DESIGNING AN EFFECTIVE ORGANIZATION STRUCTURE

DESIGNING AN EFFECTIVE ORGANIZATION

STRUCTURE

What is Organization Structure?

Framework for dividing responsibilities and authority

Enables accountability and coordination

Visualized in organization charts showing:

Groupings of people and tasks

Communication and authority flows

Formal vs. informal organization

Formal - Official structure and relationships

Informal - Personal interactions and networks

Key Organizational Design Decisions

Identifying Core Competencies

Decide which functions to keep in-house based on strengths

Outsource non-core functions to other companies

Defining Job Responsibilities

Optimize work specialization - dividing tasks into specialized jobs

Specialization aligns skills and improves efficiency

But can bore employees and inhibit collaboration

The Chain of Command

Defines authority and accountability relationships

Flows top-down through management hierarchy

Delegation hands off tasks down chain of command

Span of Management

Number of direct reports - wide vs. narrow span

Wide spans mean flatter organizations, narrow spans mean taller

ones

Centralization vs. Decentralization

Centralization concentrates authority at top

Decentralization delegates authority downward

Balance depends on company's needs

Developing an Agile Organization

Structure, policies, capabilities enabling quick response to change

Giving teams authority to act without bureaucratic delays

Major Types of Structure

Functional

Groups by skill sets - R&D, manufacturing, marketing etc.

Economies of scale, career growth, deep expertise

But can create disconnected silos

Divisional

Self-contained units for product, process, customer, geography

Flexibility, specialized service, but duplication and misalignment

Matrix

People assigned to function and project team simultaneously

Shared resources, mix of skills

But dual reporting relationships and power struggles

Network

Coordinates internal and external partners

Lowers costs, adds flexibility

But vulnerability and lack of distinction

Organizing the Workforce

Departmentalization

Grouping people and tasks logically into departments

Vertical layers of hierarchy

Horizontal divisions of functions/divisions

Distributed and Hybrid Models

Range from traditional on-site to fully virtual/distributed

Hybrid model blends on-site and WFH

Requires extra effort to maintain unified culture

Organizing in Teams

Teams vs. Groups

Teams have collective mission and responsibility

Groups are looser associations for information sharing

Types of Teams

Problem-solving - Improve quality and efficiency

Self-managed - Manage own work with little oversight

Functional - Within a department

Cross-functional - Across multiple departments

Virtual - Members in different locations

Social networks - Informal links within and across organizations

Key Organizational Design Decisions

Identifying Core Competencies

Decide which functions to keep in-house based on strengths

Outsource non-core functions to other companies

Defining Job Responsibilities

Optimize work specialization - dividing tasks into specialized jobs

Specialization aligns skills and improves efficiency

But can bore employees and inhibit collaboration

The Chain of Command

Defines authority and accountability relationships

Flows top-down through management hierarchy

Delegation hands off tasks down chain of command

Span of Management

Number of direct reports - wide vs. narrow span

Wide spans mean flatter organizations, narrow spans mean taller

ones

Centralization vs. Decentralization

Centralization concentrates authority at top

Decentralization delegates authority downward

Balance depends on company's needs

Developing an Agile Organization

Structure, policies, capabilities enabling quick response to change

Giving teams authority to act without bureaucratic delays

Major Types of Structure

Functional

Groups by skill sets - R&D, manufacturing, marketing etc.

Economies of scale, career growth, deep expertise

But can create disconnected silos

Divisional

Self-contained units for product, process, customer, geography

Flexibility, specialized service, but duplication and misalignment

Matrix

People assigned to function and project team simultaneously

Shared resources, mix of skills

But dual reporting relationships and power struggles

Network

Coordinates internal and external partners

Lowers costs, adds flexibility

But vulnerability and lack of distinction

Organizing the Workforce

Departmentalization

Grouping people and tasks logically into departments

Vertical layers of hierarchy

Horizontal divisions of functions/divisions

Distributed and Hybrid Models

Range from traditional on-site to fully virtual/distributed

Hybrid model blends on-site and WFH

Requires extra effort to maintain unified culture

Organizing in Teams

Teams vs. Groups

Teams have collective mission and responsibility

Groups are looser associations for information sharing

Types of Teams

Problem-solving - Improve quality and efficiency

Self-managed - Manage own work with little oversight

Functional - Within a department

Cross-functional - Across multiple departments

Virtual - Members in different locations

Social networks - Informal links within and across organizations

Key Organizational Design Decisions

Identifying Core Competencies

Decide which functions to keep in-house based on strengths

Outsource non-core functions to other companies

Defining Job Responsibilities

Optimize work specialization - dividing tasks into specialized jobs

Specialization aligns skills and improves efficiency

But can bore employees and inhibit collaboration

The Chain of Command

Defines authority and accountability relationships

Flows top-down through management hierarchy

Delegation hands off tasks down chain of command

Span of Management

Number of direct reports - wide vs. narrow span

Wide spans mean flatter organizations, narrow spans mean taller

ones

Centralization vs. Decentralization

Centralization concentrates authority at top

Decentralization delegates authority downward

Balance depends on company's needs

Developing an Agile Organization

Structure, policies, capabilities enabling quick response to change

Giving teams authority to act without bureaucratic delays

Major Types of Structure

Functional

Groups by skill sets - R&D, manufacturing, marketing etc.

Economies of scale, career growth, deep expertise

But can create disconnected silos

Divisional

Self-contained units for product, process, customer, geography

Flexibility, specialized service, but duplication and misalignment

Matrix

People assigned to function and project team simultaneously

Shared resources, mix of skills

But dual reporting relationships and power struggles

Network

Coordinates internal and external partners

Lowers costs, adds flexibility

But vulnerability and lack of distinction

Organizing the Workforce

Departmentalization

Grouping people and tasks logically into departments

Vertical layers of hierarchy

Horizontal divisions of functions/divisions

Distributed and Hybrid Models

Range from traditional on-site to fully virtual/distributed

Hybrid model blends on-site and WFH

Requires extra effort to maintain unified culture

Organizing in Teams

Teams vs. Groups

Teams have collective mission and responsibility

Groups are looser associations for information sharing

Types of Teams

Problem-solving - Improve quality and efficiency

Self-managed - Manage own work with little oversight

Functional - Within a department

Cross-functional - Across multiple departments

Virtual - Members in different locations

Social networks - Informal links within and across organizations

Key Organizational Design Decisions

Identifying Core Competencies

Decide which functions to keep in-house based on strengths

Outsource non-core functions to other companies

Defining Job Responsibilities

Optimize work specialization - dividing tasks into specialized jobs

Specialization aligns skills and improves efficiency

But can bore employees and inhibit collaboration

The Chain of Command

Defines authority and accountability relationships

Flows top-down through management hierarchy

Delegation hands off tasks down chain of command

Span of Management

Number of direct reports - wide vs. narrow span

Wide spans mean flatter organizations, narrow spans mean taller

ones

Centralization vs. Decentralization

Centralization concentrates authority at top

Decentralization delegates authority downward

Balance depends on company's needs

Developing an Agile Organization

Structure, policies, capabilities enabling quick response to change

Giving teams authority to act without bureaucratic delays

Major Types of Structure

Functional

Groups by skill sets - R&D, manufacturing, marketing etc.

Economies of scale, career growth, deep expertise

But can create disconnected silos

Divisional

Self-contained units for product, process, customer, geography

Flexibility, specialized service, but duplication and misalignment

Matrix

People assigned to function and project team simultaneously

Shared resources, mix of skills

But dual reporting relationships and power struggles

Network

Coordinates internal and external partners

Lowers costs, adds flexibility

But vulnerability and lack of distinction

Organizing the Workforce

Departmentalization

Grouping people and tasks logically into departments

Vertical layers of hierarchy

Horizontal divisions of functions/divisions

Distributed and Hybrid Models

Range from traditional on-site to fully virtual/distributed

Hybrid model blends on-site and WFH

Requires extra effort to maintain unified culture

Organizing in Teams

Teams vs. Groups

Teams have collective mission and responsibility

Groups are looser associations for information sharing

Types of Teams

Problem-solving - Improve quality and efficiency

Self-managed - Manage own work with little oversight

Functional - Within a department

Cross-functional - Across multiple departments

Virtual - Members in different locations

Social networks - Informal links within and across organizations

Key Organizational Design Decisions

Identifying Core Competencies

Decide which functions to keep in-house based on strengths

Outsource non-core functions to other companies

Defining Job Responsibilities

Optimize work specialization - dividing tasks into specialized jobs

Specialization aligns skills and improves efficiency

But can bore employees and inhibit collaboration

The Chain of Command

Defines authority and accountability relationships

Flows top-down through management hierarchy

Delegation hands off tasks down chain of command

Span of Management

Number of direct reports - wide vs. narrow span

Wide spans mean flatter organizations, narrow spans mean taller

ones

Centralization vs. Decentralization

Centralization concentrates authority at top

Decentralization delegates authority downward

Balance depends on company's needs

Developing an Agile Organization

Structure, policies, capabilities enabling quick response to change

Giving teams authority to act without bureaucratic delays

Major Types of Structure

Functional

Groups by skill sets - R&D, manufacturing, marketing etc.

