11 John R Schermerhorn, Jr Daniel G Bachrach Management 13th edition CHAPTER 11 ORGANIZATIONAL STRUCTURES AND DESIGN PLANNING AHEAD — KEY TAKEAWAYS  Describe organizing as a management function and the difference between formal and informal organization structures  Identify the traditional organizational structures, and the strengths and weaknesses of each  Identify newer horizontal organizational structures, and the strengths and weaknesses of each  Explain how organizational designs are changing in the modern workplace Copyright ©2015 John Wiley & Sons, Inc CHAPTER 11 OUTLINE Organizing as a Management Function a) b) c) What is organization structure? Formal structures Informal structures Traditional Organization Structures a) b) c) Functional structures Divisional structures Matrix structures Copyright ©2015 John Wiley & Sons, Inc CHAPTER 11 OUTLINE Horizontal Organization Structures a) b) c) Team structures Network structures Boundaryless structures Organizational Designs a) b) c) Contingency in organizational design Mechanistic and organic organization designs Trends in organizational designs Copyright ©2015 John Wiley & Sons, Inc ORGANIZING AS A MANAGEMENT FUNCTION  Organizing as a management function Organizing  Arranges people and resources to work together to accomplish a goal Organization  structure The system of tasks, reporting relationships, and communication linkages Copyright ©2015 John Wiley & Sons, Inc FIGURE 11.1 ORGANIZING VIEWED IN RELATIONSHIP WITH THE OTHER MANAGEMENT FUNCTIONS Copyright ©2015 John Wiley & Sons, Inc ORGANIZING AS A MANAGEMENT FUNCTION  An organization chart is a diagram describing reporting relationships and the formal arrangement of work positions within an organization It includes: The division of work Supervisory relationships Communication channels Major subunits Levels of management Copyright ©2015 John Wiley & Sons, Inc ORGANIZING AS A MANAGEMENT FUNCTION  Informal structures  The set of unofficial relationships between organization members Social network analysis  Identifies informal structures and social relationships in the organization Copyright ©2015 John Wiley & Sons, Inc ORGANIZING AS A MANAGEMENT FUNCTION  Informal structures and social networks Potential advantages of informal structures: Allow people to make contacts with others who can help them get things done  Stimulate learning as people work and interact together  Sources of emotional support and friendship that satisfy members’ social needs  Copyright ©2015 John Wiley & Sons, Inc ORGANIZING AS A MANAGEMENT FUNCTION Potential disadvantages of informal structures: Presence of “In and out groups” Susceptibility to rumor May carry inaccurate information May breed resistance to change Diversion of work efforts from important objectives Feeling of alienation by outsiders Copyright ©2015 John Wiley & Sons, Inc FIGURE 11.7 THE BOUNDARYLESS ORGANIZATION ELIMINATES INTERNAL AND EXTERNAL BARRIERS Copyright ©2015 John Wiley & Sons, Inc ORGANIZATIONAL DESIGNS Organizational design Process of creating structures that accomplish mission and objectives A problem-solving activity that should be approached from a contingency perspective Copyright ©2015 John Wiley & Sons, Inc ORGANIZATIONAL DESIGNS Bureaucracy A form of organization based on logic, order, and the legitimate use of formal authority Bureaucratic designs feature … Clear-cut division of labor  Strict hierarchy of authority  Formal rules and procedures  Promotion based on competency  Copyright ©2015 John Wiley & Sons, Inc ORGANIZATIONAL DESIGNS Contingency perspective on bureaucracy asks the questions: When is bureaucracy a good choice for an organization? When it isn’t, what alternatives are available? Copyright ©2015 John Wiley & Sons, Inc ORGANIZATIONAL DESIGNS Environment determines the most appropriate design Mechanistic designs work in a stable environment Organic designs work in a rapidly changing and uncertain environment  Adaptive organizations operate with a minimum of bureaucratic feature and encourage worker empowerment and teamwork Copyright ©2015 John Wiley & Sons, Inc ORGANIZATIONAL DESIGNS Organic Designs Mechanistic Designs • • • • • • • Predictable goals Centralized authority Many rules and procedures Narrow spans of control Specialized tasks Few teams and task forces Formal and impersonal means of coordination • • • • • • • Adaptable goals Decentralized authority Few rules and procedures Wide spans of control Shared tasks Many teams and task forces Informal and personal means of coordination Copyright ©2015 John Wiley & Sons, Inc FIGURE 11.8 A CONTINUUM OF ORGANIZATIONAL DESIGN ALTERNATIVES: FROM BUREAUCRATIC TO ADAPTIVE ORGANIZATIONS Copyright ©2015 John Wiley & Sons, Inc ORGANIZATIONAL DESIGNS Contemporary organizing trends include: Fewer levels of management Shorter chains of command  Less unity of command  Wider spans of control More delegation and empowerment Decentralization with centralization Reduced use of staff Copyright ©2015 John Wiley & Sons, Inc TRENDS IN ORGANIZATIONAL DESIGNS Chain of command • Links all employees with successively higher levels of authority Span of control • The number of persons directly reporting to a manager Organizing trend: • Organizations are being “streamlined” by cutting unnecessary levels of management • Flatter structures are viewed as a competitive advantage Copyright ©2015 John Wiley & Sons, Inc TRENDS IN ORGANIZATIONAL DESIGNS More delegation and empowerment • A common management failure is unwillingness to delegate • Delegation leads to empowerment Organizing trend: • Managers are delegating more and finding more ways to empower people at all levels Copyright ©2015 John Wiley & Sons, Inc TRENDS IN ORGANIZATIONAL DESIGNS  More delegation and empowerment Delegation is the process of distributing and entrusting work to other persons The manager assigns responsibility, grants authority to act, and creates accountability Authority should be commensurate with responsibility Copyright ©2015 John Wiley & Sons, Inc ORGANIZATIONAL DESIGNS Three Steps in Delegation: Assign responsibility – explain task and expectations Grant authority – allow others to make decisions and act Create accountability – require others to report back on results Copyright ©2015 John Wiley & Sons, Inc ORGANIZATIONAL DESIGNS Decentralization with centralization Centralization is the concentration of authority for making most decisions at the top levels of the organization Decentralization is the dispersion of authority to make decisions throughout all levels of the organization Copyright ©2015 John Wiley & Sons, Inc ORGANIZATIONAL DESIGNS Decentralization with centralization • Centralization and decentralization not an “either/or” choice Organizing trend: • Delegation, empowerment, and horizontal structures contribute to more decentralization in organizations • Advances in information technology allow for the retention of centralized control Copyright ©2015 John Wiley & Sons, Inc ORGANIZATIONAL DESIGNS Reduced use of staff • Staff positions provide technical expertise for other parts of the organization • No one best solution for dividing line-staff responsibilities Organizing trend: • Organizations are downsizing • Organizations are lowering costs and increasing efficiency by employing fewer staff personnel and using smaller staff units Copyright ©2015 John Wiley & Sons, Inc ... designs are changing in the modern workplace Copyright ©2015 John Wiley & Sons, Inc CHAPTER 11 OUTLINE Organizing as a Management Function a) b) c) What is organization structure? Formal structures... John Wiley & Sons, Inc FIGURE 11. 1 ORGANIZING VIEWED IN RELATIONSHIP WITH THE OTHER MANAGEMENT FUNCTIONS Copyright ©2015 John Wiley & Sons, Inc ORGANIZING AS A MANAGEMENT FUNCTION  An organization... organizational designs Copyright ©2015 John Wiley & Sons, Inc ORGANIZING AS A MANAGEMENT FUNCTION  Organizing as a management function Organizing  Arranges people and resources to work together