Managing Organization Design

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Chapter 12

• Managing Organization Design

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Organization DesignBureaucratic Model

• Bureaucratic Model
• Organization design based on a legitimate and
  formal system of authority.
• Division of labor
• Each position filled by an expert
• Consistent set of rules to ensure uniformity
• Hierarchy of positions, which establish a chain
  of command

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Organization DesignBureaucratic Model

• Bureaucratic Modelcontinued
• Impersonal management with appropriate distance
  between superiors and subordinates
• Advancement based on technical expertise
• Employees protected from arbitrary dismissal

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Organization DesignBureaucratic Model

• Advantages
• Efficiency
• Prevents favoritism
• Disadvantages
• Inflexibility and rigidity
• Neglects social and human processes of an
  organization

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Organization DesignBehavioral Model

• consistent with the human relations movement
• Rensis Likert
• Belief that organizations who paid attention to
  work groups and interpersonal processes were more
  effective.

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Organization DesignBehavioral Model

• Advantages
• Stresses the value of an organizations employees
• Disadvantages
• Belief in one best way to design an organization

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Situational Influences Affecting Organizational
Design

• Technology - conversion processes used to
  transform inputs into outputs.
• Environment - organizations in stable
  environments tend to have different kind of
  design from organizations in unstable
  environments.
• Mechanistic organization - Similar to the
  bureaucratic or system 1 model
• Organic organization - Very flexible and informal
  model of organization design

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Strategy and Organization Designs

• Organizations can adopt a variety of corporate
  level strategies, such as
• Single-product strategy.
• Portfolio approach.
• The chosen strategy affects the organizational
  design.

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Business Level Strategy

• These strategies can affect the design of
  individual businesses within the organization as
  well the overall organization itself.
• Possible outcomes
• An organization can be centralized or
  decentralized.

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Organizational Functions

• Aggressive marketing strategy calls for separate
  departments such as advertising, direct sales,
  and sales promotion.
• A production strategy can call for manufacturing
  in diverse locations.
• Human resource strategy may call for a lesser
  degree of decentralization.

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Emerging Issues in Organizational Design

• Teams
• Virtual Organizations
• Learning Organizations