Structural Design for Organizations Hong Teri Natasha Kim Namjung 8 team Hong Teri Natasha Kim Namjung Choe Huije Jeon Subin

INDEX. 1 Define the Three key components of organization structure. 2 Explain the vertical and horizontal information-sharing concepts of structure. 2 Understand the role of task forces and teams in organization structure. 3 Identify departmental grouping options, such as functional, divisional, and matirx. 4

INDEX. Understand the strengths and weaknesses of various structural forms. 5 Explain new horizontal and virtual network Structural forms. 6 Describe the symptoms of structural deficiency Within an organizaiton. 7

Define the Three key components of organization structure. 1

the Three key components of organization structure.

Key Components of Organization Structure the Three key components of organization structure. Key Components of Organization Structure Designates formal reporting relationships Identifies the grouping together of individuals into departments Ensure effective inter and intra department communication

Information Sharing Concept the Three key components of organization structure. Information Sharing Concept Horizontal vertical

Explain the vertical and horizontal information-sharing concepts of structure. 2

the vertical and horizontal information-sharing concepts of structure

For LEARNING Horizontal Shared task via group empowerment the vertical and horizontal information-sharing concepts of structure Horizontal Shared task via group empowerment Relaxed hierarchy with minimal rules Horizontal communication (informal face to face) Many teams and task forces Decentralized decision making For LEARNING

the vertical and horizontal information-sharing concepts of structure

For EFFICIENCY vertical Specialized tasks Few teams/task forces the vertical and horizontal information-sharing concepts of structure vertical Specialized tasks Few teams/task forces Centralized decision making Vertical communication (formal reporting) Strict hierarchy For EFFICIENCY

Understand the role of task forces and teams in organization structure. 3

What are Groups and Teams? the role of task forces and teams in organization structure What are Groups and Teams? There is some confusion about the difference between a group and a team academics, communication and management theorists group, group-working, group-interaction, group-structure to refer to the dynamics of people working together towards a common cause. 

What are Groups and Teams? the role of task forces and teams in organization structure What are Groups and Teams? When we talk about groups and teams, we use the terms interchangeably it is possible to have a group without a team but not a team without a group we use the following definition of group A group is a collection of people with some common characteristics or purpose. 

What are Groups and Teams? the role of task forces and teams in organization structure What are Groups and Teams? A group can consist of any number of people. People in groups interact, engage and identify with each other, often at regular or pre-determined times and places. The group members share beliefs, principles, and standards about areas of common interest and they come together to work on common tasks for agreed purposes and outcomes. People in groups are defined by themselves and by others as group members, in other words individuals are aware that they are part of a group.

Important Defining Features of Groups the role of task forces and teams in organization structure Important Defining Features of Groups People who can identify with each other. Sharing ideas, beliefs and / or experience of common areas People who frequently and regularly engage with each other, agreeing on a purpose and working together on shared tasks. People who recognise themselves and are recognised by others as part of a group.

the role of task forces and teams in organization structure Effective Teams

Task vs. Process Team Roles the role of task forces and teams in organization structure Task vs. Process Team Roles Task roles focus on ‘what’: the job in hand, and getting it done. The key ‘task-focused’ team roles are Shaper, Implementer, Completer-Finisher, Monitor-Evaluator, Plant and Specialist. Process roles focus on ‘how’, and particularly on the people involved. They include Coordinator, Resource Investigator, and Team Worker

Task vs. Process Team Roles the role of task forces and teams in organization structure Task vs. Process Team Roles Process  Task  most effective team-workers are those who can see what skills are available within the group, and use their own skills to fill any gaps. People tend to be either task- or process-focused, rather than a mixture. : It is perfectly possible to learn to take on the other focus, if you want to do so, and this will make you a highly effective team member.

Finally it is important to remember that all team-working situations are fundamentally about working with other people. If you have good interpersonal skills, and are open to receiving feedback and improving them as a result, then you will become, and be, a good person to work with in a team. It truly is as simple as that.

