Organizational Design, Effectiveness, and Innovation Chapter Seventeen

Learning Objectives LO.1 Describe the four characteristics common to all organizations, and explain the difference between closed and open systems. LO.2 Define the term learning organization. LO.3 Review the factors that hinder an organization’s ability to learn from success and failure. LO.4 Describe seven basic ways organizations are structured. LO.5 Discuss Burns and Stalker’s findings regarding mechanistic and organic organizations.

Learning Objectives (cont.) LO.6 Identify when each of the seven organization structures is the right fit. LO.7 Describe the four generic organizational effectiveness criteria. LO.8 Discuss the difference between innovation, invention, creativity, and integration. LO.9 Review the myths about innovation. LO.10 Explain the model of innovation.

What is an Organization? system of consciously coordinated activities or sources of two or more people.

Organization Charts Organization chart a graphic representation of formal authority and division of labor relationships

Sample Organization Chart for a Hospital

The Organization as an Open System

Learning Organizations one that proactively creates, acquires, and transfers knowledge and that changes its behavior on the basis of new knowledge and insights Team mental model represents team members’ shared, organized understanding and mental representation of knowledge about key elements of the team’s relevant environment

Designs That Open Boundaries between Organizations Hollow structure organization identifies core competencies and outsources noncore processes to vendors who can do them cheaper or faster Modular structure Outsources parts of a product instead of processes

Designs That Open Boundaries between Organizations Virtual organization organization identifies partners with the needed talents and negotiates an agreement in which the participants typically work in separate facilities, linked by technology

Mechanistic versus Organic Organizations Mechanistic organizations Rigid bureaucracies with strict rules, narrowly defined tasks, and top-down communication. Organic organizations Flexible networks of multitalented individuals who perform a variety of tasks

Different Approaches to Decision Making Centralized decision making key decisions are made by top management Decentralized decision making important decisions are made by middle- and lower-level managers

Getting the Right Fit A functional structure can save money by grouping together people who need similar materials and equipment Divisional structures increase employees’ focus on customers and products

Four Dimensions of Organizational Effectiveness

Organizational Innovation Creation of something new that is used by consumers.