Economies of scale, career growth, deep expertise

But can create disconnected silos

Divisional

Self-contained units for product, process, customer, geography

Flexibility, specialized service, but duplication and misalignment

Matrix

People assigned to function and project team simultaneously

Shared resources, mix of skills

But dual reporting relationships and power struggles

Network

Coordinates internal and external partners

Lowers costs, adds flexibility

But vulnerability and lack of distinction

Organizing the Workforce

Departmentalization

Grouping people and tasks logically into departments

Vertical layers of hierarchy

Horizontal divisions of functions/divisions

Distributed and Hybrid Models

Range from traditional on-site to fully virtual/distributed

Hybrid model blends on-site and WFH

Requires extra effort to maintain unified culture

Organizing in Teams

Teams vs. Groups

Teams have collective mission and responsibility

Groups are looser associations for information sharing

Types of Teams

Problem-solving - Improve quality and efficiency

Self-managed - Manage own work with little oversight

Functional - Within a department

Cross-functional - Across multiple departments

Virtual - Members in different locations

Social networks - Informal links within and across organizations

Key Organizational Design Decisions

Identifying Core Competencies

Decide which functions to keep in-house based on strengths

Outsource non-core functions to other companies

Defining Job Responsibilities

Optimize work specialization - dividing tasks into specialized jobs

Specialization aligns skills and improves efficiency

But can bore employees and inhibit collaboration

The Chain of Command

Defines authority and accountability relationships

Flows top-down through management hierarchy

Delegation hands off tasks down chain of command

Span of Management

Number of direct reports - wide vs. narrow span

Wide spans mean flatter organizations, narrow spans mean taller

ones

Centralization vs. Decentralization

Centralization concentrates authority at top

Decentralization delegates authority downward

Balance depends on company's needs

Developing an Agile Organization

Structure, policies, capabilities enabling quick response to change

Giving teams authority to act without bureaucratic delays

Major Types of Structure

Functional

Groups by skill sets - R&D, manufacturing, marketing etc.

Economies of scale, career growth, deep expertise

But can create disconnected silos

Divisional

Self-contained units for product, process, customer, geography

Flexibility, specialized service, but duplication and misalignment

Matrix

People assigned to function and project team simultaneously

Shared resources, mix of skills

But dual reporting relationships and power struggles

Network

Coordinates internal and external partners

Lowers costs, adds flexibility

But vulnerability and lack of distinction

Organizing the Workforce

Departmentalization

Grouping people and tasks logically into departments

Vertical layers of hierarchy

Horizontal divisions of functions/divisions

Distributed and Hybrid Models

Range from traditional on-site to fully virtual/distributed

Hybrid model blends on-site and WFH

Requires extra effort to maintain unified culture

Organizing in Teams

Teams vs. Groups

Teams have collective mission and responsibility

Groups are looser associations for information sharing

Types of Teams

Problem-solving - Improve quality and efficiency

Self-managed - Manage own work with little oversight

Functional - Within a department

Cross-functional - Across multiple departments

Virtual - Members in different locations

Social networks - Informal links within and across organizations

Key Organizational Design Decisions

Identifying Core Competencies

Decide which functions to keep in-house based on strengths

Outsource non-core functions to other companies

Defining Job Responsibilities

Optimize work specialization - dividing tasks into specialized jobs

Specialization aligns skills and improves efficiency

But can bore employees and inhibit collaboration

The Chain of Command

Defines authority and accountability relationships

Flows top-down through management hierarchy

Delegation hands off tasks down chain of command

Span of Management

Number of direct reports - wide vs. narrow span

Wide spans mean flatter organizations, narrow spans mean taller

ones

Centralization vs. Decentralization

Centralization concentrates authority at top

Decentralization delegates authority downward

Balance depends on company's needs

Developing an Agile Organization

Structure, policies, capabilities enabling quick response to change

Giving teams authority to act without bureaucratic delays

Major Types of Structure

Functional

Groups by skill sets - R&D, manufacturing, marketing etc.

Economies of scale, career growth, deep expertise

But can create disconnected silos

Divisional

Self-contained units for product, process, customer, geography

Flexibility, specialized service, but duplication and misalignment

Matrix

People assigned to function and project team simultaneously

Shared resources, mix of skills

But dual reporting relationships and power struggles

Network

Coordinates internal and external partners

Lowers costs, adds flexibility

But vulnerability and lack of distinction

Organizing the Workforce

Departmentalization

Grouping people and tasks logically into departments

Vertical layers of hierarchy

Horizontal divisions of functions/divisions

Distributed and Hybrid Models

Range from traditional on-site to fully virtual/distributed

Hybrid model blends on-site and WFH

Requires extra effort to maintain unified culture

Organizing in Teams

Teams vs. Groups

Teams have collective mission and responsibility

Groups are looser associations for information sharing

Types of Teams

Problem-solving - Improve quality and efficiency

Self-managed - Manage own work with little oversight

Functional - Within a department

Cross-functional - Across multiple departments

Virtual - Members in different locations

Social networks - Informal links within and across organizations

Key Organizational Design Decisions

Identifying Core Competencies

Decide which functions to keep in-house based on strengths

Outsource non-core functions to other companies

Defining Job Responsibilities

Optimize work specialization - dividing tasks into specialized jobs

Specialization aligns skills and improves efficiency

But can bore employees and inhibit collaboration

The Chain of Command

Defines authority and accountability relationships

Flows top-down through management hierarchy

Delegation hands off tasks down chain of command

Span of Management

Number of direct reports - wide vs. narrow span

Wide spans mean flatter organizations, narrow spans mean taller

ones

Centralization vs. Decentralization

Centralization concentrates authority at top

Decentralization delegates authority downward

Balance depends on company's needs

Developing an Agile Organization

Structure, policies, capabilities enabling quick response to change

Giving teams authority to act without bureaucratic delays

Major Types of Structure

Functional

Groups by skill sets - R&D, manufacturing, marketing etc.

Economies of scale, career growth, deep expertise

But can create disconnected silos

Divisional

Self-contained units for product, process, customer, geography

Flexibility, specialized service, but duplication and misalignment

Matrix

People assigned to function and project team simultaneously

Shared resources, mix of skills

But dual reporting relationships and power struggles

Network

Coordinates internal and external partners

Lowers costs, adds flexibility

But vulnerability and lack of distinction

Organizing the Workforce

Departmentalization

Grouping people and tasks logically into departments

Vertical layers of hierarchy

Horizontal divisions of functions/divisions

Distributed and Hybrid Models

Range from traditional on-site to fully virtual/distributed

Hybrid model blends on-site and WFH

Requires extra effort to maintain unified culture

Organizing in Teams

Teams vs. Groups

Teams have collective mission and responsibility

Groups are looser associations for information sharing

Types of Teams

Problem-solving - Improve quality and efficiency

Self-managed - Manage own work with little oversight

Functional - Within a department

Cross-functional - Across multiple departments

Virtual - Members in different locations

Social networks - Informal links within and across organizations

Key Organizational Design Decisions

Identifying Core Competencies

Decide which functions to keep in-house based on strengths

Outsource non-core functions to other companies

Defining Job Responsibilities

Optimize work specialization - dividing tasks into specialized jobs

Specialization aligns skills and improves efficiency

But can bore employees and inhibit collaboration

The Chain of Command

Defines authority and accountability relationships

Flows top-down through management hierarchy

Delegation hands off tasks down chain of command

Span of Management

Number of direct reports - wide vs. narrow span

Wide spans mean flatter organizations, narrow spans mean taller

ones

Centralization vs. Decentralization

Centralization concentrates authority at top

Decentralization delegates authority downward

Balance depends on company's needs

Developing an Agile Organization

Structure, policies, capabilities enabling quick response to change

Giving teams authority to act without bureaucratic delays

Major Types of Structure

Functional

Groups by skill sets - R&D, manufacturing, marketing etc.

