Organization and Teamwork Chapter 8 8-1

Chapter 8 Objectives After studying this chapter, you will be able to: Explain the major decisions needed to design an organization structure. Define the four major types of organization structure. Explain how a team differs from a group and describe the six most common forms of teams. 8-2

Chapter 8 Objectives Cont. Highlight the advantages and disadvantages of working in teams and list the characteristics of effective teams. Review the five stages of team development and explain why conflict can arise in team settings. Explain the concept of an unstructured organization and identify the major benefits and challenges of taking this approach 8-3

Effective Organizational Structure Organization Structure: A framework that enables managers to divide responsibilities, ensure employee accountability, and distribute the decision-making authority Divide Responsibilities Distribute Authority Coordinate and Control Work Promote Accountability 8-4

Organizational Chart Organization Chart: A diagram that shows how employees and tasks are grouped and where the lines of communication and authority flow. Agile Organization: A company whose structure, policies, and capabilities allow employees to respond quickly to customer needs and changes in the business environment. 8-5

Work Specialization Advantages Disadvantages Work Specialization: Specialization in or responsibility for some portion of an organization’s overall work tasks. Also called division of labor. Advantages Disadvantages Efficiency Boredom Productivity Alienation 8-6

Chain of Command Chain of Command: A pathway for the flow of authority from one management level to the next. Responsibility Accountability Authority Delegation 8-7

Line and Staff Line Organization: Line-and-Staff Organization: Line President VP Production VP Marketing Finance Legal Department Human Resources Department Head of Accounting Department National Sales Manager Line Staff Line Organization: A chain of command system that establishes a clear line of authority flowing from the top down. Line-and-Staff Organization: An organization system that has a clear chain of command but that also includes functional groups of people who provide advice and specialized services. 8-8

Span of Management Span of Management: The number of people under one manager’s control. Also known as span of control. Tall Structure Tall Organization Flat Structure Flat Organization 8-9

Decision-Making Authority Centralization: Concentration of decision-making authority at the top of an organization Decentralization: Delegation of decision-making authority to employees in lower-level positions Centralized Decentralized Top-Level Management Lower-Level Management Rich Experience Broad Vision More Responsive Faster Decisions

Organizing the Workforce Departmentalization: Grouping people within an organization according to function, division, matrix, or network. Departmentalization Division Function Network Matrix Hybrid 8-11

Functional Structures Job Skills Resource Use Job Requirements 13-12 ©2007 Prentice Hall 12

Functional Structure

Functional Structure Advantages Disadvantages Resource Allocation Departmental Barriers Unified Direction Slow Response Time Improved Coordination Ineffective Planning Better Communication Over Specialization 8-14

Divisional Structure 8-15

Product Division Structure

Customer Division Structure

Geographic Division Structure

Matrix Structure 8-19

Lacks hands-on control Vulnerable to suppliers competitive distinction Network Structure Network Structure: A structure in which individual companies are connected electronically to perform selected tasks for a small headquarters organization. Also called virtual organization. Advantages Disadvantages Lower costs Lacks hands-on control Increased flexibility Vulnerable to suppliers Increased competitiveness Lack of competitive distinction 8-20

Hybrid Structure Divisional Geographic Functional Network 8-21

Comparing Work Groups and Work Teams Shared Information Neutral Individual Random or Varied Goal Synergy Responsibility Skills Shared Mission Positive Individual and Mutual Complementary

Organizing in Teams Problem Solving Cross Functional Self-Managed Virtual Functional Social Networks 8-23

Organizing in Teams A problem-solving team is assembled to find ways of improving quality, efficiency, or other performance issues. Self-managed teams manage their own activities. Team members are responsible for an entire process or operation and require minimum supervision. Functional teams, or command teams, are organized along the lines of the organization’s vertical structure and thus may be referred to as vertical teams. They are composed of managers and employees within a single functional department. 12-24 24

Organizing in Teams A cross-functional team, or horizontal team, draws together employees from various functional areas and expertise. Virtual teams are groups of physically dispersed members who communicate electronically. Social networking technologies are redefining teamwork and team communication by helping erase the constraints of geographic and organization boundaries. 12-25 25

Working in Teams Advantages Disadvantages Higher-quality decisions Increased commitment Lower levels of stress Improved flexibility Inefficiency Groupthink Diminished motivation Structural disruption Excessive workloads 8-26

Characteristics of Effective Teams Clear sense of purpose Open and honest communication Creative thinking Accountability Focus Decision by consensus 8-27

Team Development Forming Storming Norming Performing Adjourning 8-28

Team Development Cohesiveness Norms A measure of how committed team members are to their team’s goals Norms Informal standards of conduct that guide team behavior

Team Conflict Constructive Conflict: Destructive Conflict: Brings important issues into the open, increases the involvement of team members, and generates creative ideas for solving a problem Destructive Conflict: Diverts energy from more important issues, destroys the morale of teams or individual team members, or polarizes or divides the team

Causes of Team Conflict Scarce Resources Responsibility Issues Poor Communication Personality Differences Power Struggles Incompatible Goals 8-31

Solutions to Team Conflict Proactive attention Communication Openness Research Flexibility Fair play Alliance 8-32

Managing an Unstructured Organization An organization that doesn’t have a conventional structure but instead assembles talent as needed from the open market; the virtual and networked organizational concepts taken to the extreme

Benefits and Challenges of Unstructured Organizations

Benefits and Challenges of Unstructured Organizations

Applying What You’ve Learned Explain the major decisions needed to design an organization structure Define four major types of organization structure Explain how a team differs from a group and describe the six most common forms of teams

Applying What You’ve Learned Highlight the advantages and disadvantages of working in teams and list the characteristics of effective teams Review the five stages of team development and explain why conflict can arise in team settings Explain the concept of an unstructured organization and identify the major benefits and challenges of taking this approach