1. Chapter 13: Organizational Structure Organizational Behaviour
5th Canadian Edition
Langton / Robbins / Judge
Copyright © 2010 Pearson Education Canada

2. Chapter Outline What Is Organizational Structure?
Mechanistic and Organic Organizations
Traditional Organizational Designs
New Design Options
What Major Forces Shape an Organization’s Structure?
Langton, Robbins and Judge, Organizational Behaviour, Fifth Cdn. Ed.
Copyright © 2010 Pearson Education Canada

3. Organizational Structure
What are the key elements of organizational structure?
How flexible can organizational structures be?
What are some examples of traditional organizational designs?
What do newer organizational structures look like?
Why do organizational structures differ?
Material pertinent to this discussion is found at the beginning of the chapter.
Langton, Robbins and Judge, Organizational Behaviour, Fifth Cdn. Ed.
Copyright © 2010 Pearson Education Canada

4. What Is Organizational Structure?
Organizational structure defines how job tasks are formally divided, grouped, and coordinated.
It includes the degree of complexity, formalization, and centralization in the organization.
Material pertinent to this discussion is found under “What Is Organizational Structure?”
Langton, Robbins and Judge, Organizational Behaviour, Fifth Cdn. Ed.
Copyright © 2010 Pearson Education Canada

5. Exhibit 13-1 Pyramidal Organizational Structure
Material pertinent to this discussion is found under “What Is Organizational Structure?”
Langton, Robbins and Judge, Organizational Behaviour, Fifth Cdn. Ed.
Copyright © 2010 Pearson Education Canada

6. Exhibit 13-2 Flat Organizational Structure
Material pertinent to this discussion is found under “What Is Organizational Structure?”
Langton, Robbins and Judge, Organizational Behaviour, Fifth Cdn. Ed.
Copyright © 2010 Pearson Education Canada

7. Exhibit 13-3 Six Key Questions for Organizational Structure
Material pertinent to this discussion is found under “What Is Organizational Structure?”
Langton, Robbins and Judge, Organizational Behaviour, Fifth Cdn. Ed.
Copyright © 2010 Pearson Education Canada

8. Work Specialization
The degree to which tasks in the organization are subdivided into separate jobs.
Also known as division of labour.
Benefits:
Efficiency-less time changing tasks, putting equipment away
Easier to train employees
Downsides:
Boredom, stress, low productivity, high turnover, increased absenteeism
Material pertinent to this discussion is found under “What Is Organizational Structure?”
Langton, Robbins and Judge, Organizational Behaviour, Fifth Cdn. Ed.
Copyright © 2010 Pearson Education Canada

9. Departmentalization The basis on which jobs are grouped together.
Types:
Functional
Product
Geographic
Process
Customer
Organizational Variety
Material pertinent to this discussion is found under “What Is Organizational Structure?”
Langton, Robbins and Judge, Organizational Behaviour, Fifth Cdn. Ed.
Copyright © 2010 Pearson Education Canada

10. Exhibit 13-4 Departmentalization by Function
Material pertinent to this discussion is found under “What Is Organizational Structure?” .
Langton, Robbins and Judge, Organizational Behaviour, Fifth Cdn. Ed.
Copyright © 2010 Pearson Education Canada

11. Exhibit 13-5 Departmentalization by Product
Material pertinent to this discussion is found under “What Is Organizational Structure?” .
Langton, Robbins and Judge, Organizational Behaviour, Fifth Cdn. Ed.
Copyright © 2010 Pearson Education Canada

12. Exhibit 13-6 Departmentalization by Geography
Material pertinent to this discussion is found under “What Is Organizational Structure?”
Langton, Robbins and Judge, Organizational Behaviour, Fifth Cdn. Ed.
Copyright © 2010 Pearson Education Canada

13. Exhibit 13-7 Departmentalization by Customer
Material pertinent to this discussion is found under “What Is Organizational Structure?”
Langton, Robbins and Judge, Organizational Behaviour, Fifth Cdn. Ed.
Copyright © 2010 Pearson Education Canada

14. Chain of Command Two aspects Delegation Authority Unity of command
Who has the right to give orders and expect them to be obeyed.
Unity of command
Subordinates should have only one superior.
Delegation
Assignment of authority to another person to carry out specific duties, allowing the employee to make some of the decisions.
Material pertinent to this discussion is found under “What Is Organizational Structure?”
Langton, Robbins and Judge, Organizational Behaviour, Fifth Cdn. Ed.
Copyright © 2010 Pearson Education Canada

