PART 3: ORGANIZING
CHAPTER 5 - BASIC ORGANIZATION DESIGNS
LEARNING OUTCOMES (PPT 5-2 & 5-3)
After reading this chapter students should be able to:
1. Identify and define the six elements of organization structure.
2. Describe the advantages and disadvantages of work specialization.
3. Contrast authority and power.
4. Identify the five different ways by which management can departmentalize.
5. Contrast mechanistic and organic organizations.
6. Summarize the effect on organization structures of strategy, size, technology, and environment.
7. Contrast the divisional and functional structures.
8. Explain the strengths of the matrix structure.
9. Describe the boundaryless organization and what elements have contributed to its development.
10. Explain what is meant by the term “learning organization.”
11. Describe what is meant by the term “organization culture.”
Opening Vignette
SUMMARY
For decades, Coke and Pepsi have been involved in a neck and neck race to dominate the soft
drink market, and both have spent millions on product development, research, and marketing. Both take
their market share seriously, and muster all their competitive energies to grow market share. For both
soft-drink companies, their greatest growth has come in non-carbonated beverages like bottled waters and
varieties of teas. At Coke, for example, non-carbonated drinks now account for approximately 12 percent
of company sales and company leaders estimate that the number can be close to 25 percent within the
next 2 years. To achieve that goal, new leaders at Coke have created an environment where they want
employees to be innovative and take some risk. But such a culture may have contributed to an
embarrassment for Coke---one that they would sure like to forget.
At the center of a controversy which cost some Coke executives their jobs and left a black mark
on the company’s image was the introduction of Frozen Coke. After a few Coke employees presented
company officials with data that indicated that this new product would generate strong demand, Coke
encouraged Burger King to introduce the Frozen Coke product. After Burger King spent nearly $65
million to add the equipment to dispense the product in each of its restaurants nationwide, Burger King
executives were dumbfounded when the product wasn’t selling as well as Coke promised. Then, one of
Coke’s internal auditors blew the whistle, claiming Coke rigged the market tests in Richmond, Virginia.
Consultants were paid, according to this auditor, to take children to selected Burger King locations and
Chapter 5 - Basic Organization Designs
spend $10,000 in Richmond Burger King restaurants on this new product. Burger King is suing Coke to
get back the money it lost due to Coke’s behavior.
How did Coke allow something like this to happen? It appears that the organization’s culture was
a significant contributor to this outcome. The strong desire by employees to make their bosses look good
by giving them the numbers they desired may have pressured them to cross the line and pump up the
research results. So far, the President of Coke’s Food Service and Hospitality Unit, and one of his direct
reports, have resigned over the situation.
Teaching notes
1. Discuss this case with students asking them:

What do you think made it possible for Coke employee’s to conduct this unethical behavior?
(Loose control systems, lots of trust/no checking up on employees, lack of ethics training, etc.)
 What do you see as the forces driving or supporting this type of behavior?
(Pressure to introduce new products, behavior of managers, pressure to compete with Pepsi, etc.)

