Chapter 13, Nancy Langton and Stephen P. Robbins, Organizational Behaviour, Fourth Canadian Edition 13-1 Copyright © 2007 Pearson Education Canada Chapter 13 Organizational Structure

Chapter 13, Nancy Langton and Stephen P. Robbins, Organizational Behaviour, Fourth Canadian Edition 13-2 Copyright © 2007 Pearson Education Canada What Is Organizational Structure? Organizational structure defines how job tasks are formally divided, grouped, and coordinated. It includes the degree of complexity, formalization, and centralization in the organization.

Chapter 13, Nancy Langton and Stephen P. Robbins, Organizational Behaviour, Fourth Canadian Edition 13-3 Copyright © 2007 Pearson Education Canada Mechanistic vs. Organic Models

Chapter 13, Nancy Langton and Stephen P. Robbins, Organizational Behaviour, Fourth Canadian Edition 13-4 Copyright © 2007 Pearson Education Canada Simple Structure Strengths: –Simplicity: fast, flexible, inexpensive. Weakness: –Works best in small organizations. –Can slow down decision making in larger organization. –Can be risky as it relies on one person to make all decisions.

Chapter 13, Nancy Langton and Stephen P. Robbins, Organizational Behaviour, Fourth Canadian Edition 13-5 Copyright © 2007 Pearson Education Canada The Family Business Family businesses represent 70 percent of Canadian employment and more than 30 percent of the gross domestic product. Family businesses face both family/personal relations and business/management relations. Family businesses must manage the conflicts found within families as well as the normal business issues that arise for any business.

Chapter 13, Nancy Langton and Stephen P. Robbins, Organizational Behaviour, Fourth Canadian Edition 13-6 Copyright © 2007 Pearson Education Canada Bureaucracy Strengths: –Standardizes activities in an efficient manner. Economies of scale, minimum duplication of personnel and equipment. Lower quality employees are acceptable, which reduces employment costs. Weaknesses: –Creates subunit conflicts. –There is an obsessive concern with following rules.

Chapter 13, Nancy Langton and Stephen P. Robbins, Organizational Behaviour, Fourth Canadian Edition 13-7 Copyright © 2007 Pearson Education Canada Matrix Organization Breaks the unity of command principle. –Employees have two bosses. Strengths: –Facilitates coordination when there are many activities. –More communication. –Efficient allocation of specialists. Disadvantages: –Power struggles, confusion, stress.

Chapter 13, Nancy Langton and Stephen P. Robbins, Organizational Behaviour, Fourth Canadian Edition 13-8 Copyright © 2007 Pearson Education Canada New Design Options Breaking the boundaries internally –Team Structure Breaking the boundaries externally –Modular Organization –Virtual Organization Breaking the boundaries externally and internally –Boundaryless Organization

Chapter 13, Nancy Langton and Stephen P. Robbins, Organizational Behaviour, Fourth Canadian Edition 13-9 Copyright © 2007 Pearson Education Canada Exhibit New-Style vs. Old- Style Organizations New –Dynamic, learning –Information rich –Global –Small and large –Product/customer oriented –Skills oriented –Team oriented –Involvement oriented –Lateral/networked –Customer oriented Old –Stable –Information is scarce –Local –Large –Functional oriented –Job oriented –Individual oriented –Command/control oriented –Hierarchical –Job requirements oriented

Chapter 13, Nancy Langton and Stephen P. Robbins, Organizational Behaviour, Fourth Canadian Edition Copyright © 2007 Pearson Education Canada What Major Forces Shape An Organization’s Structure? Strategy –Innovation, cost minimization, and imitation. Organizational Size –An organization’s size significantly affects its structure. –The relationship isn’t linear; rather, size affects structure at a decreasing rate.

Chapter 13, Nancy Langton and Stephen P. Robbins, Organizational Behaviour, Fourth Canadian Edition Copyright © 2007 Pearson Education Canada Strategy Structural Option InnovationOrganic: A loose structure; low specialization, low formalization, decentralized Cost minimization Mechanistic: Tight control; extensive work specialization, high formalization, high centralization ImitationMechanistic and organic: Mix of loose with tight properties; tight controls over current activities and looser controls for new undertakings Exhibit The Strategy-Structure Thesis

Chapter 13, Nancy Langton and Stephen P. Robbins, Organizational Behaviour, Fourth Canadian Edition Copyright © 2007 Pearson Education Canada What Major Forces Shape an Organization’s Structure? Technology –Every organization has at least one technology for converting financial, human, and physical resources into products or services. –The common theme that differentiates technologies is their degree of routineness. Environment –Composed of forces outside the organization and the uncertainty associated with them.

Chapter 13, Nancy Langton and Stephen P. Robbins, Organizational Behaviour, Fourth Canadian Edition Copyright © 2007 Pearson Education Canada Environmental Uncertainty Capacity –Degree to which environment can support growth. Instability –Degree of predictable change. Complexity –Degree of heterogeneity and concentration in environment.

Chapter 13, Nancy Langton and Stephen P. Robbins, Organizational Behaviour, Fourth Canadian Edition Copyright © 2007 Pearson Education Canada Breakout Group Exercises Form small groups to discuss the following: 1. Describe the structure of an organization in which you worked. Was the structure appropriate for the tasks being done? 2. Have you ever worked in an organization with a structure that seemed inappropriate to the task? What would have improved the structure? 3. You are considering opening up a coffee bar with several of your friends. What kind of structure might you use? After the coffee bar becomes successful, you decide that expanding the number of branches might be a good idea. What changes to the structure might you make?

Chapter 13, Nancy Langton and Stephen P. Robbins, Organizational Behaviour, Fourth Canadian Edition Copyright © 2007 Pearson Education Canada Learning Points What structure did you use at first? What structure evolved? How did the task affect structure?