Management 11e Griffin © 2013 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as.

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Management 11e Griffin © 2013 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. PowerPoint Presentation by Charlie Cook The University of West Alabama © 2013 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

Describe the basic nature of organization design. Management 11e Griffin Describe the basic nature of organization design. Identify and explain two basic universal perspectives on organization design. Identify and explain key situational influences on organization design. Discuss how an organization’s strategy and its design are interrelated. Describe the basic forms of organization design. Describe emerging issues in organization design © 2013 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. © 2013 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

The Nature of Organization Design Management 11e Griffin The Nature of Organization Design Organization Design The structural elements and the relationships among the elements used to manage the organization. A means to implement strategies and plans to achieve organizational goals. Organization Design Concepts Organizations are not designed and then left intact. Organizations are in a continuous state of change. Designs for larger organizations are extremely complex and have many nuances and variations. © 2013 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. © 2013 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

Perspectives on Organization Design Management 11e Griffin Perspectives on Organization Design Bureaucratic Model (Max Weber) A logical, rational, and efficient organization design based on a legitimate and formal system of authority. Characteristics: A division of labor with each position filled by an expert. A consistent set of rules ensuring uniformity in task performance. A hierarchy of positions that creates a chain of command. Impersonal management; with the appropriate social distance between superiors and subordinates. Employment and advancement based on technical expertise, and employees protected from arbitrary dismissal. © 2013 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. © 2013 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

Bureaucratic Model Advantages Disadvantages Efficiency in function Management 11e Griffin Bureaucratic Model Advantages Disadvantages Efficiency in function Organizational inflexibility and rigidity Prevention of favoritism Neglect of social and human processes Recognition of and requirement for expertise Belief in “one best way” to design organizations © 2013 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. © 2013 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

Management Challenge Question Management 11e Griffin Management Challenge Question What characteristics of a bureaucratic structure help an organization in meeting its diversity goals? What characteristics of a bureaucratic would hinder an organization in meeting its diversity goals? © 2013 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. © 2013 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

Behavioral Model: Likert System Management 11e Griffin Behavioral Model: Likert System Renesis Likert Organizations that pay attention to work groups and interpersonal processes are more effective than bureaucratic organizations. Bureaucratic Behavioral System 1 Exploitative Authoritative System 2 Benevolent Authoritative System 3 Consultative System 4 Participative Employee-centered leader behavior Job-centered leader behavior © 2013 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. © 2013 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

Situational Influences on Organization Design Management 11e Griffin Situational Influences on Organization Design Environment Technology Organizational Life Cycle Organization Design Size © 2013 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. © 2013 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

Organization Design and Technology Management 11e Griffin Organization Design and Technology Core Technology Is the conversion processes used to transform inputs into outputs. Is an organization’s most important technology. Joan Woodward Initially sought a correlation between organization size and design; instead, she found a potential relationship between technology and design: As the complexity of technology increases, so do the number of levels of management. © 2013 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. © 2013 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

Core Technology and Organization Design Management 11e Griffin Core Technology and Organization Design Woodward’s Basic Forms of Technology Unit or small-batch Large-batch/mass-production Continuous-process © 2013 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. © 2013 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

Situational Influences on Organization Design (cont’d) Management 11e Griffin Situational Influences on Organization Design (cont’d) The Environment (Burns and Stalker) Forms of the organizational environment Stable environments that remain constant over time. Unstable environments subject to uncertainty and rapid change. Organization Designs Mechanistic organizations are similar to bureaucratic or System 1 models; found most frequently in stable environments. Organic organizations are flexible and informal models; usually found in unstable and unpredictable environments. © 2013 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. © 2013 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

Situational Influences on Organization Design (cont’d) Management 11e Griffin Situational Influences on Organization Design (cont’d) Organization Dimensions (Lawrence and Lorsch) Differentiation The extent to which the organization is broken down into subunits. Integration The degree to which the various subunits must work together in a coordinated fashion. © 2013 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. © 2013 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

Situational Influences on Organization Design (cont’d) Management 11e Griffin Situational Influences on Organization Design (cont’d) Organizational Size (Ashton Studies) Defined as the total number of full-time or full-time equivalent employees Research findings: Small firms tend to focus on their core technology. Large firms have more job specialization, standard operating procedures, rules and regulations, and are more decentralized. Organizational Life Cycle Organizations progressively evolve as they grow and mature—birth, youth, midlife, and maturity. © 2013 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. © 2013 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

Strategy and Organization Design Management 11e Griffin Strategy and Organization Design Corporate-Level Strategies Single-product strategy Related or unrelated diversification Portfolio approach to managing strategic business units Organizational Functions Major functions of the organization can influence an organization’s design. © 2013 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. © 2013 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

Organizational Strategies Management 11e Griffin Organizational Strategies Business-Level Strategies Generic Competitive Strategies Defender Differentiation Prospector Cost Leadership Analyzer Focus © 2013 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. © 2013 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

