66OrganizationalStructureOrganizationalStructure

1.Concept of Organization

2.Principle of Org. Design

3. Structure

4. Trend & Issue of Org.

Designing Organizational StructureDesigning Organizational Structure

Organizing: the process by which managers establish working relationships among employees to achieve goals.

Principle of Organizational DesignVertical dimensionUnity of CommandCentralization & DecentralizationAuthority & ResponsibilitySpan of Management/control

Horizontal dimensionDivision of LaborDepartmentalization

The principle that a subordinate should have one n only one superior to whom he or she is directly responsible.

Principle-Unity of Command

Embarrassing Situation

Authority & Responsibility

Authority : The rights inherent lie in a managerial position to give orders and expect them to be obeyed.

Responsibility: An obligation to perform assigned activities.

Authority Line authority: the authority that entitles a manager to direct the work of a subordinate.

Staff authority: authority given to individuals who support ,assist ,and advise others who have line authority.

Chain of command : the flow of authority from the top to the bottom of an organization.

Executive Director

Assistant to the Executive Director

Director of Personnel

Director of Purchasing

Director of Operation

Other Directors

Unit 1 Manager

Unit 2 Manager

Personnel Operation Purchasing Other

Theory of AuthorityAcceptance theory of authority: The theory that authority comes from the willingness of subordinates to accept it.

The classical view: The rights inherently lie in one’s formal organizational position, if an order is given , it would be obeyed.

Responsibility

Equating responsibility and authority

When managers delegate authority, responsibility must be given as well.

Centralization Centralization :lower managers are not capable at making decisions.

Validity : More stable environment. Decision is significant. Company is large.

Disadvantage:Face crisis or failure risk.

Decentralization Decentralization: lower managers are capable at making decisions.

Validity: uncertain Environment . Decision is minor Company is geographically dispersed.

Centralization-Decentralization is a relative

Span of Control

The number of subordinates a manager can supervise efficiently and effectively

管理跨度概念：一个上司能有效指挥的下属个数 。管理跨度的意义 管理跨度的现代观点 影响管理跨度的因素

管理跨度的对比

管理跨度的意义管理跨度决定组织层次和管理人员的数目，进而决定了组织的工作效率．

组织层次与沟通效率：人力成本与经济效率

管理跨度的现代观点赞成尽量扩大管理跨度→　有的拓宽到１０

～２０个　→　形成扁平化的组织结构．扩大管理跨度是否会影响管理效果？

影响管理跨度的因素 下属的素质； 下属工作的相似性； 任务的复杂性； 下属工作地点的远近； 管理信息系统的先进程度； 组织文化的凝聚力； 管理风格

Contrasting Spans of Control

Assuming Span of 4 Assuming Span of 8

1 1

4 816

4096

51264

64

256

1024

4096

Operators: 4096

Managers : 1365 level : 7

Operators:4096

Managers: 585

Level: 5

Departmentalization The process of grouping individuals into separate units or departments to accomplish organization goals Functional departmentalization Product & Service departmentalization Geographic Departmentalization Market or Customer Departmentalization Process departmentalization Global structure

Grouping activities by functions performed.

Functional departmentalization

Functional DepartmentalizationExecutive Director

Director of Personnel

Director of Purchasing

Director of Operation

Other Directors

Unit 1 Manager

Unit 2 Manager

Personnel Operation Purchasing Other

divisions created according to the type of product or service.

Product & Service departmentalization Product & Service

departmentalization

Product & Service StructureProduct & Service StructureC h art T it le

W ashing M achineDivision

LightingDivision

T elevisionDivision

CorporateM anagers

CEOCorporation

Figure 8.4a

Geographic structure: divisions based on the area of a country or world served.

Geographic Departmentalization

Geographic Structure

Market structure: divisions based on the types of customers served.

Market or Customer DepartmentalizationMarket or Customer Departmentalization

Market or Customer DepartmentalizationMarket or Customer Departmentalization

C h art T it le

Large BusinessCustom ers

Sm all BusinessCustom ers

EducationalInstitutions

IndividualCustom ers

CorporateM anagers

CEOCorporation

Figure 8.4c

Process departmentalization

Grouping activities on the basis of product or customer flow.

Process departmentalization

Global StructuresGlobal Structures

When managers find different problems or demands across the globe, global solutions are needed. Global geographic structure: different divisions serve

each world region. Global product structure: Customers in different regions

buy similar products so firms keep most functional work at home and set up a division to market product abroad.

