Organization Structure, Culture, and Change

1
Chapter 8

• Organization Structure, Culture, and Change

2
Principles of Organization in a Bureaucracy

• Hierarchy of authority
• Unity of command (one boss only)
• Task specialization
• Responsibilities and job descriptions
• Line and staff functions (primary purpose of
  organization versus support activities)

3
Departmentalization

• Functional arrange by functions such as
  marketing or information technology
• Geographic arrange by territory, such as
  northern and southern
• Product-Service arrange according to products or
  services, such as Gatorade division of PepsiCo.

4
The Matrix Organization

• A project structure is superimposed on a
  functional structure to capitalize on the
  advantages of both.

CEO
Project workers have two bosses
Function
Project Worker
Program
5
Flat Structures

• Has relatively few layers.
• Shorter chain of command can lead to faster
  decision making.
• Managers have larger spans of control
• Fewer layers can save money, yet many valuable
  managers might be eliminated.

6
Outsourcing

• Other companies perform your work, often in
  lower-wage area.
• High-level work, such as marketing, is also
  subject to outsourcing.
• Homeshoring (moving customer service into
  workers homes) is popular.
• Outsourcing saves money yet not so good for
  building loyal and proud workforce.

7
Informal Structures and Communication Networks

• Informal structure adds flexibility and speed to
  formal structure through unofficial
  relationships.
• Informal networks are contacts used to accomplish
  work.
• Information technology can help solve problems
  through information networks.

8
Selection of Organization Structure

• Company strategy and goals
• High technology versus low technology
• Large size versus small size
• Financial condition of the firm (e.g. flat
  structure costs less than tall structure)
• Environmental stability (flexible structure
  better suited for uncertainty)

9
Delegation Suggestions

1. Assign duties to right people.
2. Delegate whole task, let go of details.
3. Give as much instruction as needed.
4. Retain some important tasks.
5. Get feedback on delegated task.

10
Dimensions of Organizational Culture

1. Values
2. Relative diversity
3. Resource allocation and rewards
4. Degree of change
5. Strength of the culture (strong culture guides
   employees in everyday actions)

11
Consequences of Organizational Culture

1. Gaining competitive advantage
2. Productivity, quality, and morale
3. Innovation if creativity is encouraged
4. Effectiveness of merger with another company
5. Closeness of person-organization fit
6. Direction of leadership activity

12
Why Workers Resist Change

1. Fear of unfavorable outcome
2. Not wanting to break old habits
3. Personality factors such as rigidity
4. Fear of not having right skills
5. Preference for familiar devil
6. Perceived weaknesses of change

13
Gaining Support for Change

1. Allow for discussion and negotiation.
2. Allow for participation.
3. Point out financial benefits.
4. Avoid change overload.
5. Observation of successful change.
6. Get best people behind program.

14
Six Sigma and Planned Change

• Shift is to high-quality company, following the
  standard
• Six Sigma 3.4 errors in 1 million
  opportunities.
• Six Sigma also refers to philosophy of driving
  out waste and improving quality, and cost
  performance.
• Highly data-driven and behavioral

15
DICE Framework for Change Management

• D. Short duration of project is better.
• I. Integrity (good) of performance counts.
• C. Commitment of senior executives and staff to
  the change effort.
• E. Additional effort required of all employees
  affected by the change.