In what ways, if any, do you see size related to the organization’s behavior? Do you think it would be
more difficult to for this kind of behavior to happen if the organization was smaller? Why or why
not?
I. INTRODUCTION
A. Organization design is a process in which managers develop or change their organization’s
structure. (PPT 5-4)
1. This process involves making decisions about how specialized jobs should be allocated, the
rules to guide employees’ behavior, and at what levels decisions are to be made.
II. THE ELEMENTS OF STRUCTURE
A. The Basic Concepts of Organization Design
1. Formulated by management writers in the early 1900s.
2. These principles still provide valuable insights into designing effective and efficient
organizations.
3. There are six elements of structure: work specialization, unity of command, span of control,
authority and responsibility, centralization versus decentralization, and departmentalization.
B. What Is Work Specialization? (PPT 5-4)
1. In the 1700s Adam Smith advocated in Wealth of Nations the use of work specialization.
2. A job is broken down into a number of steps and each is completed by a separate individual.
a) Individuals specialize in doing part of an activity.
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b) Work specialization makes efficient use of the diversity of skills that workers hold.
3. Some tasks require highly developed skills; others lower skill levels.
4. Excessive work specialization can lead to boredom, fatigue, stress, low productivity, poor
quality, increased absenteeism, and high turnover. (See Exhibit 5-1.) (PPT 5-5)
5. It is important to recognize the economies work specialization can provide as well as its
limitations.
C. What Is the Chain and Unity of Command? (PPT 5-6, 5-7)
1. The chain of command is the continuous line of authority that extends from upper
organizational levels to the lowest and clarifies who reports to whom.
2. An employee who has to report to two or more bosses might have to cope with conflicting
demands or priorities.
3. Therefore, the early management writers argued that an employee should have only one
superior (Unity of command)
4. If the chain of command had to be violated, early management writers always explicitly
designated that there be a clear separation of activities and a supervisor responsible for each.
5. The unity of command concept was logical when organizations were comparatively simple.
6. There are instances today when strict adherence to the unity of command creates a degree of
inflexibility that hinders an organization’s performance.
D. What Is the Span of Control? (PPT 5-6, 5-8)
1. How many employees can a manager efficiently and effectively direct?
2. This question received a great deal of attention from early management writers.
3. There was no consensus on a specific number but early writers favored small spans of less
than six to maintain close control.
4. Level in the organization is a contingency variable.
a) Top managers need a smaller span than do middle managers, and middle managers
require a smaller span than do supervisors.
5. There is some change in theories about effective spans of control.
6. Many organizations are increasing their spans of control.
7. The span of control is increasingly being determined by contingency variables.
a) The more training and experience employees have, the less direct supervision needed.
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8. Other contingency variables should also be considered; similarity of employee tasks, the task
complexity, the physical proximity of employees, the degree of standardization, the
sophistication of the organization’s management information system, the strength of the
organization’s value system, the preferred managing style of the manager, etc.
E. What Are Authority and Responsibility?
1. Authority refers to the rights inherent in a managerial position to give orders and expect the
orders to be obeyed.
2. Authority was a major tenet of the early management writers; the glue that held the
organization together.
a) It was to be delegated downward to lower-level managers.
3. Each management position has specific inherent rights that incumbents acquire from the
position’s rank or title.
a) Authority is related to one’s position and ignores personal characteristics.
4. When a position of authority is vacated, the authority remains with the position.
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On a Management Classic
SUMMARY
Stanley Milgram, a social psychologist at Yale University, wondered how far individuals would
go in following orders. If subjects were placed in the role of a teacher in a learning experiment and told
by the experimenter to administer a shock to a learner each time that learner made a mistake, would the
subjects follow the commands of the experimenter?
Milgram hired a set of subjects. Each was led to believe that the experiment was to investigate the
effect of punishment on memory. Punishment in this case was an electric shock. The learner was an actor,
and the electric shocks were phony--but the subjects didn't know that. The subjects were instructed to
shock the learner each time he made a mistake. And subsequent mistakes would result in an increase in
shock intensity. Throughout the experiment, the subject got verbal feedback from the learner. After 300
volts, the learner did not respond to further questions.
Most subjects protested and, fearful that they might kill the learner if the increased shocks were to
bring on a heart attack, insisted that they could not go on. But the experimenter said that was their job.
Most of the subjects dissented but didn’t disobey. 62% increased the shock level to the maximum of 450
volts, more than enough to kill even the strongest human! One conclusion is that authority is a potent
source of getting people to do things.
Teaching notes
1. As you discuss this case with students, give them an opportunity to comment on what they saw and
why they think the “teachers” behaved differently during the experiment.
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2. You might want to encourage students to talk about what the “teachers” had in common and what the
students felt was different about them.
3. You might ask if the students think there was anything unique about that time period in history versus
today that might have caused them to respond as they did.
4. How do students believe people typically respond to authority today? (If cell phones had been
available during the Milgram Experiments, and the “teacher” received a call during the experiment,
do they think the “teacher” would have halted the experiment to take the call? Does that relate to
authority? Why or why not?)
5. Give students an opportunity to comment on what they think they would have done in the same
situation and why.
6. Ask students if they think people in their general age group or geographic area or ethnic group
respond to authority differently. If so, in what ways?
7. Before agreeing too easily with students that you and they “wouldn’t have done that,” you might want
to steer the conversation to work-related issues. Who would you agree to fire and under what
conditions? What if you felt the person didn’t deserve to be fired but the person you reported to said
essentially, “I don’t like that person. They don’t fit with the image I have for this organization. You
need to fire them.” What if you were a single parent with three small children and jobs in your area
were scarce? What would you do? What other factors might impact your final decision?
5. When managers delegate authority, they must allocate commensurate responsibility.
a) When employees are given rights, they assume a corresponding obligation to perform and
should be held accountable for that performance!
b) Allocating authority without responsibility creates opportunities for abuse.
c) No one should be held responsible for something over which he or she has no authority.
6.
Are there different types of authority relationships? (PPT 5-9)
a) The early management writers distinguished between two forms of authority.
1) Line authority entitles a manager to direct the work of an employee.
(a) It is the employer-employee authority relationship that extends from top to
bottom.
(b) See Exhibit 5-2. (PPT 5-7)
(c) A line manager has the right to direct the work of employees and make certain
decisions without consulting anyone.
2) Sometimes the term “line” is used to differentiate line managers from staff managers.
(PPT 5-9)
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(a) Line emphasizes managers whose organizational function contributes directly to
the achievement of organizational objectives (e.g., production and sales).
(b) Staff managers have staff authority (e.g., human resources and payroll).
3) A manager’s function is classified as line or staff based on the organization’s
objectives.
b) As organizations get larger and more complex, line managers find that they do not have
the time, expertise, or resources to get their jobs done effectively.
1) They create staff authority functions to support, assist, advise, and generally reduce
some of their informational burdens.
2) Exhibit 5-3 illustrates line and staff authority. (PPT 5-10)
7. How does the contemporary view of authority and responsibility differ from the
historical view?
a) The early management writers assumed that the rights inherent in one’s formal position
in an organization were the sole source of influence.
b) This might have been true 30 or 60 years ago.
c) It is now recognized that you do not have to be a manager to have power, and that power
is not perfectly correlated with one’s level in the organization.
d) Authority is but one element in the larger concept of power.
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Dilemma in Management
Following Orders
SUMMARY
A survey of U.S. managers has revealed that there was a significant difference in the values,
attitudes, and beliefs they personally held and what they encountered in the workplace. This is also true of
managers around the world.
If you were asked to follow orders that you believed were unconscionable, would you comply?
What if you merely disagreed with the orders? What would you do in these instances? Furthermore, what
effect do you feel national culture has on your complying with orders that have been given to you?
Teaching notes
1. When discussing this, help students understand that it is the process and where they draw the line that
is important.
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2. Offer the students the following framework for evaluating such decisions. While it doesn’t provide
“the” answer, it provides a tool for evaluating ethical decisions.

Who are the stakeholders? Who will be affected? What is your relationship with them? How will this
possibly harm them?

What competing claims or values are in conflict? What personal and organizational values are
involved?

Where does responsibility for action lie? Who or what caused the situation—causal? Who has
responsibility—role? Who could address the situation if they chose to—capacity?

What organizational factors contribute to the ethical conflict? Culture, rules and procedures, or
possibly organizational systems.

