Title: Presentation Slides to Accompany Organizational Behavior 10th Edition Don Hellriegel and John W' Slo
1Presentation Slidesto AccompanyOrganizational
Behavior 10th EditionDon Hellriegel and John W.
Slocum, Jr.
Chapter 14Designing Organizations
- Prepared by
- Michael K. McCuddy
- Valparaiso University
2Slide 14.1Learning Objectives forDesigning
Organizations
- Explain how environmental, strategic, and
technological factors affect the design of
organizations - State the differences between mechanistic and
organic organizations - Describe four traditional organization
designsfunctional, place, product, and
multidivisional - Describe three contemporary organization
designsmultinational, network, and virtual
3Slide 14.2Important Factors in anOrganizations
Environment
- Suppliers
- Distributors
- Competitors
- Customers
4Slide 14.3Strategies for Building aCompetitive
Advantage
- Low-cost strategy
- Based on an organizations ability to provide a
product or service at a lower cost than its
rivals - Differentiation strategy
- Based on providing customers with something
unique and makes the organizations product or
service distinctive from its competition
5Slide 14.3 (continued) Strategies for Building
aCompetitive Advantage
- Focused strategy
- Designed to help an organization target a
specific niche in an industry, unlike both the
low-cost and differentiation strategies, which
are designed to target industrywide markets
6Slide 14.4Types of Task Interdependencein
Organization Design
Pooled
Sequential
Reciprocal
C
C
C
A
A
A
B
B
B
Complex
Simple
7Slide 14.5Organization Design Options
Virtual Design
Complex
Network Design
Multinational Design
Multidivisional Design
Environmental Factors
Product Design
Place Design
Simple
Functional Design
Pooled
Reciprocal
Technological Factors
8Slide 14.6Mechanistic and Organic Organizations
- Mechanistic organization
- Characterized by a reliance on formal rules and
regulations, centralization of decision making,
narrowly defined job responsibilities, and a
rigid hierarchy of authority - Organic organization
- Characterized by low to moderate use of formal
rules and regulations, decentralized and shared
decision making, broadly defined job
responsibilities, and a flexible authority
structure with fewer levels in the hierarchy
9Slide 14.7Characteristics of Bureaucracy
- The organization operates according to a set of
rules that are intended to tightly control
employees behavior - All employees must carefully follow extensive
impersonal rules and procedures in making
decisions - Each employees job involves a specified area of
expertise, with strictly defined obligations,
authority, and powers to compel obedience
10Slide 14.7 (continued)Characteristics of
Bureaucracy
- Each lower-level position is under the tight
control and direction of a higher one - Candidates for jobs are selected on the basis of
technical qualifications - The organization has a career ladder promotion
is by seniority or achievement and depends on the
judgment of superiors
11Slide 14.8Organic and MechanisticDesign Features
- Hierarchy of authority
- Centralization
- Division of labor
- Rules
- Procedures
- Impersonality
- Chain of command
- Unity of command
- Span of control
12Slide 14.9Organizational Uses ofFunctional
Design
- Permits clear identification and assignment of
responsibilities - Employees easily understand the design
- People doing similar tasks and facing similar
problems work together, thus increasing the
opportunities for interaction and mutual support - Employees tend to lose sight of the organization
as a whole - Coordination across functional departments often
becomes difficult
13Slide 14.9 (continued)Organizational Uses
ofFunctional Design
- With the exception of marketing, most employees
have no direct contact with customers and may
lose sight of the need to meet or exceed customer
expectations - May be effective when the organization
- Has a narrow product line
- Competes in a uniform environment
- Pursues a low-cost or focused business strategy
- Does not have to respond to the pressures of
serving different types of customers
14Slide 14.10 Organizational Uses of Place Design
- Each department or division is in direct contact
with customers in its locale and can adapt more
readily to their demands - Lower costs for materials, freight, and perhaps
labor may result - Marketing strategies and tactics can be tailored
to geographic regions - Control and coordination problems increase
- Employees may begin to emphasize their own units
goals and needs rather than those of the entire
organization
15Slide 14.11United Technologies
CEO
Otis Elevators Escalators Moving walks
UT Auto- motive Automotive electrical
systems Electric motors Automotive
interior exterior trim
Flight Systems Helicopters Propellers Space
life support systems
Carrier Heating air conditioning
Building controls Refriger- ation
equipment
Pratt Whitney Jet engines Rocket
engines Industrial gas turbines
Source http//www.utc.com
16Slide 14.12 Organizational Uses ofProduct Design
- Reduces the information overload that managers
face in a purely functional design - More effective handling of the business is
possible - Addition of product lines, diverse customers, and
technological advances increases the complexity
and uncertainty of an organizations business
environment - Product design may incorporate features of
functional and place designs into the
organization of each product division
17Slide 14.13 Organizational Uses
ofMultidivisional Design
- Eases problems of coordination by focusing
functional expertise and knowledge on specific
goods or services - A firm must have a large number of managerial
personnel to oversee all the product lines - Higher costs result from the duplication of
various functions - Often reduces the environmental complexity facing
any one team, department, or division - Horizontal mechanisms help in dealing with
complex environments
18Slide 14.14Basic Options in Multinational Design
Functions
Functions
Marketing
Manufacturing
Product line
Finance
Human Resources
Others
Place
Country or Region Organization
Global Product Organization
Matrix
Country Responsiveness, Adaptation, Competitors,
Manufacture, Customer
Global Integration, Products, Competitors, Factori
es, Customers
19Slide 14.15Organizational Uses ofMultinational
Design
- Worldwide product-line divisions will be more
dominant than geographically based divisions
under certain conditions - A worldwide product-line division may not be as
effective at opening up new territories as a
geographically organized division - A division operating under a place design often
- Can establish relations with host governments
- Invest in distribution channels
- Develop brand recognition
- Build competencies that no single product-line
division could afford
20Slide 14.16Key Elements of Network Design
- Distinctive competence
- Responsibility
- Goal setting
- Communication
- Information technology
- Organization design
- Balanced view
21Slide 14.17Organizational Uses ofNetwork Design
- Effective in creating alliances of flexible
partnerships - Can create successful external relationships
through - Importance
- Investment
- Interdependence
- Integration
- Information
- Institutionalization
22Slide 14.18Key Developments inInformation
Technology
- Open systems
- Distributed computing
- Real time
- Global networking
23Slide 14.19Organizational Uses of Virtual Design
- Structure can be changed quickly to meet changing
conditions and situations - Boundaries between an organization and its
customers and suppliers are blurred - Employees continually master new manufacturing
and information technologies, speeding the
production process and the flow of information
through the organization
24Slide 14.19 (continued)Organizational Uses of
Virtual Design
- Employees respond quickly to changing customer
demands with customized products and services
available at any time and place - Employees are reciprocally interdependent
- Managers delegate authority and responsibility to
employees while providing a clear vision of the
organizations purpose and goals