Identify departmental grouping options, such as functional, divisional, and matirx. 4 Top executives periodically evaluate organization structure to determine whether it is appropriate to changing needs. Manager try to achieve the best fir between internal reporting relationships and the needs of the external environment.

1 Departments and Divisions Organization Design Alternatives How organizations coordinate departments and divisions in the organizational hierarchy? Top executives periodically evaluate organization structure to determine whether it is appropriate to changing needs. Manager try to achieve the best fir between internal reporting relationships and the needs of the external environment.

Departmental grouping affects employees. grouping options 2 Departmental grouping affects employees. The reasons Employees share a common supervisor Employees share a common resources Employees are jointly responsible for performance Employees tend to identify and collaborate with one another Top executives periodically evaluate organization structure to determine whether it is appropriate to changing needs. Manager try to achieve the best fir between internal reporting relationships and the needs of the external environment.

2 Structural Design Options for Grouping Employees into Departments Top executives periodically evaluate organization structure to determine whether it is appropriate to changing needs. Manager try to achieve the best fir between internal reporting relationships and the needs of the external environment.

Functional Structure 3 Functional grouping places employees according to some similarity Similar functions Similar work processes Top executives periodically evaluate organization structure to determine whether it is appropriate to changing needs. Manager try to achieve the best fir between internal reporting relationships and the needs of the external environment. Similar knowledge Similar skills

4 Strengths and Weaknesses of Functional Structure Strengths Allows economies of scale within functional departments 1. Slow response time to environment changes 2. Enables in-depth knowledge and skill development 2. May cause decisions to pile on top; hierarchy overload 3. Leads to poor horizontal coordination among departments 3. Enables organization to accomplish functional goals 4. Involves restricted view of organizational goals 4. Is best with only one or a few products 5. Results in less innovation Top executives periodically evaluate organization structure to determine whether it is appropriate to changing needs. Manager try to achieve the best fir between internal reporting relationships and the needs of the external environment.

may improve horizontal coordination by Functional Structure with Horizontal Linkages 5 manager may improve horizontal coordination by Using IT system Direct contact between departments Full-time integrators Project managers ( Top executives periodically evaluate organization structure to determine whether it is appropriate to changing needs. Manager try to achieve the best fir between internal reporting relationships and the needs of the external environment.

6 & Divisional Structure Divisional grouping places employees according to organization’s product. Product structure or strategic business units. & The distinctive feature ; Grouping is based on organizational outputs Top executives periodically evaluate organization structure to determine whether it is appropriate to changing needs. Manager try to achieve the best fir between internal reporting relationships and the needs of the external environment.

7 Strengths and Weaknesses of Divisional Structure Strengths 1. Suited to fast change in unstable environment. 1. Eliminates economies of scale in functional departments 2. Leads to customer satisfaction because product responsibility and contact points are clear. 2. Leads to poor coordination across product lines 3. Involves high coordination across functions 4. Allows units to adapt to differences in products, regions, customers 3. Eliminates in-depth competence and technical specialization 5. Best in large organizations with several products 4. Makes integration and standardization across product lines difficult 6. Decentralizes decision making Top executives periodically evaluate organization structure to determine whether it is appropriate to changing needs. Manager try to achieve the best fir between internal reporting relationships and the needs of the external environment.

8 Reorganization from Functional Structure to Divisional Structure at Info-Tech 8 Top executives periodically evaluate organization structure to determine whether it is appropriate to changing needs. Manager try to achieve the best fir between internal reporting relationships and the needs of the external environment.

9 Matrix the correct structure when the following conditions are met. Condition 1. Sharing scarce resources across product lines Matrix Structure Condition 2. A dual-authority structure Top executives periodically evaluate organization structure to determine whether it is appropriate to changing needs. Manager try to achieve the best fir between internal reporting relationships and the needs of the external environment. Condition 3. Information processing in both vertical and horizontal direction. An organization’s structure needs to be multi-focused

( ) Same authority between the vertical and horizontal lines Condition 1. Sharing scarce resources across product lines Condition 2. A dual-authority structure Condition 3. Information processing in both vertical and horizontal direction. Matrix Structure Top executives periodically evaluate organization structure to determine whether it is appropriate to changing needs. Manager try to achieve the best fir between internal reporting relationships and the needs of the external environment. ( ) Same authority between the vertical and horizontal lines A balanced matrix is hard to implement and maintain Variations of matrix structure

Dual-Authority Structure in a Matrix Organization Top executives periodically evaluate organization structure to determine whether it is appropriate to changing needs. Manager try to achieve the best fir between internal reporting relationships and the needs of the external environment.