How much freedom of choice do you really have and what is at risk for each choice?
2. Use the examples offered in the vignette and try to apply each framework to them.
3. Ask each student to evaluate the examples with the above criteria and come to a decision and reason
for their decision.
4. Discuss their decisions by either asking for volunteers, asking who would and who wouldn’t and
select participants from each side of the issue, or place them into groups and have them choose one
decision among them to present to the class.
8.
How do authority and power differ?
a)
Authority and power are frequently confused.
b) Authority is a right, the legitimacy of which is based on the authority figure’s position in
the organization. (PPT 5-11)
1) Authority goes with the job.
c) Power refers to an individual’s capacity to influence decisions.
1) Authority is part of the larger concept of power.
2) Exhibit 5-4 visually depicts the difference. (PPT 5-12)
d) Power is a three-dimensional concept.
1) It includes not only the functional and hierarchical dimensions but also centrality.
2) While authority is defined by one’s vertical position in the hierarchy, power is made
up of both one’s vertical position and one’s distance from the organization’s power
core, or center.
e) Think of the cone in Exhibit 5-4 as an organization. (PPT 5-12)
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1) The closer you are to the power core, the more influence you have on decisions.
2) The existence of a power core is the only difference between A and B in Exhibit 5-4.
f) The cone analogy explicitly acknowledges two facts:
1) The higher one moves in an organization (an increase in authority), the closer one
moves to the power core.
2) It is not necessary to have authority in order to wield power because one can move
horizontally inward toward the power core without moving up.
(a) Example, administrative assistants, “powerful” as gatekeepers with little
authority.
3) Low-ranking employees with contacts in high places might be close to the power
core.
4) So, too, are employees with scarce and important skills.
(a) The lowly production engineer with twenty years of experience might be the only
one in the firm who knows the inner workings of all the old production
machinery.
g) Power can come from different areas.
1) John French and Bertram Raven have identified five sources, or bases, of power.
(a) See Exhibit 5-5. (PPT 5-13)
F. How Do Centralization and Decentralization Differ? (PPT 5-14)
1. Centralization is a function of how much decision-making authority is pushed down to lower
levels in the organization.
2. Centralization-decentralization is a degree phenomenon.
3. By that, we mean that no organization is completely centralized or completely decentralized.
4. Early management writers felt that centralization in an organization depended on the
situation.
a) Their objective was the optimum and efficient use of employees.
b) Traditional organizations were structured in a pyramid, with power and authority
concentrated near the top of the organization.
c) Given this structure, historically, centralized decisions were the most prominent.
5. Organizations today are more complex and are responding to dynamic changes.
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a) Many managers believe that decisions need to be made by those closest to the problem.
6. Today, managers often choose the amount of centralization or decentralization that will allow
them to best implement their decisions and achieve organizational goals.
7. One of the central themes of empowering employees was to delegate to them the authority to
make decisions on those things that affect their work.
a) That’s the issue of decentralization at work.
b) It doesn’t imply that senior management no longer makes decisions!
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G. Can You Identify the Five Ways to Departmentalize? (PPT 5-15, 5-16)
1. Early management writers argued that activities should be specialized and grouped.
2. Work specialization creates specialists who need coordination.
a) This is facilitated by putting specialists together in departments under the direction of a
manager.
3. Creation of these departments is typically based on a variety of factors (e.g., work functions
performed, product or service offered, the target customer or client, the geographic territory
covered, or the process used to turn inputs into outputs).
4. No single method of departmentalization was advocated by the early writers.
5. Method(s) used should reflect grouping that would best contribute to the attainment of the
organization’s objectives and the goals of individual units (see Exhibit 5-6). (PPT 5-15)
6. How are activities grouped? (PPT 5-16)
a) One of the most popular ways to group activities is by functional departmentalization.
1) Can be used in all types of organizations.
2) The major advantage is the achievement of economies of scale by placing people
with common skills and specializations into common units.
b) Product departmentalization focuses attention on major product areas in the corporation.
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1) Each major product area in the corporation is placed under the authority of a senior
manager who is a specialist in, and is responsible for, everything having to do with
his or her product line.
2) L.A. Gear’s structure is based on its varied product lines.
3) The advantage of product grouping is that it increases accountability for product
performance.
c) The particular type of customer the organization seeks can also be used to group
employees.
1) The assumption is that customers in each department have a common set of problems
and needs that can best be met by having specialists for each.
2) A customer-related organization’s activities can dictate employee grouping.
(a) Example, sales activities in an office supply firm can be grouped into three
departments that serve retail, wholesale, and government customers.
d) Another way to departmentalize is geographic departmentalization.
1) Valuable, if an organization’s customers are scattered over a large geographic area.
2) The organization structure of Coca-Cola in the new millennium reflects the
company’s operations in two broad geographic areas.
(a) The North American sector.
(b) The international sector (includes the Pacific Rim, the European Community,
Northeast Europe and Africa, and Latin America).
e) Process departmentalization groups activities on the basis of work or customer flow.
1) Units are organized around common skills needed to complete a certain process.
2) If you have ever been to a state motor vehicle office to get a driver’s license, you
experienced a process organization.
7.
How does the contemporary view of departmentalization differ from the historical view?
a) Most large organizations continue to use the departmental groups suggested by the early
management writers.
b) There is a recent trend for rigid departmentalization to be complemented by the use of
teams that cross traditional departmental lines.
1) Today’s competitive environment has refocused attention on customers.
c) To better monitor the needs of customers and to be able to respond to changes in those
needs, many organizations have given greater emphasis to customer departmentalization.
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d)
As tasks have become more complex, and diverse skills are needed to accomplish those
tasks, management has increasingly introduced the use of teams and task forces.
e)
Early writers believed the ideal structural design to be mechanistic or bureaucratic.
f)
Today, we recognize that there is no single ideal organization structure for all situations.
8. Self-Assessment #41, What Type of Organizational Structure Do I Prefer?
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III. CONTINGENCY VARIABLES AFFECTING STRUCTURE
A. Introduction
1. The most appropriate structure to use will depend on contingency factors.
2. The more popular contingency variables are strategy, size, technology, and environment.
B. How Is a Mechanistic Organization Different from an Organic Organization? (PPT 5-17)
1. Exhibit 5-7 describes two organizational forms. (PPT 5-18)
2. The mechanistic organization (or bureaucracy) was the natural result of combining the six
elements of structure.
a) The chain-of-command principle ensured the existence of a formal hierarchy of authority.
b) Keeping the span of control small created tall, impersonal structures.
1) Top management increasingly imposed rules and regulations.
c) The high degree of work specialization created simple, routine, and standardized jobs.
d) Departmentalization increased impersonality and the need for multiple layers of
management.
3. The organic form is a highly adaptive form that is a direct contrast to the mechanistic one.
a) The organic organization’s loose structure allows it to change rapidly as needs require.
1) Employees tend to be professionals who are technically proficient and trained to
handle diverse problems.
2) They need very few formal rules and little direct supervision.
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b) The organic organization is low in centralization.
4. When each of these two models is appropriate depends on several contingency variables.
C. How Does Strategy Affect Structure?
1. An organization’s structure is a means to help management achieve its objectives.
a) Strategy and structure should be closely linked.
b) Example, if the organization focuses on providing certain services—police protection in a
community—its structure will be one that promotes standardized and efficient services.
c) Example, if an organization is attempting to employ a growth strategy by entering into
global markets, it will need a structure that is flexible, fluid, and readily adaptable to the
environment.
2. Accordingly, organizational structure should follow strategy. If management makes a
significant change in strategy, it needs to modify its structure as well.
3. The first important research on the strategy-structure relationship was Alfred Chandler’s
study of close to 100 large U.S. companies.
4. After tracing the development of these organizations over fifty years and compiling extensive
case histories, Chandler concluded that changes in corporate strategy precede and lead to
changes in an organization’s structure.
a) Organizations usually begin with a single product or line.
b) The simplicity of the strategy requires only a simple form of structure to execute it.
