Chapter 07
ORGANIZATIONAL
STRUCTURE
AND DESIGN
07-1
Learning Objectives (cont.)
You should learn to:
1,Define organizational structure and
organizational design
2, Describe the six key elements of
organizational structure
3, Differentiate mechanistic and organic
organizational design
4, Identify the four contingency factors that
influence organizational design
07-2
Learning Objectives
You should learn to:
5,Describe a simple structure, a functional
structure, and a divisional structure
6,Explain team-based structures and why
organizations are using them
7,Describe matrix structures, project
structures, autonomous internal units, and
boundaryless organizations
8,Explain the concept of a learning
organization and how it influences
organizational design
07-3
Defining Organizational Structure
1,Define organizational structure and
organizational design
– organizing - the process of creating an
organization’s structure
– organizational structure - the formal
framework by which job tasks are divided,
grouped, and coordinated
– organizational design - process of
developing or changing an organization’s
structure
07-4
2,Describe the six key elements of organizational structure
2.1Work Specialization
– the degree to which tasks in an
organization are divided into separate jobs
• individuals specialize in doing part of
an activity rather than the entire activity
– an important organizing mechanism,
though not a source of ever-increasing
productivity
07-5
3,Describe the six key elements of organizational structure
2.2 Departmentalization
– the basis by which jobs are grouped together
• functional - groups jobs by functions
performed
• product - groups jobs by product line
• geographical - groups jobs on the basis of
territory or geography
• process - groups jobs on the basis of product
or customer flow
• customer - groups jobs on the basis of
common customers
10-6
3,Describe the six key elements of organizational structure
Departmentalization (cont.)
– large organizations combine most or all forms of
departmentalization
– trends
• customer departmentalization is increasingly
being used
– better able to monitor and respond to
customer needs
– cross-functional teams跨职能团队are becoming
popular
» groups of individuals who are experts in
various specialties
» involved in all aspects of bringing a new
product to market
10-7
Functional Departmentalization
Plant Manager
Manager,
Engineering
Manager,
Accounting
Manager,
Manufacturing
Manager,
Human Resources
Manager,
Purchasing
10-8
Product Departmentalization
Bombardier, Ltd.
Mass Transit
Sector
Recreational and Utility
Vehicles Sector
Mass Transit
Division大宗运输事业部
Bombardier-Rotax
(Vienna)
Rail Products
Sector
Recreational Products
Division
Logistic Equipment
Division
Industrial Equipment
Division
Bombadier-Rotax
(Gunskirchen)
10-9
Geographical Departmentalization
Vice President
for Sales
Sales Director,
Western Region
Sales Director,
Southern Region
Sales Director,
Midwestern Region
Sales Director,
Eastern Region
10-10
Process Departmentalization
Plant Superintendent
工厂主管
Sawing
Department
Manager
Planning and
Milling压边
Department
Manager
Finishing抛光
Department
Manager
Inspection and
Shipping
Department
Manager
Assembling
Department
Manager
Lacquering and
Sanding漆涂和打磨
Department
Manager
10-11
Customer Departmentalization
Director
of Sales
Manager,
Retail Accounts
Manager,
Wholesale Accounts
Manager,
Government Accounts
10-12
2,Describe the six key elements of organizational structure
2.3Chain of Command (cont.)
– continuous line of authority that extends from upper
organizational levels to the lowest levels and clarifies who
reports to whom
• unity of command - a person should report to only one
manager
3.4 authority & responsibility
authority - the inherent rights in a managerial position to
tell people what to do and to expect them to do it
responsibility - the obligation to perform any assigned
duties
– these concepts are less relevantly important today due to
information technology and employee empowerment被授权
10-13
2,Describe the six key elements of organizational structure
2.5 Span of Control管理跨度
– number of employees that a manager can
efficiently and effectively manage
– determines the number of levels and managers in
an organization
– the wider the span, the more efficient the
organization
– appropriate span influenced by:
• the skills and abilities of employees
• the complexity of tasks performed
• availability of standardized procedures
• sophistication of organization’s information
system
10-14
2.5 Contrasting Spans Of Control
Organizational Level
Members at Each Level
1
1
1
2
4
8
3
16
64
4
64
512
5
256
4,096
6
1,024
7
4,096
Span of 4
Operatives作业人员
= 4,096
Managers (levels 1-6) = 1,365
Span of 8
Operatives
= 4,096
Managers (levels 1-4) = 585
10-15
2,Describe the six key elements of organizational structure
2.6 Centralization & Decentralization
Centralization
– the degree to which decision making is
concentrated at a single point in the organization
• top-level managers make decisions with little
input from subordinates in a centralized
organization
Decentralization
– the degree to which decisions are made by lowerlevel employees
– distinct trend toward decentralized decision
making
10-16
Factors That Influence the Amount of Centralization and Decentralization
10-17
Defining Organization Structure (cont.)
Formalization
– the degree to which jobs within the organization
are standardized
• standardization - provides the need for
employees to consider alternatives
– extent to which employee behavior is guided by
rules and procedures
• employee allowed minimal discretion判断力in
highly formalized jobs
– explicit job descriptions
– clearly defined procedures
10-18
3,Differentiate mechanistic and organic organizational design
Mechanistic Organization
– rigidly and tightly controlled structure
– tries to minimize the impact of human traits
– most large organizations have some mechanistic
characteristics
Organic Organization
– highly adaptive and flexible structure
– permits organization to change when the need
arises
– employees are highly trained and empowered to
handle diverse job activities
– minimal formal rules and little direct supervision
10-19
3,Differentiate mechanistic and organic organizational design
Mechanistic
Organic
• High Specialization
• Cross-Hierarchical
• Rigid
Departmentalization
• Clear Chain of
Command
• Narrow Spans of
Control
• Centralization
• High Formalization
Teams跨职能团队
• Free Flow of
Information
• Wide Spans of
Control
• Decentralization
• Low Formalization
10-20
4,Identify the four contingency factors that influence
organizational design
Contingency Factors
4.1 Strategy and Structure - structure should
facilitate the achievement of goals
• strategy and structure should be closely linked
• strategy focuses on:
– innovation - need the flexibility and free
flow of information of the organic
structure
– cost minimization - seek efficiency,
stability, and tight controls of mechanistic
structure
– imitation - use structural characteristics of
both mechanistic and organic structures
10-21
4,Identify the four contingency factors that influence
organizational design
Contingency Factors (cont.)