Economies of scale, career growth, deep expertise

But can create disconnected silos

Divisional

Self-contained units for product, process, customer, geography

Flexibility, specialized service, but duplication and misalignment

Matrix

People assigned to function and project team simultaneously

Shared resources, mix of skills

But dual reporting relationships and power struggles

Network

Coordinates internal and external partners

Lowers costs, adds flexibility

But vulnerability and lack of distinction

Organizing the Workforce

Departmentalization

Grouping people and tasks logically into departments

Vertical layers of hierarchy

Horizontal divisions of functions/divisions

Distributed and Hybrid Models

Range from traditional on-site to fully virtual/distributed

Hybrid model blends on-site and WFH

Requires extra effort to maintain unified culture

Organizing in Teams

Teams vs. Groups

Teams have collective mission and responsibility

Groups are looser associations for information sharing

Types of Teams

Problem-solving - Improve quality and efficiency

Self-managed - Manage own work with little oversight

Functional - Within a department

Cross-functional - Across multiple departments

Virtual - Members in different locations

Social networks - Informal links within and across organizations

Key Organizational Design Decisions

Identifying Core Competencies

Decide which functions to keep in-house based on strengths

Outsource non-core functions to other companies

Defining Job Responsibilities

Optimize work specialization - dividing tasks into specialized jobs

Specialization aligns skills and improves efficiency

But can bore employees and inhibit collaboration

The Chain of Command

Defines authority and accountability relationships

Flows top-down through management hierarchy

Delegation hands off tasks down chain of command

Span of Management

Number of direct reports - wide vs. narrow span

Wide spans mean flatter organizations, narrow spans mean taller

ones

Centralization vs. Decentralization

Centralization concentrates authority at top

Decentralization delegates authority downward

Balance depends on company's needs

Developing an Agile Organization

Structure, policies, capabilities enabling quick response to change

Giving teams authority to act without bureaucratic delays

Major Types of Structure

Functional

Groups by skill sets - R&D, manufacturing, marketing etc.

Economies of scale, career growth, deep expertise

But can create disconnected silos

Divisional

Self-contained units for product, process, customer, geography

Flexibility, specialized service, but duplication and misalignment

Matrix

People assigned to function and project team simultaneously

Shared resources, mix of skills

But dual reporting relationships and power struggles

Network

Coordinates internal and external partners

Lowers costs, adds flexibility

But vulnerability and lack of distinction

Organizing the Workforce

Departmentalization

Grouping people and tasks logically into departments

Vertical layers of hierarchy

Horizontal divisions of functions/divisions

Distributed and Hybrid Models

Range from traditional on-site to fully virtual/distributed

Hybrid model blends on-site and WFH

Requires extra effort to maintain unified culture

Organizing in Teams

Teams vs. Groups

Teams have collective mission and responsibility

Groups are looser associations for information sharing

Types of Teams

Problem-solving - Improve quality and efficiency

Self-managed - Manage own work with little oversight

Functional - Within a department

Cross-functional - Across multiple departments

Virtual - Members in different locations

Social networks - Informal links within and across organizations

Key Organizational Design Decisions

Identifying Core Competencies

Decide which functions to keep in-house based on strengths

Outsource non-core functions to other companies

Defining Job Responsibilities

Optimize work specialization - dividing tasks into specialized jobs

Specialization aligns skills and improves efficiency

But can bore employees and inhibit collaboration

The Chain of Command

Defines authority and accountability relationships

Flows top-down through management hierarchy

Delegation hands off tasks down chain of command

Span of Management

Number of direct reports - wide vs. narrow span

Wide spans mean flatter organizations, narrow spans mean taller

ones

Centralization vs. Decentralization

Centralization concentrates authority at top

Decentralization delegates authority downward

Balance depends on company's needs

Developing an Agile Organization

Structure, policies, capabilities enabling quick response to change

Giving teams authority to act without bureaucratic delays

Major Types of Structure

Functional

Groups by skill sets - R&D, manufacturing, marketing etc.

Economies of scale, career growth, deep expertise

But can create disconnected silos

Divisional

Self-contained units for product, process, customer, geography

Flexibility, specialized service, but duplication and misalignment

Matrix

People assigned to function and project team simultaneously

Shared resources, mix of skills

But dual reporting relationships and power struggles

Network

Coordinates internal and external partners

Lowers costs, adds flexibility

But vulnerability and lack of distinction

Organizing the Workforce

Departmentalization

Grouping people and tasks logically into departments

Vertical layers of hierarchy

Horizontal divisions of functions/divisions

Distributed and Hybrid Models

Range from traditional on-site to fully virtual/distributed

Hybrid model blends on-site and WFH

Requires extra effort to maintain unified culture

Organizing in Teams

Teams vs. Groups

Teams have collective mission and responsibility

Groups are looser associations for information sharing

Types of Teams

Problem-solving - Improve quality and efficiency

Self-managed - Manage own work with little oversight

Functional - Within a department

Cross-functional - Across multiple departments

Virtual - Members in different locations

Social networks - Informal links within and across organizations

Key Organizational Design Decisions

Identifying Core Competencies

Decide which functions to keep in-house based on strengths

Outsource non-core functions to other companies

Defining Job Responsibilities

Optimize work specialization - dividing tasks into specialized jobs

Specialization aligns skills and improves efficiency

But can bore employees and inhibit collaboration

The Chain of Command

Defines authority and accountability relationships

Flows top-down through management hierarchy

Delegation hands off tasks down chain of command

Span of Management

Number of direct reports - wide vs. narrow span

Wide spans mean flatter organizations, narrow spans mean taller

ones

Centralization vs. Decentralization

Centralization concentrates authority at top

Decentralization delegates authority downward

Balance depends on company's needs

Developing an Agile Organization

Structure, policies, capabilities enabling quick response to change

Giving teams authority to act without bureaucratic delays

Major Types of Structure

Functional

Groups by skill sets - R&D, manufacturing, marketing etc.

Economies of scale, career growth, deep expertise

But can create disconnected silos

Divisional

Self-contained units for product, process, customer, geography

Flexibility, specialized service, but duplication and misalignment

Matrix

People assigned to function and project team simultaneously

Shared resources, mix of skills

But dual reporting relationships and power struggles

Network

Coordinates internal and external partners

Lowers costs, adds flexibility

But vulnerability and lack of distinction

Organizing the Workforce

Departmentalization

Grouping people and tasks logically into departments

Vertical layers of hierarchy

Horizontal divisions of functions/divisions

Distributed and Hybrid Models

Range from traditional on-site to fully virtual/distributed

Hybrid model blends on-site and WFH

Requires extra effort to maintain unified culture

Organizing in Teams

Teams vs. Groups

Teams have collective mission and responsibility

Groups are looser associations for information sharing

Types of Teams

Problem-solving - Improve quality and efficiency

Self-managed - Manage own work with little oversight

Functional - Within a department

Cross-functional - Across multiple departments

Virtual - Members in different locations

Social networks - Informal links within and across organizations

Key Organizational Design Decisions

Identifying Core Competencies

Decide which functions to keep in-house based on strengths

Outsource non-core functions to other companies

Defining Job Responsibilities

Optimize work specialization - dividing tasks into specialized jobs

Specialization aligns skills and improves efficiency

But can bore employees and inhibit collaboration

The Chain of Command

Defines authority and accountability relationships

Flows top-down through management hierarchy

Delegation hands off tasks down chain of command

Span of Management

Number of direct reports - wide vs. narrow span

Wide spans mean flatter organizations, narrow spans mean taller

ones

Centralization vs. Decentralization

Centralization concentrates authority at top

Decentralization delegates authority downward

Balance depends on company's needs

Developing an Agile Organization

Structure, policies, capabilities enabling quick response to change

Giving teams authority to act without bureaucratic delays

Major Types of Structure

Functional

Groups by skill sets - R&D, manufacturing, marketing etc.

Economies of scale, career growth, deep expertise

But can create disconnected silos

Divisional

Self-contained units for product, process, customer, geography

Flexibility, specialized service, but duplication and misalignment

Matrix

People assigned to function and project team simultaneously

Shared resources, mix of skills

But dual reporting relationships and power struggles

Network

Coordinates internal and external partners

Lowers costs, adds flexibility

But vulnerability and lack of distinction

Organizing the Workforce

Departmentalization

Grouping people and tasks logically into departments

Vertical layers of hierarchy

Horizontal divisions of functions/divisions

Distributed and Hybrid Models

Range from traditional on-site to fully virtual/distributed

Hybrid model blends on-site and WFH

Requires extra effort to maintain unified culture

Organizing in Teams

Teams vs. Groups

Teams have collective mission and responsibility

Groups are looser associations for information sharing

Types of Teams

Problem-solving - Improve quality and efficiency

Self-managed - Manage own work with little oversight

Functional - Within a department

Cross-functional - Across multiple departments

Virtual - Members in different locations

Social networks - Informal links within and across organizations

Key Organizational Design Decisions

Identifying Core Competencies

Decide which functions to keep in-house based on strengths

Outsource non-core functions to other companies

Defining Job Responsibilities

Optimize work specialization - dividing tasks into specialized jobs

Specialization aligns skills and improves efficiency

But can bore employees and inhibit collaboration

The Chain of Command

Defines authority and accountability relationships

Flows top-down through management hierarchy

Delegation hands off tasks down chain of command

Span of Management

Number of direct reports - wide vs. narrow span

Wide spans mean flatter organizations, narrow spans mean taller

ones

Centralization vs. Decentralization

Centralization concentrates authority at top

Decentralization delegates authority downward

Balance depends on company's needs

Developing an Agile Organization

Structure, policies, capabilities enabling quick response to change

Giving teams authority to act without bureaucratic delays

Major Types of Structure

Functional

Groups by skill sets - R&D, manufacturing, marketing etc.