c) Decisions can be centralized and complexity and formalization will be low.
d) As organizations grow, their strategies become more ambitious and elaborate.
5. Research has generally confirmed the strategy-structure relationship.
a) Organizations pursuing a differentiation strategy must innovate to survive.
1) An organic organization matches best with this strategy because it is flexible and
maximizes adaptability.
b) A cost-leadership strategy seeks stability and efficiency.
1) Stability and efficiency help to produce low-cost goods and services and can best be
achieved with a mechanistic organization.
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D. How Does Size Affect Structure?
1. There is historical evidence that an organization’s size significantly affects its structure.
2. Large organizations—employing 2,000 or more employees—tend to have more work
specialization, horizontal and vertical differentiation, and rules and regulations than do small
organizations.
3. The relationship is not linear; the impact of size becomes less important as an organization
expands.
a) Example, once an organization has around 2,000 employees, it is already fairly
mechanistic—an additional 500 employees will not have much effect.
b) Adding 500 employees to an organization that has only 300 members is likely to result in
a shift toward a more mechanistic structure.
E. How Does Technology Affect Structure?
1. Every organization uses some form of technology to convert its inputs into outputs.
2. To attain its objectives, the organization uses equipment, materials, knowledge, and
experienced individuals and puts them together into certain types and patterns of activities.
a) Example, workers at Maytag build washers, dryers, and other home appliances on a
standardized assembly line.
b) Example, employees at Kinko’s produce custom jobs for individual customers.
c) Example, employees at Bayer AG work on a continuous flow production line for
manufacturing its pharmaceuticals.
3. Joan Woodward (British scholar) found that distinct relationships exist between size of
production runs and the structure of the firm.
a) The effectiveness of organizations was related to “fit” between technology and structure.
4. Most studies focused on the processes or methods that transform inputs into outputs and how
they differ by their degree of routineness.
a) Three categories, representing three distinct technologies, had increasing levels of
complexity and sophistication. (PPT 5-19)
1)
Unit production described the production of items in units or small batches.
2)
Mass production described large batch manufacturing.
3)
The most technically complex group, process production, included continuousprocess production.
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b) The more routine the technology, the more standardized and mechanistic the structure
can be.
5. Organizations with more non-routine technology are more likely to have organic structures.
F. How Does Environment Affect Structure?
1. Mechanistic organizations are most effective in stable environments.
2. Organic organizations are best matched with dynamic and uncertain environments.
3. The environment-structure relationship is why so many managers have restructured their
organizations to be lean, fast, and flexible.
4. Global competition, accelerated product innovation, knowledge management, and increased
demands from customers for higher quality and faster deliveries are examples of dynamic
environmental forces.
5. Mechanistic organizations tend to be ill equipped to respond to rapid environmental change.
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IV. ORGANIZATION DESIGN APPLICATIONS (PPT 5-20)
A. What Is a Simple Structure?
1. Most organizations start as an entrepreneurial venture with a simple structure.
2. This design reflects the owner as president, with all employees reporting directly to her.
3. Work specialization is low, few rules govern the operations, and authority is centralized in a
single person—the owner.
4. The simple structure is a “flat” organization, with centralized decision-making authority.
5. The simple structure is most widely used in smaller businesses.
6. The strengths of the simple structure are that it is fast, flexible, and inexpensive to maintain,
and accountability is clear.
7. Major weaknesses.
a) It is effective only in small organizations.
b) It becomes increasingly inadequate as an organization grows; its few policies or rules to
guide operations and its high centralization result in information overload at the top.
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c) As size increases, decision making becomes slower and can eventually stop.
d) Everything depends on one person.
B. What Do We Mean by a Bureaucracy?
1. Many organizations do not remain simple structures because structural contingency factors
dictate it.
2. As the number of employees rises, informal work rules of the simple structure give way to
more formal rules.
3. Rules and regulations are implemented; departments are created, and levels of management
are added to coordinate the activities of departmental people.
4. At this point, a bureaucracy is formed.
5. Two of the most popular bureaucratic design options are called the functional and divisional
structures.
6. Why do companies implement functional structures?
a) The functional structure merely expands the functional orientation (See Exhibit 5-8).
(PPT 5-21)
b) The strength of the functional structure lies in work specialization.
1) Economies of scale, minimizes duplication of personnel and equipment, makes
employees comfortable and satisfied.
c) The weakness of the functional structure is that the organization frequently loses sight of
its best interests in the pursuit of functional goals.
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7. What is the divisional structure? (PPT 5-22)
a) An organization design made up of self-contained units or divisions.
b) General Foods and PepsiCo are examples. (See Exhibit 5-9.) (PPT 5-22)
c) Each division is generally autonomous, with a division manager responsible for
performance and holding complete strategic and operational decision-making authority.
1) Central headquarters provides support services—such as financial and legal
services—to the divisions.
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2) Headquarters acts as an external overseer to coordinate and control the various
divisions.
d) The chief advantage of the divisional structure is that it focuses on results.
1)
Division managers have full responsibility for a product or service.
2)
It also frees the headquarters from concern with day-to-day operating details.
e) The major disadvantage is duplication of activities and resources.
1)
The duplication of functions increases the organization’s costs and reduces
efficiency.
C. Can an Organization Design Capture the Advantages of Bureaucracies While Eliminating
Their Disadvantages?
1. The functional structure offers the advantages that accrue from specialization.
2. The divisional structure has a greater focus on results but suffers from duplication of
activities and resources.
3. The matrix structure combines the advantages of functional specialization with the focus and
accountability that product departmentalization provides. (PPT 5-23)
a) Exhibit 5-10 illustrates the matrix structure of an aerospace firm. (PPT 5-24)
4. The unique characteristic of the matrix is that employees in this structure have at least two
bosses: their functional departmental manager and their product or project managers.
a) Project managers have authority over the functional members who are part of that
manager’s team.
5. Authority is shared between the two managers.
a) Typically, the project manager is given authority over project employees relative to the
project’s goals.
b) Decisions such as promotions, salary recommendations, and annual reviews remain the
functional manager’s responsibility.
6. To work effectively, project and functional managers must communicate and coordinate.
7. The primary strength of the matrix is that it can facilitate coordination of a multiple set of
complex and interdependent projects while still retaining the economies that result from
keeping functional specialists grouped together.
8. The major disadvantages of the matrix are in the confusion it creates and its propensity to
foster power struggles.
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D. What Are Team-Based Structures? (PPT 5-23)
1. The entire organization consists of work groups or teams.
2. Team members have the authority to make decisions that affect them, because there is no
rigid chain of command.
3. How team structures can benefit the organization is exemplified by the example of the
National Cooperative Bank in Washington, DC.
a) Their functional structure in the lending area was slowing up decision making and
constraining customer service.
b) They restructured the bank into teams representing specific industries, such as health
care, distribution, etc., based on the special regulatory issues in each industry.
c) The bank witnessed significant reductions in the time spent to process a loan; customer
satisfaction increased, as did employee cooperation.
4. At AMS Hillend’s factory in Edinburgh, Scotland, a team-based structure for their circuit
board production has resulted in “enhanced customer responsiveness, quality and efficiency
gains, and an 88 percent increase in productivity.”
E. Why Is There Movement Toward a Boundaryless Organization?
1. A boundaryless organization is not defined or limited by boundaries or categories imposed by
traditional structures. (PPT 5-23)
2. It blurs the historical boundaries surrounding an organization by increasing its
interdependence with its environment.
a) Sometimes called network organizations, learning organizations, barrier-free, modular, or
virtual corporations. (PPT 5-25)
b) Boundaryless structures cut across all aspects of the organization.
c) Example, eBay, the world’s market leader in online trading has “no inventory, no
warehouses, no sales force—yet trades nearly $10 billion worth of goods each year!”
(PPT 5-25)
3. Boundaryless organizations are not merely flatter organizations. They attempt to eliminate
vertical, horizontal, and inter-organizational barriers.
a) To do this frequently requires an internal revolution.
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b) Horizontal organizations require multidisciplinary work teams who have the authority to
make decisions, to do the work, and to be held accountable for measurable outcomes.
