The Structure Piece Lecturer: Dr.Nor Zairah Ab. Rahim Information Technology and organizational Transformation Chapter Three:

Chapter3: The Structure Piece Introduction Structure: How an enterprise is organized to achieve its goals e.g. distribution of Power and Authority Importance :  Second piece of the management puzzle  It’s called “the other half of strategy”  Effective structure = competitive advantage in marketplace  Managing complexity  Change management  Management tool for problem solving  Flourishing innovation and change 2

Chapter3: The Structure Piece  Departmentalization  Specialization  Authority and Control Traditional organizational structure main consideration: IT and Organizational Structure:  Facilitating and Creating of all levels of coordination  Facilitating organizational structure design  Distribution of Power  Centralization VS Decentralization 3 Traditional Organizational Structures

Chapter3: The Structure Piece Traditional structure Forms Traditional view: Structure types:  Designing around a focal theme Productivity Transaction costs Function structure Market Structure Geographic Structure Product Structure 4

Chapter3: The Structure Piece Hybrid organizational structure:  Identified by Galbraith (1990’s)  For complex organizations  Getting benefits of several structures  Minimizing the weakness of main structure theme Types of hybrid organizational structure:  Lateral organization: Facilitating different perspectives within the firm by recreation of management role at lower levels 5

Chapter3: The Structure Piece  Multi-structuring: creating cross-functional units/teams for different market segments, customers and channels Types of hybrid organizational structure: (Cont.)  Front–back structure: Focusing on customer segments, products and services  Internal marketing: making all parts of the organization more responsive, competitive and flexible 6

Chapter3: The Structure Piece Traditional vs. New Organizational Structures Traditional success factors: size, role, clarity, specialization and control Critical Success Factors for new organizational structures:  Speed: the smaller, the faster Problems of traditional Organization:  Changing environment  Hypercompetition  Technological complexity 7

Chapter3: The Structure Piece  Flexibility  Key factor in hypercompetition environment  Balance between stability and responsiveness:  Types:  Steady-state flexibility: stable environment  Operational flexibility: variable but familiar activities and volume  Structural flexibility: evolving business conditions  Strategic flexibility: unfamiliar environmental changes Critical Success Factors for new organizational structures: (Cont.) 8

Chapter3: The Structure Piece  Integration and Coordination  Focused on accomplishing the work or business process best  Types:  Informal: easiest and least expensive  Formal: more difficult and expensive  Integrator: most difficult and most expensive  learning and innovation  Essential factor to grow in the rapid changing environment  Encouraging all levels of organization to share knowledge Critical Success Factors for new organizational structures: (Cont.) 9

Chapter3: The Structure Piece Boundaryless Organization  Proposed by Ashkenas and his colleagues  Boundaryless? Possible?!  Reshaping boundaries and making them more permeable for a greater fluidity in the organization Four types of boundaries in organizations:  Vertical:  Like roofs and floor for home  Healthy hierarchy to meet all success factors  Revising information, competence, authority, rewards 10

Chapter3: The Structure Piece  Horizontal:  Like walls between rooms  Dividing lines between divisions, departments, groups, units and functions  Arranging around specialties; silo, chimney  Less customer satisfaction  Slow and sequential  The enemy within syndrome  External  Like outside walls of house Four types of boundaries in organizations: (Cont.) 11

Chapter3: The Structure Piece  External (Cont.)  External sourcing and alliances  Partnerships and joint ventures  Networks  Business webs  Physical/Global:  High costs of physical office and equipments  Types of companies (regarding office):  Without an office: Verifone / Shared office / Telecommuting / Virtual teams Four types of boundaries in organizations: (Cont.) 12

Chapter3: The Structure Piece Conclusion  Structure plays different and important roles in each organization e.g. organizing the firm to handle all works, coordinating and integration roles, etc.  Moving toward a flexible, fast, cooperative and integrated structure is inevitable for the organizations of 21 st century. basically they must remove their mental barriers. After that they should design the new structure according to their needs and current situation. 13