Economies of scale, career growth, deep expertise

But can create disconnected silos

Divisional

Self-contained units for product, process, customer, geography

Flexibility, specialized service, but duplication and misalignment

Matrix

People assigned to function and project team simultaneously

Shared resources, mix of skills

But dual reporting relationships and power struggles

Network

Coordinates internal and external partners

Lowers costs, adds flexibility

But vulnerability and lack of distinction

Organizing the Workforce

Departmentalization

Grouping people and tasks logically into departments

Vertical layers of hierarchy

Horizontal divisions of functions/divisions

Distributed and Hybrid Models

Range from traditional on-site to fully virtual/distributed

Hybrid model blends on-site and WFH

Requires extra effort to maintain unified culture

Organizing in Teams

Teams vs. Groups

Teams have collective mission and responsibility

Groups are looser associations for information sharing

Types of Teams

Problem-solving - Improve quality and efficiency

Self-managed - Manage own work with little oversight

Functional - Within a department

Cross-functional - Across multiple departments

Virtual - Members in different locations

Social networks - Informal links within and across organizations

Key Organizational Design Decisions

Identifying Core Competencies

Decide which functions to keep in-house based on strengths

Outsource non-core functions to other companies

Defining Job Responsibilities

Optimize work specialization - dividing tasks into specialized jobs

Specialization aligns skills and improves efficiency

But can bore employees and inhibit collaboration

The Chain of Command

Defines authority and accountability relationships

Flows top-down through management hierarchy

Delegation hands off tasks down chain of command

Span of Management

Number of direct reports - wide vs. narrow span

Wide spans mean flatter organizations, narrow spans mean taller

ones

Centralization vs. Decentralization

Centralization concentrates authority at top

Decentralization delegates authority downward

Balance depends on company's needs

Developing an Agile Organization

Structure, policies, capabilities enabling quick response to change

Giving teams authority to act without bureaucratic delays

Major Types of Structure

Functional

Groups by skill sets - R&D, manufacturing, marketing etc.

Economies of scale, career growth, deep expertise

But can create disconnected silos

Divisional

Self-contained units for product, process, customer, geography

Flexibility, specialized service, but duplication and misalignment

Matrix

People assigned to function and project team simultaneously

Shared resources, mix of skills

But dual reporting relationships and power struggles

Network

Coordinates internal and external partners

Lowers costs, adds flexibility

But vulnerability and lack of distinction

Organizing the Workforce

Departmentalization

Grouping people and tasks logically into departments

Vertical layers of hierarchy

Horizontal divisions of functions/divisions

Distributed and Hybrid Models

Range from traditional on-site to fully virtual/distributed

Hybrid model blends on-site and WFH

Requires extra effort to maintain unified culture

Organizing in Teams

Teams vs. Groups

Teams have collective mission and responsibility

Groups are looser associations for information sharing

Types of Teams

Problem-solving - Improve quality and efficiency

Self-managed - Manage own work with little oversight

Functional - Within a department

Cross-functional - Across multiple departments

Virtual - Members in different locations

Social networks - Informal links within and across organizations

Key Organizational Design Decisions

Identifying Core Competencies

Decide which functions to keep in-house based on strengths

Outsource non-core functions to other companies

Defining Job Responsibilities

Optimize work specialization - dividing tasks into specialized jobs

Specialization aligns skills and improves efficiency

But can bore employees and inhibit collaboration

The Chain of Command

Defines authority and accountability relationships

Flows top-down through management hierarchy

Delegation hands off tasks down chain of command

Span of Management

Number of direct reports - wide vs. narrow span

Wide spans mean flatter organizations, narrow spans mean taller

ones

Centralization vs. Decentralization

Centralization concentrates authority at top

Decentralization delegates authority downward

Balance depends on company's needs

Developing an Agile Organization

Structure, policies, capabilities enabling quick response to change

Giving teams authority to act without bureaucratic delays

Major Types of Structure

Functional

Groups by skill sets - R&D, manufacturing, marketing etc.

Economies of scale, career growth, deep expertise

But can create disconnected silos

Divisional

Self-contained units for product, process, customer, geography

Flexibility, specialized service, but duplication and misalignment

Matrix

People assigned to function and project team simultaneously

Shared resources, mix of skills

But dual reporting relationships and power struggles

Network

Coordinates internal and external partners

Lowers costs, adds flexibility

But vulnerability and lack of distinction

Organizing the Workforce

Departmentalization

Grouping people and tasks logically into departments

Vertical layers of hierarchy

Horizontal divisions of functions/divisions

Distributed and Hybrid Models

Range from traditional on-site to fully virtual/distributed

Hybrid model blends on-site and WFH

Requires extra effort to maintain unified culture

Organizing in Teams

Teams vs. Groups

Teams have collective mission and responsibility

Groups are looser associations for information sharing

Types of Teams

Problem-solving - Improve quality and efficiency

Self-managed - Manage own work with little oversight

Functional - Within a department

Cross-functional - Across multiple departments

Virtual - Members in different locations

Social networks - Informal links within and across organizations

Key Organizational Design Decisions

Identifying Core Competencies

Decide which functions to keep in-house based on strengths

Outsource non-core functions to other companies

Defining Job Responsibilities

Optimize work specialization - dividing tasks into specialized jobs

Specialization aligns skills and improves efficiency

But can bore employees and inhibit collaboration

The Chain of Command

Defines authority and accountability relationships

Flows top-down through management hierarchy

Delegation hands off tasks down chain of command

Span of Management

Number of direct reports - wide vs. narrow span

Wide spans mean flatter organizations, narrow spans mean taller

ones

Centralization vs. Decentralization

Centralization concentrates authority at top

Decentralization delegates authority downward

Balance depends on company's needs

Developing an Agile Organization

Structure, policies, capabilities enabling quick response to change

Giving teams authority to act without bureaucratic delays

Major Types of Structure

Functional

Groups by skill sets - R&D, manufacturing, marketing etc.

Economies of scale, career growth, deep expertise

But can create disconnected silos

Divisional

Self-contained units for product, process, customer, geography

Flexibility, specialized service, but duplication and misalignment

Matrix

People assigned to function and project team simultaneously

Shared resources, mix of skills

But dual reporting relationships and power struggles

Network

Coordinates internal and external partners

Lowers costs, adds flexibility

But vulnerability and lack of distinction

Organizing the Workforce

Departmentalization

Grouping people and tasks logically into departments

Vertical layers of hierarchy

Horizontal divisions of functions/divisions

Distributed and Hybrid Models

Range from traditional on-site to fully virtual/distributed

Hybrid model blends on-site and WFH

Requires extra effort to maintain unified culture

Organizing in Teams

Teams vs. Groups

Teams have collective mission and responsibility

Groups are looser associations for information sharing

Types of Teams

Problem-solving - Improve quality and efficiency

Self-managed - Manage own work with little oversight

Functional - Within a department

Cross-functional - Across multiple departments

Virtual - Members in different locations

Social networks - Informal links within and across organizations

Key Organizational Design Decisions

Identifying Core Competencies

Decide which functions to keep in-house based on strengths

Outsource non-core functions to other companies

Defining Job Responsibilities

Optimize work specialization - dividing tasks into specialized jobs

Specialization aligns skills and improves efficiency

But can bore employees and inhibit collaboration

The Chain of Command

Defines authority and accountability relationships

Flows top-down through management hierarchy

Delegation hands off tasks down chain of command

Span of Management

Number of direct reports - wide vs. narrow span

Wide spans mean flatter organizations, narrow spans mean taller

ones

Centralization vs. Decentralization

Centralization concentrates authority at top

Decentralization delegates authority downward

Balance depends on company's needs

Developing an Agile Organization

Structure, policies, capabilities enabling quick response to change

Giving teams authority to act without bureaucratic delays

Major Types of Structure

Functional

Groups by skill sets - R&D, manufacturing, marketing etc.

