1. DIRECTIONS IN ORGANIZATION STRUCTURES

2. Recap. Team Structures…Any questions?

3. Network Structures As information technology improves, more businesses are moving towards this sort of a model. Network Structures use IT to link with networks of outside suppliers and service contractors The business stays pretty small. The core business is dealt with by a few employees. Most of the functions of the business are carried out through strategic alliances and outsourcing. Bombardier does this.

4. Network Structures Strategic Alliances can lead to innovation. Why do you think this is? Outsourcing is also a part of network structures. -we know it as the process of having things made cheaper in other countries. For our purposes, we have to think of it simply as contracting business functions to outside suppliers. ExamplesExamples

5. Advantages of Network Structures Low overhead costs -Ability to be cost-competitive. Small Staff Simple internal systems Quick decision making. IT makes it easy to manage the alliances and contracts. -Instant communication, etc

6. Disadvantages of Network Structures The more complex the business or mission of the organization, the more complicated the relationship network will be. If one part fails, the whole system could fall. Loss of control? Lack of loyalty?

7. Seven “no-no’s” of Outsourcing 1. Outsourcing activities that are part of the core. 2. Outsourcing to untrustworthy vendors. 3. Not having good contacts with the vendor. 4. Overlooking impact on existing employees. 5. Not maintaining good supervision, losing control to vendors. 6. Overlooking hidden costs of managing contracts. 7. Failing to anticipate need to change vendors, cease outsourcing.

8. Boundaryless Organizations These organizations: -eliminate internal boundaries among smaller systems and external boundaries with the outside environment. Combines team AND network structures. Constantly changing. Teamwork and communication replace formal lines of authority.

9. Key Features of Boundaryless Organizations Empowerment of team members Absence of hierarchy Technology usage ACCEPTANCE OF IMPERMANENCE Doing this is supposed to encourage creativity, quality, timeliness, and flexibility. It is supposed to reduce inefficiencies and increase speed.

10. Easier way to think of this: A Start Up

11. Boundaryless Organizations Larger organizations have this happening also. Just on a much larger scale, all over the world, with thousands of employees. PWC is a worldwide consulting firm. There are over 150,000 “partners” who collaborate in a learning and problem-solving network.

12. Organizing Trends and Practices Remember the upside down pyramid? Most of the trends in business nowadays keep that theme in mind. We are going to be talking about SIX common trends in today’s business environment. All of them aim to increase efficiency, performance, and worker participation. All are meant to streamline the business and put more focus on customer needs and the marketplace.

13. 1. Shorter Chains of Command A Chain of Command is the structure of authority. It links all persons with higher- levels of authority. Classical management theory says that there should be a scalar principle. -Clear, unbroken chain of command from low-level workers to the top manager. As companies grow, they usually get taller. -Increases costs, slows decision-making, lost contact with clients/customers. TREND: Streamlining businesses by cutting “unnecessary” levels of management.

14. 2. Less Unity of Command Classical management theory used the unity-of-command principle. -”One-person, one boss.” More than one boss is an attempt to improve teamwork in special projects. TREND: More cross-functional teams, task forces, horizontal structures. More customer conscious.

15. 3. Wider Spans of Control Span of control is the number of subordinates directly reporting to a manager. General thought is that there is a limit to how many people a manager can supervise. Taller structures have narrower spans. Flat structures have wider spans. TREND: Shifting to wider spans of control. Makes sense, since shorter chains of command also flattens a structure.

16. 4. More Delegation and Empowerment It is EASY for people in charge to want to do everything. A major role of management is to delegate. This means you assign jobs and trust others to do them. Three steps: 1. Manager assigns responsibility. 2. Manager gives authority to act. 3. Manager creates accountability.

17. 4. More Delegation and Empowerment Classical management says that a manager should not delegate without giving proper authority to act. A common mistake is not delegating. This is bad for the employee and the manager. Why do you think this is? TREND: More delegation. Mangers are giving more power to employees to make decisions about things that will affect them and their work.

18. Delegating Guidelines Carefully choose the person to whom you delegate. Define the responsibility; make the assignment clear. Agree on performance objectives and standards Agree on a performance timetable Give authority; allow the other person to act independently. Show trust in the other person. Provide performance support. Give performance feedback. Recognize and reinforce progress. Help when things go wrong. Don’t forget YOUR accountability for performance results

19. 5. Decentralization with Centralization. “Should most decisions be made at the top levels of an organization, or should they be dispersed by delegation throughout all levels of management?” Centralization is the first part. Decentralization is the second. New age business focuses on decentralization, BUT technology has made it easier for upper-level managers to have more control over multiple functions. TREND: While delegation, empowerment, and horizontal structures contribute to more decentralization, IT advances allow for more centralized control at the same time.

20. 6. Reduced Use of Staff Some organizations employ specialized staff. These provide technical expertise for other parts of the organization. Could be a single person or a department. These improve coordination and control over many areas. In a retail chain, line managers make decisions about daily activities. Specialized staff provide direction and support so all stores can operate the same way.

21. 6. Reduced Use of Staff Personal Staff are “Assistant-to” positions. They support senior management. Some are given to junior managers so they can learn a little bit about the job. Others are there to support the managers and perform some of the more mundane duties. Both specialized staff and personal staff have the tendency to grow too large in number. TREND: Organizations are trying to reduce staffing levels to reduce costs and increase efficiency.