15. Span of Control
Number of subordinates that can be efficiently and effectively managed.
Small span
Expensive, more managers.
Makes vertical communication more complicated.
Encourages tight supervision and discourages autonomy.
Larger span
Empowers workers.
Speeds up decisions.
Material pertinent to this discussion is found under “What Is Organizational Structure?”
Langton, Robbins and Judge, Organizational Behaviour, Fifth Cdn. Ed.
Copyright © 2010 Pearson Education Canada

16. Exhibit 13-8 Contrasting Spans of Control
Members at each level
(Highest)
Assuming span of 4
Assuming span of 8 1 1 1 4 8 2 3 16 64
Organizational Level 4 64
512
Material pertinent to this discussion is found under “What Is Organizational Structure?” 5
256
4096 6
1024 7
4096
Operatives
= 4096
Operatives
= 4096
Managers (Levels 1 –
6) = 1365
Managers (Levels 1 –
4) = 585
Langton, Robbins and Judge, Organizational Behaviour, Fifth Cdn. Ed.
Copyright © 2010 Pearson Education Canada

17. Centralization and Decentralization
The degree to which decision making is concentrated at a single point in the organization.
Decentralization
The degree to which decision making is distributed to lower level employees.
Makes it easier to address customer concerns quickly
Material pertinent to this discussion is found under “What Is Organizational Structure?”
There is a marked trend toward decentralization.
Langton, Robbins and Judge, Organizational Behaviour, Fifth Cdn. Ed.
Copyright © 2010 Pearson Education Canada

18. Formalization How standardized are the jobs?
High formalization means employees have little discretion.
Low formalization means employees have more freedom.
Material pertinent to this discussion is found under “What Is Organizational Structure?”
Langton, Robbins and Judge, Organizational Behaviour, Fifth Cdn. Ed.
Copyright © 2010 Pearson Education Canada

19. Exhibit 13-10 Mechanistic vs. Organic Models
Material pertinent to this discussion is found under “Mechanistic and Organic Organizations.”
Langton, Robbins and Judge, Organizational Behaviour, Fifth Cdn. Ed.
Copyright © 2010 Pearson Education Canada

20. Simple Structure Strengths: Weakness:
Simplicity: fast, flexible, inexpensive.
Weakness:
Works best in small organizations.
Can slow down decision making in larger organization.
Can be risky as it relies on one person to make all decisions.
Material pertinent to this discussion is found under “Traditional Organizational Designs.”
A structure characterized by a low degree of departmentalization, wide spans of control, and authority centralized in a single person.
Langton, Robbins and Judge, Organizational Behaviour, Fifth Cdn. Ed.
Copyright © 2010 Pearson Education Canada

21. The Family Business
Family businesses represent 70 percent of Canadian employment and more than 30 percent of the gross domestic product.
Family businesses face both family/personal relations and business/management relations.
Family businesses must manage the conflicts found within families as well as the normal business issues that arise for any business.
Material pertinent to this discussion is found under “Traditional Organizational Designs.”
Some of the most prominent family businesses in Canada over the past 50 years include the Bronfman family (Seagram’s), the Eaton family (Eaton’s), the Birk family (Birks), the Irving family (Irving Paper), the Molson family (Molson Breweries) and the McCain family (McCains Foods.) Not all family businesses are as large as these, however.
Langton, Robbins and Judge, Organizational Behaviour, Fifth Cdn. Ed.
Copyright © 2010 Pearson Education Canada

22. Bureaucracy Strengths: Weaknesses:
Standardizes activities in an efficient manner.
Economies of scale, minimum duplication of personnel and equipment.
Lower quality employees are acceptable, which reduces employment costs.
Weaknesses:
Creates subunit conflicts.
There is an obsessive concern with following rules.
Material pertinent to this discussion is found under “Traditional Organizational Designs.”
A structure with highly routine operating tasks achieved through specialization, very formalized rules and regulations, tasks that are grouped into functional departments, centralized authority, narrow spans of control, and decision making that follows the chain of command. Bureaucracies can be very, very productive when the work is highly specialized.
Langton, Robbins and Judge, Organizational Behaviour, Fifth Cdn. Ed.
Copyright © 2010 Pearson Education Canada

