Post on 14-Dec-2015
Chapter Two
Simple Ideas, Complex Organizations
Properties of Organizations
Organizations are ComplexHuman behavior is difficult to predictAlmost anything can affect anything else in collective activity
Organizations are SurprisingYesterday’s solutions creating future impediments
Organizations are DeceptiveDefy expectations, camouflage surprisesTendency to attribute things to personalityCultural taboos
Properties of Organizations
Organizations are AmbiguousWe aren’t sure what the problem is. . .We aren’t sure what is really happening. . .We aren’t sure what we want . . .We don’t have the resources we need. . .We aren’t sure who is supposed to to what. . .We aren’t sure how to get what we want. . .We aren’t sure how to determine if we’ve succeeded. . .
Fallacies in Organizational Diagnosis
People BlamingBlame the BureaucracyThirst for Power
The Structural Frame
Structural ImperativesSizeAgeCore ProcessesEnvironmentStrategy and GoalsInformation TechnologyNature of the Workforce
Structural Dilemmas
DifferentiationIntegrationGaps and overlapsPersonnel underuse vs. overloadLack of clarity versus lack of creativityAutonomy vs. interdependence
Structural Dilemmas
Loose/tightDiffuse authority vs. overcentralizationGoalless vs. goalboundIrresponsible/unresponsive
Organizational Design DefinedOrganizational Design Defined
The way in which the activities of an organization are arranged and coordinated so
that its mission can be fulfilled and its goals achieved
Components of Organizational DesignComponents of Organizational Design
Organizational StructureDefines the primary reporting relationships that exist within an organization.Common forms of organizational structure:
Functional structureDivisional structureMatrix structureNetwork structure
Mintzberg’s Fives
Elements of DesignOperating CoreMiddle LineStrategic ApexTechnostructureSupport Staff
Mintzberg’s Fives
Five Basic StructuresSimple StructureMachine BureaucracyProfessional BureaucracyDivisionalized FormAdhocracy
Functional Structure Slide 1 of 3
Functional Structure Slide 1 of 3
Members of the organization are grouped according to the particular function that they perform within the organizationAppropriate when an organization’s greatest source of complexity comes from the diverse tasks that must be performed rather than from its products, geographic markets or consumer groups
Functional Structure Slide 2 of 3
Functional Structure Slide 2 of 3Advantages
Facilitates specializationCohesive work groupsImproved operational efficiency
DisadvantagesFocus on departmental vs. organizational issuesDifficult to develop generalists needed for top managementOnly top management held accountable for profitability
Functional Structure Slide 3 of 3
Functional Structure Slide 3 of 3
Coors Brewing Company
CEOCEO
SalesSales FinanceFinanceHRMHRMR & DR & D
Divisional Structure Slide 1 of 6
Divisional Structure Slide 1 of 6
Members of the organization are grouped on the basis of common products, geographic markets, or customers servedTypes of divisional structures
Product divisionsMost appropriate for organizations with relatively diverse product lines that require specialized efforts to achieve high product quality.
Divisional Structure Slide 2 of 6
Divisional Structure Slide 2 of 6
Types of divisional structures (cont.)Geographic divisions
Most appropriate for organizations with limited product lines that either have wide geographic coverage or desire to grow through geographic expansion.
Customer divisionsMost appropriate for organizations that have separate customer groups with very specific and distinct needs.
Divisional Structure Slide 3 of 6
Divisional Structure Slide 3 of 6
AdvantagesEnhanced coordinationBetter assessment of manager performance and responsibilityDevelopment of generalist managers
DisadvantagesManagers may lack expertise to operate in wide geographic areasDuplication of resources
Product division
Divisional Structure Slide 4 of 6
Divisional Structure Slide 4 of 6
AdvantagesAllows for focus on specific new marketsGood structure for growth along geographic linesAdaptable to local needs
DisadvantagesDuplication of product or product/technology effortsCoordination and integration are difficult
Geographic division
Divisional Structure Slide 5 of 6
Divisional Structure Slide 5 of 6
DisadvantagesMay be difficult to manage diverse product lines
Geographic division (cont.)
Divisional Structure Slide 6 of 6
Divisional Structure Slide 6 of 6
Bowyer-Singleton and Company
CEOCEO
Land Development
Land Development
Survey & MappingSurvey & Mapping
Envir. SciencesEnvir.
Sciences
Matrix Structure Slide 1 of 3
Matrix Structure Slide 1 of 3
A structure in which the tasks of the organization are grouped along two organizational dimensions simultaneously
Examples include product/function, product/geographic region, etc.
