Learning Objectives
 7.1 Describe the organizing process and
how formal and informal organizations
 7.2 Identify some common types of
organizational structures and discuss the
span of control represented by each one.
 7.3 Explain how an organization’s culture
is affected by workplace diversity.
 7.4 Discuss the pros and cons of using
teams and when it is most beneficial to use
 7.5 Describe the stages of team
development and how productive teams
can be rewarded.
What does
Organizing is the process of analyzing
and arranging the pattern of work tasks and
relationships to achieve goals efficiently and
What is an
Organizational Structure is the
structure derived from systematically
grouping the tasks to be performed and
from prescribing formal relationships that
strengthen the ability of people to work
more effectively together in pursuing
common goals.
Formal and Informal
Organizational Structures
• Organization in the workplace can be both formal and informal.
• Formal Organizational Structures – provides the framework
or chain of command for determining accountability
• An organizational chart is a published document that
graphically represents the formal organizational structure.
• Informal Organizational Structures – is unpublished, and is
formed out of the everyday relationships that exist between
• An informal leader emerges based on an individual’s
influence, and norms are adopted that direct the behavior of
Organizing Process Steps
• The organizing process is a systematic division of division of labor
or division of work to achieve or accomplish a plan. The process
follows these steps:
• Make a list of all the tasks that must be performed to
accomplish a goal.
• Divide tasks into activities that can be performed by one
• Group together related jobs or sequence jobs in a logical order.
• Allocate authority and establish relationships between the
various jobs and groupings.
Types of Organizational Structures
• Almost all organizational structures are built on the concept of
departmentalization, which is the grouping of jobs into related
work units. Common types of organizational structures include:
Functional Organization
Product Organization
Geographic Organization
Customer Organization
Hybrid Organization
Line Structure
Line and Staff Structure
Matrix Structure
Horizontal Structure
Virtual Structure
Flat and Tall Structure
Functional Organization
Functional Organization – The categorization of organizational units in
terms of the nature of the work. Most organizations have four basic
functions: production, marketing, finance, and human resources.
Advantages of functional organizations include:
Allows for specialization within functions.
Provides efficient use of equipment and resources, potential
economies of scale, and ease of coordination within the function itself.
Disadvantages of functional organizations include:
Members of a functional group can develop more loyalty to the
functional groups goals than the organization’s goals
Conflict can develop among different departments striving for different
Product Organization
Product Organization – The placement of all activities necessary to
produce and market a product or service under one manager.
Advantages of product organizations include:
Allows employees to identify with a particular product.
Provides opportunities for training executive personnel by letting them
experience a broad range of functional activities.
Disadvantages of product organizations include:
Departments can become overly competitive to the detriment of the
overall organization.
Possible duplication of facilities and equipment.
Geographic Organization
Geographic Organization – The categorization of organizational units by
Advantages of geographic organizations include:
Allows for the use of local employees or salespeople.
Can create customer goodwill and an awareness to local needs.
Disadvantages of product organizations include:
Having multiple locations can be costly.
Customer Organization
Customer Organization – The categorization of organizational units by
customers served.
Advantages of customer organizations include:
Allows employees to identify with a particular customer type.
Provides opportunities for training executive personnel by letting them
experience a broad range of functional activities.
Disadvantages of customer organizations include:
Departments can become overly competitive to the detriment of the
overall organization.
Possible duplication of facilities and equipment.
Hybrid Organization
• Hybrid Organization – An organizational structure that uses
multiple types of departmentalization within the organization.
• A small organization may have no organization at first. As it grows,
it may organize first on one basis, then another, and then another.
• Hybrid organizations share the same advantages and
disadvantages as the organization types being used within it.
Line Structure
Line Structure – An organizational structure in which authority originates
at the top and moves downward in a line and in which all organizational
units are directly involved in producing and marketing the organization’s
goods or services.
It is the simplest organizational structure.
Advantages of a line structure include:
It is a clear authority structure that promotes rapid decision making.
Disadvantages of a line structure include:
May force managers to perform too broad a range of duties.
May cause the organization to become too dependent on key
employees who are capable of performing multiple duties.
Line and Staff Structure
Line and Staff Structure – An organizational structure that results when
staff specialists are added to a line organization.