23. Matrix Organization Breaks the unity of command principle. Strengths:
Employees have two bosses.
Strengths:
Facilitates coordination when there are many activities.
More communication.
Efficient allocation of specialists.
Disadvantages:
Power struggles, confusion, stress.
Material pertinent to this discussion is found under “Traditional Organizational Designs.”
A structure that creates dual lines of authority; combines functional and product departmentalization. The matrix structure has positive aspects such as flexibility. A matrix structure also has real negatives. For example, employees find themselves with more than one boss, hence with conflicting demands.
Langton, Robbins and Judge, Organizational Behaviour, Fifth Cdn. Ed.
Copyright © 2010 Pearson Education Canada

24. Exhibit 13-11 Matrix Structure
Material pertinent to this discussion is found under “Traditional Organizational Designs.”
Langton, Robbins and Judge, Organizational Behaviour, Fifth Cdn. Ed.
Copyright © 2010 Pearson Education Canada

25. New Design Options Breaking the boundaries internally
Team Structure
Breaking the boundaries externally
Modular Organization
Virtual Organization
Breaking the boundaries externally and internally
Boundaryless Organization
Material pertinent to this discussion is found under “New Design Options.”
The team structure modifies internal boundaries.
The modular and virtual organizations both modify external organizational boundaries.
The boundaryless organization attempts to break down both internal and external boundaries.
Langton, Robbins and Judge, Organizational Behaviour, Fifth Cdn. Ed.
Copyright © 2010 Pearson Education Canada

26. Exhibit 13-12 New-Style vs. Old-Style Organizations
Dynamic, learning
Information rich
Global
Small and large
Product/customer oriented
Skills oriented
Team oriented
Involvement oriented
Lateral/networked
Customer oriented
Old
Stable
Information is scarce 
Local
Large
Functional oriented
Job oriented
Individual oriented
Command/control oriented
Hierarchical
Job requirements oriented
Material pertinent to this discussion is found under “New Design Options.”
Organizational theorists Jay Galbraith and Edward Lawler have argued that there is a “new logic of organizing” for organizations. They suggest that new-style organizations are considerably more flexible than older-style organizations.
Source: J. R. Galbraith and E. E. Lawler III, “Effective Organizations: Using the New Logic of Organizing,” in Organizing for the Future: The New Logic for Managing Complex Organizations, ed. J. R. Galbraith, E. E. Lawler III, and associated (San Francisco: Jossey-Bass, 1993). Copyright © 1993 Jossey-Bass Inc. Publishers. Reprinted with permission of John Wiley & Sons, Inc.
Langton, Robbins and Judge, Organizational Behaviour, Fifth Cdn. Ed.
Copyright © 2010 Pearson Education Canada

27. Modular Organization
A small core organization that outsources major business functions.
Advantages:
Can devote technical and managerial talent to most critical activities.
Can respond more quickly to environmental changes.
Increased focus on customers and markets.
Disadvantages:
Reduces management’s control over business.
Relies on outsiders to get job done.
Material pertinent to this discussion is found under “New Design Options.”
Langton, Robbins and Judge, Organizational Behaviour, Fifth Cdn. Ed.
Copyright © 2010 Pearson Education Canada

28. Exhibit 13-13 Modular Structure
Technology
Development
Marketing
and Sales
Procurement
Operations
OUTSOURCED
Organizational Infrastructure
Human Resource
Management
Service
Material pertinent to this discussion is found under “New Design Options.”
The modular organization is typically a small, core organization that outsources major business functions.
Langton, Robbins and Judge, Organizational Behaviour, Fifth Cdn. Ed.
Copyright © 2010 Pearson Education Canada

29. Virtual Organization Advantages: Disadvantages:
A continually evolving network of independent companies—suppliers, customers, even competitors—linked together to share skills, costs, and access to one another’s markets.
Advantages:
Organizations can share costs and skills.
Provides access to global markets.
Increases market responsiveness.
Disadvantages:
Companies give up operational and strategic control to work together.
Managers need to be more flexible, acquire new skills.
Material pertinent to this discussion is found under “New Design Options.”
Langton, Robbins and Judge, Organizational Behaviour, Fifth Cdn. Ed.
Copyright © 2010 Pearson Education Canada

