1. Organizational Behavior 15th Ed Foundations of Organizational Structure Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall15-1 Robbins and Judge Chapter 15

2. Chapter 15 Learning Objectives After studying this chapter you should be able to: 1. 1. Identify the six elements of an organization’s structure. 2. 2. Identify the characteristics of a bureaucracy. 3. 3. Describe a matrix organization. 4. 4. Identify the characteristics of a virtual organization. 5. 5. Show why managers want to create boundaryless organizations. 6. 6. Demonstrate how organizational structures differ and contrast mechanistic and organic structural models. 7. 7. Analyze the behavioral implications of different organizational designs. Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall15-2

3. Identify the six elements of an organization’s structure Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall 15-3 LO 1 1

4. Identify the six elements of an organization’s structure Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall 15-4 LO 1 Work Specialization By the late 1940s, most manufacturing jobs in industrialized countries were being done this way. Managers also looked for other efficiencies that could be achieved through work specialization. Repetition of work Training for specialization Increasing efficiency through invention 1

5. Identify the six elements of an organization’s structure Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall 15-5 LO 1 1

6. Identify the six elements of an organization’s structure Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall 15-6 LO 1 Departmentalization Grouping jobs together so common tasks can be coordinated is called departmentalization. By functions performed By type of product or service the organization produces By geography or territory By process differences By type of customer 1

7. Identify the six elements of an organization’s structure Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall 15-7 LO 1 Chain of Command Once a cornerstone in design of organizations, "an unbroken line of authority that extends from the top of the organization to the lowest echelon and clarifies who reports to whom." Two complementary concepts: authority and unity of command. Authority Unity-of-command 1

8. Identify the six elements of an organization’s structure Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall 15-8 LO 1 Chain of Command The concepts are less relevant today because of technology and the trend of empowering employees. Operating employees make decisions previously reserved for management. The popularity of self-managed and cross- functional teams. Many organizations find most productive by enforcing the chain of command. 1

9. Identify the six elements of an organization’s structure Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall 15-9 LO 1 1

10. Identify the six elements of an organization’s structure Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall 15-10 LO 1 Centralization and Decentralization Centralization refers to the degree to which decision-making is concentrated at a single point in the organization. A decentralized organization can act more quickly to solve problems, more people provide input into decisions, and employees are less likely to feel alienated from those who make decisions that affect their work lives. 1

11. Identify the six elements of an organization’s structure Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall 15-11 LO 1 Formalization refers to the degree to which jobs within the organization are standardized. A highly formalized job gives the job incumbent a minimum amount of discretion. The greater the standardization, the less input the employee has into how the job is done. Low formalization—job behaviors are relatively nonprogrammed, and employees have a great deal of freedom to exercise discretion in their work. 1

12. Identify the characteristics of a bureaucracy Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall 15-12 LO 2 A bureaucracy is characterized by: Highly routine operating tasks. Very formalized rules and regulations. Tasks grouped into functional departments. Centralized authority. Narrow spans of control. Decision-making that follows the chain of command. 1

13. Identify the characteristics of a bureaucracy Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall 15-13 LO 2 Its primary strength is in its ability to perform standardized activities in a highly efficient manner. Weaknesses include subunit conflicts, unit goals dominate, obsessive behavior, covering weak management. The bureaucracy is efficient only as long as employees confront familiar problems with programmed decision rules. 1

14. Describe a matrix organization Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall 15-14 LO 3 The Matrix Structure It combines two forms of departmentalization— functional and product: The strength of functional is putting specialists together. Product departmentalization facilitates coordination. It provides clear responsibility for all activities related to a product, but with duplication of activities and costs. 1

15. Describe a matrix organization Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall 15-15 LO 3 1

16. Demonstrate how organizational structures differ and contrast mechanistic and organic structural models Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall 15-16 LO 6 1

17. Demonstrate how organizational structures differ and contrast mechanistic and organic structural models Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall 15-17 LO 6 Technology refers to how an organization transfers its inputs into outputs. Every organization has at least one technology. Numerous studies have examined the technology-structure relationship. Organizations engaged in nonroutine activities tend to prefer organic structures. 1

18. Demonstrate how organizational structures differ and contrast mechanistic and organic structural models Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall 15-18 LO 6 An organization’s environment includes outside institutions or forces that can affect its performance. Dynamic environments create significantly more uncertainty for managers than do static ones. Any organization’s environment has three dimensions: capacity, volatility, and complexity. 1

19. Demonstrate how organizational structures differ and contrast mechanistic and organic structural models Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall 15-19 LO 6 1

20. Analyze the behavioral implications of different organizational designs Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall 15-20 LO 7 Organization’s structure can have significant effects. A review of the evidence leads to a pretty clear conclusion: you can’t generalize! Not everyone prefers the freedom and flexibility of organic structures. Different factors stand out in different structures as well. Some people are most productive and satisfied when work tasks are standardized and ambiguity minimized. 1

21. Summary and Implications for Managers Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall 15-21 1

22. Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of the publisher. Printed in the United States of America. Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall 15-22