Staff people are normally specialists in one field, and their authority is
normally limited to making recommendations to line people.
Advantages of a line and staff structure include:
Allows more specialization and flexibility then a simple line structure.
Disadvantages of a line structure include:
Some staff specialist may resent the fact that they act as only advisors
over line personnel and have no real authority.
Line managers who have responsibility for the product can be reluctant
at times to listen to staff advice.
Matrix Structure
Matrix Structure – A hybrid organizational structure in which individuals
from different functional areas are assigned to work on a specific project or
Advantages of a matrix structure include:
Allows for resources and people to be changed as project needs
Employees are challenged constantly, interdepartmental cooperation
develops along with expanded managerial talent.
Disadvantages of a matrix structure include:
A role conflict can develop if the authority of the project manager is not
clearly delineated form that of a functional managers.
They defy tradition and put undue stress on communication networks.
Horizontal Structure
Horizontal Structure – An organizational structure consisting of two
groups: the first composed of senior management responsible for strategic
decisions and policies, and the second composed of empowered
employees working together in different process teams.
Characteristics of a horizontal structure include:
The organization is build around three to five core processes. Each
process has an owner or champion.
The hierarchy is flattened to reduce supervision.
Teams manage everything, including themselves.
Customers, not stock appreciation or profitability, drive performance.
Team performance, not just the individual, is rewarded.
Customer contact is maximized with employees.
Emphasis is on informing and training all employees.
Virtual Organization
Virtual Organization – A network of independent companies– suppliers,
customers, and even rivals– linked by information technology to share
skills, costs, and access to one another’s markets.
Three types of virtual organizations exist:
A group of skilled individuals from a company that communicate via
computer, phone, fax, or videoconference.
A group of companies, each of which specializes in a certain function,
partner together.
A large company that outsources or subcontracts many of its
operations using modern technology to transmit information.
Technology plays a central role in allowing virtual organizations to form.
Benefits and Challenges of a
Virtual Organization
• Increases productivity.
• Decreases the cost of doing
• Provides the ability to hire the best
talent regardless of location.
• Allows rapid problem solving by
forming dynamic teams.
• Leaders must move from a control
model to a trust method.
• New forms of communication and
collaboration are required.
• Management must enable a
learning culture and be willing to
• Improves the work environment.
• Provides competitive advantage.
• Provides better balance for
professional and personal lives.
• Staff reduction may be required.
• It can be difficult to monitor
employee behavior.
Flat & Tall Structures
Flat Structure – An organization with few levels and relatively large spans
of management control at each level.
Tall Structure – An organization with many levels and relatively small
spans of management control.
A study suggests that organizations with fewer levels and wider spans of
management control offered the potential for greater job satisfaction.
Another study suggested that groups operating in a tall structure had better
performance than those operating in a flat structure.
Japanese organizations tend to have fewer middle managers and flatter
structures than American organizations.
What is
Span of
Span of control is the number of employees
a manager supervises.
It is influenced by a number of factors including
specialization and complexity of the business,
geographical dispersion of employees, and
centralized vs. decentralized organization.
Centralized and Decentralized
Centralized Organization – An organization where decision making
authority is at the top of the organization and employees have little freedom
to make their own decisions.
Decentralized Organization – An organization where decision making is
pushed down to lower levels and employees have greater freedom to make
Span of control is smaller when employees are geographically dispersed,
decision-making is centralized, and activities are specialized and complex.
Span of control is wide when employees perform similar activities in the
same work area.
In order for a manager to be responsible for a span of control, they must
have authority or power to carry out the responsibility.
Authority is established by title or rank, or it can be handed down or
delegated from a higher level of management.
What is
Organizational culture is the underlying set of
assumptions, beliefs, attitudes, values, and
expectations shared by employees of an organization.
As a general rule, most corporate cultures have the
following attributes:
• Implicit and fuzzy, not explicit or clearly defined.
• Relatively stable, although they do evolve over time.
• A product of tope management beliefs and visions.
• Of varying strength.
Managers Role in Organizational Culture
• Managers play a critical role in the development, maintenance, and
communication of an organization’s culture.
• Culture influences the way managers perform their primary
functions– planning, organizing, staffing, leading, and controlling.