4.2 Size and Structure - size affects structure at a
decreasing rate
4.3 Technology and Structure
• technology - converts inputs into outputs
– unit production单件生产 - production of items in
units or small batches批
– mass production大批量生产 - large-batch
manufacturing
– process production连续生产 - continuous-process
production
• mechanistic structure supports routine常规化technology
• organic structure supports nonroutine technology
10-22
Structural
Characteristics
Woodward’s Findings On Technology, Structure,
And Effectiveness
Unit
Production
Mass
Production
Low vertical纵向分化
differentiation
Low horizontal
differentiation
Low formalization
Moderate vertical High vertical
differentiation
differentiation
High horizontal
Low horizontal
differentiation
differentiation
High formalization Low formalization
Most effective
structure
Organic
Mechanistic
Process
Production
Organic
10-23
4,Identify the four contingency factors that influence
organizational design
Contingency Factors (cont.)
4.4 Environmental Uncertainty and Structure
• one way to reduce environmental uncertainty is
to adjust the organization’s structure
– with greater stability, mechanistic structures
are more effective
» mechanistic structures are not equipped to
respond to rapid environmental change
– the greater the uncertainty, the greater the
need for an organic structure
» organizations are being designed to be
more organic nowadays
10-24
5,Describe a simple structure, a functional structure, and a
divisional structure
Traditional Organizational Designs
5.1 Simple Structure - low departmentalization,
wide spans of control, authority centralized in a
single person, and little formalization
• commonly used by small businesses
• as organizations increase in size, the structure
tends to become more specialized and
formalized
5.2 Functional Structure - groups similar or
related occupational specialists together
10-25
5,Describe a simple structure, a functional structure, and a
divisional structure
Traditional Organizational Designs (cont.)
5.3 Divisional Structure - composed of
separate divisions
• each division has relatively large
autonomy
• parent corporation acts as an external
overseer to coordinate and control the
divisions
–provides support services
10-26
Strengths and Weakness of Common Traditional Organizational Designs
10-27
6,Explain team-based structures and why organizations are
using them
Contemporary Organizational Designs
– Team-Based Structures - entire organization is
made up of work teams
• employee empowerment is crucial
• teams responsible for all work activity and
performance
• complements functional or divisional structures
in large organizations
– allows efficiency of a bureaucracy行政式机构
– provides flexibility of teams
10-28
7,Describe matrix structures, project structures, autonomous
internal units, and boundaryless organizations
Contemporary Organizational Designs (cont.)
– Matrix Structure - assigns specialists from
different functional departments to work on
projects led by project managers
• adds vertical dimension to the traditional
horizontal functional departments
• creates a dual chain of command
– violates unity of command
– project managers have authority in areas
relative to the project’s goals
– functional managers retain authority over
human resource decisions (e.g.,
promotions)
10-29
A Matrix Organization in an Aerospace Firm
10-30
Common Organizational Designs (cont.)
Contemporary Organizational Designs (cont.)
– Project Structure - employees work continuously
on projects在项目中员工持续地变换工作
• employees do not return to a functional
department at the conclusion of a project
• all work performed by teams comprised of
employees with appropriate skills and abilities
• tends to be very fluid and flexible
– no rigid departmentalization or organization
hierarchy
– managers serve as facilitators and mentors促进
者、导师
10-31
Common Organizational Designs (cont.)
Contemporary Organizational Designs (cont.)
– Autonomous Internal Units – independent,
decentralized business units
• each has its own products, clients,
competitors, and profit goals
• business units are autonomous
–there is no centralized control or
resource allocation
10-32
Common Organizational Designs (cont.)
Contemporary Organizational Designs (cont.)
– Boundaryless Organization - design is not defined by,
or limited to, the horizontal, vertical, or external
boundaries imposed by a predefined structure
• strategic alliances break down barriers between the
company and its customers and suppliers
• seeks to eliminate the chain of command, to have
limitless spans of control, and to replace
departments with empowered teams
• flattens the hierarchy by removing vertical
boundaries
• horizontal boundaries removed by organizing work
around processes instead of functional departments
10-33
8,Explain the concept of a learning organization and how it
influences organizational design
Contemporary Organizational Designs (cont.)
– Learning Organization - an organizational mind-set理
念rather than a specific organizational design
• has developed the capacity to continuously adapt
• all members take an active role in identifying and
resolving work-related issues
• practice knowledge management by continually
acquiring and sharing new knowledge
• environment is conducive to有益于open
communication
• empowered teams are important
• leadership creates a shared vision for the future
• organizational culture provides sense of community
10-34
Characteristics Of A Learning Organization
Organizational Design
• Boundaryless
• Teams
• Empowerment
Organizational Culture
• Strong Mutual
Relationships
• Sense of Community
• Caring
• Trust
The
Learning
Organization
Information Sharing
• Open
• Timely
• Accurate
Leadership
• Shared Vision
• Collaboration
10-35