Chapter 10 (Lecture Outline Presentation) Organizing in the Twenty-First Century.

Chapter 10(Lecture Outline Presentation)

Organizing in the Twenty-First

Century

Copyright © Houghton Mifflin Company. All rights reserved. Lecture Outline Presentation, 10–2

Chapter Objectives

1. Explain the concept of contingency organization design.

2. Distinguish between mechanistic and organic organizations.

3. Discuss the roles that differentiation and integration play in organization structure.

4. Identify and briefly describe the five basic departmentalization formats.

5. Describe how a highly centralized organization differs from a highly decentralized one.


Chapter Objectives (cont’d)

6. Define the term delegation and list at least five common barriers to delegation.

7. Explain how the traditional pyramid organization is being reshaped.


Contingency Design

• Organizing• The structuring of a coordinated system of authority

relationships and task responsibilities.

• Contingency Design• The process of determining the degree of

environmental uncertainty and adapting the organization and its sub units to the situation.

• How much environmental uncertainty is there?

• What combination of structural characteristics is most appropriate?

• There is no single best organization design.


Contingency Design (cont’d)

• The Burns and Stalker Model• Mechanistic organizations are rigid in design, rely on

formal communications, and have strong bureaucratic qualities best suited to operating in relatively stable and certain environments.

• Organic organizations have flexible structures, participative communication patterns and are successful in adapting to change in unstable and uncertain environments.



• Joan Woodward’s Study• When task complexity is either high or low,

organizations with organic structures are more effective.

• When task complexity is moderate, organizations with mechanistic structures are more effective.



• The Lawrence and Lorsch Model• The relationship of two opposing structural forces and

environmental complexity.

• Differentiation: the tendency of specialists to think and act in restricted ways.

• Integration: the collaboration among specialists needed to achieve a common purpose.

• A dynamic equilibrium between differentiation and integration is necessary for a successful organization.

• Both differentiation and integration increase as environmental complexity increases.


Basic Structural Formats

• Departmentalization• The grouping of related jobs or processes into major

organizational units.

• Overcomes some of the effect of fragmentation caused by differentiation (job specialization).

• Permits coordination (integration) to be handled in the least costly manner.

• Sometimes refers to division, group, or unit in large organizations.


Basic Structural Formats (cont’d)

• Functional Departments• Categorizing jobs according to the activity performed.

• Product-Service Departments• Grouping jobs around a specific product or service.

• Geographic Location Departments• Adopting a structural format based on the physical

dispersion of assets, resources, and customers.

• Customer Classification Departments• Creating a structural format centered on various

customer categories.


Basic Structural Formats (cont’d)

• Work Flow Process Departments in Reengineered Organizations• Creating horizontal organizations that emphasize

speedy work flow between two points:

• Identifying customer needs

• Satisfying customer needs


Contingency Design Alternatives

• Span of Control (Management)• The number of people who report to a manager.

• Narrow spans of control foster tall organizations with many organizational/managerial layers.

• Flat organizations have wider spans of control.

• Is There an Ideal Span of Control?• The right span of control efficiently balances too little

and too much supervision.


Contingency Design Alternatives (cont’d)

• The Contingency Approach to Spans of Control• Both overly narrow and overly wide spans of control

are counterproductive.

• Situational factors dictate the width of spans of control.

• Wide spans of control are appropriate for departments where many workers work close together and do the same job.

• Narrow spans of control are best suited for departments where the work is complex and/or the workers are widely dispersed.



• Centralization• The retention of decision-making authority by top

management.

• Decentralization• The sharing of decision-making authority by

management with lower-level employees.

• The Need for Balance• The challenge is to balance the need for

responsiveness to changing conditions (decentralization) with the need to create low-cost shared resources (centralization).



• Decentralization Through Strategic Business• Strategic business units (SBU) are organizational

subunits that

• serve a specific market outside the parent organization.

• face outside competitors.

• are in a position of controlling their own destiny.

• are profit centers, with their effectiveness measured in terms of profit and loss.


• Line and Staff Organizations• Organizations in which line managers make decisions

and staff personnel provide advice and support.

• Personal staff are assigned to a specific manager in supporting roles.

• Specialized staff constitute a reservoir of specialized talent available to the entire organization.

• Functional authority gives staff temporary and limited authority for specified tasks.



Matrix Organization

• Matrix Organization• A structure with both vertical and horizontal lines of

authority.

• Advantages

• Increased coordination

• Improved quantity of information flow.

• Disadvantages

• Violates unity-of-command principle.

• Authority gap (lack of line authority) for project managers.

• Decreases quality of information flow.


Effective Delegation

• Delegation• Assigning various degrees of decision-making

authority to lower-level employees.

• The Advantages of Delegation• Frees up managerial time for other important tasks.

• Serves as a training and development tool for lower-level managers.

• Increases subordinates’ commitment by giving them challenging assignments.


Effective Delegation (cont’d)

• Barriers to Delegation• Belief that only you can do the job right.

• Lack of confidence and trust in subordinates.

• Low self-confidence.

• Fear of being called lazy.

• Vague job definition.

• Fear of competition from subordinates.

• Reluctance to take risks that depend on others.

• Lack of early warning controls.

• Poor example of bosses who do not delegate.


The Changing Shape of Organizations

• Characteristics of New Organizations• Fewer organizational layers

• More teams

• Smallness within bigness

• New Organizational Configurations• Hourglass organization: a three-layer structure with

constricted middle (management) layer.

• Cluster organization: collaborative structure in which teams are the primary unit.

• Virtual organizations: internet-linked networks of value-adding subcontractors.

Chapter 10 (Lecture Outline Presentation) Organizing in the Twenty-First Century.

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