4. What factors have contributed to the rise of boundaryless organizational designs?
a) Globalization of markets and competitors has played a major role.
b) An organization’s need to respond and adapt to the complex and dynamic environment.
c) Changes in technology have also contributed to this movement.
1)
Advances in computer power, “intelligent” software, and telecommunications enable
boundaryless e-commerce organizations to exist.
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V. HOW DO YOU CREATE A LEARNING ORGANIZATION? (PPT 5-26)
1. The concept of a learning organization describes an organizational mindset or philosophy that
has significant design implications.
2. A learning organization has developed the capacity to continuously adapt and change because
all members take an active role in identifying and resolving work-related issues.
3. Employees are practicing knowledge management.
a) Continually acquiring and sharing new knowledge.
b)
Willing to apply that knowledge in making decisions or performing their work.
4. According to some organizational design theorists, an organization’s ability to learn
and to apply that learning may be the only sustainable source of competitive advantage.
5. See Exhibit 5-11 for characteristics of a learning organization. (PPT 5-27)
a) Members share information and collaborate on work activities throughout the entire
organization.
b)
Minimize or eliminate existing structural and physical boundaries.
1) Employees are free to work together and to collaborate.
2) Teams tend to be an important feature of the structural design.
3) Managers serve as facilitators, supporters, and advocates.
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c) Information is shared openly, in a timely manner, and as accurately as possible.
d) Leadership creates a shared vision for the organization’s future and keeps organizational
members working toward that vision.
1) Leaders should support and encourage the collaborative environment.
e) A learning organization’s culture is one in which everyone agrees on a shared vision and
everyone recognizes the inherent interrelationships among the organization’s processes,
activities, functions, and external environment.
1) There is a strong sense of community, caring for each other, and trust.
2) Employees feel free to openly communicate, share, experiment, and learn without
fear of criticism or punishment.
6. The organization’s structural design should help employees do their work in the best, most
efficient, and effective way they can.
a) The structure is simply a means to an end.
VI.
ORGANIZATION CULTURE
A. What Is an Organization Culture? (PPT 5-28)
1. A system of shared meaning.
2. Organizations have cultures that govern how their members should behave.
3. In every organization, stories, rituals, material symbols, and language evolve over time.
4. These shared values determine what employees see and how they respond to their world.
B. How Can Cultures Be Assessed?
1. Currently there is no definitive method for measuring an organization's culture.
2. Cultures can be analyzed by assessing how an organization rates on ten characteristics.
a) See Exhibit 5-12. (PPT 5-29)
b) These ten characteristics are relatively stable and permanent over time.
C. Where Does an Organization’s Culture Come from?
1. An organization’s culture usually reflects the vision or mission of the organization’s
founders.
a) The founders also have biases on how to carry out the idea.
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b) They are unconstrained by previous customs or ideologies.
c) The small size of most new organizations also helps the founders impose their vision.
2. An organization’s culture results from the interaction between:
a) the founders’ biases and assumptions, and
b) what the first employees learn subsequently from their own experiences.
c) Example, the founder of IBM, Thomas Watson, established a culture based on “pursuing
excellence, providing the best customer service, and respect for employees.”
d) Some 75 years later, in an effort to revitalize the ailing IBM, CEO Louis Gerstner
enhanced that culture with his strong “customer-oriented sensibility” recognizing the
urgency the marketplace places on having their expectations met.
e) Example, Southwest Airlines, former CEO Herb Kelleher reinforced the company’s
“people culture” by doing things and having in place practices—such as compensation
and benefits that are above industry averages—to make employees happy.
D. How Does Culture Influence Structure?
1. An organization’s culture may have an effect on an organization’s structure, depending on
how strong, or weak, the culture is.
2. In organizations that have a strong culture, the organization’s culture actually can substitute
for the rules and regulations.
a) Strong cultures can create predictability, orderliness, and consistency without the need
for written documentation.
b) The stronger an organization’s culture, the less need for concern with formal rules and
regulations.
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Review, Comprehension, Application
Chapter Summary
1. The six elements of organization structure are: work specialization (having each discrete step of a
job done by a different individual rather than one individual do the whole job); unity of command
(management principle that no employee should report to more than one boss); span of control (the
number of employees a manager can effectively and efficiently manage); authority (rights inherent in
a managerial position to give orders and expect them to be followed) and responsibility (an obligation
to perform assigned activities); centralization (the higher the level in which decisions are made)
versus decentralization (pushing down of decision-making authority to lower levels in an
organization); and departmentalization (the grouping of activities in an organization by function,
product, customer, geography, or process).
2.
The advantages of work specialization are related to economic efficiencies. It makes efficient use of
the diversity of skills that workers hold. Skills are developed through repetition. Less time is wasted
than when workers are generalists. Training is also easier and less costly, but work specialization
can result in human diseconomies. Excessive work specialization can cause boredom, fatigue, stress,
low productivity, poor quality, increased absence, and high turnover.
3.
Authority is related to rights inherent in a position. Power describes all means by which an
individual can influence decisions, including formal authority. Authority is synonymous with
legitimate power. However, a person can have coercive, reward, expert, or referent power without
holding a position of authority. Thus, authority is actually a subset of power.
4.
Managers can departmentalize on the basis of function (work being done), product (product or
service being generated), customer (group served), geography (location of operations), or process
(work flow). In practice, most large organizations use all five ways.
5.
The mechanistic organization, or bureaucracy, rates high on worker specialization, formal work rules
and regulations, and centralized decisions. Workers perform specific job duties, their actions are
guided by formal work regulations, and decisions are typically made by higher levels in the
organization. In the organic organization, employees are generalists and perform all parts of a job,
face fewer work regulations, and often times have the authority to make decisions on issues directly
related to their work.
6.
The strategy-determines-structure thesis argues that structure should follow strategy. As strategies
move from single product to vertical integration, to product diversification, structure must move from
organic to mechanistic. As size increases, so, too, do specialization, formalization, and horizontal
and vertical differentiation. But size has less of an impact on large organizations than on small ones
because once an organization has around 2,000 employees, it tends to be fairly mechanistic. All
other things equal, the more routine the technology, the more mechanistic the organization should be.
The more nonroutine the technology, the more organic the structure should be. Finally, stable
environments are better matched with mechanistic organizations, but dynamic environments fit better
with organic organizations.
7.
The functional structure groups similar or related occupational specialties together. It takes
advantage of specialization and provides economies of scale by allowing people with common skills
to work together. The divisional structure is composed of autonomous units or divisions, with
managers having full responsibility for a product or service. However, these units are frequently
organized as functional structures inside their divisional framework. So divisional structures
typically contain functional structures within them—and they are less efficient.
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8.
By assigning specialists from functional departments to work on one or more projects led by project
managers, the matrix structure combines functional and product departmentalization. It thus has the
advantages of both work specialization and high accountability.
9.
The boundaryless organization is a design application in which the structure is not defined by or
limited to the boundaries imposed by traditional structures. It breaks down horizontal, vertical, and
interorganizational barriers. It’s also flexible and adaptable to environmental conditions. The factors
contributing to boundaryless organizations include global markets and competition, technology
advancements, and the need for rapid innovation.
10. A learning organization is an organization that has developed the capacity to continuously adapt and
change because all members take an active role in identifying and resolving work-related issues. In a
learning organization, employees are practicing knowledge management by continually acquiring
and sharing new knowledge, and they are willing to apply that knowledge in making decisions or
performing their work.
11. Organization culture is a system of shared meaning within an organization that determines, in large
degree, how employees act.
Companion Website
We invite you to visit the Robbins/DeCenzo Companion Website at www.prenhall.com/robbins for the
chapter quiz and student PowerPoints.
OneKey Online Courses
We invite you to visit www.prenhall.com/onekey for the part-ending ethics scenarios, diversity exercises,
and learning modules.


