Org Structure & Design Ch 15 Apr 29, 2008

Structure Basic Dimensions Org structure – formal structure betw groups & people of allocation of tasks, responsibilities, authority –View w/org chart –Shows formal lines of authority 2 basic requirements of org structure – –Divide labor into distinct tasks –Coordinate tasks so employees can work

Coordination Options Can coordinate tasks by: –Using informal communication Examples? –Use formal hierarchy (but…limited) –Use of standardization Examples?

Dimensions of Org Structure Hierarchy –Tall (many levels) vs flat (few levels) Division of Labor –Specialization of tasks Span of Control –Number of people reporting to ea manager Wide (many people) vs narrow (few people) What is this linked to?

Dimensions (cont.) Line v staff positions –Line = decision making; staff = support Decentralization –Level of delegation of power Changes over time, as org grows What is often assumed v. what is best?

Ways to structure orgs Departmentalization – how to organize units –Functional orgs – departmentalize by task Examples? Disadvantages? –Product orgs – departmentalize by output Examples? Disadvantages?

Matrix Orgs Matrix orgs – employees report to both project/product manager & functional / division manager –Combines function and product forms –Use of dual authority structure – 2 bosses –When does this work well?

Emerging forms of depts. Team-based (lateral) structure –Very flat structure using cross-functional teams –Very little formalization w/ empowered teams –Advantages? Disadvantages?

Emerging forms Network structure (aka ‘virtual org’) –Cisco Systems – network of suppliers, manufacturers, other partners –Outsourcing noncritical functions to those w/expertise, core org coordinates process –Advantages? Disadvantages?

Org Design Process of coordinating the structure elements Range of theories –Classical org theory – assume one best way to design/structure org (early 1900s) What was presumed to be best? –Neoclassical theory – human relations focus w/goal of ee satisfaction What was preferred?

Org Design Contingency Approaches – Lawrence& Lorsch (1969); now most accepted org design –Design depends on org’s environment Including economy, competitors, geography, suppliers, workforce –Studies comparing orgs in stable v unstable environments resulted in models of ‘mechanistic’ v ‘organic’ orgs

Org Design –Mechanistic Orgs – stable environments with little change in product, market, or technology What is their strength? –Organic Orgs – unstable environments What are their features? –What is most effective, according to Lawrence & Lorsch?

Mintzberg’s Theory Orgs composed of 5 basic elements; which one is dominant determines most effective design for that situation –How are each defined? –Operating Core: –Strategic Apex: –Middle Line: –Technostructure: –Support Staff:

Mintzberg (cont.) Mintzberg specifies 5 designs based on which of the 5 groups dominates… –How is each structured? –1) Simple structure: –2) Machine bureaucracy: –3) Professional bureaucracy: –4) Divisional structure: –5) Adhocracy: