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ORGANIZATION STRUCTURE AND DESIGNChapter 8
WHAT IS ORGANIZING AS A MANAGERIAL RESPONSIBILITY?
Organizing is one of the management functions Organizing arranges people and resources to work
towards a goal Organization Charts describe the formal structures
of organizations Organization structure – a system of tasks,
reporting relationships and communication linkages Organization chart – describes the arrangement of
work positions within an organization Division of labor – people and groups perform
different jobs Formal structure – official structure of the
organization
Organizations also operate with informal structures
Informal structure – set of unofficial relationships among members of an organization
Social network analysis – identifies the informal structures and their embedded social relationships that are active in an organization
Informal structures have good points and bad points
WHAT ARE THE MOST COMMON TYPES OF ORGANIZATIONAL STRUCTURES?
Departmentalization – process of grouping together jobs and people into work units
Functional structures group together people using similar skills
Functional chimneys/ functional silos problem – lack of communication and coordination across functions
Divisional Structures group together people by products, customers or locations
Product structure – groups together people and jobs working on a single product or service
Geographical structure – brings together people and jobs performed in the same location
Customer structure – groups together people and jobs that serve the same customers or clients
Matrix Structures combine functional and divisional structures
Cross-functional team – brings together members form different functional departments
Team structures use many permanent and temporary terms
Network structures extensively use strategic alliances and outsourcing
Virtual organization – uses information technologies to operate as a shifting network of alliances
WHAT ARE THE TRENDS IN ORGANIZATION DESIGN?
Organization design – the process of configuring organizations to meet environmental challenges
Organizations become flatter, with fewer levels of management
Span of control – the number of persons directly reporting to a manager
Organizations are increasing decentralization Centralization – top management keeps
power to make most decisions Decentralization – top management allows
lower levels to help make many decisions Organizations are increasing delegation and
empowerment Delegation – process of entrusting work to
others
Organizations are becoming more horizontal and adaptive
Bureaucracy- emphasizes formal authority, rules, order, fairness and efficiency
Mechanistic designs – bureaucratic, using a centralized and vertical structure
Organic designs – adaptive, using a decentralized, horizontal structure
Organizations are using more alternative work schedules
Compressed workweek – allows a worker to complete a full-time job in less than 5 days
Flexible working hours – gives employees some choice in daily work hours
Telecommuting – involves using IT to work at home or outside the office
Job sharing –splits one job between two people
ORGANIZATIONAL CULTURES, INNOVATION AND CHANGEChapter 9
WHAT IS THE NATURE OF ORGANIZATIONAL CULTURE?
Organizational culture is the personality of the organization
Organizational culture – system of shared beliefs and values guiding behavior
Organizational culture shapes behavior and influences performance
Strong cultures – clear, well defined and widely shared among members
Socialization – a process through which new members learn the culture of an organization
The observable culture is what you see and hear as an employee or customer
The core culture is found in the underlying values of an organization
Core values – are beliefs and values shared by an organization
Value-based management supports a strong organizational culture
Value-based management – actively develops, communicates and enacts shared values
Symbolic leader – uses language and symbols and actions to establish and maintain a desired organizational culture
Workplace spirituality – involves practices that create meaning and shared community among members
HOW DO ORGANIZATIONS SUPPORT AND ACHIEVE INNOVATION?
Innovation – process of taking in an idea and putting it into practice
Organizations pursue process, product and business model innovations
Process innovations –result in better ways of doing things
Product innovations– result in new or improved goods or services
Business model innovations – result in ways for firms to make money
Green innovations pursue and support the goals of sustainability
Green innovation/ sustainable innovation – reduces the carbon footprint of an organization and its products
Social innovation seeks solutions to important societal problems
Social innovation is business innovation driven by a social conscience
Social entrepreneurship – pursues innovative ways to solve pressing social problems
Commercializing innovations turn new ideas into saleable products
Reverse innovation – recognizes the potential for valuable innovations to be launched form lower organizational levels and diverse locations, including emerging markets
Innovative organizations share many common characteristics
Skunkworks – special creative units set free from normal structure for the purpose of organization
HOW DO MANAGERS LEAD THE PROCESS OF ORGANIZATIONAL CHANGE?
Change leader tries to change the behavior of another person or social system
Organizations pursue both transformational and incremental changes
Transformational change – results in major and comprehensive redirection of the organization
Incremental change – bends and adjusts existing ways to improve performance
Three phases of planned change are unfreezing, changing and refreezing
Unfreezing – a phase during which a situation is prepared for a change
Changing – a phase where a planned change actually takes place
Refreezing – phase in which a change is stabilized
Managers use force-coercion, rational persuasion, and shared power change strategies
Force-coercion strategy – pursues change through formal authority and/ or use of rewards or punishments
Shared power strategy - pursues change by participation
Change leaders identify and deal positively with resistance to change