Chapter
9
Designing
Adaptive
Organizations
Management
4th Edition
Chuck Williams
Chapter 9
Copyright ©2007 by South-Western, a division of Thomson Learning. All rights reserved
Prepared by
Deborah Baker
Texas Christian University
1
What Would You Do?
Yahoo Headquarters, Sunnyvale, California

Where do you start to fix a
company that has a $100 million
loss, falling ad sales, plummeting
stock prices, and an unmanageable
organizational structure?

Yahoo has done a poor job in
establishing relationships with
customers
What structure should Yahoo adopt?
What should you do about the informal culture?
How can better decisions be made for the company?
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2
Organizational Structure
Organizational Structure
The vertical and horizontal configuration
of departments, authority, and jobs within a
company.
Organizational Process
The collection of activities that transform
inputs into outputs that customers value.
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3
Organizational Structure
Process View of Microsoft’s Organization
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Exhibit 9.2
4
Designing Organizational
Structures
After reading these sections,
you should be able to:
1.
2.
3.
describe the departmentalization approach to
organizational structure.
explain organizational authority.
discuss the different methods for job design.
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5
Departmentalization
Functional
Customer
Product
Geographic
Matrix
1
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6
Functional Departmentalization
1.1
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7
Functional Departmentalization
Advantages



Work done by highly
skilled specialists
Lowers costs through
reduced duplication
Communication and
coordination problems
are lessened
Disadvantages



Cross-department
coordination can be
difficult
May lead to slower
decision making
Produces managers
with narrow
experiences
1.1
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8
Product Departmentalization
United Technologies
1.2
Carrier
Chubb
Hamilton
Sundstrand
Otis
Pratt & Whitney
Sikorsky
--Administrative services
--Communication & public relations
--Customer service & support
--E-Business
--Engineering
--etc…
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UTC Power
Adapted from Exhibit 9.4
9
Product Departmentalization
Advantages



Managers specialize,
but have broader
experiences
Easier to assess workunit performance
Decision-making is
faster
Disadvantages


Duplication of activities
Difficult to coordinate
across departments
1.2
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10
Customer Departmentalization
Sprint
Corporation
Business
Solutions
1.3
Consumer
Solutions
Local Telecom
Division
Sprint
North Supply
U.S.
Businesses
Local
Service
Local
Service
Supply Chain
Integration
International
Businesses
LongDistance
Service
LongDistance
Service
Logistics
Network
Solutions
Wireless
Services
Wireline &
Wireless
Services
Distribution
Centers
(Partial Listing)
Chapter 9
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Adapted from Exhibit 9.5
11
Customer Departmentalization
Advantages


Focuses on customer
needs
Products and services
tailored to customer
needs
Disadvantages



Duplication of resources
Difficult to coordinate
across departments
Efforts to please
customers may hurt the
company
1.3
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12
Coca-Cola Enterprises
Territories of Operation
Geographic Departmentalization
1.4
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Exhibit 9.6
13
Geographic Departmentalization
Advantages


Responsive to the
demands of different
market areas
Unique resources
located close to the
customer
Disadvantages


Duplication of resources
Difficult to coordinate
across departments
1.4
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14
Matrix Departmentalization
CitiGroup International
Global
Consumer
North
America
(excluding
Mexico)
Europe,
Middle East,
Africa
Global
Corporate &
Investment
Bank
Global
Investment
Management
1.5
Smith Barney
Asia Pacific
Country
Managers in
Spain, UAE,
Kenya, etc.
Country
Managers in
China, Australia,
etc.
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Adapted from Exhibit 9.7
15
Matrix Departmentalization
Advantages


Efficiently manage large,
complex tasks
Pool of available
resources
Disadvantages



Requires high levels
of coordination
Conflict between bosses
Requires high levels of
management skills
1.5
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16
Organizational Authority
Chain of
Command
Line versus
Staff Authority
Delegation
of Authority
Degree of
Centralization
2
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17
Chain of Command



The vertical line of authority in an organization
Clarifies who reports to whom
Unity of command
 workers report to only one boss
 matrix organizations violate
this principle
2.1
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18
Line versus Staff Authority

Line authority
 the right to command immediate subordinates
in the chain of command

Staff authority
 the right to advise but not command others
2.2
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19
Delegation of Authority
Delegation of Authority
The assignment of direct authority and
responsibility to a subordinate to complete
tasks for which the manager is normally
responsible.
2.3
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20
Delegation of Authority
2.3
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Adapted from Exhibit 9.8
21
How to be a More
Effective Delegator
1.
2.
3.
4.
5.
6.
7.
8.
9.
2.3
Trust your staff to be a good job
Avoid seeing perfection
Give effective job instructions
Know your true interests
Follow up on progress.
Praise the efforts of your staff.
Don’t wait to the last minute to delegate.
Ask questions, expect answers, assist employees.
Provide the resources you would provide if doing
the assignment yourself.
10. Delegate to the lowest possible level.
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Adapted from Exhibit 9.9
22
Degree of Centralization

