Chapter 11 Contemporary Organization Designs Hellriegel, Jackson, and Slocum MANAGEMENT: A Competency-Based Approach South-Western College Publishing Copyright © 2002

Learning Objectives After reading this chapter, you should be able to:  State the role of strategic and environmental factors in the development and adoption of contemporary organization designs  Describe the role of technology in organization design  Discuss the impact of two basic information processing factors in the use of four design strategies  Explain the features of three contemporary organization designs 11.1

Hellriegel, Jackson, and Slocum MANAGEMENT: A Competency-Based Approach South-Western College Publishing Copyright © 2002 Key Factors in Contemporary Organization Design Technology Factors Strategic and Environmental Factors Information Processing Factors Adapted from Figure Contemporary Designs Matrix Organization Network Organization Virtual Organization

Hellriegel, Jackson, and Slocum MANAGEMENT: A Competency-Based Approach South-Western College Publishing Copyright © 2002 Characteristics of Organic Structure  Tasks tend to be interdependent  Tasks are continually adjusted and redefined through interaction and as situations change  Generalized roles are accepted  Network structure of control, authority, and communication  Communication and decision making are both vertical and horizontal depending on where needed information and expertise reside  Communication emphasizes the forms of mutual influence and advice among all levels 11.3 Adapted from Table 11.1

Hellriegel, Jackson, and Slocum MANAGEMENT: A Competency-Based Approach South-Western College Publishing Copyright © 2002 Characteristics of Mechanistic Structure  Tasks are highly specialized  Tasks tend to remain rigidly defined unless changed by top management  Specific roles are prescribed for each employee  Hierarchical structure of control, authority, and communication  Communication and decision making are primarily vertical, top-down  Communication emphasizes directions and decisions issued by superiors 11.4 Adapted from Table 11.1

Hellriegel, Jackson, and Slocum MANAGEMENT: A Competency-Based Approach South-Western College Publishing Copyright © 2002 Three Types of Technological Interdependence Input Output a) Pooled interdependence b) Sequential interdependence OutputInput c) Reciprocal interdependence OutputInputOutputInput Output Input Adapted from Figure

Hellriegel, Jackson, and Slocum MANAGEMENT: A Competency-Based Approach South-Western College Publishing Copyright © 2002 Service Technology High Low Customer Participation CuCussttoommiizzaattiioonnooffsseerrvviicceeCuCussttoommiizzaattiioonnooffsseerrvviicceestomizationofservice Adapted from Figure 11.3 A Sequential Customized Service Car repair Dry cleaning Freight transportation B Reciprocal Service Psychotherapy Alcohol/drug rehab Legal assistance D Pooled Service Banking Car Rental Insurance C Sequential Standardized Service Laundromat Fast-food restaurant Self-service convenience store 11.6

Hellriegel, Jackson, and Slocum MANAGEMENT: A Competency-Based Approach South-Western College Publishing Copyright © 2002 Information Processing Strategies  Increase the organization’s ability to process information  Decrease the need to process information Strategy Adapted from Table 11.3 Factors  Vertical information design  Lateral information design  Slack resources design  Self-contained design 11.7

Hellriegel, Jackson, and Slocum MANAGEMENT: A Competency-Based Approach South-Western College Publishing Copyright © 2002 Vertical Information Design Strategy 11.8  Information processing  Sends information up and down the organizational chain of command  Provides the right information at the right time

Hellriegel, Jackson, and Slocum MANAGEMENT: A Competency-Based Approach South-Western College Publishing Copyright © 2002 Lateral Information Design Strategy  Fosters horizontal communications and decision making  Creates new positions to integrate information and decision making G EF B C A D 11.9

Hellriegel, Jackson, and Slocum MANAGEMENT: A Competency-Based Approach South-Western College Publishing Copyright © 2002 Slack Resources Design Strategy  Stockpiling of resources to better respond to environmental changes  Includes materials, funds, and time  Minimizes the problems that are likely to arise  Can reduce the need to process information

Hellriegel, Jackson, and Slocum MANAGEMENT: A Competency-Based Approach South-Western College Publishing Copyright © 2002 Self-Contained Design Strategy  Assigns all activities concerning a specific project, product, or geographical region to one group, team, or strategic business unit (SBU)  Emphasizes product or place versus function  Allows greater flexibility and adaptability  Reduces the amount of information a manager needs to process

Hellriegel, Jackson, and Slocum MANAGEMENT: A Competency-Based Approach South-Western College Publishing Copyright © 2002 Matrix Organization Design High Low ReRellaattiivveeIInnfflluueenncceeReRellaattiivveeIInnfflluueenncceelativeInfluence Functional department’s influence in decision making Product department’s influence in decision making Functional organization Functional authority structure Product organization Product authority structure Matrix organization Dual authority Adapted from Figure

Hellriegel, Jackson, and Slocum MANAGEMENT: A Competency-Based Approach South-Western College Publishing Copyright © 2002 A Three-Firm Alliance Network Adapted from Figure 11.5 Disney McDonalds Coca-Cola Common Vision Formal long-term alliance Formal marketing alliance