6 chapter organization design and structure copyright ©2013 pearson education, inc. publishing as...
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6Chapter
Organization Design andStructure
Copyright ©2013 Pearson Education, Inc. publishing as Prentice Hall 6-1
Learning Outcomes
After studying this chapter, you will be able to:• Describe six key elements in org design.• Identify the contingency factors that favor either the
mechanistic model or the organic model of organizational design.
• Compare and contrast traditional and contemporary organizational designs.
• Discuss the design challenges faced by today’s organizations.
Copyright ©2013 Pearson Education, Inc. publishing as Prentice Hall 6-2
Copyright ©2013 Pearson Education, Inc. publishing as Prentice Hall 6-3
Elements in Organizational Design
Six key elements:• Work specialization• Departmentalization• Authority & responsibility• Span of control• Centralization v.
decentralization• Formalization
Copyright ©2013 Pearson Education, Inc. publishing as Prentice Hall 6-4
Work Specialization
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Departmentalization
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Types of Authority Relationships
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Line and Staff Authority
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Unity of Command
Unity of command is a structure in which each employee reports to only one manager.
Copyright ©2013 Pearson Education, Inc. publishing as Prentice Hall 6-9
Authority and Power
• Authority – A right; legitimacy is based on authority figure’s position in the organization
• Power – An individual’s capacity to influence decisions
Copyright ©2013 Pearson Education, Inc. publishing as Prentice Hall 6-10
Authority and Power: Differences
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Sources of Power
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Span of Control
Span of control – The number of employees a manager can efficiently and effectively supervise
Examples of contingency variables:– Employee training and experience– Similarity of tasks and task complexity– Location of employees– Use of standardized procedures– Sophistication of management information system
Copyright ©2013 Pearson Education, Inc. publishing as Prentice Hall 6-13
Centralization and Decentralization
Centralization – Decision making takes place at upper levels of the organization.
Decentralization – Lower-level managers provide input or actually make decisions.
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Formalization
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Models of Organizational Design
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Strategy and Structure
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Size and Structure
Large organizations tend to have more specialization, departmentalization, centralization, and regulations than small organizations.
Copyright ©2013 Pearson Education, Inc. publishing as Prentice Hall 6-19
Technology and Structure
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The Environment and Structure
• Mechanistic organizations• Organic organizations• Dynamic environmental forces– Global competition– Accelerated product innovation by competitors – Knowledge management– Increased customer demand for higher quality and
faster deliveries.
Copyright ©2013 Pearson Education, Inc. publishing as Prentice Hall 6-21
Copyright ©2013 Pearson Education, Inc. publishing as Prentice Hall 6-22
Traditional Organizational Designs
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Functional Structure
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Divisional Structure
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Contemporary Organizational Designs
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Team Structure
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Matrix & Project Structures
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Project Structure
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Boundaryless Organizations
Boundaryless organization – An organization whose design is not imposed by a predefined structure– Internal boundaries– External boundaries• Can be minimized or eliminated by using virtual
or network structural designs
Copyright ©2013 Pearson Education, Inc. publishing as Prentice Hall 6-30
Copyright ©2013 Pearson Education, Inc. publishing as Prentice Hall 6-31
Current Organizational Design Challenges
1. Keeping employees connected
2. Managing global structural issues
3. Building a learning org 4. Designing flexible work
arrangements
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A Learning Organization
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Flexible Work Arrangements
• Telecommuting• Compressed
workweeks• Flextime• Job sharing• Contingent
workforce
Copyright ©2013 Pearson Education, Inc. publishing as Prentice Hall 6-34
Copyright ©2013 Pearson Education, Inc. publishing as Prentice Hall 6-35
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