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Organizational Design
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Organizational Design, organizational structure, Organization design, design process, organizational change, matrix structure, organizational effectiveness, Organizational Development, organization structure, Corporate Culture, organizational redesign, requisite organization, succession planning, business unit, Executive Coaching, organizational structures, hierarchical structure, Shared Services, design approach, chain of command, consulting services, customer service, decision making,
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Document Sample
Organizational
Design
MANAGEMENT
Meeting and Exceeding Customer Expectations
EIGHTH EDITION
Prepared by
Chapter 10
Deborah Baker
Texas Christian University
1
Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved
learning objectives
1. Explain the meaning of organizational design
2. Describe the four objectives of organizational
design
3. Distinguish between mechanistic and organic
organizational structures
4. Discuss the influence that contingency
factors—organizational strategy, environment,
size, age, and technology—have on
organizational design
5. Describe the characteristics, advantages, and
disadvantages of functional, divisional, matrix,
team, and network structural designs
Chapter 10
2
Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved
1 Organizational Design
Organizational The creation of or change to
Design an organization’s structure
Develop the overall layout of positions
and departments
Develop the interrelationships of the
departments
Create the means to implement plans,
achieve goals, and ultimately satisfy the
Chapter 10
customer
3
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2 Common Elements of Organizations
They operate with authority
They have departments
They use line and staff positions
Chapter 10
4
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2 Objectives of Organizational Design
Respond to
Change
Integrate New
Elements
Coordinate
Components
Encourage
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Flexibility
5
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3 Organizational Structures
A tight organizational structure
Mechanistic characterized by rigidly defined
Structure tasks, formalization, many rules
and regulations, and centralized
decision making
A flexible, free-flowing
Organic organizational structure that has
Structure few rules and regulations and
decentralizes decision making
right down to the employees
performing the job
Chapter 10
6
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3 Organizational Structures
Chapter 10
7
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4
Contingency Factors Affecting
Organizational Design
Strategy
Environment
Size
Age
Chapter 10
Technology
8
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4 Influence of Strategy on Structure
Chapter 10
9
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4 Environment
Requirements for an Unstable Environment
1. The organization must be able to adapt
to change
2. The organization needs greater
coordination between departments
Chapter 10
10
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4 Environment and Structure
Chapter 10
11
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4 Environment
Stable Environment Unstable Environment
Mechanistic Organic structure
structure
Flexibility
Centralized Coordination
decision making
Less formal
Wide spans of procedures
control
Specialization
Chapter 10
12
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4 Size of the Organization
Small Organizations Large Organizations
Organic structure Mechanistic structure
Little division of labor Greater division of
labor
Few rules and
regulations More rules and
regulations
Informal procedures
More elaborate
internal systems to
control
Chapter 10
13
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4 Age of the Organization
Organizational Life Cycle
Birth Youth Midlife Maturity
Chapter 10
14
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4 Organizational Life Cycle
Chapter 10
15
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4 Technology
Small Batch
Mass Production
Continuous Process
Flexible Manufacturing
Systems
Chapter 10
16
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4 Technology
Chapter 10
17
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5 Structural Options
Functional
Divisional Matrix
Team Network
Chapter 10
18
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5 Structural Options
Chapter 10
19
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5 Functional Structure
Advantages Disadvantages
Economies of scale Employees have little
understanding of or
Minimizes duplication
concern for areas
Comfortable outside their own area
environment for
employees
Barriers in
communication,
Simplifies training cooperation, and
coordination
Slow response time to
changes in the
environment
Chapter 10
20
Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved
5 Functional Structure
Chapter 10
21
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5 Divisional Structure
Advantages Disadvantages
Focuses the attention Duplication of
on results activities and
resources
Flexible and
responsive to change Loss of efficiency and
economies of scale
Responsibility and
accountability are Lack of technical
easier to target specialization,
expertise, and training
Excellent vehicle for
developing senior Different divisions
executives may feel they are
competing with one
Chapter 10
another
22
Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved
5 Divisional Structure
Chapter 10
23
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5 Matrix Structure
Advantages Disadvantages
Flexible Dual chain of command
Increase in Pits divisional objectives
communication and against functional
coordination objectives
Increase in employee Time loss to meetings
motivation
Balance of power
Sense of commitment between functional and
and satisfaction divisional sides
Training in functional
and management skills
General perspective
Chapter 10
24
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5 Matrix Structure
Chapter 10
25
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5 Team Structure
Advantages Disadvantages
Breaks down Performance suffers if
departmental barriers training is not
provided
Speeds up decision
making Time required for
team meetings
Motivates employees
Lower administrative
costs
Does not involve the
problem of double
reporting
Chapter 10
Team membership
26
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5 Team Structure
Chapter 10
27
Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved
5 Network Structure
Advantages Disadvantages
Flexibility Lack of control
Low administrative Reliance on
overhead contractors
Communication by Supply unreliability
e-mail
Lack of technical
expertise
Chapter 10
28
Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved
5 Network Structure
Chapter 10
29
Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved
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