Economies of scale, career growth, deep expertise

But can create disconnected silos

Divisional

Self-contained units for product, process, customer, geography

Flexibility, specialized service, but duplication and misalignment

Matrix

People assigned to function and project team simultaneously

Shared resources, mix of skills

But dual reporting relationships and power struggles

Network

Coordinates internal and external partners

Lowers costs, adds flexibility

But vulnerability and lack of distinction

Organizing the Workforce

Departmentalization

Grouping people and tasks logically into departments

Vertical layers of hierarchy

Horizontal divisions of functions/divisions

Distributed and Hybrid Models

Range from traditional on-site to fully virtual/distributed

Hybrid model blends on-site and WFH

Requires extra effort to maintain unified culture

Organizing in Teams

Teams vs. Groups

Teams have collective mission and responsibility

Groups are looser associations for information sharing

Types of Teams

Problem-solving - Improve quality and efficiency

Self-managed - Manage own work with little oversight

Functional - Within a department

Cross-functional - Across multiple departments

Virtual - Members in different locations

Social networks - Informal links within and across organizations

Key Organizational Design Decisions

Identifying Core Competencies

Decide which functions to keep in-house based on strengths

Outsource non-core functions to other companies

Defining Job Responsibilities

Optimize work specialization - dividing tasks into specialized jobs

Specialization aligns skills and improves efficiency

But can bore employees and inhibit collaboration

The Chain of Command

Defines authority and accountability relationships

Flows top-down through management hierarchy

Delegation hands off tasks down chain of command

Span of Management

Number of direct reports - wide vs. narrow span

Wide spans mean flatter organizations, narrow spans mean taller

ones

Centralization vs. Decentralization

Centralization concentrates authority at top

Decentralization delegates authority downward

Balance depends on company's needs

Developing an Agile Organization

Structure, policies, capabilities enabling quick response to change

Giving teams authority to act without bureaucratic delays

Major Types of Structure

Functional

Groups by skill sets - R&D, manufacturing, marketing etc.

Economies of scale, career growth, deep expertise

But can create disconnected silos

Divisional

Self-contained units for product, process, customer, geography

Flexibility, specialized service, but duplication and misalignment

Matrix

People assigned to function and project team simultaneously

Shared resources, mix of skills

But dual reporting relationships and power struggles

Network

Coordinates internal and external partners

Lowers costs, adds flexibility

But vulnerability and lack of distinction

Organizing the Workforce

Departmentalization

Grouping people and tasks logically into departments

Vertical layers of hierarchy

Horizontal divisions of functions/divisions

Distributed and Hybrid Models

Range from traditional on-site to fully virtual/distributed

Hybrid model blends on-site and WFH

Requires extra effort to maintain unified culture

Organizing in Teams

Teams vs. Groups

Teams have collective mission and responsibility

Groups are looser associations for information sharing

Types of Teams

Problem-solving - Improve quality and efficiency

Self-managed - Manage own work with little oversight

Functional - Within a department

Cross-functional - Across multiple departments

Virtual - Members in different locations

Social networks - Informal links within and across organizations

Key Organizational Design Decisions

Identifying Core Competencies

Decide which functions to keep in-house based on strengths

Outsource non-core functions to other companies

Defining Job Responsibilities

Optimize work specialization - dividing tasks into specialized jobs

Specialization aligns skills and improves efficiency

But can bore employees and inhibit collaboration

The Chain of Command

Defines authority and accountability relationships

Flows top-down through management hierarchy

Delegation hands off tasks down chain of command

Span of Management

Number of direct reports - wide vs. narrow span

Wide spans mean flatter organizations, narrow spans mean taller

ones

Centralization vs. Decentralization

Centralization concentrates authority at top

Decentralization delegates authority downward

Balance depends on company's needs

Developing an Agile Organization

Structure, policies, capabilities enabling quick response to change

Giving teams authority to act without bureaucratic delays

Major Types of Structure

Functional

Groups by skill sets - R&D, manufacturing, marketing etc.

Economies of scale, career growth, deep expertise

But can create disconnected silos

Divisional

Self-contained units for product, process, customer, geography

Flexibility, specialized service, but duplication and misalignment

Matrix

People assigned to function and project team simultaneously

Shared resources, mix of skills

But dual reporting relationships and power struggles

Network

Coordinates internal and external partners

Lowers costs, adds flexibility

But vulnerability and lack of distinction

Organizing the Workforce

Departmentalization

Grouping people and tasks logically into departments

Vertical layers of hierarchy

Horizontal divisions of functions/divisions

Distributed and Hybrid Models

Range from traditional on-site to fully virtual/distributed

Hybrid model blends on-site and WFH

Requires extra effort to maintain unified culture

Organizing in Teams

Teams vs. Groups

Teams have collective mission and responsibility

Groups are looser associations for information sharing

Types of Teams

Problem-solving - Improve quality and efficiency

Self-managed - Manage own work with little oversight

Functional - Within a department

Cross-functional - Across multiple departments

Virtual - Members in different locations

Social networks - Informal links within and across organizations

Key Organizational Design Decisions

Identifying Core Competencies

Decide which functions to keep in-house based on strengths

Outsource non-core functions to other companies

Defining Job Responsibilities

Optimize work specialization - dividing tasks into specialized jobs

Specialization aligns skills and improves efficiency

But can bore employees and inhibit collaboration

The Chain of Command

Defines authority and accountability relationships

Flows top-down through management hierarchy

Delegation hands off tasks down chain of command

Span of Management

Number of direct reports - wide vs. narrow span

Wide spans mean flatter organizations, narrow spans mean taller

ones

Centralization vs. Decentralization

Centralization concentrates authority at top

Decentralization delegates authority downward

Balance depends on company's needs

Developing an Agile Organization

Structure, policies, capabilities enabling quick response to change

Giving teams authority to act without bureaucratic delays

Major Types of Structure

Functional

Groups by skill sets - R&D, manufacturing, marketing etc.

Economies of scale, career growth, deep expertise

But can create disconnected silos

Divisional

Self-contained units for product, process, customer, geography

Flexibility, specialized service, but duplication and misalignment

Matrix

People assigned to function and project team simultaneously

Shared resources, mix of skills

But dual reporting relationships and power struggles

Network

Coordinates internal and external partners

Lowers costs, adds flexibility

But vulnerability and lack of distinction

Organizing the Workforce

Departmentalization

Grouping people and tasks logically into departments

Vertical layers of hierarchy

Horizontal divisions of functions/divisions

Distributed and Hybrid Models

Range from traditional on-site to fully virtual/distributed

Hybrid model blends on-site and WFH

Requires extra effort to maintain unified culture

Organizing in Teams

Teams vs. Groups

Teams have collective mission and responsibility

Groups are looser associations for information sharing

Types of Teams

Problem-solving - Improve quality and efficiency

Self-managed - Manage own work with little oversight

Functional - Within a department

Cross-functional - Across multiple departments

Virtual - Members in different locations

Social networks - Informal links within and across organizations

Key Organizational Design Decisions

Identifying Core Competencies

Decide which functions to keep in-house based on strengths

Outsource non-core functions to other companies

Defining Job Responsibilities

Optimize work specialization - dividing tasks into specialized jobs

Specialization aligns skills and improves efficiency

But can bore employees and inhibit collaboration

The Chain of Command

Defines authority and accountability relationships

Flows top-down through management hierarchy

Delegation hands off tasks down chain of command

Span of Management

Number of direct reports - wide vs. narrow span

Wide spans mean flatter organizations, narrow spans mean taller

ones

Centralization vs. Decentralization

Centralization concentrates authority at top

Decentralization delegates authority downward

Balance depends on company's needs

Developing an Agile Organization

Structure, policies, capabilities enabling quick response to change

Giving teams authority to act without bureaucratic delays

Major Types of Structure

Functional

Groups by skill sets - R&D, manufacturing, marketing etc.