• It is a managers job to help employees understand their
organization’s culture and learn the norms governing expected
• By designing and implementing experiences that emphasize the
organization’s culture, managers can shape employee attitudes and
Managing a
Diversity is the differences or individual attributes which distinguish
one person from another.
Diversity can include age, gender, religion, ethnicity, disability,
education, creativity, influence, personality, political affiliation, and
It is estimated that US organizations spend over $8 billion annually
on diversity training and other diversity initiatives.
Diversity is an asset to organizations because it contributes towards:
– More varied beliefs and cross-cultural experiences.
– Enhanced creativity and innovation.
– Expanded global reach to new markets.
– Diverse alliances with customers and suppliers.
Managers Role in Valuing
and Managing Diversity
Managers play a dual role in valuing (passive) and managing (active)
They manage diversity to create an environment that enables employees to
achieve their full potential.
Managers need to be aware of unique needs of individual employees and
to provide “accommodations” that support those needs.
Poorly managed diversity can have a negative impact on performance and
create conflict.
Organizational culture, strategy, and HR practices, determine whether
diversity will boost performance or drag it down.
Diversity is best managed with an “open” organizational culture.
Policies &
Equal Employment Opportunity
(EEO) is a system of organizational justice,
stipulated by law, that applies to all aspects
of employment and is intended to provide
equal opportunity for all members of the
labor force.
Affirmative Action is an in-company
program designed to remedy current and
future inequities in employment of
Effective Management of Diversity
The following strategies can facilitate the effective management of
Communicate diversity goals and expectations clearly to employees.
Incorporate diversity goals in the organization’s mission, vision, value
statements and other written communications.
Ensure diversity is supported at the top with visible evidence so that
employees will view it as real and credible.
Give immediate attention to correcting abusive behaviors and
rectifying violations of EEO laws.
Respect differences and avoid trying to make all employees the same.
Develop a management plan for assessing diversity and setting
When do Teams Make Sense?
Teams are better when no individual “expert” exists because teams tend to
make better judgments than the average individual acting alone.
Teams are often superior in stimulating innovation and creativity.
Teams are better when risk is desirable, because of their tendency to make
more extreme decisions.
Teams can help create a context where people feel connected and valued.
Teams can serve to create a sense of community and support.
Unnecessary teams slow decisions, detract from individual effort, and take
up organizational resources.
Effective Teams
The Team Concept is a commonly used
form of organization to accomplish complex
tasks that can benefit from a diverse set of
skills or that require input from multiple
departments or units.
When effective, teams can make better
decisions, be more productive, innovative and
creative than individuals.
Teams can create more satisfying work
environments and increase retention rates.
Teamwork Myths
Teams are always the answer. Teams are often not the best way to accomplish a
task. If the proper conditions for teamwork are not present, a manager is better off
making individual assignments.
The key to team performance is cohesiveness. High cohesion is not a sufficient,
or even the most critical, element for great performance. It sometimes causes teams
to make bad decisions and flounder.
The team leader is the primary determinant of team performance. Teams with
leaders who control all the details, manage all the key relationships, and present all
the ideas are usually underproductive.
The more the merrier. The larger a team gets, the harder it becomes to keep
working on the same page, informed of what is happening, and personally invested
in the teams performance.
The best individual performers will create the highest-performing teams. The
highest performing teams have complementary members, willing and capable of
playing different roles.
Types of Teams
Most teams can be classified in one of three
• Teams that recommend things
• Teams that make or do things
• Teams that run things
Teams that Recommend Things
These teams include task forces and project groups formed to study and
solve particular problems.
These teams often have predetermined completion dates.
Teams that recommend things must have a clear objective and include
members with the skills necessary to complete organizational tasks.
These teams are often cross-functional, comprised of members from
various departments or units.
These teams derive their strength from diversity.
Teams that Make or do Things
These teams include people on or near the frontlines who are responsible
for manufacturing, development, operations, marketing, sales, service, and
other value-adding activities.
These teams usually have no completion date since their projects or
activities are ongoing.
They are most effective when they deal with “critical delivery points.”
For these teams to be effective a relentless focus on performance is
Teams that make or do things often take the form of self-managed teams.
Self-managed teams develop over a long period of time and work
without the ongoing direction of a manager or supervisor.
Teams that Run Things
These teams over see some business, ongoing programs or significant
functional activities.
