Discussion Topic
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Daft12ePPT_Ch10.pptxChapter 10
Designing Adaptive Organizations
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Organizing
All organizations wrestle with structural design and reorganization
The deployment of organizational resources to achieve strategic goals
Division of labor
Lines of authority
Coordination
Organizing is important because it follows from strategy
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Organizing the Vertical Structure
Organizing structure defines:
The set of formal tasks assigned to individuals and departments
Formal reporting relationships
The design of the systems to ensure effective coordination
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10.1 Sample Organization Chart
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Organizing Concepts
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Work Specialization is the degree to which organizational tasks are subdivided into individual jobs; also called division of labor
Chain of Command is an unbroken line of authority that links all individuals in the organization and specifies who reports to whom
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Authority, Responsibility, and Delegation
Authority is vested in organizational positions, not people
Authority flows down the vertical hierarchy
Authority is accepted by subordinates
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Authority, Responsibility, and Delegation
Responsibility is the duty to perform the task or activity as assigned
Accountability is the mechanism through which authority and responsibility are aligned
Delegation is the process managers use to transfer authority and responsibility down the chain
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Line and Staff Authority
Line departments perform primary business tasks
Sales
Production
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Line and Staff Authority
Staff departments support line departments
Marketing
Labor relations
Research
Accounting
Human Resources
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Line and Staff Authority
Line authority means that people in management positions have formal authority to direct and control immediate subordinates
Staff authority is narrower and includes the right to advise, recommend, counsel in the staff specialists’ area of expertise
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Span of Management
The number of employees reporting to a supervisor
Less supervision/larger spans of control
Work is stable and routine
Subordinates perform similar work
Subordinates are in one location
Highly trained/require little direction
Rules and procedures are defined
Few planning or nonsupervisory activities
Manager’s preference
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Span of Management
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Tall structure have more levels and narrow span
Flat structure have a wide span and fewer levels
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10.2 Reorganization and Span of Management
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Centralization and Decentralization
Centralization – decision authority is located near the top of the organization
Decentralization – decision authority is pushed downward to all levels
Factors that influence centralization versus decentralization:
Change and uncertainty are usually associated with decentralization
Strategic fit
Crisis requires centralization
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Departmentalization: Functional and Divisional
Basis for grouping positions into departments and departments into the total organization
Vertical functional approach
Grouping of positions into departments based on skills, expertise, work activities, and resource use
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10.3 Five Approaches to Structural Design
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10.3 Five Approaches to Structural Design
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10.3 Five Approaches to Structural Design
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10.3 Five Approaches to Structural Design
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10.3 Five Approaches to Structural Design
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Departmentalization: Functional and Divisional
Divisional approach
Grouping based on organizational output
Product, program, business
Geographic or Customer-based divisions group activities by geography or customer
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10.4 Functional vs. Divisional Structure
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10.5 Geographic-Based Global Organization Structure
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Departmentalization: Matrix and Team Approach
Matrix approach combines functional and divisional approaches
Improve coordination and information
Dual lines of authority
Team approach is a very widespread trend
Allows managers to delegate authority
Flexible, responsive
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10.6 Dual-Authority Structure in a Matrix Organization
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10.7 Global Matrix Structure
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Virtual Network Approach
Extends idea of horizontal coordination and collaboration
Could be a loose interconnected group
i.e., outsourcing
Virtual network structure means that the firm subcontracts most of its major functions to separate companies
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10.8 Network Approach to Departmentalization
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10.9 Structural Advantages and Disadvantages
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Organizing for Horizontal Coordination
Companies need more flexibility than vertical structure can offer
Meet fast-shifting environment
Break down barriers between departments
Need integration and coordination
Lack of coordination and cooperation can cause information problems
Growing global challenge
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10.10 Evolution of Organization Structures
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Reengineering
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Radical redesign of business processes to achieve dramatic improvements in cost, quality, service, and speed
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Task Forces, Teams, and Project Management
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Project Manager – person responsible for coordinating activities of several departments for the completion of a specific project
Task Force – a temporary team or committee formed to solve a specific short-term problem involving several departments
Cross-functional Team – furthers horizontal coordination by including members across the organization
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10.11 Project Manager Relationships to Departments
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Relational Coordination
Frequent, timely, problem-solving communication carried out through [employee] relationships of shared goals, shared knowledge, and mutual respect.
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Structure Follows Strategy
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Business performance is influenced by structure
Strategic goals should drive structure
Structure should facilitate strategic goals
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10.12 Factors Affecting Organization Structure
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10.13 Relationship of Structural Approach to Strategy
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Structure Fits the Technology
Knowledge, tools, techniques, and activities should match production activities
Manufacturing firms can be categorized according to:
Small-batch and unit production
Large-batch and mass production
Continuous process production
The technical complexity of each type of firm differs
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