Economies of scale, career growth, deep expertise

But can create disconnected silos

Divisional

Self-contained units for product, process, customer, geography

Flexibility, specialized service, but duplication and misalignment

Matrix

People assigned to function and project team simultaneously

Shared resources, mix of skills

But dual reporting relationships and power struggles

Network

Coordinates internal and external partners

Lowers costs, adds flexibility

But vulnerability and lack of distinction

Organizing the Workforce

Departmentalization

Grouping people and tasks logically into departments

Vertical layers of hierarchy

Horizontal divisions of functions/divisions

Distributed and Hybrid Models

Range from traditional on-site to fully virtual/distributed

Hybrid model blends on-site and WFH

Requires extra effort to maintain unified culture

Organizing in Teams

Teams vs. Groups

Teams have collective mission and responsibility

Groups are looser associations for information sharing

Types of Teams

Problem-solving - Improve quality and efficiency

Self-managed - Manage own work with little oversight

Functional - Within a department

Cross-functional - Across multiple departments

Virtual - Members in different locations

Social networks - Informal links within and across organizations

Key Organizational Design Decisions

Identifying Core Competencies

Decide which functions to keep in-house based on strengths

Outsource non-core functions to other companies

Defining Job Responsibilities

Optimize work specialization - dividing tasks into specialized jobs

Specialization aligns skills and improves efficiency

But can bore employees and inhibit collaboration

The Chain of Command

Defines authority and accountability relationships

Flows top-down through management hierarchy

Delegation hands off tasks down chain of command

Span of Management

Number of direct reports - wide vs. narrow span

Wide spans mean flatter organizations, narrow spans mean taller

ones

Centralization vs. Decentralization

Centralization concentrates authority at top

Decentralization delegates authority downward

Balance depends on company's needs

Developing an Agile Organization

Structure, policies, capabilities enabling quick response to change

Giving teams authority to act without bureaucratic delays

Major Types of Structure

Functional

Groups by skill sets - R&D, manufacturing, marketing etc.

Economies of scale, career growth, deep expertise

But can create disconnected silos

Divisional

Self-contained units for product, process, customer, geography

Flexibility, specialized service, but duplication and misalignment

Matrix

People assigned to function and project team simultaneously

Shared resources, mix of skills

But dual reporting relationships and power struggles

Network

Coordinates internal and external partners

Lowers costs, adds flexibility

But vulnerability and lack of distinction

Organizing the Workforce

Departmentalization

Grouping people and tasks logically into departments

Vertical layers of hierarchy

Horizontal divisions of functions/divisions

Distributed and Hybrid Models

Range from traditional on-site to fully virtual/distributed

Hybrid model blends on-site and WFH

Requires extra effort to maintain unified culture

Organizing in Teams

Teams vs. Groups

Teams have collective mission and responsibility

Groups are looser associations for information sharing

Types of Teams

Problem-solving - Improve quality and efficiency

Self-managed - Manage own work with little oversight

Functional - Within a department

Cross-functional - Across multiple departments

Virtual - Members in different locations

Social networks - Informal links within and across organizations

Key Organizational Design Decisions

Identifying Core Competencies

Decide which functions to keep in-house based on strengths

Outsource non-core functions to other companies

Defining Job Responsibilities

Optimize work specialization - dividing tasks into specialized jobs

Specialization aligns skills and improves efficiency

But can bore employees and inhibit collaboration

The Chain of Command

Defines authority and accountability relationships

Flows top-down through management hierarchy

Delegation hands off tasks down chain of command

Span of Management

Number of direct reports - wide vs. narrow span

Wide spans mean flatter organizations, narrow spans mean taller

ones

Centralization vs. Decentralization

Centralization concentrates authority at top

Decentralization delegates authority downward

Balance depends on company's needs

Developing an Agile Organization

Structure, policies, capabilities enabling quick response to change

Giving teams authority to act without bureaucratic delays

Major Types of Structure

Functional

Groups by skill sets - R&D, manufacturing, marketing etc.

Economies of scale, career growth, deep expertise

But can create disconnected silos

Divisional

Self-contained units for product, process, customer, geography

Flexibility, specialized service, but duplication and misalignment

Matrix

People assigned to function and project team simultaneously

Shared resources, mix of skills

But dual reporting relationships and power struggles

Network

Coordinates internal and external partners

Lowers costs, adds flexibility

But vulnerability and lack of distinction

Organizing the Workforce

Departmentalization

Grouping people and tasks logically into departments

Vertical layers of hierarchy

Horizontal divisions of functions/divisions

Distributed and Hybrid Models

Range from traditional on-site to fully virtual/distributed

Hybrid model blends on-site and WFH

Requires extra effort to maintain unified culture

Organizing in Teams

Teams vs. Groups

Teams have collective mission and responsibility

Groups are looser associations for information sharing

Types of Teams

Problem-solving - Improve quality and efficiency

Self-managed - Manage own work with little oversight

Functional - Within a department

Cross-functional - Across multiple departments

Virtual - Members in different locations

Social networks - Informal links within and across organizations

Key Organizational Design Decisions

Identifying Core Competencies

Decide which functions to keep in-house based on strengths

Outsource non-core functions to other companies

Defining Job Responsibilities

Optimize work specialization - dividing tasks into specialized jobs

Specialization aligns skills and improves efficiency

But can bore employees and inhibit collaboration

The Chain of Command

Defines authority and accountability relationships

Flows top-down through management hierarchy

Delegation hands off tasks down chain of command

Span of Management

Number of direct reports - wide vs. narrow span

Wide spans mean flatter organizations, narrow spans mean taller

ones

Centralization vs. Decentralization

Centralization concentrates authority at top

Decentralization delegates authority downward

Balance depends on company's needs

Developing an Agile Organization

Structure, policies, capabilities enabling quick response to change

Giving teams authority to act without bureaucratic delays

Major Types of Structure

Functional

Groups by skill sets - R&D, manufacturing, marketing etc.

Economies of scale, career growth, deep expertise

But can create disconnected silos

Divisional

Self-contained units for product, process, customer, geography

Flexibility, specialized service, but duplication and misalignment

Matrix

People assigned to function and project team simultaneously

Shared resources, mix of skills

But dual reporting relationships and power struggles

Network

Coordinates internal and external partners

Lowers costs, adds flexibility

But vulnerability and lack of distinction

Organizing the Workforce

Departmentalization

Grouping people and tasks logically into departments

Vertical layers of hierarchy

Horizontal divisions of functions/divisions

Distributed and Hybrid Models

Range from traditional on-site to fully virtual/distributed

Hybrid model blends on-site and WFH

Requires extra effort to maintain unified culture

Organizing in Teams

Teams vs. Groups

Teams have collective mission and responsibility

Groups are looser associations for information sharing

Types of Teams

Problem-solving - Improve quality and efficiency

Self-managed - Manage own work with little oversight

Functional - Within a department

Cross-functional - Across multiple departments

Virtual - Members in different locations

Social networks - Informal links within and across organizations

Key Organizational Design Decisions

Identifying Core Competencies

Decide which functions to keep in-house based on strengths

Outsource non-core functions to other companies

Defining Job Responsibilities

Optimize work specialization - dividing tasks into specialized jobs

Specialization aligns skills and improves efficiency

But can bore employees and inhibit collaboration

The Chain of Command

Defines authority and accountability relationships

Flows top-down through management hierarchy

Delegation hands off tasks down chain of command

Span of Management

Number of direct reports - wide vs. narrow span

Wide spans mean flatter organizations, narrow spans mean taller

ones

Centralization vs. Decentralization

Centralization concentrates authority at top

Decentralization delegates authority downward

Balance depends on company's needs

Developing an Agile Organization

Structure, policies, capabilities enabling quick response to change

Giving teams authority to act without bureaucratic delays

Major Types of Structure

Functional

Groups by skill sets - R&D, manufacturing, marketing etc.

Economies of scale, career growth, deep expertise

But can create disconnected silos

Divisional

Self-contained units for product, process, customer, geography

Flexibility, specialized service, but duplication and misalignment

Matrix

People assigned to function and project team simultaneously

Shared resources, mix of skills

But dual reporting relationships and power struggles

Network

Coordinates internal and external partners

Lowers costs, adds flexibility

But vulnerability and lack of distinction

Organizing the Workforce

Departmentalization

Grouping people and tasks logically into departments

Vertical layers of hierarchy

Horizontal divisions of functions/divisions

Distributed and Hybrid Models

Range from traditional on-site to fully virtual/distributed

Hybrid model blends on-site and WFH

Requires extra effort to maintain unified culture

Organizing in Teams

Teams vs. Groups

Teams have collective mission and responsibility

Groups are looser associations for information sharing

Types of Teams

Problem-solving - Improve quality and efficiency

Self-managed - Manage own work with little oversight

Functional - Within a department

Cross-functional - Across multiple departments

Virtual - Members in different locations

Social networks - Informal links within and across organizations

Key Organizational Design Decisions

Identifying Core Competencies

Decide which functions to keep in-house based on strengths

Outsource non-core functions to other companies

Defining Job Responsibilities

Optimize work specialization - dividing tasks into specialized jobs

Specialization aligns skills and improves efficiency

But can bore employees and inhibit collaboration

The Chain of Command

Defines authority and accountability relationships

Flows top-down through management hierarchy

Delegation hands off tasks down chain of command

Span of Management

Number of direct reports - wide vs. narrow span

Wide spans mean flatter organizations, narrow spans mean taller

ones

Centralization vs. Decentralization

Centralization concentrates authority at top

Decentralization delegates authority downward

Balance depends on company's needs

Developing an Agile Organization

Structure, policies, capabilities enabling quick response to change

Giving teams authority to act without bureaucratic delays

Major Types of Structure

Functional

Groups by skill sets - R&D, manufacturing, marketing etc.

