The Use
of Organization
Structure and
Organizational
Design
Topics Last Week

Housekeeping:
 Internship
UNU
 Cases
 Group
2 pls stay after class
 Check with your group, drop by Wednesday!
 Group 2 get questions asked by group 3, etc.
 All teams read Ch. 6 of “Tools for Innovators”
on Team Management
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Questions about the readings for this week.
What did you think of it? Now Presentation!
Markets, public-private partnerships &
contracts
 Privatization
Topics

Housekeeping:
 California
Electricity Crisis: Deregulation
 Internships UN
 Cases
 Costa
Rica’s Minister of Education Faces a
Dilemma (A & B)
 Don’t worry. It takes time. Beginning is hard
(also the readings, e.g., governance).
 Good group discussion

Readings this week. What did you think?
 Presentation!
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Set up of the course
Organizational structure and design
Course Outline
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Introduction:
 Corruption
& Kleptocracy
 What is public management
 Governance

Traditional tools:
 The
use of contracts: Non-profits & private firms
 Organization Structure and Design
 HRM
 Budgeting, Financial Management, MIS
 Leadership, Standard Operating Procedures
Course Outline

Organizational Strategy: The Bureaucracy’s
Environment
 Strategic
Planning
 Political Management
 Corruption & Ethics

Integrating Environment & Operations:
Management Innovation Techniques
 Privatization
 TQM
& Mgmt innovation
Today’s Outline
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Origins/reasons for organizational structure
building blocks of org structure
different types of structure
reorganizing structure
 when
 design

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Costs of reorganization
Other issues
 Program
Management
 Fair & reasonable assignments
 Control (& learn to delegate)
Organizational Structure

Second class, we talked about the complexity
of our society. What basic process caused
that?
 Differentiation,
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Specialization, Division of Labor
Third class, we discussed different types of
markets and how the govt needs to
discriminate between these types of markets
and needs capacity to deal with these
markets. One argument for more market-like
functioning was efficiency. Now when you ‘ve
an organization, the organizational structure
should foster efficiency.
Organizational Structure

Why do you need an organization structure?
 If
you have differentiation, you also need Integration
(to whom do you report, who is the boss, what are
the responsibilities)
 Formal power, possibilities for promotion, higher
financial rewards, special perks. Sometimes more
interesting work.

Is a structure always fixed? In the long run,
everything is a process. Structure is dependent on:
 strategy
of the organization: goals
 internal social structure
 external environment
Organizational Structure

This explains two definitions of organizational
structure
 organization
chart & policies and procedures of
administrative systems, such as those for
planning, resource allocation, resource
allocation, budgeting, and controlling
 organization chart (building blocks, family
picture)
Organizational Structure

Org Structure is
 division
of labor
 relationships and tasks
 internal coordination and authority
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The organization chart shows the formal
structure. Yet, structure encompasses more
than a set of boxes, it also is set of
agreements on how the org. functions
Does an organization only have a formal
structure? No, you also have to understand
the informal relationships. (Hawthorne studies)
Building Blocks: A Puzzle

Horizontal differentiation (emphasis is on
execution/ primary process):
 functional
(differentiation)
 geographic (specialization)
 market (specialization)
 product (specialization)
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Vertical differentiation (emphasis on leading &
strategy & decision making)
 Integrative

management
Distinguish between line-management and
staff management
Different types of structures
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Functional
Divisional
Overlay
Matrix
All have their advantages and disadvantages
in terms of adaptation and flexibility
 Stable
environment-Unstable Environment
 Centralized-Decentralized
Different types of structures
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With govt organizational structure you often
have to deal with programs. So, the structure
needs to be geared to understanding program
management
A program is a set of related programs
Every organization structure involves a tradeoffs, for example
 regional
adaptation vs. efficiency
When do you reorganize?
Reorganization is a strategic choice about the
future of the organization
 To break up dysfunctional patterns of
organizational behavior (internal: informal
patterns of communication and unsanctioned
organizational goals develop)
 To create more logical combinations of
functions in order to stimulate greater
organizational efficiencies e.g., improve workflow & communication (internal & external)
 To emphasize new or modified missions,
goals, or objectives, e.g., growth (strategy).
 To reward excellent performers (internal).
Steps in reorganization/design

Diagnosis of a structural problem
 which
results are bad or off-balance
 perspectives of people on the organization
(growth, important issues for work behavior)
 emergent relationship and perspectives within
and outside the organization
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Analysis of structural design
 What
are the key tasks? (What is the primary
process? Prioritize tasks?)
 How can the key tasks be grouped?
 In other words, what is the ideal organization
without taken office politics into account. Look
at 4 subquestions:
Steps in reorganization/design
 In
light of prioritized tasks and the organization’s size,
what is the most important basic rationale for the
horizontal division of labor?(functional, divisional,
overlay, matrix)
 In lights of tasks, size and basic form, what are the
essential units of horizontal differentiation? Cluster
tasks. Put similar services/products together, for
example lobbying & PR
 What are the essential units of vertical division of labor?
(who does the operational work, strategic work, and
control)
 Are there other integrative mechanisms necessary?
E.g., budgetary control, conflict management, clear
mission, etc. as in the case today.
Steps in reorganization/design
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Synthesis:
 Given
the ideal design, what will be the effects
on the perspectives of groups and key
individuals? So, you bring the political, practical
and ideal together, e.g., some good people or
strong divisions could better stay close, what
are the informal patterns of communication).
 Be iterative, go over the steps at least once
again
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Implementation:
 monitor
(responsibilities, time-line)
 correct & adjust
 follow-up (in procedures, etc.)
 evaluation
Possible Costs of
Reorganization
Disrupt informal patterns of communication
(pos & neg ones)
 Create insecurity & declining productivity
 Less effective formal reporting relationships
 Sometimes people feel not involved in the
process, the reorganization is sprung on them
Look at reorganization as an investment risk.
Involve the employees. Seek advice.
Reorganization does not solve operational
problems, e.g., budgeting. It is no substitute
for motivation. Structural redesign as the last
resort.
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Other issues

Why are organizations getting flatter today?
 Need
for faster response to clients facilitated by
 modern
production techniques
 ICT for faster communication

Other topics:
 Program
Management (check with your org or
course)
 Fair & reasonable assignment
 Control & delegation (p. 109-110)
Today’s Outline




Origins/reasons for organizational structure
building blocks of org structure
different types of structure
reorganizing structure
 when
 design


Costs of reorganization
Other issues
 Program
Management
 Fair & reasonable assignments
 Control (& learn to delegate)
Topics

Housekeeping:
 California
Electricity Crisis: Deregulation
 Internships UN
 Cases
 Costa
Rica’s Minister of Education Faces a
Dilemma (A & B)
 Don’t worry. It takes time. Beginning is hard
(also the readings, e.g., governance).
 Good group discussion

Readings this week. What did you think?
 Presentation!


Set up of the course
Organizational structure and design