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Organizational Design

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Title: Organizational Design


1
Organizational Design
  • Ch. 9

2
Topics
  • What are the basic building blocks of
    organizational design?
  • What are the different ways we can design overall
    organizational structures?
  • What are the different ways that we can think
    about organizational processes (how work flows
    within and between organizations)?
  • Intra-organizational Processes (within the
    company)
  • Inter-organizational Processes (between companies)

3
Basic Building Blocks
  • Departmentalization
  • Authority
  • Chain of command
  • Line and staff authority
  • Delegation of authority
  • Centralization/decentralization of decision
    making
  • Job design

4
Departmentalization
Subdividing work and workers into separate
organizational units that take responsibility
for completing particular tasks
5
Functional Departmentalization
6
Functional Departmentalization
  • Work done by highly skilled specialists
  • Lowers costs through reduced duplication
  • Communication and coordination problems are
    lessened
  • Cross-department coordination can be difficult
  • May lead to slower decision making
  • Produces managers with narrow experiences

7
Product Departmentalization
(Partial Listing of Products)
8
Product Departmentalization
  • Duplication of activities
  • Difficult to coordinate across product departments
  • Managers specialize, but have broader
    experiences
  • Easier to assess work-unit performance
  • Decision-making is faster

9
Customer Departmentalization
10
Customer Departmentalization
  • Focuses on customer needs
  • Products and services tailored to customer needs
  • Duplication of resources
  • Difficult to coordinate across customer
    departments
  • Efforts to please customers may hurt the company

11
Geographic Departmentalization
12
Geographic Departmentalization
  • Responsive to the demands of different market
    areas
  • Unique resources located close to the customer
  • Duplication of resources
  • Difficult to coordinate across geographic
    departments

13
Matrix Departmentalization
14
Matrix Departmentalization
  • Requires high levels of coordination
  • Conflict between bosses
  • Requires high levels of management skills
  • Efficiently manage large, complex tasks
  • Effectively carry out large, complex tasks

15
Modular Organizations
16
Modular Organizations
  • can cost less to run thantraditional
    organizations
  • lets organizations focuson core competencies
  • loss of control from outsourcing
  • may reduce their competitive advantage

17
Virtual Organizations
18
Virtual Organizations
  • let companies share costs
  • fast and flexible
  • being the best shouldprovide better products
  • difficult to control the quality of partners
  • requires tremendous management skills

19
Ruth needs to re-organize her research staff.
She is considering using ____________ because it
lowers costs by reducing duplication.
  • Product
  • Geographic
  • Matrix
  • Customer
  • Process

20
Organizational Authority
Brightcove LA Cops
Authority is the right to give commands, take
action, and make decisions to achieve
organizational objectives.
21
(No Transcript)
22
Chain of Command
  • The vertical line of authority in an organization
  • Clarifies who reports to whom
  • Unity of command
  • workers report to only one boss
  • prevents confusion
  • matrix organizations violate this principle

23
Line versus Staff Authority
  • Line authority
  • the right to command immediate subordinates in
    the chain of command
  • an activity that contributes directly to profit
    generation
  • Example Plant manager
  • Staff authority
  • the right to advise but not command others
  • an activity that supports profit generation
  • Example Assistant Strategic Planning Manager

24
Microsoft, 2005
Chairman Bill Gates
Technical Strategy SVP Eric Rudder
CEO Steve Ballmer
Network Distribution SVP Ray Ozzie
Platform Products Services President Jim
Allchin Kevin Johnson
Business Division President Jeff Raikes
Entertainment Devices President Robbie Bach
Horizontal coordination
Vertical chain of command
25
Delegation of Authority
  • The assignment of direct authority and
    responsibility to a subordinate

26
How to Delegate Better
  • Trust your staff to be a good job
  • Avoid seeking perfection
  • Give effective job instructions
  • Know your true interests
  • Follow up on progress.
  • Praise the efforts of your staff.
  • Dont wait to the last minute to delegate.
  • Ask questions, expect answers, assist employees.
  • Provide the resources you would provide if doing
    assignment yourself.
  • Delegate to the lowest possible level.

Theory Y managers will delegate Theory X
managers will not delegate
27
Degree of Centralization
  • Centralization of authority
  • primary authority is held by upper management
  • Decentralization
  • significant authority is found in lower levels of
    the organization

Centralization of decision making determines the
level at which significant organizational
decisions are made
28
Which of the following is a mistake in delegating
responsibilities?
  • Having trust in ones staff
  • Giving clear instructions on the delegated
    activity
  • Giving staff complete freedom with the task and
    not requiring progress reports
  • Provide all the resources you would have yourself
    to do the job
  • All of the above are mistakes.

29
Job Design
  • Job design is the number, kind, and variety of
    tasks that individual workers perform in doing
    their jobs

30
Different Ways to Design Jobs
  • Job Specialization
  • Breaking jobs into small tasks
  • Jobs are simple, easy to learn, and economical
  • Job Rotation
  • Periodically moving workers from one specialized
    job to another
  • Job Enlargement
  • Increasing the number of tasks performed by a
    worker
  • Job Enrichment
  • Adding more tasks and authority to an employees
    job

31
Job Characteristics Model
  • A job redesign approach that seeks to increase
    employee motivation
  • Emphasizes internal motivation
  • experience work as meaningful
  • experience responsibility for work outcomes
  • knowledge of results

32
Job Design Techniques that Increase Motivation
33
Job Characteristics Model
High Internal Work Motivation High-quality Work
Performance High Satisfaction with Work Low
Absenteeism Turnover
34
Which of the following is a good way to enrich a
job?
  • Develop specialized tasks for only one employee
    to do
  • Have employees deal directly with the clients
  • Change employees schedules
  • Pay more money to employees for doing routine
    tasks
  • Allow employees to take time off for personal
    activities

35
Reengineering Jobs
  • The fundamental rethinking and radical redesign
    of business processes
  • Intended to achieve dramatic improvements in
    performance
  • Change the orientation from taking orders to
    satisfying the customer (internal or external)
  • Changes focus from job to work flow
  • Understanding how work flows uncovers how tasks
    are interdependent

36
Reengineering and Task Interdependence
Example How does work flow in team projects?
Pooled Interdependence
37
Reengineering and Task Interdependence
Sequential Interdependence
38
Reengineering and Task Interdependence
Reciprocal Interdependence
39
How has your BUS 340 team operated in terms of
work flow?
  • Pooled interdependence
  • Sequential interdependence
  • Reciprocal interdependence
  • Independent
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