Management, 6e
Schermerhorn
Prepared by
Cheryl Wyrick
California State Polytechnic University Pomona
John Wiley & Sons, Inc
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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