ORGANIZATION STRUCTURE AND DESIGNChapter 8

WHAT IS ORGANIZING AS A MANAGERIAL RESPONSIBILITY?

Organizing is one of the management functions Organizing arranges people and resources to work

towards a goal Organization Charts describe the formal structures

of organizations Organization structure – a system of tasks,

reporting relationships and communication linkages Organization chart – describes the arrangement of

work positions within an organization Division of labor – people and groups perform

different jobs Formal structure – official structure of the

organization

Organizations also operate with informal structures

Informal structure – set of unofficial relationships among members of an organization

Social network analysis – identifies the informal structures and their embedded social relationships that are active in an organization

Informal structures have good points and bad points

WHAT ARE THE MOST COMMON TYPES OF ORGANIZATIONAL STRUCTURES?

Departmentalization – process of grouping together jobs and people into work units

Functional structures group together people using similar skills

Functional chimneys/ functional silos problem – lack of communication and coordination across functions

Divisional Structures group together people by products, customers or locations

Product structure – groups together people and jobs working on a single product or service

Geographical structure – brings together people and jobs performed in the same location

Customer structure – groups together people and jobs that serve the same customers or clients

Matrix Structures combine functional and divisional structures

Cross-functional team – brings together members form different functional departments

Team structures use many permanent and temporary terms

Network structures extensively use strategic alliances and outsourcing

Virtual organization – uses information technologies to operate as a shifting network of alliances

WHAT ARE THE TRENDS IN ORGANIZATION DESIGN?

Organization design – the process of configuring organizations to meet environmental challenges

Organizations become flatter, with fewer levels of management

Span of control – the number of persons directly reporting to a manager

Organizations are increasing decentralization Centralization – top management keeps

power to make most decisions Decentralization – top management allows

lower levels to help make many decisions Organizations are increasing delegation and

empowerment Delegation – process of entrusting work to

others

Organizations are becoming more horizontal and adaptive

Bureaucracy- emphasizes formal authority, rules, order, fairness and efficiency

Mechanistic designs – bureaucratic, using a centralized and vertical structure

Organic designs – adaptive, using a decentralized, horizontal structure

Organizations are using more alternative work schedules

Compressed workweek – allows a worker to complete a full-time job in less than 5 days

Flexible working hours – gives employees some choice in daily work hours

Telecommuting – involves using IT to work at home or outside the office

Job sharing –splits one job between two people

ORGANIZATIONAL CULTURES, INNOVATION AND CHANGEChapter 9

WHAT IS THE NATURE OF ORGANIZATIONAL CULTURE?

Organizational culture is the personality of the organization

Organizational culture – system of shared beliefs and values guiding behavior

Organizational culture shapes behavior and influences performance

Strong cultures – clear, well defined and widely shared among members

Socialization – a process through which new members learn the culture of an organization

The observable culture is what you see and hear as an employee or customer

The core culture is found in the underlying values of an organization

Core values – are beliefs and values shared by an organization

Value-based management supports a strong organizational culture

Value-based management – actively develops, communicates and enacts shared values

Symbolic leader – uses language and symbols and actions to establish and maintain a desired organizational culture

Workplace spirituality – involves practices that create meaning and shared community among members

HOW DO ORGANIZATIONS SUPPORT AND ACHIEVE INNOVATION?

Innovation – process of taking in an idea and putting it into practice

Organizations pursue process, product and business model innovations

Process innovations –result in better ways of doing things

Product innovations– result in new or improved goods or services

Business model innovations – result in ways for firms to make money

Green innovations pursue and support the goals of sustainability

Green innovation/ sustainable innovation – reduces the carbon footprint of an organization and its products

Social innovation seeks solutions to important societal problems

Social innovation is business innovation driven by a social conscience

Social entrepreneurship – pursues innovative ways to solve pressing social problems

Commercializing innovations turn new ideas into saleable products

Reverse innovation – recognizes the potential for valuable innovations to be launched form lower organizational levels and diverse locations, including emerging markets

Innovative organizations share many common characteristics

Skunkworks – special creative units set free from normal structure for the purpose of organization

HOW DO MANAGERS LEAD THE PROCESS OF ORGANIZATIONAL CHANGE?

Change leader tries to change the behavior of another person or social system

Organizations pursue both transformational and incremental changes

Transformational change – results in major and comprehensive redirection of the organization

Incremental change – bends and adjusts existing ways to improve performance

Three phases of planned change are unfreezing, changing and refreezing

Unfreezing – a phase during which a situation is prepared for a change

Changing – a phase where a planned change actually takes place

Refreezing – phase in which a change is stabilized

Managers use force-coercion, rational persuasion, and shared power change strategies

Force-coercion strategy – pursues change through formal authority and/ or use of rewards or punishments

Shared power strategy - pursues change by participation

Change leaders identify and deal positively with resistance to change