Module 3: Organizing Organization Structure and Design - The overall set of structural elements that can be used to configure the total organization. - A means to implement strategic and plans to achieve organizational goals. - 1. Skills variety - number of tasks a a person does a job. 2. Task identity - extent to which the worker does a complete or identifiable portion of the total job. 3. Task Significance - perceived importance of the task by the worker. 4. Autonomy - the degree of control the worker has over how the work is performed. 5. Feedback - extent to which the worker knows how well the job is being performed. The Basic Elements of Organizing 1. - - Job specialization Degree to which the overall task of the organization is broken down and divided into smaller component parts. Decide how much you break down task in the job Ex. Doctors and Nurses Advantages - Proficiency of workers - Decrease in transfer time - Easier development of specialized equipment - Low training cost Disadvantage - Dissatisfaction and boredom of workers 5 Characteristics: - Growth Need Strength: The desire for people to grow, develop, and expand their capabilities that is their response to the core dimensions. F. Work teams - allows an entire group to design the work system it will use to perform an interrelated set of tasks; groups decide how jobs will be allocated. (groups) 2. Departmentalization Alternatives to Specialization - efficiency & productivity = creativity and autonomy A. Job Rotation systematically moving employees from one job to the other jobs do not change, but instead workers move from job to job. (apply only to simple task; job rotation for training) B. Job Enlargement increases the total number of tasks that workers perform workers perform a variety of tasks. C. Job Enrichment - increase both the number of tasks a worker does and the control the worker has the over the job - delegate more authority to employees (managers) D. Job Characteristics - suggests the jobs should be diagnosed and improved along five core dimensions. Taking into account both the work system and employee preferences - skills variety, task identity, task significance, autonomy, and feedback. (focus on characteristic system) - - the process of grouping jobs according to some logical arrangement Organizational growth exceeds the owner - manager’s capacity to personally supervise all of the organization “How will you group the Job?” 4 ways to group jobs: 1. Functional Departmentalization - grouping jobs involving the same or similar activities (Ex. Marketing, Operations, Finance Department) Advantages: - Each department can be staffed by functional-area experts - Supervision is facilitated in the managers only need to be families with a narrow set of skills. - Coordination inside each department is easier. Disadvantages: - Decision-making becomes slow and bureaucratic - Employees narrow their focus to the department and lose sight of organizational goals/issues - Accountability and performance are difficult to monitor. 2. Product Departmentalization - grouping activities around products or product groups. (ex. Unilever: Shampoo, soap) Advantages: - All activities associated with one product can be integrated and coordinated. - Speed and effectiveness of decision making are enhanced - Performance of individual products or product groups can be assessed. Disadvantages: - Managers may focus on their product to the exclusion of the rest of the organization - Administrative costs may increase due to each department having its own functional-area experts 3. Customer Departmentalization - grouping activities to respond and interact with customer/customer group. (Ex. Bank) Advantages: - Skilled specialists can deal with unique customers or customer groups. Disadvantages: - A large Administrative staff is needed to integrate activities of various departments. 4. - Location Departmentalization grouping jobs on the basis of defined geographic sites or areas (Ex. Transpo) Advantages: - Enables the organization to respond each to unique customer and environmental characteristics. Disadvantages: - Large administrative Staff may be needed to keep track of units in scattered locations. 3. Establishing Reporting Relationship Chain of Command - a clear and distinct line of authority among the positions in an organization. 1. - 2. - Unity of command each person within an organization must have a clear reporting relationship to one and only one boss Scalar Principle there must be a clear and unbroken line of Authority that extends from the lowest to the highest position in the organization. Span of Management - The number of people who report to a particular manager - Also called span of control Tall vs Flat Organizations - number of layers in the organizational hierarchy Tall Organization - more layers more tall the organization become Flat Organization - has a lot vice president; span of management is wider; more people are reporting to one person. 4. Distributing Authority Authority - power that has been legitimized by the organization. 1. 2. - - The Delegation Process the process by which a manager assigns a portion of his or her total workload Assigns total workload to other people Give control over the job; how she will do it Establish a sense of accountability to that person. Decentralization and centralization Decentralization - the process of systematically delegating power and authority throughout the organization to middle- and lower-level managers Centralization - the process of systematically retaining power and authority its the hands of higher-level managers.; authority remains in the higher-level manager 5. Coordinating Activities/Coordination Coordination - the process of linking the activities of the various departments of the organization - Systems must be put into place to keep the activities of each department focused on the attainment The need for coordination - department and work groups are interdependent - they depend on one another for information and resource to perform their respective activities - The greater the interdependence, the more coordination the organization requires. 1. Pooled Interdependence - when units with little interaction; their output is pooled at the organizational level - Interdependent in terms of the output they produce - Ex. H&M branches 2. Sequential Interdependence - When the output of one unit becomes the input for another in a sequential fashion. - applies to assembly line - The output of the other becomes the input of the other; one way - Step by step process - Ex. Laptop Making 3. - Reciprocal Interdependence when activities flow both ways between units interact with each other; coordinate continuously Ex. Hotel: reservation > front desk > housekeeping Structural Coordination Techniques 1. 2. 3. 4. 5. Managerial Hierarchy - when one manager is in charge of interdependent department or units Rules and Procedures - when coordination is governed by a set of rules and procedures Ex. Airports: landing is the priority Liaison Roles- when an individual acts as a common point of contact; individuals may not have any formal authority over the groups but simply facilitate the flow of information. Liaison officers facilitate the flow of information: Ex. Task Forces - when individuals are assembled by drawing one representative from each group; usually temporary Formed to perform a simple or one task Integrating Departments - similar to a task force but more permanent Situational Influences on Organizational Design - Based on the assumption that the optimal design for any given organization depends on a set of relevant situational factors. 1. Core Technology - Technology conversion process used to transform inputs into outputs. 2. Environment 3. Organization Size and life cycle - Organization Size: Total number of full-time or full-time equivalent employees - Organizational Life Cycle: Progression through which organizations evolve as they grow and mature. Basic Forms of Organization Design 1. - Functional (U-form) Design Based on the functional approach to departmentalization U for Unitary Approach; bc you all work together for the goal of the organization Members and units are grouped into functional departments Promotes a functional rather than organizational focus and tends to promote centralization 2. Conglomerate (H-form) Design - used by an organization made up of a set of unrelated businesses - H for Holding - A holding company that results from unrelated diversification - Managers usually find it difficult to compare and integrate activities across a large number of diverse operations. 4. Matrix Design - based on two overlapping bases of departmentalization - The foundation of a matrix is a set of functional departments then a set of product groups or temporary departments is superimposed to access the functional departments. - Employees in a matrix are simultaneously members of functional departments and project teams. 5. Hybrid Design - Combination of two or more of the common forms of organization design - Ex. Five relate divisions and one unrelated division (M-form + H-form) Emerging Issues in Organization Design 1. 2. 3. 3. Divisional (M-form) Design - Based on multiple businesses in related areas operation within a larger organizational framework. - M for Multi-divisional - Results from related diversification - The M form designs basic objective is to optimize internal competition and cooperation by sharing resources The team organization - an approach to organization design that relies almost exclusively on project-type teams, with little or no underlying hierarchy Virtual Organization - one that has little or no formal structure Learning Organization - one that works to facilitate the lifelong learning and personal development of all its employees while continually transforming itself to respond to changing demands and needs.