Strengths and Weaknesses of Matrix Structure Strengths Weaknesses 1. Achieves coordination necessary to meet dual demands from customers 1. Causes participants to experience dual authority, which can be frustration and confusing 2. Flexible sharing of human resources across products 2. Means participants need good interpersonal skills and extensive training 3. Suited to complex decisions and frequent changes in unstable environment 3. Is time consuming; involves frequent meetings and conflict resolution sessions 4. Provides opportunity for both functional and product skill development 4. Will not work unless participants understand it and adopt collegial rather than vertical type relationships 5. Best in medium-sized organizations with multiple products 5. Requires great effort to maintain power balance Top executives periodically evaluate organization structure to determine whether it is appropriate to changing needs. Manager try to achieve the best fir between internal reporting relationships and the needs of the external environment.

Matrix Structure for Englander Steel Top executives periodically evaluate organization structure to determine whether it is appropriate to changing needs. Manager try to achieve the best fir between internal reporting relationships and the needs of the external environment.

Understand the strengths and weaknesses of various structural forms. 5 Explain new horizontal and virtual network Structural forms. 6

Reengineering Horizontal Structure Weaknesses Horizontal and virtual network Reengineering Horizontal Structure Characteristics Strengths Weaknesses

“ ” = flat organization, delayering what is horizontal structure? Few or no levels of middle management between staff and executive “ ” = flat organization, delayering

structure to horizontal structure Reengineering 1 business process reengineering(BPR) : redesign of vertical structure to horizontal structure

2 characteristics Boundaries between departments are deleted Process owners have responsibility for each core process entirely Employees are cross-trained Financial contribution to company

3 Strengths and Weaknesses strengths Weaknesses Promotes flexibility to changes in customer need fast Can give better service to customer Each employee has broader view of organization goals. Promote teamwork Gives employees some free wills to make decisions Core process determination is time consuming Require some changes when reengineering, and it's hard to make traditional managers to give up their authority Require training of employess to adjust in horizontal team Limited in-depth skill development

Outsourcing strengths weaknesses Virtual Networks and Outsourcing

what is outsourcing? Contracting out of certain tasks to other firms Involves tranfering employees and assets between firms Reduce cost on peripheral business Can concentrate resources to core business

Virtual networks Outsource most of its major functions Connected in to headquaters that combine all tasks No physical connection Almost every tasks also separate in to companies or individuals

Virtual networks strengths Weaknesses Can't control over many activities and employees Require a great deal of time to take care of relationships Risk of organizational failure Low employee loyalty and weak corporate culture Enables small firms to obtain resources. Enables company to easily reach to producing without huge investment Very flexible and responsive to changing of customer's needs Reduce administrative costs Can't control over many activities and employees Require a great deal of time to take care of relationships Risk of organizational failure Low employee loyalty and weak corporate culture

Describe the symptoms of structural deficiency Within an organization. 7 Top executives periodically evaluate organization structure to determine whether it is appropriate to changing needs. Manager try to achieve the best fir between internal reporting relationships and the needs of the external environment.

Symptoms of Structural Deficiency manager Top executives periodically evaluate organization structure to determine whether it is appropriate to changing needs. Manager try to achieve the best fir between internal reporting relationships and the needs of the external environment. Internal reporting relationships the needs of the external environmemt

When organization structure is out of alignment with organization Symptoms of Structural Deficiency When organization structure is out of alignment with organization As a general rule, when organization structure is out of alignment with organization needs, one or more of the following symptoms of structural deficiency appear. Symptoms of Structural Deficiency

Symptoms of Structural Deficiency Decision making is delayed or lacking in quality. Symptoms of Structural Deficiency Employee performance declines and goals are no being met. The organization does not respond innovatively to a changing environment . Too much conflict is evident

1 Decision making is delayed or lacking in quality. The hierarchy funnels too many problems and decisions to them. Decision Makers Information may not reach the correct people.