Economies of scale, career growth, deep expertise

But can create disconnected silos

Divisional

Self-contained units for product, process, customer, geography

Flexibility, specialized service, but duplication and misalignment

Matrix

People assigned to function and project team simultaneously

Shared resources, mix of skills

But dual reporting relationships and power struggles

Network

Coordinates internal and external partners

Lowers costs, adds flexibility

But vulnerability and lack of distinction

Organizing the Workforce

Departmentalization

Grouping people and tasks logically into departments

Vertical layers of hierarchy

Horizontal divisions of functions/divisions

Distributed and Hybrid Models

Range from traditional on-site to fully virtual/distributed

Hybrid model blends on-site and WFH

Requires extra effort to maintain unified culture

Organizing in Teams

Teams vs. Groups

Teams have collective mission and responsibility

Groups are looser associations for information sharing

Types of Teams

Problem-solving - Improve quality and efficiency

Self-managed - Manage own work with little oversight

Functional - Within a department

Cross-functional - Across multiple departments

Virtual - Members in different locations

Social networks - Informal links within and across organizations

Key Organizational Design Decisions

Identifying Core Competencies

Decide which functions to keep in-house based on strengths

Outsource non-core functions to other companies

Defining Job Responsibilities

Optimize work specialization - dividing tasks into specialized jobs

Specialization aligns skills and improves efficiency

But can bore employees and inhibit collaboration

The Chain of Command

Defines authority and accountability relationships

Flows top-down through management hierarchy

Delegation hands off tasks down chain of command

Span of Management

Number of direct reports - wide vs. narrow span

Wide spans mean flatter organizations, narrow spans mean taller

ones

Centralization vs. Decentralization

Centralization concentrates authority at top

Decentralization delegates authority downward

Balance depends on company's needs

Developing an Agile Organization

Structure, policies, capabilities enabling quick response to change

Giving teams authority to act without bureaucratic delays

Major Types of Structure

Functional

Groups by skill sets - R&D, manufacturing, marketing etc.

Economies of scale, career growth, deep expertise

But can create disconnected silos

Divisional

Self-contained units for product, process, customer, geography

Flexibility, specialized service, but duplication and misalignment

Matrix

People assigned to function and project team simultaneously

Shared resources, mix of skills

But dual reporting relationships and power struggles

Network

Coordinates internal and external partners

Lowers costs, adds flexibility

But vulnerability and lack of distinction

Organizing the Workforce

Departmentalization

Grouping people and tasks logically into departments

Vertical layers of hierarchy

Horizontal divisions of functions/divisions

Distributed and Hybrid Models

Range from traditional on-site to fully virtual/distributed

Hybrid model blends on-site and WFH

Requires extra effort to maintain unified culture

Organizing in Teams

Teams vs. Groups

Teams have collective mission and responsibility

Groups are looser associations for information sharing

Types of Teams

Problem-solving - Improve quality and efficiency

Self-managed - Manage own work with little oversight

Functional - Within a department

Cross-functional - Across multiple departments

Virtual - Members in different locations

Social networks - Informal links within and across organizations

Key Organizational Design Decisions

Identifying Core Competencies

Decide which functions to keep in-house based on strengths

Outsource non-core functions to other companies

Defining Job Responsibilities

Optimize work specialization - dividing tasks into specialized jobs

Specialization aligns skills and improves efficiency

But can bore employees and inhibit collaboration

The Chain of Command

Defines authority and accountability relationships

Flows top-down through management hierarchy

Delegation hands off tasks down chain of command

Span of Management

Number of direct reports - wide vs. narrow span

Wide spans mean flatter organizations, narrow spans mean taller

ones

Centralization vs. Decentralization

Centralization concentrates authority at top

Decentralization delegates authority downward

Balance depends on company's needs

Developing an Agile Organization

Structure, policies, capabilities enabling quick response to change

Giving teams authority to act without bureaucratic delays

Major Types of Structure

Functional

Groups by skill sets - R&D, manufacturing, marketing etc.

Economies of scale, career growth, deep expertise

But can create disconnected silos

Divisional

Self-contained units for product, process, customer, geography

Flexibility, specialized service, but duplication and misalignment

Matrix

People assigned to function and project team simultaneously

Shared resources, mix of skills

But dual reporting relationships and power struggles

Network

Coordinates internal and external partners

Lowers costs, adds flexibility

But vulnerability and lack of distinction

Organizing the Workforce

Departmentalization

Grouping people and tasks logically into departments

Vertical layers of hierarchy

Horizontal divisions of functions/divisions

Distributed and Hybrid Models

Range from traditional on-site to fully virtual/distributed

Hybrid model blends on-site and WFH

Requires extra effort to maintain unified culture

Organizing in Teams

Teams vs. Groups

Teams have collective mission and responsibility

Groups are looser associations for information sharing

Types of Teams

Problem-solving - Improve quality and efficiency

Self-managed - Manage own work with little oversight

Functional - Within a department

Cross-functional - Across multiple departments

Virtual - Members in different locations

Social networks - Informal links within and across organizations

Key Organizational Design Decisions

Identifying Core Competencies

Decide which functions to keep in-house based on strengths

Outsource non-core functions to other companies

Defining Job Responsibilities

Optimize work specialization - dividing tasks into specialized jobs

Specialization aligns skills and improves efficiency

But can bore employees and inhibit collaboration

The Chain of Command

Defines authority and accountability relationships

Flows top-down through management hierarchy

Delegation hands off tasks down chain of command

Span of Management

Number of direct reports - wide vs. narrow span

Wide spans mean flatter organizations, narrow spans mean taller

ones

Centralization vs. Decentralization

Centralization concentrates authority at top

Decentralization delegates authority downward

Balance depends on company's needs

Developing an Agile Organization

Structure, policies, capabilities enabling quick response to change

Giving teams authority to act without bureaucratic delays

Major Types of Structure

Functional

Groups by skill sets - R&D, manufacturing, marketing etc.

Economies of scale, career growth, deep expertise

But can create disconnected silos

Divisional

Self-contained units for product, process, customer, geography

Flexibility, specialized service, but duplication and misalignment

Matrix

People assigned to function and project team simultaneously

Shared resources, mix of skills

But dual reporting relationships and power struggles

Network

Coordinates internal and external partners

Lowers costs, adds flexibility

But vulnerability and lack of distinction

Organizing the Workforce

Departmentalization

Grouping people and tasks logically into departments

Vertical layers of hierarchy

Horizontal divisions of functions/divisions

Distributed and Hybrid Models

Range from traditional on-site to fully virtual/distributed

Hybrid model blends on-site and WFH

Requires extra effort to maintain unified culture

Organizing in Teams

Teams vs. Groups

Teams have collective mission and responsibility

Groups are looser associations for information sharing

Types of Teams

Problem-solving - Improve quality and efficiency

Self-managed - Manage own work with little oversight

Functional - Within a department

Cross-functional - Across multiple departments

Virtual - Members in different locations

Social networks - Informal links within and across organizations

Key Organizational Design Decisions

Identifying Core Competencies

Decide which functions to keep in-house based on strengths

Outsource non-core functions to other companies

Defining Job Responsibilities

Optimize work specialization - dividing tasks into specialized jobs

Specialization aligns skills and improves efficiency

But can bore employees and inhibit collaboration

The Chain of Command

Defines authority and accountability relationships

Flows top-down through management hierarchy

Delegation hands off tasks down chain of command

Span of Management

Number of direct reports - wide vs. narrow span

Wide spans mean flatter organizations, narrow spans mean taller

ones

Centralization vs. Decentralization

Centralization concentrates authority at top

Decentralization delegates authority downward

Balance depends on company's needs

Developing an Agile Organization

Structure, policies, capabilities enabling quick response to change

Giving teams authority to act without bureaucratic delays

Major Types of Structure

Functional

Groups by skill sets - R&D, manufacturing, marketing etc.

