Discussion quastions for one paper

Organizational Structure and

Culture

Organizational Structure

Formal system of work roles

and relationships

Govern how associates and

managers interact

Organizational Culture

Shared values and norms

Influence behavior

ELEMENTS OF ORGANIZATIONAL STRUCTURE

Structural Characteristics

� Tangible, physical properties

� Determine basic shape and appearance of hierarchy

~ height

~ span of control

~ departmentalization

Structuring Characteristics

� Policies and approaches

� Directly prescribe behavior of managers and associates

~ centralization

~ standardization

~ formalization

~ specialization

STRUCTURAL CHARACTERISTICS

Span of Control

HeightDepartmentalization

DEPARTMENTALIZATION: FUNCTIONAL ORGANIZATION

CEO

VP Research &

Development VP Finance VP Operations

VP Marketing

VP Human Resources

Adapted from Exhibit 13-2: Simplified Functional Organization

Benefit: deep specialization knowledge in each functional area and economies of scale within functional areas Weakness: members in each function may become isolated from other departments

CEO

Head of Operations

Head of R&D

Head of Human

Resources

Head of Finance

Head of Marketing

V.P. Product/Service

Area 1

Head of Operations

Head of R&D

Head of Human

Resources

Head of Finance

Head of Marketing

V.P. Product/Service

Area 2

Head of Operations

Head of R&D

Head of Human

Resources

Head of Finance

Head of Marketing

V.P. Product/Service

Area 3

DEPARTMENTALIZATION: DIVISIONAL ORGANIZATION

Benefit: better coordination among individuals in functional areas; rapid response to change; tailoring to different product/service or geographical market Weakness: poor collaboration across product/service or geographic markets; diseconomies of scales within functional areas

DEPARTMENTALIZATION: DIVISIONAL ORGANIZATION

STRUCTURING CHARACTERISTICS

Centralization

Degree authority

for decisions is retained at

the top

Standardization

Degree rules and standard operating

procedures govern

behavior

Formalization

Degree rules and operating

procedures are

documented

Specialization

Degree associates

and managers have jobs

with narrow scopes and

limited variety

Boundaryless Traditional

Organic Mechanistic

MODERN ORGANIZATION

F L E X I B L E E M P O W E R I N G T Y P E O F S T R U C T U R E

1. Fewer management levels (height)

2. Broader spans of control

3. Less:

~ centralization

~ standardization

~ formalization

~ Specialization

4. Innovation/flexibility vs. Formalization

Learning Nonlearning

FACTORS AFFECTING ORGANIZATIONAL STRUCTURE

� Role of Strategy

� Role of Environment

� Role of Technology

� Role of Organizational Size

FA C TO R S A F F E C T I N G O R G A N I Z AT I O N A L S T R U C T U R E

ROLE OF STRATEGY

Corporate Strategy

� Approach used in interacting with its environment

~ Growth

| internal dev.: (Initially larger marketing and R&D departments)

| external acquisition: (More specialized legal functions required to analyze and negotiate acquisitions)

~ Diversification

Business Strategy

� How it competes for success against others in the market

~ low cost/low price

| Emphasize functions and decisions are centralized to maintain economies of scale

~ product/service differentiation

| Organic and flexible structures needed

DIVERSIFICATION STRATEGY AND STRUCTURE

Adapted from Exhibit 13-4: Matches between Diversification Strategy and Structure

Holding CompanyUnrelated product

DivisionalUnrelated product

DivisionalRelated product

DivisionalDominant product (several products)

FunctionalDominant product (few products)

FunctionalSingle product

StructureDiversification

The more diversified, the more they should adopt the divisional form (e.g., for each product) and authority delegated to each division

FA C T O R S A F F E C T I N G O R G A N I Z AT I O N A L S T R U C T U R E

ROLE OF THE ENVIRONMENT

� Environmental Uncertainty

~ degree the environment is complex and changing

~ uncertain environments are difficult to monitor and understand

ENVIRONMENT AND BASIC STRUCTURE

• Organic • Lower-level

managers and employees must think for themselves

High Uncertainty

• Less Organic • Mid- and senior-

level managers create rules and procedures to follow

Low Uncertainty

Orgs. tend to be:

FA C T O R S A F F E C T I N G O R G A N I Z AT I O N A L S T R U C T U R E

THE ROLE OF TECHNOLOGY

Adapted from Exhibit 13-6: Organizations and Technology

Task Analyzability (degree problems can be solved using

known steps and procedures)

Ta sk

V ar

ia bi

lit y

(n um

be r

of d

if fe

re nt

pr

ob le

m ty

pe s

ov er

ti m

e)

LowHigh

High

Low

Specialized Engineering

Consulting Firm

Mass-Production Firm

Research and Development

Firm

Public School

Engineering Non-Routine

Routine Craft

FA C T O R S A F F E C T I N G O R G A N I Z AT I O N A L S T R U C T U R E

ROLE OF ORGANIZATIONAL SIZE

As organizations grow bigger…

� Number of associates and managers increases

� Becomes taller

� Formalization increases

� Centralization decreases

DEVELOPING ORGANIZATIONAL

CULTURE

Adapted from Exhibit 13-7: Process of Developing Organizational Culture

Reinforcin g

Outcomes

Shared Values

Norms

Individual and Group Behavior

ORGANIZATIONAL CULTURE

Internal Focus/Integration versus External Focus/Differentiation

St ab

ili ty

/C on

tr ol

v er

su s

F le

xi bi

lit y/

D is

cr et

io n

Effectiveness- Efficiency and Order

Leadership- Monitors and Organizers

Ch.- formal, standardized, with emphasis on explicit knowledge

Effectiveness- Cohesion and Morale

Leadership- Mentors and Coaches

Ch.- commitment and loyalty

Clan

Hierarchy

Effectiveness- Goal Achievement and Winning

Leadership- Hard Drivers and Competitors

Ch.- Constant focus on results on colleague completion

Market

Effectiveness- Creativity and Innovation

Leadership- Entrepreneurs and Innovators

Ch.- Vibrant place to work with significant risk taking

Adhocracy

CULTURAL SOCIALIZATION

CULTURAL SOCIALIZATION: THREE SETS

1. Context: process of imparting values to newcomers

� Collective vs. individual

� Formal (off-the-job learning and training) vs. Informal (on- the-job learning and training

2. Content: information of developmental activities

� Reduces uncertainty

3. Social dynamics:

� Serial approach: organizational members as role models

� Disjunctive: no formal relations

� Investiture: positive support since the beginning

� Divestiture: negative support such as hazing

CULTURAL AUDIT

� Analyze new associate socialization process and content.

� Analyze responses to critical incidents in the organization’s history.

� Analyze values and beliefs of culture creators and carriers.

� Explore anomalies discovered in analysis.

� Examine linkage of current culture to goals.

SUBCULTURE

PERSON-ORGANIZATION FIT

Goals

• types of personal goals one ought to have

Behavior

• types of behaviors one ought to use in reaching goals

Values

TYPES OF PERSONAL VALUES

Adapted from Exhibit 13-9: Types of Personal Values

End (Goal) Values

Prosperity Stimulating

Achievement World peace Harmony’ Equality Security Freedom

Happiness Inner peace

Love National security

Pleasure Religion

Self-respect Social respect

Friendship Wisdom

Means (Behavior) Values

Ambition Open-mindedness

Competence Cheerfulness Cleanliness

Courageousness Forgiving

Helpfulness Honesty

Imagination Independence Intelligence Rationality Affection Obedience Courtesy

Responsibility Self-discipline