Matrix Structure Slide 2 of 3
Matrix Structure Slide 2 of 3Advantages
Can achieve simultaneous objectives.Managers focus on two organizational dimensions, resulting in more specific job skills.
DisadvantagesComplex, leading to difficulties in implementation.Behavioral difficulties from “two bosses.”Time consuming from a planning/coordination perspective.
Matrix Structure Slide 3 of 3
Matrix Structure Slide 3 of 3
PGP, Inc.CEO
VP Cosmetics
VP Nail Care
VP Skin Care
Domestic
Europe
Asia
Network Structure Slide 1 of 5
Network Structure Slide 1 of 5
A contemporary organizational structure that is founded on a set of alliances with other organizations that serve a wide variety of functionsTypes of network structures
Internal networkA network structure that relies on internally developed units to provide services to a core organizational unit.
Network Structure Slide 2 of 5
Network Structure Slide 2 of 5
Types of network structures (cont.)Stable network
A network structure that utilizes external alliances selectively as a mechanism for gaining strategic flexibility.
Dynamic networkA network structure that makes extensive use of outsourcing through alliances with outside organizations.
Network Structure Slide 3 of 5
Network Structure Slide 3 of 5
AdvantagesMaximizes the effectiveness of the core unitDo more with less resourcesFlexibility
DisadvantagesFragmentation makes it difficult to develop control systemsSuccess is dependent on ability to locate sources
Network Structure Slide 4 of 5
Network Structure Slide 4 of 5
Disadvantages (cont.)Difficult to develop employee loyalty
Network Structure Slide 5 of 5
Network Structure Slide 5 of 5
BrokerBroker
SuppliersSuppliers
DesignersDesigners
DistributorsDistributors
ProducersProducers
Managing Complexity Through IntegrationManaging Complexity Through Integration
InterdependenceThe degree to which work groups are interrelated.
Three primary levels of work group integration
Pooled interdependenceSequential interdependenceReciprocal interdependence
Pooled InterdependencePooled InterdependenceOccurs when organizational units have a
common resource but no interrelationship with one another
Head-quarters
B
C
D
A
F
E
Sequential Interdependence Sequential Interdependence Occurs when organizational units must coordinate the flow of information, resources, and tasks from
one unit to another
A B C
Reciprocal InterdependenceReciprocal InterdependenceOccurs when information, resources, and tasks must
be passed back and forth between work groups
A
C
E F
D
B
Integrating Mechanisms Slide 1 of 2
Integrating Mechanisms Slide 1 of 2
Methods for managing the flow of information, resources, and tasks within the organizationThree major categories of integrating mechanisms
General management systemsMethods of increasing coordination potentialMethods of reducing the need for coordination
Integrating Mechanisms Slide 2 of 2
Integrating Mechanisms Slide 2 of 2
Methods of increasing
coordinationpotential
Methods of increasing
coordinationpotential
Methods of reducing the needfor coordination
Methods of reducing the needfor coordination
Integrating mechanisms
General management
systems
General management
systems
Boundary Spanning RolesBoundary Spanning Roles
Lateral relationships that help to integrate and coordinate the activities of the organizationExamples include:
Liaisons, committees, task forces, integrating positions, and interfunctional work teams
Locus of Decision Making Slide 1 of 2
Locus of Decision Making Slide 1 of 2
The degree to which decision making is centralized versus decentralized
Centralized decision makingAdvantage
Gives top management maximum control.
DisadvantageLimits the organization’s ability to respond quickly and effectively to changes in the environment.
Locus of Decision Making Slide 2 of 2
Locus of Decision Making Slide 2 of 2
Centralized vs. Decentralized (cont.)Decentralized decision making
AdvantageOrganizations can respond to environmental change more rapidly and effectively because the decision makers are the people closest to the situation.
DisadvantageTop managers lose some control.
Mechanistic versus Organic SystemsMechanistic versus Organic Systems
Mechanistic systemsHighly centralized organizations in which decision-making authority rests with top management.
Organic systemsDecentralized organizations that push decision making to the lowest levels of the organization in an effort to respond more effectively to environmental change.
Stable versus Turbulent EnvironmentsStable versus Turbulent Environments
Stable environmentsEnvironments which experience little change.
Turbulent environmentsEnvironments which are characterized by rapid and significant change.
Adaptive OrganizationsAdaptive Organizations
Organizations that eliminate bureaucracy that limits employee creativity and brings the decision makers of the organization closer to the customer
Generic Issues in Restructuring
Need to account for specific tensions specific to structural form
Web of Inclusion