2 Departments are not coordinated horizontally. The organization does not respond innovatively to a changing environment 2 Departments are not coordinated horizontally. Identification of customer needs by the marketing department technological developments in the research department

Complexity of the market environment 3 Employee performance declines and goals are not being met. Clear goals, responsibilities, mechanisms for coordination Complexity of the market environment yet be straightforward enough for employees to effectively work within.

4 ( ) Too much conflict is evident Cross-purposes or under pressure at the expenses of organizational goals ) 1002046201092 Organization structure should allow conflicting departmental goals to combine into a single set of goals for the entire organization.

Symptoms of Structural Deficiency Design Esssentials

1 Organization structure must accomplish two things for the organization 1 Organization structure Mechanisms for linking and coordinating organizational elements into a coherent whole A framework of responsibilities, reporting relationships, and groupings Organization structure must accomplish two things for the organization.

1 + + Use Coherent whole Organization Organization structure must accomplish two things for the organization 1 Coherent whole Organization Organization structure must accomplish two things for the organization. The structure is reflected on the organization chart. Use Information systems Organization chart + Linkage devices +

2 ( ) Traditional organization Contemporary organization Organization structure can be Designed to provide vertical and Horizontal information linkages 2 Traditional organization designed for efficiency, which emphasizes vertical linkages manager Hierarchy, rules and plans, and formal information systems ( ) Organization structure must accomplish two things for the organization. The structure is reflected on the organization chart. Linkages are Based on the information processing required to meet the organization’s overall goal. designed for learning and adaptation, which emphasizes horizontal communication and coordination Contemporary organization

2 Organization Organization structure can be Designed to provide vertical and Horizontal information linkages 2 Organization Cross-functional information systems Liaison roles Temporary task forces Full-time integrators Organization structure must accomplish two things for the organization. The structure is reflected on the organization chart. Linkages are Based on the information processing required to meet the organization’s overall goal. Teams By creating the conditions to enable relational coordination Horizontal linkages

With a horizontal structure, activities are organized horizontally around core work processes 3 Functional grouping Divisional grouping Horizontal grouping Multi-focused grouping Virtual network grouping Alternatives for grouping employees an departments into overall structural design

Where coordination and integration will be greatest. With a horizontal structure, activities are organized horizontally around core work processes 3 Functional grouping Divisional grouping Horizontal grouping Multi-focused grouping Virtual network grouping Where coordination and integration will be greatest.

With a horizontal structure, activities are organized horizontally around core work processes 3 Functional grouping Divisional grouping Horizontal grouping Multi-focused grouping Virtual network grouping Managers use horizontal linkage mechanisms to complement the vertical dimension and achieve integration of departments and levels into an organizational whole.

A virtual network structure extends the concept of horizontal coordination and collaboration 4 Virtual network structure extends the concept of horizontal coordination and collaboration beyound the boundaries of the organization. Other functions and activities are outsourced to contract partners. Core activities are performed by a central

The matrix structure attempts to achieve an equal balance between the vertical and horizontal dimensions of structure 5 Vertical dimensions of structure horizontal dimensions of structure Most organizations do not exist in these pure forms, using instead hybrid structures that incorporate characteristics of two of more types of structure

6 Vertical control Horizontal coordination Managers attempt to find the correct balance between vertical control and horizontal coordination 6 manager Vertical control Horizontal coordination Signs of structural misalignment ① delayed decision making ②lack of innovation ③poor employee performance ④excessive conflict

7 Organization chart An organization chart is only so many lines and boxes on a piece of paper. 7 The purpose of the organization chart Encourage and direct employees into activities and communications that enable the organization to achieve its goals. The chart is a guideline to encourage people to work together, but management must implement the structure and carry it out Employees provide the behavior structure Organization chart

THANKS