Enhancing your Skill in Ethical Decision Making
New to this edition is an online interactive feature designed to give students experience in making
management decisions about hypothetical yet realistic ethical issues. Introductory paragraphs at the
ends of Parts 1, 2, 3, 4, and 5 provide background about the company (Boeing) and set up the
situation for each set of exercises. After they have studied the chapters in each part, have students log
onto www.prenhall.com/onekey and work through the two multiple choice questions and two shortessay questions. You may want to hold classroom debates, assign students to conduct role-plays, or
have students work in teams to explore the decision alternatives involved in some of these ethical
challenges.

Diversity Perspectives: Communication and Interpersonal Skills, by Carol Harvey and June
Allard
1. In terms of diversity, what opportunities/issues did the previous management of Savory Foods, Inc.
miss?
Clearly, management was not proactive about the increasing diversity of the consumer markets that
offer growth opportunities. Because of the bureaucratic structure and the culture of the organization,
feedback and communication from diverse employees such as Danny, who had new perspectives to offer,
was not encouraged or supported.
2. From the scenario, provide specific examples of the types of power Len demonstrated. In your answer,
be sure to indicate how these vary by participant’s perspectives.
As the CEO, Len has reward power (taking Danny to lunch), legitimate power (as the sole owner),
expert power (in finance and marketing), and possibly referent power too (as exemplified by his
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approach of working closely with the employees, listening to Danny’s ideas, etc.). From Nick’s
perspective Len may exhibit coercive power in terms of the plan to reorganize and take the organization
into new strategic directions.
3. What other aspect of diversity could also affect this situation?
Nick perceived that he was losing power and Danny was gaining power. This situation may be
exacerbated because of Nick’s experience as an older long-time employee. He may feel that his work and
history with the company are no longer valued from Len’s perspective. It is important that managers be
aware that experienced employees may perceive situations such as this as threatening their proximity to
the power core. Len needs to be aware that sometimes older workers feel threatened by such changes and
need reassurance of their value to an organization.
Reading for Comprehension
1. Describe what is meant by the term organization design.
Answer – Once decisions regarding corporate strategies are made, an effective structure must be
implemented to facilitate the attainment of those goals. When managers develop or change the
organization’s structure, they are engaging in organization design. Organization design decisions are
typically made by senior managers. Organization design applies to any type of organization.
2. How are authority and organization structure related? Authority and power?
Answer – Authority refers to the rights inherent in a managerial position to give orders and expect the
orders to be obeyed. Authority was a major tenet of the early management writers, the glue that held
the organization together. It was to be delegated downward to lower-level managers. Each
management position has specific inherent rights that incumbents acquire from the position’s rank or
title. Authority is related to one’s position and ignores personal characteristics. When a position of
authority is vacated, the authority remains with the position. Authority is closely tied to structure.
That is not necessarily true with power.
Authority and power are frequently confused. Authority is a right, the legitimacy of which is based on
the authority figure’s position in the organization. Authority goes with the job. Power refers to an
individual’s capacity to influence decisions. Authority is part of the larger concept of power. Exhibit
5-4 visually depicts the difference. While authority is defined by one’s vertical position in the
hierarchy, power is made up of both one’s vertical position and one’s distance from the organization’s
power core, or center.
3. In what ways can management departmentalize? When should one method be considered over the
others?
Answer – See Exhibit 5-6, Types of Departmentalization.
One of the most popular ways to group activities is by functional departmentalization. See Exhibit
5-8. Functional departmentalization can be used in all types of organizations.
L.A. Gear uses the product departmentalization method. See Exhibit 5-9. Its structure is based on its
varied product lines. Service-related organization activities would be autonomously grouped.
The particular type of customer the organization seeks can also be used to group employees. The
assumption is that customers in each department have a common set of problems and needs that can
best be met by having specialists for each.
Another way to departmentalize is geographic departmentalization. Valuable, if an organization’s
customers are scattered over a large geographic area.
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Process departmentalization groups activities on the basis of work or customer flow.
The matrix structure combines the advantages of functional specialization with the focus and
accountability that product departmentalization provides. See Exhibit 5-10.
4. Why is the simple structure inadequate in large organizations?
Answer – The simple structure is a “flat” organization, with centralized decision making. The simple
structure is most widely used in smaller businesses. The strengths of the simple structure: it is fast,
flexible, and inexpensive to maintain, and accountability is clear. Major weaknesses: it is effective
only in small organizations. It becomes increasingly inadequate as an organization grows; its few
policies or rules to guide operations and its high centralization result in information overload at the
top. As size increases, decision making becomes slower and can eventually stop. Everything depends
on one person.
5. Describe the characteristics of a boundaryless organization structure.
Answer – A boundaryless organization is not defined or limited by boundaries or categories imposed
by traditional structures. It blurs the historical boundaries around an organization by increasing its
interdependence with its environment. Sometimes called network organizations, learning
organizations, barrier-free, modular, or virtual corporations. Boundaryless structures cut across all
aspects of the organization. Boundaryless organizations are not merely flatter organizations. They
attempt to eliminate vertical, horizontal, and inter-organizational barriers. A boundaryless
organization provides the flexibility and fluid structure that facilitates quick movements to capitalize
on opportunities.
6. What is the source of an organization’s culture?
Answer – An organization’s culture usually reflects the vision or mission of the organization’s
founders. Because the founders had the original idea, they also have biases on how to carry out the
idea. The small size of most new organizations also helps the founders impose their vision on all
organization members. An organization’s culture, then, results from the interaction between 1) the
founders’ biases and assumptions and (2) what the first employees learn subsequently from their own
experiences. See Exhibit 5-12.
Linking Concepts to Practice
1. Which do you think is more efficient—a wide or a narrow span of control? Support your decision.
Answer – Students’ arguments should differentiate between efficient and effective. A narrow span of
control is more effective because it provides more control. A wide span of control is more efficient
because there is less overhead and bureaucracy, but also less control, which could lead to greater
waste.
2. “An organization can have no structure.” Do you agree or disagree with this statement? Explain.
Answer – A boundaryless or virtual organization is not without structure, structure is minimized but
not eliminated. There is always some degree of reporting relations, some type of division of labor,
some need for the management of processes, etc.
3. Show how both the functional and matrix structures might create conflict within an organization.
Answer – The conflict within a matrix is clear, competing and conflicting demands by different
bosses on the same employee. In a functional organization, different functions and their managers can
end up in competition for resources, personnel, priorities, etc., since each area is responsible for a
separate function.
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4. Do you think the concept of organizational structures, as described in this chapter, is appropriate for
charitable organizations? If so, which organization design application would you believe to be most
appropriate? If not, why not? Explain your position.
Answer – All organizations have some type of design, so of course the material is relevant and
appropriate. Any form can fit depending on the mission and purpose of the charity. Does it provide a
service or product? Does it need to minimize cost and overhead—a thrift shop, a church; or exercise
maximum control—a juvenile home, etc.
5. What effects do you think the characteristics of the boundaryless organization will have on employees
in the 21st century organizations?
Answer – It will lead to a need for smarter, more independent, better educated and more trustworthy
employees as they will work with more individual authority and less direct supervision.
6. Classrooms have cultures. Describe your class culture. How does it affect your instructor? You?
Answer – The answer will vary based on your class.
Management Workshop
Team Skill-Building Exercise
How Is Your School Organized?
Every university or college displays a specific type of organizational structure. For example, if
you are a business major, your classes are often housed in a department, school, or college of business.
But have you ever asked why? Or is it something you just take for granted?
In Chapter 3 you had an opportunity to assess your college’s strengths, weaknesses, and
comparative advantage and see how this fits into its strategy. Now, in this chapter we have built a case
that structure follows strategy. Given your analysis in Chapter 3 (if you have not done so, you may want
to refer to page 101 for the strategy part of this exercise), analyze your college’s overall structure in terms
of formalization, centralization, and complexity. Furthermore, look at the departmentalization that exists.
Is your college more organic or mechanistic?
Objective: To see how an organization’s strategy and structure should match through the application of
your assessment of your college's strengths, weaknesses, and comparative advantage to its strategy.
Time: 1 to 2 class periods. Assessment in one (or outside of class) and discussion in class.
Instructions:
1. Place students into small groups.
2. Refer them back to their assessment of the college’s strengths, weaknesses, and comparative
advantage in Chapter 3.
3. Students should analyze the college’s overall structure in terms of formalization, centralization, and
complexity.

