Prepared by Management Department | | O RGANIZATIONAL C ULTURE,S TRUCTURE, & D ESIGN : B UILDING B LOCKS OF THE O RGANIZATION Week 7

What Is an Organizational Culture?  a system of shared beliefs and values that develops within an organization and guides the behavior of its members.  Just as a human being has a personality - fun-loving, warm, uptight, competitive, or whatever – so an organization has a “personality”, too, and that is its culture. “ This is the “social glue” that binds members of the organization together “.

The Two Levels of Culture 1. T HE I NVISIBLE L EVEL : T HE C ORE C ULTURE 2. T HE V ISIBLE L EVEL : T HE O BSERVABLE C ULTURE S YMBOLS R ITES AND R ITUALS S TORIES H EROES

FOUR FUNCTIONS OF ORGANIZATIONAL CULTURE

Culture for Enhancing Economic Performance: Three Perspectives T HE A DAPTIVE P ERSPECTIVE : Success results when culture helps the firm adapt T HE S TRENGTH P ERSPECTIVE : Success results when cultures fits with the firm’s business context : Success results when a firm has a strong culture T HE F IT P ERSPECTIVE

Eleven Ways Cultures Become Embedded in Organizations Slogans and Sayings Formal Statement Stories, Legends, & Myths Leader Reactions to Crises Role Modelling, Training, & Coaching Reward, Titles, Promotion, & Bonuses Physical Design Organizational Goals & Performance Criteria Measurable & Controllable Activities Organizational Structure The Eleven Ways Cultures: 1 Procedures for Self- Development

1. F OR -P ROFIT O RGANIZATION 3. M UTUAL -B ENEFIT O RGANIZATION T HE O RGANIZATION : T HREE T YPES 2. N ON P ROFIT O RGANIZATION

W HAT I S O RGANIZATION ? O RGANIZATION C HART

T WO K INDS OF I NFORMATION T HAT O RGANIZATION C HARTS R EVEAL A BOUT O RGANIZATIONAL S TRUCTURE A RE : 1. T HE V ERTICAL H IERARCHY OF A UTHORITY : W HO R EPORTS TO W HOM 2. T HE H ORIZONTAL S PECIALIZATION : W HO S PECIALIZES IN W HAT W ORK

Common Elements of Organizations: Four Proposed by Edgar Schein H IERARCHY OF A UTHORITY D IVISION OF L ABOR The Chain of Command Work Specialization for Greater Efficiency C OMMON P URPOSE Working Together for Common Purpose The Means for Unifying Members C OORDINATED E FFORT

Common Elements of Organizations: Three More That Most Authorities Agree On C ENTRALIZATION VS D ESENTRALIZATION centralized authority, important decisions are made by higher-level mgr. decentralized authority, important decisions are made by middle&spv mgr. S PAN OF C ONTROL Line versus Staff Positions Narrow (or Tall) versus Wide (or Flat) A UTHORITY, R ESPONSIBILITY,& D ELEGATION

The Simple Structure The Functional Structure The Conglomerate Structure The Hybrid Structure Basic Types of Organizational Structures The Divisional Structure The Matrix Structure The Team- Based Structure The Network Structure

Simple Structure

Functional Structure

Divisional Structure

Conglomerate Structure

Hybrid Structure

Matrix Structure

Team-Based Structure

Network Structure

Contingency Design: Factors In Creating The Best Structure 1. T HE E NVRONMENT : M ECHANISTIC VERSUS O RGANIC T HE B URNS & S TALKER M ODEL

Organizational Design Decisions  Mechanistic Organization  A rigid and tightly controlled structure High specialization Rigid departmentalization Narrow spans of control High formalization Limited information network (downward) Low decision participation  Organic Organization  Highly flexible and adaptable structure Non-standardized jobs Fluid team-based structure Little direct supervision Minimal formal rules Open communication network Empowered employees

Mechanistic versus Organic Organization High specialization Rigid departmentalization Clear chain of command Narrow spans of control Centralization High formalization Cross-functional teams Cross-hierarchical teams Free flow of information Wide spans of control Decentralization Low formalization

D IFFERENTIATION VERSUS I NTEGRATION T HE L AWRENCE & L ORSCH M ODEL 2. T HE E NVRONMENT :

T HE L ARGER THE O RGANIZATION, THE M ORE M ECHANISTIC 3. S IZE :

S MALL -B ATCH, L ARGE -B ATCH, OR C ONTINUOUS -P ROCESS 4. T ECHNOLOGY : T HE W OODWARD M ODEL

F OUR S TAGES IN THE LIFE OF AN ORGANIZATION 5. L IFE C YCLE :

Four Stages in the Life of an Organization T HE M ATURITY S TAGE T HE M IDLIFE S TAGE Very Bureaucratic, large, and mechanistic Bureaucratic, a period of growth evolving into stability T HE B IRTH S TAGE Prebureaucratic, a stage of growth and expansion Nonbureaucratic, in which organization is created T HE Y OUTH S TAGE

1. P EOPLE B ELIEVE T HAT C OMPETITION IS A LWAYS B ETTER T HAN C OLLABORATION W HY O RGANIZATION M IGHT R ESIST L EARNING : 2. F RAGMENTATION L EADS TO S PECIALIZED F IEFDOMS T HAT R ESIST L EARNING 3. U NLESS E NCOURAGED, P EOPLE W ON ’ T T AKE R ISKS, THE B ASIS FOR L EARNING

“W E ’ RE A LL S TAKEHOLDERS ” T HE N EW P ARADIGM :

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