Management, 6e Schermerhorn Prepared by Cheryl Wyrick California State Polytechnic University Pomona John Wiley & Sons, Inc COPYRIGHT Copyright 1999 © John Wiley & Sons, Inc. All rights reserved. Reproduction or translation of this work beyond that named in Section 117 of the United States Copyright Act without the express written consent of the copyright owner is unlawful. Request for further information should be addressed to the Permission Department, John Wiley & Sons, Inc. The purchaser may make back-up copies for his/her owner use only and not for distribution or resale. The Publisher assumes no responsibility for errors, omissions, or damages, cause by the use of these programs or from the use of the information contained herein. Chapter 10 Organizing to Create Structures Planning Ahead – What is organizing as a management function? – What are the major types of organization structures? – What are the new developments in organization structures? – What organizing trends are changing the modern workplace? Schermerhorn - Chapter 10 3 Organizing as a Management Function What is Organization Structure? – system of tasks, workflow, reporting relationships, and communication channels that link together workgroups Schermerhorn - Chapter 10 4 Organizing as a Management Function Formal Structure – official working relationships often represented by an organizational chart Schermerhorn - Chapter 10 5 Organizing as a Management Function Informal Structure – unofficial working relationships – important in understanding organizations – sometimes work against best interest of organizations Schermerhorn - Chapter 10 6 Traditional Organization Structures Functional – people performing similar tasks are formally grouped together – workers share technical expertise, interests, and responsibilities Schermerhorn - Chapter 10 7 Traditional Organization Structures Advantages of Functional Structures – economies of scale – task assignments consistent with expertise – high-quality technical problem solving – in-depth training and skill development – clear career paths Schermerhorn - Chapter 10 8 Traditional Organization Structures Disadvantage of Functional Structures – functional chimneys problem • lack of problem solving across functions Schermerhorn - Chapter 10 9 •Traditional Organization Structures Divisional Structures – groups together employees who work on the same product or service in the same geographic area Schermerhorn - Chapter 10 10 Traditional Organization Structures Advantages of Divisional Structures – more flexibility – improved coordination – clear points of responsibility – expertise focused on specific customers, products, and regions – greater ease in restructuring Schermerhorn - Chapter 10 11 Traditional Organization Structures Disadvantages of Divisional Structures – reduce economies of scale – increase costs through duplication of resources across divisions – create unhealthy rivalries Schermerhorn - Chapter 10 12 Traditional Organization Structures Product Structures – group together jobs and activities working on a single product or service Geographical (Area) Structures – group together jobs and activities being performed in the same location or geographical region Schermerhorn - Chapter 10 13 •Traditional Organization Structures Customer Structures – group together jobs and activities that are serving the same customers or clients Process Structures – group together jobs and activities that are related to one another and collectively create something of value Schermerhorn - Chapter 10 14 •Traditional Organization Structures Matrix Structure – combination of functional and divisional structures – used in • • • • manufacturing service industries professional fields nonprofit sector Schermerhorn - Chapter 10 15 Traditional Organization Structures Advantages of Matrix Structure – – – – – – better interfunctional cooperation increased flexibility in restructuring better customer services better performance accountability improved decision making improved strategic management Schermerhorn - Chapter 10 16 Traditional Organization Structures Disadvantages of Matrix Structures – two-boss system is susceptible to power struggles – workers may suffer task confusion – focused team loyalties to the detriment of organization Schermerhorn - Chapter 10 17 Development in Organization Structures Team Structures – cross functional • more horizontal Schermerhorn - Chapter 10 18 Developments in Organization Structures Advantages of Team Structures – break down barriers between operating departments – boost morale – improve speed and quality of decisions Schermerhorn - Chapter 10 19 Developments in Organization Structures Disadvantages of Team Structures – conflicting loyalties among members – spend a lot of time in meetings Schermerhorn - Chapter 10 20 Developments in Organization Structures Network Structures – central core that is linked through networks of relationships with outside suppliers of essential services • boundaryless organizations • virtual corporations Schermerhorn - Chapter 10 21 Developments in Organization Structures Advantages of Network Structures – operate with fewer full-time employees – reduced overhead – increased operating efficiency – work together across great distances instead of face-to-face Schermerhorn - Chapter 10 22 Developments in Organization Structures Disadvantages of Network Structures – coordination of the entire system of relationships Schermerhorn - Chapter 10 23 Developments in Organization Structures Organizing Trends in the Modern Workplace – Shorter Chains of Command • organizations are reducing levels of management – Less Unity of Command • increases in cross-functional teams, task forces, and horizontal structure Schermerhorn - Chapter 10 24 Developments in Organization Structures Organizing Trends in the Modern Workplace – Wider Spans of Control • chains of command are shortened • managers have responsibility for larger number of subordinates Schermerhorn - Chapter 10 25 Developments in Organization Structures Organizing Trends in the Modern Workplace – More Delegation and Empowerment • delegation – assigns responsibility – grants authority to act – creates accountability Schermerhorn - Chapter 10 26 Developments in Organization Structures Organizing Trends in the Modern Workplace – More Delegation and Empowerment • empowerment – freedom to contribute ideas – increases job satisfaction – better job performance Schermerhorn - Chapter 10 27 Developments in Organization Structures Organizing Trends in the Modern Workplace – Decentralization with Centralization • empowerment allows for more decentralization • advances in information technology allow for retention of centralized control Schermerhorn - Chapter 10 28 Developments in Organization Structures Organizing Trends in the Modern Workplace – Reduced use of Staff • specialized • personal Schermerhorn - Chapter 10 29