Economies of scale, career growth, deep expertise

But can create disconnected silos

Divisional

Self-contained units for product, process, customer, geography

Flexibility, specialized service, but duplication and misalignment

Matrix

People assigned to function and project team simultaneously

Shared resources, mix of skills

But dual reporting relationships and power struggles

Network

Coordinates internal and external partners

Lowers costs, adds flexibility

But vulnerability and lack of distinction

Organizing the Workforce

Departmentalization

Grouping people and tasks logically into departments

Vertical layers of hierarchy

Horizontal divisions of functions/divisions

Distributed and Hybrid Models

Range from traditional on-site to fully virtual/distributed

Hybrid model blends on-site and WFH

Requires extra effort to maintain unified culture

Organizing in Teams

Teams vs. Groups

Teams have collective mission and responsibility

Groups are looser associations for information sharing

Types of Teams

Problem-solving - Improve quality and efficiency

Self-managed - Manage own work with little oversight

Functional - Within a department

Cross-functional - Across multiple departments

Virtual - Members in different locations

Social networks - Informal links within and across organizations

Key Organizational Design Decisions

Identifying Core Competencies

Decide which functions to keep in-house based on strengths

Outsource non-core functions to other companies

Defining Job Responsibilities

Optimize work specialization - dividing tasks into specialized jobs

Specialization aligns skills and improves efficiency

But can bore employees and inhibit collaboration

The Chain of Command

Defines authority and accountability relationships

Flows top-down through management hierarchy

Delegation hands off tasks down chain of command

Span of Management

Number of direct reports - wide vs. narrow span

Wide spans mean flatter organizations, narrow spans mean taller

ones

Centralization vs. Decentralization

Centralization concentrates authority at top

Decentralization delegates authority downward

Balance depends on company's needs

Developing an Agile Organization

Structure, policies, capabilities enabling quick response to change

Giving teams authority to act without bureaucratic delays

Major Types of Structure

Functional

Groups by skill sets - R&D, manufacturing, marketing etc.

Economies of scale, career growth, deep expertise

But can create disconnected silos

Divisional

Self-contained units for product, process, customer, geography

Flexibility, specialized service, but duplication and misalignment

Matrix

People assigned to function and project team simultaneously

Shared resources, mix of skills

But dual reporting relationships and power struggles

Network

Coordinates internal and external partners

Lowers costs, adds flexibility

But vulnerability and lack of distinction

Organizing the Workforce

Departmentalization

Grouping people and tasks logically into departments

Vertical layers of hierarchy

Horizontal divisions of functions/divisions

Distributed and Hybrid Models

Range from traditional on-site to fully virtual/distributed

Hybrid model blends on-site and WFH

Requires extra effort to maintain unified culture

Organizing in Teams

Teams vs. Groups

Teams have collective mission and responsibility

Groups are looser associations for information sharing

Types of Teams

Problem-solving - Improve quality and efficiency

Self-managed - Manage own work with little oversight

Functional - Within a department

Cross-functional - Across multiple departments

Virtual - Members in different locations

Social networks - Informal links within and across organizations

Key Organizational Design Decisions

Identifying Core Competencies

Decide which functions to keep in-house based on strengths

Outsource non-core functions to other companies

Defining Job Responsibilities

Optimize work specialization - dividing tasks into specialized jobs

Specialization aligns skills and improves efficiency

But can bore employees and inhibit collaboration

The Chain of Command

Defines authority and accountability relationships

Flows top-down through management hierarchy

Delegation hands off tasks down chain of command

Span of Management

Number of direct reports - wide vs. narrow span

Wide spans mean flatter organizations, narrow spans mean taller

ones

Centralization vs. Decentralization

Centralization concentrates authority at top

Decentralization delegates authority downward

Balance depends on company's needs

Developing an Agile Organization

Structure, policies, capabilities enabling quick response to change

Giving teams authority to act without bureaucratic delays

Major Types of Structure

Functional

Groups by skill sets - R&D, manufacturing, marketing etc.

Economies of scale, career growth, deep expertise

But can create disconnected silos

Divisional

Self-contained units for product, process, customer, geography

Flexibility, specialized service, but duplication and misalignment

Matrix

People assigned to function and project team simultaneously

Shared resources, mix of skills

But dual reporting relationships and power struggles

Network

Coordinates internal and external partners

Lowers costs, adds flexibility

But vulnerability and lack of distinction

Organizing the Workforce

Departmentalization

Grouping people and tasks logically into departments

Vertical layers of hierarchy

Horizontal divisions of functions/divisions

Distributed and Hybrid Models

Range from traditional on-site to fully virtual/distributed

Hybrid model blends on-site and WFH

Requires extra effort to maintain unified culture

Organizing in Teams

Teams vs. Groups

Teams have collective mission and responsibility

Groups are looser associations for information sharing

Types of Teams

Problem-solving - Improve quality and efficiency

Self-managed - Manage own work with little oversight

Functional - Within a department

Cross-functional - Across multiple departments

Virtual - Members in different locations

Social networks - Informal links within and across organizations

Key Organizational Design Decisions

Identifying Core Competencies

Decide which functions to keep in-house based on strengths

Outsource non-core functions to other companies

Defining Job Responsibilities

Optimize work specialization - dividing tasks into specialized jobs

Specialization aligns skills and improves efficiency

But can bore employees and inhibit collaboration

The Chain of Command

Defines authority and accountability relationships

Flows top-down through management hierarchy

Delegation hands off tasks down chain of command

Span of Management

Number of direct reports - wide vs. narrow span

Wide spans mean flatter organizations, narrow spans mean taller

ones

Centralization vs. Decentralization

Centralization concentrates authority at top

Decentralization delegates authority downward

Balance depends on company's needs

Developing an Agile Organization

Structure, policies, capabilities enabling quick response to change

Giving teams authority to act without bureaucratic delays

Major Types of Structure

Functional

Groups by skill sets - R&D, manufacturing, marketing etc.

Economies of scale, career growth, deep expertise

But can create disconnected silos

Divisional

Self-contained units for product, process, customer, geography

Flexibility, specialized service, but duplication and misalignment

Matrix

People assigned to function and project team simultaneously

Shared resources, mix of skills

But dual reporting relationships and power struggles

Network

Coordinates internal and external partners

Lowers costs, adds flexibility

But vulnerability and lack of distinction

Organizing the Workforce

Departmentalization

Grouping people and tasks logically into departments

Vertical layers of hierarchy

Horizontal divisions of functions/divisions

Distributed and Hybrid Models

Range from traditional on-site to fully virtual/distributed

Hybrid model blends on-site and WFH

Requires extra effort to maintain unified culture

Organizing in Teams

Teams vs. Groups

Teams have collective mission and responsibility

Groups are looser associations for information sharing

Types of Teams

Problem-solving - Improve quality and efficiency

Self-managed - Manage own work with little oversight

Functional - Within a department

Cross-functional - Across multiple departments

Virtual - Members in different locations

Social networks - Informal links within and across organizations

Key Organizational Design Decisions

Identifying Core Competencies

Decide which functions to keep in-house based on strengths

Outsource non-core functions to other companies

Defining Job Responsibilities

Optimize work specialization - dividing tasks into specialized jobs

Specialization aligns skills and improves efficiency

But can bore employees and inhibit collaboration

The Chain of Command

Defines authority and accountability relationships

Flows top-down through management hierarchy

Delegation hands off tasks down chain of command

Span of Management

Number of direct reports - wide vs. narrow span

Wide spans mean flatter organizations, narrow spans mean taller

ones

Centralization vs. Decentralization

Centralization concentrates authority at top

Decentralization delegates authority downward

Balance depends on company's needs

Developing an Agile Organization

Structure, policies, capabilities enabling quick response to change

Giving teams authority to act without bureaucratic delays

Major Types of Structure

Functional

Groups by skill sets - R&D, manufacturing, marketing etc.

Economies of scale, career growth, deep expertise

But can create disconnected silos

Divisional

Self-contained units for product, process, customer, geography

Flexibility, specialized service, but duplication and misalignment

Matrix

People assigned to function and project team simultaneously

Shared resources, mix of skills

But dual reporting relationships and power struggles

Network

Coordinates internal and external partners

Lowers costs, adds flexibility

But vulnerability and lack of distinction

Organizing the Workforce

Departmentalization

Grouping people and tasks logically into departments

Vertical layers of hierarchy

Horizontal divisions of functions/divisions

Distributed and Hybrid Models

Range from traditional on-site to fully virtual/distributed

Hybrid model blends on-site and WFH

Requires extra effort to maintain unified culture

Organizing in Teams

Teams vs. Groups

Teams have collective mission and responsibility

Groups are looser associations for information sharing

Types of Teams

Problem-solving - Improve quality and efficiency

Self-managed - Manage own work with little oversight

Functional - Within a department

Cross-functional - Across multiple departments

Virtual - Members in different locations

Social networks - Informal links within and across organizations

Key Takeaways

Many organizational design options, each with tradeoffs

Moving from bureaucratic to agile structures

Blend of structures often optimal

Teams essential but require careful implementation

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