mgmt5 © 2012 cengage learning designing adaptive organizations 9

MGMT5

© 2012 Cengage Learning

Designing Adaptive Organizations

9


1. describe the departmentalization approach to organizational structure

2. explain organizational authority3. discuss the different methods for job design4. explain the methods that companies are using

to redesign internal organizational processes (i.e., intraorganizational processes)

5. describe the methods that companies are using to redesign external organizational processes (i.e., interorganizational processes).

Structure and Process

• Organizational structure– the vertical and horizontal configuration of

departments, authority, and jobs within a company

• Organizational process– the collection of activities that transform

inputs into outputs that customers value


Sony Corporation’s Organizational Chart


Process View of Microsoft’s Organization


Designing Organizational Structures

1. describe the departmentalization approach to organizational structure

2. explain organizational authority

3. discuss the different methods for job design


Departmentalization

• Functional

• Product

• Customer

• Geographic

• Matrix


Functional Departmentalization

• Advantages– allows work done by highly qualified

specialists– lowers costs by reducing duplication– makes communication and coordination

easier

• Disadvantages– cross-department coordination can be

difficult– may lead to slower decision making


Functional Departmentalization


Product Departmentalization

• Advantages– allows people to specialize in one area of

expertise – makes it easier to assess performance– makes decision making faster

• Disadvantages– duplication – coordination across different product

departments


Product Departmentalization: United Technologies


Customer Departmentalization

• Advantages– focuses organization on customer needs– allows companies to specialize products and

services to customer needs

• Disadvantages– duplication of resources– workers might please customers but hurt

business


Customer Departmentalization:Swisscomm AG


Geographic Departmentalization

• Advantages– helps companies respond to different markets– reduces costs by locating unique resources

closer to customers

• Disadvantages– duplication of resources– difficult to coordinate departments


Geographic Departmentalization: AB InBev Company


Matrix Departmentalization

• Advantages– allows companies to efficiently manage large,

complex tasks– gives much more diverse set of expertise and

experience

• Disadvantages– requires a high level of duplication– confusion and conflict between project bosses– requires much more management skill


Matrix Departmentalization: Procter & Gamble


Chain of Command

• Chain of command– the vertical line of authority that clarifies who

reports to whom throughout the organization

• Unity of command – workers should report to just one boss


Authority

• Line authority• Staff authority

• Line function • Staff function


Delegation: Responsibility, Authority, and Accountability


Degree of Centralization

• Centralization of authority

• Decentralization

• Standardization


Advantages of Decentralization

• Develops employee capabilities

• Faster decision making

• More satisfied employees and customers

• Better employee performance


Job Specialization

• Job comprises a smaller part of a larger task

• Easy to learn

• Low variety

• High repetition


Job Rotation, Enlargement, Enrichment

• Rotation

• Enlargement

• Enrichment


Job Characteristics Model


Internal Motivation

• Experience work as meaningful

• Experience responsibility for work outcomes

• Knowledge of results


Core Job Characteristics

• Skill variety

• Task identity

• Task significance

• Autonomy

• Feedback


To Increase Internal Motivation

• Combine tasks

• Natural work units

• Establish client relationships

• Vertical loading

• Open feedback channels


Designing Organizational Processes

4. explain the methods that companies are using to redesign internal organizational processes (i.e., intraorganizational processes)

5. describe the methods that companies are using to redesign external organizational processes (i.e., interorganizational processes)


Intraorganizational Processes

The collection of activities that take place within an organization to transform inputs

into outputs that customers value.


Reengineering

“the fundamental rethinking and radical redesign of business

processes to achieve dramatic improvements in critical,

contemporary measures of performance, such as cost, quality, service and speed.”


Reengineering and Task Interdependence


Empowerment

• Empowering workers

• Empowerment


Interorganizational Processes

A collection of activities that occur among companies to transform inputs into outputs

that customers value.


Modular Organizations


Modular Organizations

• Advantages– reduced costs

• Disadvantages– loss of control– noncore activities that are outsourced

may become source of advantage– suppliers to whom work is outsourced

can become competitors


Virtual Organizations


Virtual Organizations

• Advantages– shared costs– fast and flexible

• Disadvantages– difficult to control quality of work done

by partners– requires tremendous managerial skills


<click screenshot for video>

REELTOREAL

Rendition

1. How would you describe the workplace atmosphere in this scene? Would you say it demonstrates behavioral informality or formality?

2. Do you think the scene shows line authority or staff authority between these two men?

3. What kind of feedback is Alan Smith getting from Senator Hawkins? Is it primarily positive or negative?


<click screenshot for video>

REELTOREAL

Modern Shed

1. Describe how Modern Shed functions as a modular organization.

2. What are the advantages and disadvantages of Modern Shed’s organizational structure?


mgmt5 © 2012 cengage learning designing adaptive organizations 9

Documents

cengage learning slide

departmentalization

organizational authority

organizational structures

company organizational

different methods

different product departments

experience disadvantages