337 org structure

7/31/2019 337 Org Structure

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Spring 2007 Organization Structure 1

Organization Structure


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Why Organizations Are Structured

Organizing:

The deployment and structuring of organizational resources

to achieve organizational goals

Dimensions Specialization / division of labor

Formal lines of authority

Mechanisms for coordination

Organization or structure is designed to: Facilitate accomplishment of organizational goals

Fit with technology and environment


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Specialization / Division of Labor

Adam Smith and the pins

Efficiency vs. effectiveness

Individuals perform well-defined tasks

Short training time

Individuals become expert

Individuals can perform tasks for which they are bestsuited

Problems

Lose sight of overall goal Boredom, fatigue, stress

Lack of flexibility


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Issues in Determining Division of Labor

Nature of the work Complexity of work

Task interdependency

Organization Goals (re-engineering)

Resources

Employees Abilities

Expectations


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Authority and Responsibility

Look back at Fayol, Weber

Chain of command

Unity of command

Scalar principle

Authority The right to make decisions, issue orders and allocate

resources

Does it exist if not accepted?

Responsibility

Accountability Unity of authority and responsibility

Delegation

Line and staff


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Span of Control

Tall vs. flat organizations Nature of work

Stability

Task similarity Location

Employees Preferences Skills

Organization Policies and procedures Support for managers


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Centralization vs. Decentralization

Where are decisions made?

Need for pooled resources

Speed and flexibility (environmentaluncertainty)

Consistency

Where is the knowledge? Who must implement decisions


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Formalization

Policies and procedures Bureaucracy Max Weber again

Pro Uniformity Less uncertainty

Con Less flexibility

Deciding Nature of the work Nature of the employees


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TeamsFree flow of information

Wide spans of controlDecentralizationLow formalization

Organic

Mechanistic vs. Organic Structures

High specialization

Rigid departmentalization

Clear chain of command

Narrow span of control

CentralizationHigh formalization

Mechanistic


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Departmentalization

Functional

Divisional Product

Customer

Geographical

Matrix

Project teams


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Functional Structures

Pro:

Specialization

Efficiency

Career progress for employees

High-quality problem solving

Con:

Poor communication between functions

May be too centralized

Employees have limited perspective on total organization

Where best used

Stable environment

Single product


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Functional Structure

VPSalesVP

Sales

VPManufacturing

VPManufacturing

VPFinance

VPFinance

CEOCEO

G/ LG/ L

TaxTax

BudgetBudget


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Divisional

Types Product Geographical Customer

Pro: Speed and flexibility of

response Cross-fertilization of ideas

Focus on product /customer / area

Emphasis onorganizational goals

Where best used Uncertain environment Diversified organization

Con: Resources duplicated

(inefficient) Less coordination

between divisions Competition for resources


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Sample Divisional Structure

VPCereal

VPCereal

VPDetergent

VPDetergent

VPPaperVP

Paper

CEOCEO

TissueTissue

DiapersDiapers

TowelsTowels


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ThyssenKrupp


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Sara Lee Structure

HouseholdProducts

Headquarters

Food andBeverage

Intimates andUnderwear


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University of Tennessee System

Board ofTrustees

UT- Martin UT - Knoxville

UT -

Chattanooga

Health ScienceCenter at Memphis

Space Instituteat Tullahoma

Institute ofAgriculture

Institute forPublic Service
http://www.utk.edu/system/http://www.utk.edu/system/


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Mixed Structure

VPAdmin

VPAdmin

VPManufacturing

VPManufacturing

VPSalesVP

Sales

CEOCEO

RetailRetail

WholesaleWholesale

InternationalInternational


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Unilever Structure

Home &

Personal Care

Africa, Middle East & Turkey

Bestfoods

Ice Cream and Frozen Foods

Latin America & Slim.fast

worldwide

Unilever Bestfoods Asia Unilever Bestfoods, Europe

Unilever Bestfoods, North

America

Unilever

Bestfoods

Africa, Middle East & Turkey

Home

Diverseyever

Home and Personal Care, Asia

Home & Personal Care, Europe

Home & Personal Care, North

America

Latin America
http://www.unilever.com/company/unilevertoday/businessgroups/default.asp?ComponentID=2176&SourcePageID=42#Why%20Organizations%20Are%20Structuredhttp://www.unilever.com/company/unilevertoday/businessgroups/default.asp?ComponentID=2176&SourcePageID=42#Why%20Organizations%20Are%20Structured


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Matrix

Dual lines of authority

Examples

Pro:

Combines advantages of functional and divisionalstructures

Con:

Conflict may arise

Cost associated with grater need for coordination

Where best used: Extreme environmental pressure

Very large or geographically dispersed organizations


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Organizing Work Processes

Unit production

Mass production

Process production


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Technology, Structure and

Effectiveness

Characteristic Unit Mass ProcessVerticalDifferentiation

Low Moderate High

HorizontalDifferentiation

Low High Low

Formalization Low High Low

Structure Organic Mechanistic Organic

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