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Transcript of 2-Lec 2 - Org Structure
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C
hapter
1
C
hapter
10Managing Organizational
Structure
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10-2 2006 The McGraw-Hill Companies, Inc. All rights reserve.McGraw-Hill!Irwin
Learning Objectives
After studying the chapter you should be able to! "dentify the factors that influence managers#
choice of an organizational structure$
%&plain how managers group tasks into jobsthat are 'otivating and satisfying for e'ployees$ (escribe the types of organizational structures
'anagers can design and e&plain )hy they
choose one structure over another$ %&plain )hy there is a need to both centralized
and decentralized authority$
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Learning Objectives
%&plain why managers must coordinate
and integratebet)een jobs functions and
divisions as an organization gro)s$
%&plain )hy 'anagers )ho see+ ne) )ays
to increase efficiency and effectiveness
are using strategic alliances and net)or+
structures$
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Organizational Structure
Organizational Architecture he organizational structure
control syste's culture and
hu'an resource 'anage'ent
syste's that together
deter'ine ho) efficiently and
effectively organizationalresources are used$
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(esigning Organizational Structure
Organizing he process by )hich 'anagers establish )or+ing
relationships a'ong e'ployees to achieve goals$
Organizational Structure /or'al syste' of tas+ and reporting relationships
sho)ing ho) )or+ers use resources$
Organizational design he process by )hich 'anagers 'a+e specific
choices that result in a particular +ind oforganizational structure$
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/actors Affecting Organizational
Structure
Figure 101
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he Organizational %nviron'ent
he Organizational !nvironment he uic+er the environ'ent changes the
'ore proble's face 'anagers$
Structure 'ust be 'ore fle&ible 3i$e$
decentralized authority4 )hen
environ'ental change is rapid$
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he Organizational %nviron'ent
"trategy (ifferent strategies reuire the use of
different structures$A differentiation strategy needs a fle&ible
structure lo) cost 'ay need a 'ore for'al
structure$
"ncreased vertical integration or diversificationalso reuires a 'ore fle&ible structure$
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he Organizational %nviron'ent
#echnology he co'bination of s+ills +no)ledge tools
euip'ent co'puters and 'achines used
in the organization$
More co'ple& technology 'a+es it harder
for 'anagers to regulate the organization$
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he Organizational %nviron'ent
echnology echnology can be 'easured by!
as+ variety! the nu'ber of ne) proble's a 'anagerencounters$
as+ analyzability! the availability of progra''edsolutions to a 'anager to solve proble's$
7igh tas+ variety and lo) analyzability present'any uniue proble's to 'anagers$/le&ible structure )or+s best in these conditions$
Lo) tas+ variety and high analyzability allo)'anagers to rely on established procedures$
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ypes of echnology
S'all 8atch echnology S'all uantities of one-of-a-+ind products are
produced by the s+ills of the )or+ers )ho )or+
together in s'all groups$Appropriate structure is decentralized and fle&ible$
Mass 9roduction echnology Auto'ated 'achines that are progra''ed to
'a+e high volu'es of standard products$/or'al structure is the best choice for )or+ers )ho 'ust
perfor' repetitive tas+s$
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ypes of echnology
:ontinuous 9rocess echnology otally 'echanized syste's of auto'atic
'achines$
A fle&ible structure is necessary to allo) )or+ers to reactuic+ly to une&pected proble's$
"nfor'ation echnology 3"4 ;no)ledge 'anage'ent
he sharing and integrating of e&pertise )ithin andbet)een functions and divisions through realti'einterconnected " that allo)s for ne) +inds of tas+s and
job reporting relationships$
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he Organizational %nviron'ent
$uman %esources 7ighly s+illed )or+ers )hose jobs reuire
)or+ing in tea's usually need a 'ore
fle&ible structure$
7igher s+illed )or+ers 3e$g$ :9A#s and
doctors4 often have internalized
professional nor's$
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he Organizational %nviron'ent
$uman %esources Managers 'ust ta+e into account all four
factors 3environ'ent
strategy technology
and hu'an resources4
)hen designing the
structure of theorganization$
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he $ =$ Oldha'
Work Redesign3=eading MA! Addison-?esley 16504$
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>rouping
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Figure10*
#he Functional "tructure of +ier 1 ,mports
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(ivisional Structures
'ivisional "tructure An organizational structure is co'posed of
separate business units )ithin )hich are the
functions that )or+ together to produce a specificproduct for a specific custo'er(ivisions create s'aller 'anageable parts of a fir'$
(ivisions develop a business-level strategy to co'pete$
(ivisions have 'ar+eting finance and other functions$/unctional 'anagers report to divisional 'anagers )ho
then report to corporate 'anage'ent$
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ypes of (ivisional Structures
9roduct Structure :usto'ers are served by self-contained divisions
that handle a specific type of product or service$
Allo)s functional 'anagers to specialize in one productarea
(ivision 'anagers beco'e e&perts in their area
=e'oves need for direct supervision of division by
corporate 'anagers
(ivisional 'anage'ent i'proves the use of resources
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Figure 10-
+roduct. /arket. and eographic "tructures
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ypes of (ivisional Structures
eographic "tructure %ach region or a country or area )ith
custo'ers )ith differing needs is served by
