Chapter Designing Adaptive Organizations MGMT Chuck Williams Designed & Prepared by B-books, Ltd Copyright ©2008 Cengage Learning All rights reserved Organizational Structure Organizational Structure The vertical and horizontal configuration of departments, authority, and jobs within a company Organizational Process The collection of activities that transform inputs into outputs that customers value Copyright ©2008 Cengage Learning All rights reserved Organizational Structure Process Process View View of of Microsoft’s Microsoft’s Organization Organization Copyright ©2008 Cengage Learning All rights reserved Designing Organizational Structures After reading these sections, you should be able to: describe the departmentalization approach to organizational structure explain organizational authority discuss the different methods for job design Copyright ©2008 Cengage Learning All rights reserved Departmentalization Functional Functional Customer Customer Product Product Geographic Geographic Matrix Matrix Copyright ©2008 Cengage Learning All rights reserved Functional Departmentalization 1.1 Copyright ©2008 Cengage Learning All rights reserved Functional Departmentalization Advantages Disadvantages  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 1.1 Copyright ©2008 Cengage Learning All rights reserved Product Departmentalization United United Technologies Technologies 1.2 Carrier Carrier UTC UTCFire Fireand and Security Security Hamilton Hamilton Sundstrand Sundstrand Otis Otis Pratt Pratt&&Whitney Whitney Sikorsky Sikorsky Administrative services Communication & public relations Customer service & support E-Business Engineering etc… UTC UTCPower Power Copyright ©2008 Cengage Learning All rights reserved Product Departmentalization Advantages Disadvantages • Managers specialize, but have broader experiences • Easier to assess workunit performance • Decision-making is faster • Duplication of activities • Difficult to coordinate across departments 1.2 Copyright ©2008 Cengage Learning All rights reserved Customer Departmentalization 1.3 10 Copyright ©2008 Cengage Learning All rights reserved 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 3.3 27 Copyright ©2008 Cengage Learning All rights reserved Motivation by Job Design: The JCM • Job Characteristics Model (JCM) – Hackman and Oldham’s concept that any job can be described through five core job dimensions: • Skill variety – Requirements for different tasks in the job • Task identity – Completion of a whole piece of work • Task significance – The job’s impact on others • Autonomy – Level of discretion in decision making • Feedback – Amount of direct and clear information on performance – The way elements in a job are organized (job design) impacts motivation, satisfaction, and performance 28 Copyright ©2008 Cengage Learning All rights reserved The Job Characteristics Model Employee growth-need strength moderates the relationships Source: J.R Hackman and G.R Oldham, Work Design (excerpted from pp 78–80) © 1980 by Addison-Wesley Publishing Co., Inc Reprinted by permission of Addison-Wesley Longman, Inc 29 Copyright ©2008 Cengage Learning All rights reserved Guidelines for Enriching a Job Source: J.R Hackman and J.L Suttle, eds., Improving Life at Work (Glenview, IL: Scott Foresman, 1977), p 138 30 Copyright ©2008 Cengage Learning All rights reserved Designing Organizational Processes After reading these sections, you should be able to: explain the methods that companies are using to redesign international organizational processes (i.e., intraorganizational processes) describe the methods that companies are using to redesign external organizational processes (i.e., interorganizational processes) 31 Copyright ©2008 Cengage Learning All rights reserved Two Kinds of Organizational Designs (Burns and Stalker) 32 Copyright ©2008 Cengage Learning All rights reserved Intraorganizational Processes Reengineering Reengineering Empowerment Empowerment 33 Copyright ©2008 Cengage Learning All rights reserved Reengineering  The fundamental rethinking and radical redesign of business processes  Intended to achieve dramatic improvements in performance  Change the orientation from vertical to horizontal  Change task interdependence 4.1 34 Copyright ©2008 Cengage Learning All rights reserved Reengineering and Task Interdependence 4.1 35 Copyright ©2008 Cengage Learning All rights reserved Empowerment Empowering Empowering Workers Workers Permanently Permanentlypassing passingdecision-making decision-making authority authorityand andresponsibilities responsibilitiesfrom from managers managersto toworkers workersby bygiving givingthem them the theinformation informationand andresources resourcesthey they need needto tomake makegood gooddecisions decisions  A feeling of intrinsic motivation  Workers perceive meaning in their work  Employees are capable of self-determination 4.2 36 Copyright ©2008 Cengage Learning All rights reserved Interorganizational Processes Modular Modular Organizations Organizations Virtual Virtual Organizations Organizations 37 Copyright ©2008 Cengage Learning All rights reserved Modular Organizations 5.1 38 Copyright ©2008 Cengage Learning All rights reserved Modular Organizations Advantages Disadvantages • can cost less to run than traditional organizations • lets organizations focus on core competencies • loss of control from outsourcing • may reduce their competitive advantage 5.1 39 Copyright ©2008 Cengage Learning All rights reserved Virtual Organizations 5.2 40 Copyright ©2008 Cengage Learning All rights reserved Virtual Organizations Advantages Disadvantages • let companies share costs • fast and flexible • being the best should provide better products • difficult to control the quality of partners • requires tremendous management skills 5.2 41 Copyright ©2008 Cengage Learning All rights reserved ... primary authority is held by upper management  Decentralization • significant authority is found in lower levels of the organization  Standardization • solving problems by applying rules, procedures,... weeks, the new member must be approved by 2/3 vote of the team to remain on it • Whole Foods believes that decisions should be made by those most impacted by them Source: “Break Free!,” Fortune,... 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