1. Managing the Structure and Design of Organizations
October 24, 2007

2. Organizing
The deployment of resources to achieve strategic goals. It is reflected in:
The organization’s division of labor that forms jobs and departments.
Formal lines of authority.
The mechanisms used for coordinating diverse jobs and roles in the organization.
Strategy indicates what needs to be done.
Organizing shows how to do it.

3. Organization Structure
Formal system of relationships that determine:
Lines of authority – who reports to whom.
Tasks assigned to individuals and units – who does what tasks and with which department.
Dimensions of organization structure:
Vertical dimension
Horizontal dimension

4. Vertical Dimension Unity of Command – Authority – Line Authority
Staff Authority
Responsibility
Accountability
Span of Control
Centralization
Decentralization
Formalization

5. Horizontal Dimension
The organization structure element that is the basis for:
Dividing work into specific jobs and tasks.
Assigning jobs into units such as departments or teams.
Departmentalization:
Functional
Divisional
Matrix

6. Functional Departmental Structure

7. Divisional Organization Structure
President
Software
Division
Consulting
Source
Computer
Production
Marketing
Finance

8. Geographic-Based Organization Structure

9. Matrix Organization Structure
President
Vice President
Finance
Operations
Manufacturing
Sales and
Marketing
Region A
Manager
Region B
Region C

10. Coordination Mechanisms
Meetings
Organization Wide Reward Systems
Task Forces and Teams
Liaison Roles
Integrating Managers
Organizational Culture

11. Organization Design
The selection of an organization structure that best fits the strategic goals of the business.
Basic organization designs:
Mechanistic
Organic
Boundaryless
These designs incorporate vertical and horizontal structural elements.
Change with Business Strategy
Strategic factors that affect the choices of organization design:
Organization capabilities
Technology
Organization size
Environmental turbulence

12. Mechanistic, Organic, and Boundaryless Designs
Emphasis on teams that also may cross organization boundaries
Emphasis on teams
Emphasis on individuals working independently
Broadly defined flexible jobs
Narrowly defined specialized jobs
Decentralized decision authority
Centralized decision authority
Informal communication
Top-down communication
Low formalization
High formalization
Collaboration (vertical, horizontal, customers, suppliers, competitors)
Collaboration (both vertical and horizontal)
Rigid hierarchical relationships
Boundaryless
Organic
Mechanistic

13. Redesigning Organizations
Merger
Acquisition
Divestiture
Downsizing