What type of departmentalization exists?

Is the college more organic or mechanistic?
4. They should find or you can provide copies of the college’s mission statement.
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
Consider asking an administrator or development officer to come into the class and explain the
college’s strategy.
5. Ask students to analyze how well the college’s structure fits with its strategy/mission.
6. Analyze the college’s size, technology, and environment.
Assess its size, degree of technological routineness, and environmental uncertainty.
7. Based on these assessments, what structure would you predict your college to have? Does it have this
structure now?
8. Compare your findings with those of other classmates.
9. Discuss with students:

Are there similarities in how each group viewed the college? Differences?

What do you believe has attributed to these findings?
Understanding Yourself
Before your can develop others, you must understand your strengths. To help assist in this learning
process, students are encouraged to complete the following self-assessments from the Prentice-Hall SelfAssessment Library 3.0:

How Power Oriented Am I? (#35)

What’s My Preferred Type of Power? (#36)

What Type of Organizational Structure Do I Prefer? (#41) (Also available in this chapter, pp. 171)

What’s the Right Organizational Culture for Me? (#44)
You might want to instruct students to print out the results and keep them in a “portfolio of learning”
which could become the foundation for an end-of-semester project. This project, perhaps in the form of a
paper, could focus on the strengths they see in themselves based on the self-assessment exercises they
have completed, as well as areas where they might want to grow and develop to increase their managerial
skills.
Developing Your Power Base Skill
Building a Power Base
One of the more difficult aspects of power is acquiring it. What can one do to develop power?
Steps in practicing the skill
1. Respect others.
2. Build power relationships.
3. Develop associations.
4. Control important information.
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5. Gain seniority.
6. Build power in stages.
Practicing the Skill
1. Scenario
Margaret is a supervisor in the Internet sales division of a large clothing retailer. She has let it be
known that she is devoted to the firm and plans to build her career there. Margaret is hard working
and reliable, has volunteered for extra projects, taken in-house development courses, and joined a
committee dedicated to improving employee safety on the job. She undertook an assignment to
research ergonomic office furniture for the head of the department and gave up several lunch hours to
consult with the head of human resources about her report. Margaret filed the report late, but she
excused herself by explaining that her assistant lost several pages that she had to redraft over the
weekend. The report was well received and several of Margaret’s colleagues think she should be
promoted when the next opening arises.
2.
Evaluate Margaret’s skill in building a power base.