Centralization of authority
 primary authority is held by upper management

Decentralization
 significant authority is found in lower levels of
the organization

Standardization
 solving problems by applying rules, procedures,
and processes
2.4
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23
Job Design
Specialized
Jobs
Job Rotation,
Enlargement,
Enrichment
Job
Characteristics
Model
3
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24
Job Specialization



A job that is a small part of a larger task or process
Jobs are simple, easy to learn, and economical
Can lead to low satisfaction, high absenteeism, &
employee turnover
3.1
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25
Job Rotation, Enlargement,
and Enrichment

Job Rotation
 periodically moving workers from one
specialized job to another

Job Enlargement
 increasing the number of tasks performed
by a worker

Job Enrichment
 adding more tasks and authority to an
employee’s job
3.2
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26
Job Characteristics Model

A job redesign approach
that seeks to increase
employee motivation

Emphasizes internal motivation
 experience work as meaningful
 experience responsibility for work outcomes
 knowledge of results
3.3
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27
Job Characteristics Model
3.3
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Exhibit 9.10
28
What Really Works
The Job Characteristics Model
Job Satisfaction
Task Identity
10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
probability of success
66%
Task Significance
10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
probability of success
69%
Skill Variety
10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
3.3
probability of success
70%
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What Really Works
The Job Characteristics Model
Job Satisfaction
Autonomy
10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
probability of success
73%
Provide Feedback
10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
probability of success
70%
3.3
Chapter 9
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30
What Really Works
The Job Characteristics Model
Job Satisfaction
High Growth Need Strength/Job Satisfaction
10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
probability of success
84%
Low Growth Need Strength/Job Satisfaction
10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
probability of success
69%
3.3
Chapter 9
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31
What Really Works
The Job Characteristics Model
Workplace Absenteeism
Task Identity
10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
probability of success
63%
Task Significance
10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
probability of success
68%
Skill Variety
10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
3.3
probability of success
72%
Chapter 9
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32
What Really Works
The Job Characteristics Model
Workplace Absenteeism
Autonomy
10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
probability of success
74%
Provide Feedback
10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
probability of success
72%
3.3
Chapter 9
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33
Job Redesign Techniques
Redesigning Jobs
Combining Tasks
Forming Natural Work Units
Establishing Client Relationships
Vertically Loading the Job
3.3
Opening Feedback Channels
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Adapted from Exhibit 9.10
34
Designing Organizational Processes
After reading these sections,
you should be able to:
4.
explain the methods that companies are using
to redesign international organizational processes
(i.e., intraorganizational processes).
5.
describe the methods that companies are using to
redesign external organizational processes
(i.e., interorganizational processes).
Chapter 9
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35
Intraorganizational Processes
Reengineering
Empowerment
Behavioral
Informality
4
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36
Reengineering

The fundamental rethinking and radical redesign of
business processes

Intended to achieve dramatic improvements
in performance

Change the orientation from vertical
to horizontal

Changes task interdependence
4.1
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37
Reengineering and
Task Interdependence
4.1
Chapter 9
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Exhibit 9.11
38
Empowerment
Empowering
Workers



Permanently passing decision-making
authority and responsibilities from
managers to workers by giving them
the information and resources they
need to make good decisions
A feeling of intrinsic motivation
Workers perceive meaning in their work
Employees are capable of self-determination
4.2
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39
Behavioral Informality
Behavioral Informality



Spontaneity
Casualness
Interpersonal familiarity
Behavioral Formality



Routine & regimen
Specific behavior rules
Impersonal detachment
4.3
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40
Behavioral Informality
Popular ways to increase behavioral informality
Casual Dress
and
Open Offices
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41
Do the Right Thing
Don’t Scavenge That Office If Somebody Is Still in It
 It’s roadkill in the animal kingdom:
coworkers scavenge for office leftovers…
often before an employee leaves
 Do the right thing by maintaining the dignity
of departing coworkers: wait until the office is empty
4.3
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42
Interorganizational Processes
Modular
Organizations
Virtual
Organizations
5
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43
Modular Organizations
5.1
Chapter 9
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Exhibit 9.13
44
Modular Organizations
Advantages


can cost less to run than
traditional organizations
lets organizations focus
on core competencies
Disadvantages


loss of control from
outsourcing
may reduce their
competitive advantage
5.1
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45
Virtual Organizations
5.2
Chapter 9
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Exhibit 9.14
46
Virtual Organizations
Advantages



5.2
let companies share
costs
fast and flexible
being the “best” should
provide better products
Web Link
Disadvantages


difficult to control the
quality of partners
requires tremendous
management skills
http://www.agileweb.com
Chapter 9
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47