Title: Organizational Design
1Organizational Design
2Topics
- 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)
3Basic Building Blocks
- Departmentalization
- Authority
- Chain of command
- Line and staff authority
- Delegation of authority
- Centralization/decentralization of decision
making - Job design
4Departmentalization
Subdividing work and workers into separate
organizational units that take responsibility
for completing particular tasks
5Functional Departmentalization
6Functional 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
7Product Departmentalization
(Partial Listing of Products)
8Product 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
9Customer Departmentalization
10Customer 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
11Geographic Departmentalization
12Geographic 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
13Matrix Departmentalization
14Matrix 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
15Modular Organizations
16Modular Organizations
- can cost less to run thantraditional
organizations - lets organizations focuson core competencies
- loss of control from outsourcing
- may reduce their competitive advantage
17Virtual Organizations
18Virtual 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
19Ruth needs to re-organize her research staff.
She is considering using ____________ because it
lowers costs by reducing duplication.
- Product
- Geographic
- Matrix
- Customer
- Process
20Organizational Authority
Brightcove LA Cops
Authority is the right to give commands, take
action, and make decisions to achieve
organizational objectives.
21(No Transcript)
22Chain 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
23Line 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
24Microsoft, 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
25Delegation of Authority
- The assignment of direct authority and
responsibility to a subordinate
26How 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
27Degree 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
28Which 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.
29Job Design
- Job design is the number, kind, and variety of
tasks that individual workers perform in doing
their jobs
30Different 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
31Job 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
32Job Design Techniques that Increase Motivation
33Job Characteristics Model
High Internal Work Motivation High-quality Work
Performance High Satisfaction with Work Low
Absenteeism Turnover
34Which 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
35Reengineering 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
36Reengineering and Task Interdependence
Example How does work flow in team projects?
Pooled Interdependence
37Reengineering and Task Interdependence
Sequential Interdependence
38Reengineering and Task Interdependence
Reciprocal Interdependence
39How has your BUS 340 team operated in terms of
work flow?
- Pooled interdependence
- Sequential interdependence
- Reciprocal interdependence
- Independent