StructuresStructures A division is a collection of functions working together to produce a product.

According the method of Departmentalization

Three factors for every org.ComplexityFormalization Centralization

Division of StructuresDivision of StructuresMechanistic: A structure that is high in complexity , formalization, and centralization .

Organic: A structure that is low in complexity , formalization, and centralization.

Contrast of Main Division Contrast of Main Division

Mechanistic Organic

*Rigid hierarchical relationship

*Fixed duties

*Formalized communication

*Centralized decision authority

*Collaboration (both vertical and horizontal)

*Adaptable duties

*Informal communication

*Decentralized decision authority

Factors Affecting Organizational DesignFactors Affecting Organizational Design

Environment

Strategy

HumanResources

TechnologyDetermine design or organizational

structure

Determine design or organizational

structure

Figure 8.1

Structure must be more flexible when environmental change is rapid.

Organic structure is a good choice in this case.

Environment and StructureEnvironment and Structure

Strategy: Different strategies require the use of different structures.

Strategy and StructureStrategy and Structure

战略类型 适应结构类型简单结构 单一产品 有机式

纵向一体化复杂的战略 多样化经营 机械式* 创新战略 有机式* 最求稳定和效率 机械式

Technology & StructureTechnology & StructureUnit Production: The production of

items in units or small batches.Mass Production : automated

machines make high volumes of standard products.

Process Production: totally mechanized systems of automatic machines.

Human Resources & Structure Human Resources & Structure

Higher skilled workers who need to work in teams usually need a more flexible structure.

----Organic Structure.

?The Type of StructureMechanistic :

Functional structure Divisional structure

Organic: Simple structure Matrix structure Team-based structure Network structure

Hybrid structure

Simple structure

An organizational design that is low in complexity and formalization but high in centralization

Simple structure

Boss of The Supermarket

Staff 1 Staff 3 Staff 4 CasherStaff 2

Functional structure

Function: people working together with similar skills, tools or techniques to perform their jobs.

A Sample of Pier 1’s Functional StructureA Sample of Pier 1’s Functional Structure

V .P . Tax V .P . C on tro lle r

V .P . M IS D irec to rC orp . P lan n in g

E xec . V .P .F in an ce & A d m in .

S en io r V . P .S to res

D irec to rTran sp orta tion

V .P .D is trib u tion

S en io r V .P .L og is tic s

C la rk Joh n sonC E O

Figure 8.3

Functional structure

Advantage: Workers can learn from others doing similar tasks. Easy for managers to monitor and evaluate workers.

Disadvantage: Hard for one department to communicate with

others. Managers can become preoccupied with their

department and forget the firm

?Divisional structure

An organization structure made up of autonomous self-contained unitsAdvantage :Disadvantage:

Divisional structure

?Matrix Structure?Matrix StructureMatrix structure: managers group people by function and product teams simultaneously. Advantage: Disadvantage:

Matrix StructureMatrix StructureFigure 8.7a

CEOCEO

Func.Func. ManagersManagers

SalesSales DesignDesign ProductionProduction

Product Product team Ateam A

Product Product team Bteam B

Product Product team Cteam C

Product Team

= two boss employee

Tea

m M

anag

ers

Tea

m M

anag

ers

Team-based Structure

Product Team Structure: The members are permanently assigned to the team and empowered to bring a product to market.

Product Team StructureProduct Team StructureCEOCEO

Func.Func. ManagersManagers

SalesSales DesignDesign ProductionProduction

Manufacturing Manufacturing Manufacturing

= Product Team Manager = Team member

Figure 8.7b

?Network Structure?Network Structure

a whole series of strategic alliances. Created between suppliers, manufacturers,

and distributors. Advantage: Disadvantage:

Network Structure

Hybrid StructuresHybrid Structures

Many large organizations have divisional structures where each manager can select the best structure for that particular division. One division may use a functional structure, one

geographic, and so on.

This ability to break a large organization into many smaller ones makes it much easier to manage.

Trend & Issue of Org.Coordinating Function :To ensure sufficient coordination between functions, managers delegate authority.

Tall & Flat org: Tall structures have many levels of authority relative to the

organization’s size.Communication gets difficult and Communications can also

become garbled . More time being taken to implement decisions.

Flat structures have few levels but wide spans of control.Results in quick communications but can lead to overworked

managers.