Post on 14-Jan-2016
Designing Effective Organizations
Chapter Fifteen
Copyright © 2008 The McGraw-Hill Companies, Inc. All rights reserved.
McGraw-Hill/IrwinOrganizational Behavior: Key Concepts, Skills & Best Practices, 3/e
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After reading the material in this chapter, you should be able to:
• Describe the four characteristics common to all organizations.
• Explain the difference between closed and open systems, and contrast the military/mechanical, biological, and cognitive systems metaphors for organizations.
• Describe the four generic organizational effectiveness criteria.
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After reading the material in this chapter, you should be able to:
• Explain what the contingency approach to organizational design involves.
• Discuss Burns and Stalker’s findings regarding mechanistic and organic organizations.
• Describe new-style and old-style organizations, and list the keys to managing geographically-dispersed employees in virtual organizations.
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What is an Organization?
• Organization - system of consciously coordinated activities of two or more people.
• Four common denominators- Coordination of effort- Common goal- Division of labor- Hierarchy of authority
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Designing Effective Teams
See an article from Administrative Science Quarterly on designing effective teams
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What is an Organization?
• Unity of command principle - each employee should report to a single manager.
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Organization Charts
• Organization chart - boxes-and-lines illustration showing chain of formal authority and division of labor.
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Sample Organization Chart for a Hospital
Figure 15-1
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Organization Charts
• Span of control - the number of people reporting directly to a given manager.
• Staff personnel - provide research, advice, and recommendations to line managers.
• Line Managers - have authority to make organizational decisions.
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Needed: Open-System Thinking
• Closed System - self-sufficient entity, closed to the surrounding environment.
• Open System - organism that must constantly interact with its environment to survive
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Organizations as Military/Mechanical Bureaucracies
• Bureaucracy - Max Weber’s idea of the most rationally efficient form of organization
• Weber’s Bureaucracy- Division of labor- A hierarchy of authority- A framework of rules- Administrative personality
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The Organization as an Open System: The Biological Model
Figure 15-2
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Four Dimensions of Organizational Effectiveness
Figure 15-3
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Question?
Which effectiveness criteria is the most widely used?
A. Goal accomplishment B. Resource acquisitionC. Internal processesD. Strategic constituencies satisfaction
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Generic Effectiveness Criteria
• Goal accomplishment – most widely used effectiveness criteria
• Resource acquisition – organization is effective if it acquires necessary factors of production
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Generic Effectiveness Criteria
• Internal processes – healthy system if information flows smoothly and if employee loyalty, commitment, job satisfaction prevail
• Strategic constituencies satisfaction- Strategic constituency: any group of people
with a stake in the organization’s operation or success.
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Mixing Effectiveness Criteria: Practical Guidelines
• Goal accomplishment approach is appropriate when goals are clear, consensual, time-bounded, and measurable
• Resource acquisition approach is appropriate when inputs have a traceable effect on results or output
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Mixing Effectiveness Criteria: Practical Guidelines
• Internal processes is appropriate when organizational performance is strongly influenced by specific processes
• Strategic constituencies approach is appropriate when powerful stakeholders can significantly benefit or harm the organization
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The Contingency Approach to Designing Organizations
• Contingency approach to organization design - creating an effective organization-environment fit.
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Mechanistic versus Organic Organizations
• Mechanistic organizations - Rigid bureaucracies with strict rules, narrowly defined tasks, and top-down communication.
• Organic organizations - Flexible networks of multitalented individuals who perform a variety of tasks
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Question?
In what type of decision making do top managers make all key decisions?
A. CentralizedB. DecentralizedC. FundamentalD. Primary
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Different Approaches to Decision Making
• Centralized decision making – top managers make all key decisions
• Decentralized decision making – lower-level managers are empowered to make important decisions
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New-Style versus Old-Style Organizations
Table 15-1
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How to ManageGeographically Dispersed Employees
• Hire carefully• Communicate regularly• Practice “management by wandering around”
• Conduct regular audits• Use technology as a tool, not a weapon• Achieve a workable balance between online and live training
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Video: Wal-Mart
Paul Solman reports on Wal-Mart’s efforts to improve its public image. (9:42)