Organizational Design

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Chapter 11

• Organizational Design Work Processes

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In Germany, competition was like a wind. Now
its like a storm. And it will become a
hurricane. You have to move fast or lose.

• Heinrich von Pierer
• CEO of Siemens

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Organizational design

• The process of creating structures that best
  serve the mission objectives.
• It is the overall set of structural elements and
  the relationships among those elements used to
  manage the total organization.

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2 basic types of design

• Bureaucratic remember our old friend Max Weber?
• Adaptive designs sometimes called behavioral
  models or approaches.

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Bureaucratic Designs

• Based on logic, order, and a legitimate use of
  authority.
• They are usually Mechanistic
• Control authority are centralized
• Lots of rules
• Lots of procedures
• Clear division of labor
• They are not very flexible. Why?

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Adaptive Designs

• Sometimes called behavioral models
• Features are almost the opposite of the
  bureaucratic model
• Teamwork employee empowerment
• Built upon the assumption that people will do the
  right thing on their own

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• Just as contemporary management is based on the
  situation (or contingency), the organizational
  design is influenced by the situation (or
  contingency).
• What are some of these influencing contingencies?

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The influence of core technology

• According to Joan Woodward
• Unit or small batch technology
• Large batch or mass production technology
• Continuous process technology.
• In general the more complex the technology, the
  more complex (taller) the organizational design.

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The environmental influence

• Stable or certain environment
• There is really no need to make any changes
  because everything is running smoothly.
• Unstable or uncertain environment
• There is rapid and continuous change.
• Must be flexible responsive in a short time
  frame.

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Size of the organization as an influencer

• Large organizations tend to
• Have more job specialization
• Have more rules
• Have more operating procedures
• Have more centralization

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The influence of the life cycle

• Birth
• Youth
• Mid-life
• Maturity
• What are the implications of life cycle stages on
  the design?

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The influence of the strategy

• Stability
• Growth

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• A big determinate of your organizational design
  is the actual way the work is done.
• We call this the work process.
• It is a related group of tasks that together
  create value for the customer.

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Why is it important to continually examine your
work processes?

• To achieve the sustainable competitive advantage!!

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Process reengineering

• The radical redesign of all aspects of a business
  to achieve major gains in cost,service, or time.
• You perform a process value analysis
• Identify evaluate core processes for
  performance contributions.

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How to reengineer a process

• Find out what is being done now.
• Find out who is doing the tasks.
• Determine what the reengineering effort is to
  accomplish why are you doing it?
• Top management must be involved

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How to continued

• Create a sense of urgency people must see the
  need for and benefits of the change.
• Start with a clean slate create a new
  organization do not modify the existing one.
• Optimize top-down and bottom-up perspectives.

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What is the biggest barrier to all of the process
reengineering?
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Questions?

• For next class please read chapter 12.