Basic Forms of Organization Designs Management 11e Griffin Basic Forms of Organization Designs Functional or U-form (Unitary) Design Organizational members and units are grouped into functional departments such as marketing and production. Coordination is required across all departments. Design approach resembles functional departmentalization in its advantages and disadvantages. © 2013 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. © 2013 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

12.1 Functional or U-form Design for a Small Manufacturing Company Management 11e Griffin 12.1 Functional or U-form Design for a Small Manufacturing Company © 2013 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. © 2013 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

Basic Organization Designs (cont’d) Management 11e Griffin Basic Organization Designs (cont’d) Conglomerate or H-form (Holding) Design Organization is a set of unrelated businesses with a general manager for each business. Holding-company design is similar to product departmentalization. Coordination is based on the allocation of resources across companies in the portfolio. Design has produced only average to weak financial performance; has been abandoned for other approaches. © 2013 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. © 2013 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

12.2 Conglomerate (H-form) Design at Samsung Management 11e Griffin 12.2 Conglomerate (H-form) Design at Samsung Semiconductors Telecommunications Appliances Media CEO © 2013 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. © 2013 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

Basic Organization Designs (cont’d) Management 11e Griffin Basic Organization Designs (cont’d) Divisional or M-form (Multidivisional) Design Multiple businesses in related areas operating within a larger organizational framework. Results from a strategy of related diversification. Activities are decentralized down to the divisional level; others are centralized at the corporate level. Design advantage is in opportunities for coordination and sharing of resources. Successful M-form organizations can out perform U-form and H-form organizations. © 2013 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. © 2013 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

12.3 Multidivisional (M-form) Design at Hilton Hotels Management 11e Griffin 12.3 Multidivisional (M-form) Design at Hilton Hotels © 2013 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. © 2013 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

Basic Organization Designs (cont’d) Management 11e Griffin Basic Organization Designs (cont’d) Matrix Design Two overlapping bases of departmentalization: A set of product groups or temporary departments are superimposed across the functional departments. Employees in the matrix belong to their departments and the project team: A multiple command structure in which an employee reports to both departmental and project managers. A matrix design is useful when: There is strong environmental pressure. There are large amounts of information to be processed. There is pressure for shared resources. © 2013 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. © 2013 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

12.4 A Matrix Organization Management 11e Griffin © 2013 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. © 2013 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

Matrix Design Advantages Management 11e Griffin Matrix Design Advantages Enhances organizational flexibility. Creates high motivation and increased organizational commitment for team members. Gives team members opportunity to learn new skills. Provides an efficient way for the organization to use its human resources. Uses team members as bridges to their departments for the team. Useful as a vehicle for decentralization. © 2013 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. © 2013 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

Matrix Design Disadvantages Management 11e Griffin Matrix Design Disadvantages Employees are uncertain about reporting relationships. Managers may view design as an anarchy in which they have unlimited freedom. The dynamics of group behavior may lead to slower decision making, one-person domination, compromise decisions, or a loss of focus. More time may be required for coordinating task-related activities. © 2013 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. © 2013 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

Basic Organization Designs (cont’d) Management 11e Griffin Basic Organization Designs (cont’d) Hybrid Designs Based on two or more common forms of organization design—may have a mixture of related divisions and a single unrelated division. Most organizations use a modified form of organization design that permits them to have sufficient flexibility to make adjustments for strategic purposes. © 2013 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. © 2013 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

The Future of Organization Design Management 11e Griffin The Future of Organization Design Emerging Organization Design Issues The Team Organization The Virtual Organization The Learning Organization The International/Global Organization © 2013 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. © 2013 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

International Organization Design Issues Management 11e Griffin International Organization Design Issues Establish an international operating group? Make international operations an autonomous subunit? Create an international division? Competing Effectively in Global Markets © 2013 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. © 2013 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

12.5a Common Organization Designs for International Organizations Management 11e Griffin 12.5a Common Organization Designs for International Organizations A. Separate International Division CEO Production Marketing Finance International division B. Location Departmentalization North American operations European Asian CEO © 2013 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. © 2013 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

12.5b Common Organization Designs for International Organizations Management 11e Griffin 12.5b Common Organization Designs for International Organizations C. Product Departmentalization Product Manager A CEO Manager B Manager C Asia North America Europe D. Multidivisional Structure CEO Subsidiary A (Germany) Subsidiary C (France) Subsidiary E (China) Subsidiary D (Japan) Subsidiary B (U.S.) © 2013 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. © 2013 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

KEY TERMS organization design bureaucracy behavioral model Management 11e Griffin organization design bureaucracy behavioral model System 1 design System 4 design situational view of organization design technology mechanistic organization organic organization differentiation integration organization size organizational life cycle functional design conglomerate design divisional design matrix design hybrid design team organization virtual organization learning organization © 2013 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. © 2013 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.