What actions has she taken that are helpful to her in reaching her goal?

Is there anything she should have done differently?
Teaching tips
1. Have students apply the criteria listed under “Steps in practicing the skill.”
2.
Conduct as a discussion rather than as a written exercise.
3.
Be prepared for students to complain that there isn’t enough information regarding how she built a
power base to evaluate her skill.

Brainstorm with students what things she should do, specifically in this type of business, to
build a power base.
Developing Your Diagnostic and Analytical Skills
A Learning Organization at Svenska
Svenska Handelsbaken is Sweden’s premier banks and one of the largest banks in the Nordic
region. Lars Groenstedt is Svenska’s president and group chief executive, and believes that the bank’s
competitive advantage comes from the degree of autonomy that branch managers have. The bank’s 30plus years of developing its branch network throughout Sweden, Denmark, Finland, Norway, Norrland,
Great Britain, and 14 non-European countries has allowed it to achieve a return on equity that has been
above average.
Svenska’s branch managers can choose their customer and product offerings, and can set staffing
numbers and decide salary levels at their branch. All customers are the sole responsibility of the branch--even large global companies like Volvo are managed by a branch. Each branch is benchmarked against
each other on branch performance, as measured by a ratio of costs divided by revenues. Underperforming
branches are counseled by regional offices, and there are strict geographical boundaries to stop predatory
competition among its branches. Its staff is a relatively small percentage of what their competitors have,
and the bank’s flat management structure and emphasis on personal responsibility and consensus
approach is well suited for the Sweedish culture.
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This 130 year old bank has proven it can be successful in the industry, and Groenstedt wants to
continue to build the learning organization they’ve started.
Questions
1. What do you see as the advantages and disadvantages of Svenska Handelsbanken’s structure?
Answer – The company exists in a tradition industry where organizations are usually hierarchically
structured. Everything included in the case about the organization’s mode of operations reflects a flat
structure. Management appears to encourage creativity, entrepreneurship, and personal responsibility.
They also appear to support employee flexibility and even the opportunity for the employee to make a
mistake in order to learn. Yet Svenska balances this flexibility with rigorous financial metrics and
monitoring to keep employees focused on the organization’s work.
2. Do you believe such a structure could work effectively in cultures, like that of the U.S., where there is
less emphasis placed on consensus building?
Answer – Students’ answers will vary based on their assumptions, as the case is not explicit in regard to
these elements. However, students should acknowledge that this location level collaboration may be
working extra well in Sweden, where people are known to be more collaborative than in the U.S.
3. What do you believe Groenstedt could do to enhance the learning organization concept at Svenska?
Answer – Use Exhibit 5-11 as a guide in answering this question. Students’ responses will vary but
should include something related to each of the four characteristics of a learning organization:
organizational design, information sharing, leadership, and organizational culture.
Enhancing Your Communication Skills
1. Visit a McDonald’s on a weekday around lunchtime. On your first order, ask for a Big Mac or a
chicken sandwich. Record how long it takes to have your order filled. On your second order, request
the Big Mac or chicken sandwich and ask that it have a) no lettuce, b) extra ketchup, and c) extra
pickles. Record how long this “special” order takes. Compare the two times. Discuss the time
differences in terms of efficiencies of work specialization. Also, note whether the second order was
completed correctly. What are the implications of this simple investigation you did regarding product
standardization?
2. Discuss the pros and cons of having employees working on projects and reporting to several project
managers. Discuss the implications you envision for violating the chain of command principle. Cite
specific examples. If you were a project manager who managed project members who reported to
other managers, what would you do to make sure your project would be completed on time?
3. “Employees should follow orders and directives given to them by their managers. Those who don’t
are subject to being disciplined for insubordination.” Develop an argument for both sides of this
statement. Complete your paper by stating and supporting your position on whether employees should
unquestionably follow orders given to them by their managers.
Team Exercises Based on Chapter Material
1.
Break the class into groups of 5. Have each individual write down the name of an organization
they’d like to work for. Have the group share their selected organizations with each other, and then tell
the group they must select one of the organizations for this exercise. (10 minutes)
Next, give the groups 25 minutes to find a computer and look up that company’s website. Ask them to
try to find information about the company that would indicate how the company addresses the 6 elements
of structure.
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While the groups are conducting their research, create a table on the board with the six elements of
structure across the top, and then six (or more or less depending on the number of students in your class)
rows for the table.
When the class reconvenes, have the groups describe their chosen organizations on the various
dimensions, and complete the table you created on the board.
Ask the students to think about which of the organizations on the board seem as though they’d be the
most ideal fit for them based on the results of the self-assessments they’ve been completing.
2.
Break the class into groups of 5 by having them count off. Ask them to prepare a plan for your
class to move towards a learning organization next semester, using the criteria in exhibit 5-11. Tell them
they must provide specific examples of things you do in class and how they could be done differently in
order to make your class more like a learning organization. (30 minutes). Give the groups time to present
their ideas to the rest of the class. If there is time, ask them to describe what they would/would not get
out of the class if it was done in the fashion they propose (compared to how it is currently structured)
3.
Have the students self-select into groups of 4-6. Tell the students that their task is design a
company that makes backpacks. Do not tell them anything else. Give them 25 minutes to design their
company.
Have the groups present their designs to the class. After all the groups have presented, have the groups
reconvene and complete (if they haven’t done so already) Self-Assessment # 41. Ask the group to discuss
each of their members structure preference, and then have them discuss how those preferences are
reflected in the design/structure they choose for their backpack company. Usually, groups that are
predominately organic in their preferences on the Self-Assessment will design a very organic company
and groups that are predominately mechanistic will design a very mechanistic organization.
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