Trends in Organizational Structures Unit 5: Organizing

Current Organizational Structures The realities of today’s global economy demand that competitive businesses must have organizational structures that are flexible and allow people to solve problems quickly The matrix structure, introduced in Activity 1, is a first step toward improving flexibility and getting people to work together in cross-functional teams Matrix structures are now part of a trend in organizational structures toward less hierarchy and more empowerment of employees Information technology facilitates the new organizational structures These new structures include: team structures, network structures, boundaryless organizations, and virtual organizations

Team Structure In a team structure, both permanent and temporary cross-functional teams are used to solve problems, complete special projects, and accomplish day-to-day tasks A matrix structure is one example of a team structure Careful and thoughtful formation of teams is critical in this type of a structure It is not enough to simply call an existing group “a team”

Network Structure In a network structure, businesses concentrate on their strengths and work with outside suppliers and business partners for the other necessary functions Commonly outsourced functions include cleaning, accounting, and legal services A strategic alliance or joint venture occurs when two or more organizations join together to pursue an area of mutual interest For example, three businesses decide to share the development costs of a specialized piece of equipment or software application that they all need Together, they hire another business to create this equipment or application

Boundaryless Structure The boundaryless organization is a model that views organizations as having permeable boundaries The goal is to develop greater flexibility and responsiveness to change and to facilitate the free exchange of information and ideas Characterized by the absence of hierarchy, empowerment of team members, the use of information technology, spontaneous sharing of knowledge, and acceptance of change Example: The Virtual Team

The Virtual Team A virtual team is a group of people who work interdependently with a shared purpose across space, time, and organization boundaries using technology What makes virtual teams historically new is the awesome array of interactive technologies at their disposal Webs of technology and trust link virtual teams

Organizational Design Organizational Design - refers to the decisions made by management, and the structures created by management, to carry out the organization’s mission and objectives Organizations vary widely not only in terms of size, but also in terms of the problems and opportunities they face In some cases, traditional organizational structures may work best; in others, a network structure may work better Organizations need to be able to change their structure as necessary, to best meet the demands of their current situation

Trends in Organizational Design Structures Shorter Chain of Command – fewer layers of management Increased Delegation of Empowerment - Progressive managers entrust work to their employees along with the authority to take necessary actions Decentralization - Decisions are made throughout all organizational levels, not only at the top level Organic Structure instead of Mechanistic Structure - In an organic structure, it is common for all of the employees to be able to handle most, if not all, of the tasks Employees in a mechanistic structure have assigned duties that they must perform and are not permitted to take on additional duties unless they are told so by management

Your Task Answer the following questions independently: Which type of organizational structure appeals to you most? Would you prefer to work in a traditional structure, team structure, boundaryless organization, or virtual team? Which organizational structure would suit your personality, skills and goals? Why? Next you will form groups to discuss