O RGANIZATIONAL S TRUCTURE & D ESIGN

Organizational Structure How job tasks are formally divided, grouped, & coordinated Organizational Design How organizational structures are arranged and incorporated Why?

O RGANIZATIONAL S TRUCTURE 6 elements to address for a proper organizational structure 1. Work specialization 2. Departmentalization 3. Chain of command 4. Span of Control 5. Centralization or decentralization 6. Formalization

O RGANIZATIONAL S TRUCTURE 1. Work specialization Division of labor Jobs broken into steps with multiple people doing their individual part to make the entire product Assembly lines, McDonald’s

O RGANIZATIONAL S TRUCTURE 1. Work specialization Advantages Used to increase productivity Allows skill building on the job Disadvantages Good to a point & then diminishing returns Boredom, absenteeism, stress, high turnover

O RGANIZATIONAL S TRUCTURE 2. Departmentalization Grouping of jobs according to (5): Function Product Geography

O RGANIZATIONAL S TRUCTURE 2. Departmentalization Grouping of jobs according to: Process Customer

O RGANIZATIONAL S TRUCTURE 3. Chain of command Unbroken line of authority…who reports to whom? 2 key concepts Authority Unity of Command

O RGANIZATIONAL S TRUCTURE 3. Chain of command Seeing less chain of command with empowerment Example…

Figure 5.2: Sample Bureaucracy

O RGANIZATIONAL S TRUCTURE 4. Span of Control How many people can a manager effectively supervise? Small span of control – supervise smaller number of people Larger span of control – supervise larger number of people

Figure 5.2: Small Span of Control

Figure 5.2: Large Span of Control

O RGANIZATIONAL S TRUCTURE 4. Span of Control Is it better to operate with a smaller or larger span of control? What are advantages & disadvantages of each?

O RGANIZATIONAL S TRUCTURE 4. Span of Control Wider – fewer managers, more ee’s reporting to them Reduces cost, speeds decision making Get closer to the customer Empower employees Fewer layers of employees Invest in training staff Easier to supervise a lot of good staff than bad ones

O RGANIZATIONAL S TRUCTURE 4. Span of Control Smaller – more managers with fewer ee’s Tight managerial control Increase cost of managers Added managers slows communication Encourages micro-managing & discourages ee autonomy

O RGANIZATIONAL S TRUCTURE 5. Centralization or decentralization Degree to which decision making is concentrated at a single point in the organization

O RGANIZATIONAL S TRUCTURE Centralization Top managers make all the decisions Consistency in decision making Slow process…move up the ladder

O RGANIZATIONAL S TRUCTURE Decentralization Decision making is pushed down to mgrs closest to the action Quicker actions taken More people provide input EE’s less likely to feel alienated from decision makers Mgrs closer to situation

O RGANIZATIONAL S TRUCTURE 6. Formalization Degree to which jobs are standardized EE has minimal discretion in how, what & when to do things Policies are strictly followed Explicit job descriptions Less formalization increases freedom

O RGANIZATIONAL S TRUCTURE Rank from highly formalized to minimally formalized 1) Sports programmers 2) Hotel maid service 3) CEO 4) Flower bed landscapers

H OW DOES STRUCTURE IMPACT MANAGEMENT ?

What does this organization look like? Manager 1: Decentralized geographically; wide span of control ( 6 people); decentralized decision making, low formalization Manager 2: Departmentalized by formal functions; small span of control (3 people); centralized decision making

O RGANIZATIONAL D ESIGN Simple Structure Bureaucracy Team Based Structure Matrix Structure

O RGANIZATIONAL D ESIGN How organizational structures are arranged and incorporated Design your org around functional departmentalization, small span of control, & decentralized decision making. What will it look like?

O RGANIZATIONAL D ESIGN Simple structure (entrepreneurial start up) Low degree of departmentalization, wide span of control, centralized authority, little formalization “Flat” organization Fast, flexible, inexpensive, clear accountability Info overload at the top Difficult to use in a large organization

Figure 5.1: Sample Simple Structure

O RGANIZATIONAL D ESIGN Bureacracy Highly standardized operating tasks achieved through specialization Formalized rules Tasks grouped by function Centralized authority Narrow span of control Decision making follows the chain of command

O RGANIZATIONAL D ESIGN Bureacracy Strength – ability to perform standardized activities efficiently Functions well with less talented & less costly ee’s Resistant to change Close adherence to rules, minimizes decision making Put like minds together

O RGANIZATIONAL D ESIGN Team Based Structures Breaks down dept barriers Org is more horizontal Decentralizes decision making – to team level Requires ee’s be generalists vs. specialists Naperville Park District Group structures vs team structures…

Group Leader MarketingMaintenance RegistrationSports Group Structure Recreation Marketing Common goal Volunteers Special events Landscaping Team Structure Figure 5.3: Group vs. Team Structure Outdoor Programs

O RGANIZATIONAL D ESIGN Matrix Structure Combines functional & product departmentalization Assigns specialists to specific functional departments to work with interdisciplinary teams led by project leaders Breaks unity of command concept

Departments: Marketing Accounting Registration Human resources Arts Events Sports Maintenance

O RGANIZATIONAL C HARTS

T ERMS … Assignment of tasks Distribution of specific responsibilities Based on specialization of competencies Division of labor Delineation of responsibilities for a specific job Written purpose for a job…job description More general than assignment of tasks

T ERMS … Unity of Command One identifiable supervisor TR specialist – managing nurse on the floor & medical director Delegation of authority Entrusting work to ee’s Giving ee’s decision making authority

R EADING J OB D ESCRIPTIONS Division of labor Unity of command Consistency in levels on the chart Director, manager, coordinator, supervisor….

Notice: Functional departmentalization, small span of control, unity of command, division of labor