a local self-contained division producingproducts that best 'eet those needs$
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ypes of (ivisional Structures
lobal geographic structure(ifferent divisions serve each )orld region )hen
'anagers find different proble's or de'ands
across the globe$>enerally occurs
)hen 'anagers are
pursuing a
'ulti-do'esticstrategy
> >
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>lobal >eographic and
>lobal 9roduct Structures
Figure 10
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ypes of (ivisional Structures
/arket 2Customer3 "tructure %ach +ind of custo'er is served by a self-
contained division
>lobal 'ar+et 3custo'er4 structure:usto'ers in different regions buy si'ilar
products so fir's can locate 'anufacturingfacilities and product distribution net)or+s )here
they decide is best$/ir's pursuing a global strategy )ill use this
type of structure$
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Matri& (esign Structure
Matri& Structure An organizational structure that si'ultaneously
groups people and resources by function and
product$=esults in a co'ple& net)or+ of superior-subordinate
reporting relationships$
he structure is very fle&ible and can respond rapidly to
the need for change$
%ach e'ployee has t)o bosses 3functional 'anager and
product 'anager4 and possibly cannot satisfy both$
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Matri& Structure
Figure 104
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9roduct ea' (esign Structure
+roduct #eam "tructure he 'e'bers are per'anently assigned to the
tea' and e'po)ered to bring a product to 'ar+et$
Avoids proble's of t)o-)ay co''unication andthe conflicting de'ands of functional and product
tea' bosses$
:ross-functional tea' is co'posed of a group of
'anagers fro' different depart'ents )or+ingtogether to perfor' organizational tas+s$
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9roduct ea' Structure
Figure 104
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7ybrid Structures
$ybrid "tructure he structure of a large organization that has
'any divisions and si'ultaneously uses
'any different organizational structuresManagers can select the best structure for a
particular division@one division 'ay use a
functional structure another division 'ay have ageographic structure$
he ability to brea+ a large organization into
s'aller units 'a+es it easier to 'anage$
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arget#s 7ybrid Structure
Figure 105
:oordinating /unctions!
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:oordinating /unctions!
Allocating Authority
Authority he po)er to hold people accountable for their
actions and to 'a+e decisions concerning the use
of organizational resources$
$ierarchy of Authority An organization#s chain of co''and specifying
the relative authority of each 'anager$Span of :ontrol! refers to the nu'ber of )or+ers a
'anager 'anages$
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Allocating Authority
"pan of Control he nu'ber of subordinates that report directly to a
'anager
6ine /anager
Managers in the direct chain of co''and )ho have
authority over people and resources lo)er do)n$
9ri'arily responsible for the production of goods or
services$
"taff /anager
Managers )ho are functional-area specialists that give
advice to line 'anagers$
#he $ierarchy of Authority and "pan of Control at
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Figure 107
#he $ierarchy of Authority and "pan of Control at
/c'onald8s Corporation
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all and /lat Organizations
all structures have 'any levels of authority andnarro) spans of control$ As hierarchy levels increase co''unication gets
difficult creating delays in the ti'e being ta+en to
i'ple'ent decisions$ :o''unications can also beco'e garbled as it is
repeated through the fir'$
/lat structures have fe)er levels and )ide spans
of control$ Structure results in uic+ co''unications but can lead
to over)or+ed 'anagers$
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/lat Organizations
Figure 1010
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all Organizations
Figure 1010
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Organizational Structure
Managers should carefully evaluate! (o the organization have the right nu'ber of
'iddle 'anagers
:an the structure be altered to reduce levels:entralized and (ecentralized of Authority
(ecentralization puts 'ore authority at lo)er levels
and leads to flatter organizations$?or+s best in dyna'ic highly co'petitive environ'ent$
Stable environ'ent favor centralization of authority$
" i M h i
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"ntegrating Mechanis's
Figure 1011
/ f " t ti M h i
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/or's of "ntegrating Mechanis's
Figure 101(
St t i Alli
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Strategic Alliances
"trategic Alliance An agree'ent in )hich 'anagers pool or share fir'#s
resources and +no)-ho) )ith a foreign co'pany andthe t)o fir's share in the re)ards and ris+s of
starting a ne) venture$9etwork "tructure!
A series of strategic alliances that an organizationcreates )ith suppliers 'anufacturers and
distributors to produce and 'ar+et a product$ Bet)or+ structures allo) fir's to bring resources
together in a boundary-less organization$
828 B t + St t d "
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828 Bet)or+ Structures and "
:oundaryless Organization An organization )hose 'e'bers are lin+ed by
co'puters fa&es co'puter-aided design syste's
and video-conferencing and )ho rarely if ever
see one another face-to-face$
;nowledge /anagement "ystem A co'pany-specific virtual infor'ation syste' that
allo)s )or+ers to share their +no)ledge ande&pertise and find others to help solve proble's$
Source!
828 B t + St t d "
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828 Bet)or+ Structures and "
:usiness to :usiness 2:(: 3 networkA group of organizations that join together
and use " to lin+ the'selves to potential
global suppliers to increase efficiency andeffectiveness$
Source!
M i % l A ll 1*
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Movie %&a'ple! Apollo 1*
?hat organizationalstructure does
BASA use
to handle a 'oonlaunch