Organizing Process Structure a course of action, a route, a progression Structure an arrangement, a configuration, a construction

The process of deploying resources to achieve strategic goals Organizing The process of deploying resources to achieve strategic goals

The process of organizing takes place within a structure reflected by the way in which the organization Divides its labor into departments and jobs Establishes formal lines of authority Establishes mechanisms for coordinating diverse tasks

Organizing process leads to creation of an Organizational Structure Formal tasks assigned Formal reporting relationships Systems design for coordination across departments

Features of Organizational Structure

Work Specialization Also called division of Labor Specialists get good at a specific task Efficiency increases Employees are selected based on specific skills Training is geared toward increased efficiency. Based on a mechanistic organization

Chain of Command An unbroken line of authority Unity of Command-Everyone has only one supervisor Scalar Principle-Everyone has at least one boss. Everyone is included

Authority The formal rights of a manager to manage Vested in the organizational position, not the person. Provides the manager with positional power Authority is accepted by the subordinates Authority flow from the top, down.

Responsibility The duty to perform the task the employee has been assigned. Responsibility and Authority are delegated together and make the employee accountable to superiors

Line and Staff Organizations Line departments perform the organization’s primary tasks. Production, marketing, sales, R&D Staff Departments provide specialized skills in support of line departments. Engineering, Human Resources, Legal, Advise and council in areas of expertise

Span of Management (Control) The number of employees reporting to a supervisor. Size varies with the type of organization, skill of the subordinates, Geographic dispersion Managerial skill and preference

Centralization Decision making is done high in the organization Tendency toward decentralization Greater use of employee skills Less mechanistic Relieve burden on manager to do everything Decisions made closer to the action Decisions are make quicker

Factors influencing Decentralization Amount of change and uncertainty in the environment Corporate strategy and culture Size and dispersion of the organization The risk of failure The greater the risk, the higher up the decisions are made.

Departmentalization or Structure

Functional Approach Grouping of positions based on skills of functions.

Advantages and Disadvantages of Functional Organization Structures Efficient use of resources In depth skills Specialized career development Coordination within functions Excellent technical problems solving Disadvantages Poor communications across functions Slow response to external changes Requires high level coordination Limited general management training

Divisional Approach Based on outputs e.g. products, sbu’s etc.

Advantages and Disadvantages of Divisional Structure Customer oriented Faster response to varied environmental changes Coordination between functions within structure Easy to fix blame Emphasis on overall product and division goals Disadvantages Duplicate resources Less specialization within divisions Less top management control Competition for corporate resources

Matrix Organization Two sets of bosses-functional and divisional. Violates the chain of command, e.g. two bosses, not clear line of authority. Attempts to lower the risks of functional and divisional structures Requires employee to manage two sets of bosses.

Team Structure Delegate authority Push decision making to the lowest level Gain commitment from workers

Team Approach Advantages Disadvantages Same as functional departments Reduces barriers among functions Lower response time Better morale and enthusiasm Less overhead Disadvantages Lots of meetings Dual loyalties

Network or Value Chain Management Do what you do well, sub-contract everything else to those who do better than you. Look for the best industry practices Management the value chain rather than the organization Advantages Increased competitiveness Flexibility Reduced costs Disadvantages Requires a different kind of management Need to sell the concept Less control

Change Management-A Process

Models of Planned Organizational Change Change can be managed Organizational change is the adoption of a new idea or behavior by an organization Change comes from recognition that environmental changes will create mismatches

Forces for change Mismatches occur between the company and its external environment Customers Competitors Technology Economics International Government As well as its internal environment Management Employees Unions Inefficiencies

Managers must be aware of the mismatches as they develop and initiate change

Initiating Change Change can be made by finding established ways to eliminate the mismatch Downsizing to eliminate mismatch of department size and reduced demand. Create new ways Two people share one job

Creativity to Initiate Change Define it please “From the top of the barn, a horse looks like a violin” -Mark Twain The ability to view ordinary situations in unique ways Function of Organizational Climate and Individual characteristics Climate Open communications Good mix of experts and non experts Freedom to choose problems Resources available without a specific reason Individual Characteristics Originality Curosity Open Mindedness Focused approach Persistance Playful attitude Receptiveness to new ideas

Creativity in Organizations Creativity can be built into an organization by creating an appropriate structure New Venture teams (intrapreneurship) Idea Champions New Venture Funds

Change Management – Two Paths of Change Effectiveness Efficiency

Efficiency Classical, hierarchical, mechanistic structure Environment slow to change TQM Management changes the culture (top down) Teams uses Shewhart Cycle, quality circles to continuously improve efficiency

Effectiveness Reengineered or OD oriented, team based structure Environment quick to change Structural coupling to the environment in order to keep up with the change Employees coupled to and focusing on the customer’s needs Individual controls all the processes needed to support each customer

Making it happen—Implementing Change. Implementing change involves perturbing the system. Resistance to change is natural Feedback loops keep change from happening Change involves hard work by everyone Employees sense they will lose something Resistance can’t be ignored

A feedback loop

Force Field Analysis to Overcome Resistance When a change is introduced, some forces drive it while some inhibit it Remove the forces that inhibit the change The forces that drive it will make it happen You can also Communicate and Educate Encourage participation by all Negotiate Coerce

Types of Planned Change Strategy Technology New Products Structure Culture Changes are interrelated. A change in one affects the others.

Part One Select an organization with which you are most familiar with, preferably one with which you are most familiar with at this time. It could be a department within a larger organization

Describe the organization as a spider plant Describe the organization as a spider plant. Let your imagination run wild. Characteristics of a Spider Plant Parallels to my organization

How does the image fit. Does it grasp the nature of the organization How does the image fit? Does it grasp the nature of the organization? Any new insights

Now use the spider plant to think about how your organization could be. In other words, use the image interpreted -in whatever way you wish- as the basis for a new organizational design. If you had the opportunity to design your organization as a spider plant, how would it be? Spider Plant Characteristics Parallels in the New Design

What are the differences between the new one and the one you described in part one?