str+tre
approa+hes tailored to spe+ifi+ needs
ne +oon tpe is the +obination of the
fn+tional and diisional str+tres.
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Core
'
Semi-periphery
Periphery
rced
Casu
#ei'peripherse$eripher>n+tionalfleibilit
Part-time, contractedJob-sharing
Outsou
al
Sub-contractors
Agency temporaries
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Evolution of Organisational FormsProduct/Market strategy Organisation structure Core activity and control
system
1800> Single product or
serviceLocal/regional markets
Agency Personal direction and
control
1850> Limited, standardisedproduct/service line
Functional Centralised, differentiatedinto functional units,formalisation.,
markets
1900> Diversified, changingproduct/service line
National, international
Divisional Corporate policies anddivisional profit centres
1950> Standard andinnovative productsand services
Stable and changingmarkets
Matrix Temp teams and lateralallocation devices
2000> Product or servicedesign
Global, changingmarkets
Dynamic network Temporary networkstructures, shared info,
mutuality andcollaboration
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1ext opic - 2* 3ob Design and
the .eaning of $or)
Daft et al (2010) Chapter 3
#inger, . " Dal, #. (2000) 4High $erforan+e $artnering b
#elf -anaged 9eas in -anfa+tring5. Engineering
Management Journal, 12()* /'1&. EHarle Daidson Case
Gnights, D. " -+Cabe, D. (2000). Bewit+hed, bothered and
bewildered* 9he eaning and eperien+e of teaworing for
eploees in an atoobile fa+tor. uman !elations, &3(11),
11'1&1%
-orin, ;.-. (200) 49he eaning of wor in odern ties5,
paper presented at the 10th World Congress on Han
Resor+es -anageent, Rio de aneiro, Brail, :gst, 20th,
200.