These types of team would often times be more effective as working
groups, or individuals.
Traits of
Five disciplines consistently emerge as
essential to high performing teams:
Small size
Capable and complementary members
Shared purpose and performance objectives
Productive norms and working approach
Mutual accountability
Small Size
• People working in smaller groups work harder, engage in a wider
variety of tasks, assume more responsibility for the team’s
performance, and feel more involved with the team.
• With large teams it is hard to meet in person or virtually.
• With large teams it is difficult to gain shared understanding and
commitment, and share leadership roles.
• High performing teams rarely consist of more than 10 people and
ideally are between 5 and 8 members.
Capable and Complementary Members
• Successful teams needs members with a mix of skills and talents in
order to deliver its performance objectives.
• It is complementary team members , capable of playing diverse
roles, who contribute most to a teams success.
Shared Purpose and
Performance Objectives
• High-performing teams have both a clear understanding of the
purpose of the team and a belief that the goal is worth pursuing.
• The best teams are able to translate purpose into a clear
understanding of the goals to be achieved.
• High-performing teams know what they are expected to accomplish
and how they will be measured and evaluated as a team.
Productive Norms
• Norms are generally unwritten rules or standards of behavior that
apply to team members.
• Norms allow members to predict what others will do.
• The most critical norms when working in teams relate to effort,
meetings, and trust.
• Strong norms create a team culture where members can challenge
each other without taking offense.
Mutual Accountability
• High-performing team members pull their own weight, are rewarded
for contributing, and challenged for slacking.
• Effective teams are characterized by high level of trust among
• Effective teams find a way to reward those who contribute. Two
types of reward structures include:
• Cooperative Team Rewards – Rewards that are distributed
equally among team members.
• Competitive Team Rewards – Rewards that are distributed to
individuals for their unique contribution to the team.
The Stages of
There are five stages of team development, which include:
• Forming – The stage where the team is formed as team
members are identified or selected.
• Storming – The stage where conflict and infighting can
occur due to outside demands, as well as the process of
selecting a leader.
• Norming – The stage at which the team starts to come
together as a group.
• Performing – The stage in which the team is mature,
organized, and well-functioning.
• Adjourning – The stage where the team completes the
task required and then splits up.
How can
Meetings Facilitate
High Performing
Meetings are an effective form of
intervention to stimulate team performance
and avoid dysfunction.
Meetings are used to keep team members
informed, coordinate efforts to stay on task,
make group decisions, and empower the
Meetings can encourage group participation
and enhance motivation.
How Can Meetings be Nonproductive?
• The top three reasons for failed meetings are:
• Meetings get off subject.
• Meetings lack an agenda or goal.
• Meetings last too long.
• Meetings lack planning or preparation.
When is a Meeting Necessary?
• A meeting is necessary if it meets its objective or purpose and the
information cannot be communicated or obtained easily in another
• If basic information is all that needs to be shared with a team, then
it is best to use an alternative means of communication rather than
a meeting.
• Meeting on a regular schedule, without a defined objective or
purpose is not a good idea.
• Meetings have a cost and should be used wisely.
The Meeting Facilitator
• Meetings can be led by managers, staff, team members, facilitators
and others.
• Facilitator – an individual that assumes responsibility for leading a
meeting without bias to any individual(s) in order to achieve the
meeting’s objective or purpose.
• A facilitator may be used when independence is necessary, such as
for strategic planning, problem solving, brainstorming, or innovating.
Roles of a Meeting Leader
Responsibilities of a meeting leader include:
Starting, staying, and ending on time.
Following the agenda as closely as possible.
Designating an individual to record minutes and action items.
Maintaining a “parking lot” for later review of off-topic subjects.
Encouraging all attendees to participate.
Bringing the team to consensus.
Mediating conflict respectfully according to rules for debate.
Summarizing accomplishments at the close of the meeting.
Distributing written minutes and assignments after the meeting.
What are the
Attributes of a good
Meeting Agenda?
Meeting Agenda – clarifies the meeting objective and lists
the points of discussion and their priority.
A meeting agenda spells out the tasks, estimated time for
each task, decisions to be made, and expected outcomes or
Meeting agendas can be split into four stages:
1. Initial Stage
2. Kickoff Stage
3. Summary Stage
4. Evaluation Stage
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