30. Exhibit 13-14 Virtual Structure
Management
Technology
Development
Marketing
and Sales
Procurement
Operations
Alliance
Partner A
Partner B
Partner C
Partner D
Partner E
Organizational Infrastructure
Human Resource
Service
Material pertinent to this discussion is found under “New Design Options.”
The virtual organization “is a continually evolving network of independent companies—suppliers, customers, even competitors—linked together to share skills, costs, and access to one another’s markets.” In a virtual organization, units of different firms join together in an alliance to pursue common strategic objectives. While control in the modular structure remains with the core organization (such as Nike, Dell Computer, and Bauer), in the virtual organization participants relinquish some of their control and act more interdependently. Virtual organizations may not have a central office, an organizational chart, or a hierarchy.
Langton, Robbins and Judge, Organizational Behaviour, Fifth Cdn. Ed.
Copyright © 2010 Pearson Education Canada

31. The Boundaryless Organization
An organization that seeks to eliminate the chain of command, have limitless spans of control, and replaces departments with empowered teams.
Material pertinent to this discussion is found under “New Design Options.”
Langton, Robbins and Judge, Organizational Behaviour, Fifth Cdn. Ed.
Copyright © 2010 Pearson Education Canada

32. What Major Forces Shape An Organization’s Structure?
Strategy
Innovation, cost minimization, and imitation.
Organizational Size
An organization’s size significantly affects its structure.
The relationship isn’t linear; rather, size affects structure at a decreasing rate.
Material pertinent to this discussion is found under “What Major Forces Shape An Organization’s Structure?”
Langton, Robbins and Judge, Organizational Behaviour, Fifth Cdn. Ed.
Copyright © 2010 Pearson Education Canada

33. Exhibit 13-15 The Strategy-Structure Relationship
Strategy Structural Option
Innovation Organic: A loose structure; low specialization, low formalization, decentralized
Cost minimization Mechanistic: Tight control; extensive work specialization, high formalization, high centralization
Imitation Mechanistic and organic: Mix of loose with tight properties; tight controls over current activities and looser controls for new undertakings
Material pertinent to this discussion is found under “What Major Forces Shape An Organization’s Structure?”
Innovation Strategy: A strategy that emphasizes the introduction of major new products and services.
Cost-Minimization Strategy: A strategy that emphasizes tight cost controls, avoidance of unnecessary innovation or marketing expenses, and price cutting.
Imitation Strategy: A strategy that seeks to move.
Langton, Robbins and Judge, Organizational Behaviour, Fifth Cdn. Ed.
Copyright © 2010 Pearson Education Canada

34. What Major Forces Shape an Organization’s Structure?
Technology
Every organization has at least one technology for converting financial, human, and physical resources into products or services.
The common theme that differentiates technologies is their degree of routineness.
Environment
Composed of forces outside the organization and the uncertainty associated with them.
Material pertinent to this discussion is found under “What Major Forces Shape An Organization’s Structure?”
Langton, Robbins and Judge, Organizational Behaviour, Fifth Cdn. Ed.
Copyright © 2010 Pearson Education Canada

35. Key Dimensions of an Organization’s Environment
Capacity
Degree to which environment can support growth.
Volatility
Degree of instability in an environment.
Complexity
Degree of heterogeneity and concentration in environment.
Material pertinent to this discussion is found under “What Major Forces Shape An Organization’s Structure?”
The capacity of an environment refers to the degree to which it can support growth. Rich and growing environments generate excess resources, which can buffer the organization in times of relative scarcity.
The degree of instability in an environment is captured in the volatility dimension. Where there is a high degree of unpredictable change, the environment is dynamic. This makes it difficult for management to predict accurately the probabilities associated with various decision alternatives. At the other extreme is a stable environment.
Finally, the environment needs to be assessed in terms of complexity; that is, the degree of heterogeneity and concentration among environmental elements. Simple environments are homogeneous and concentrated. In contrast, environments characterized by heterogeneity and dispersion are called complex.
Langton, Robbins and Judge, Organizational Behaviour, Fifth Cdn. Ed.
Copyright © 2010 Pearson Education Canada

36. Exhibit 13-16 Model of the Environment
Stable
Complex
Simple
Abundant
Scarce
Dynamic
Material pertinent to this discussion is found under “What Major Forces Shape An Organization’s Structure?”
Langton, Robbins and Judge, Organizational Behaviour, Fifth Cdn. Ed.
Copyright © 2010 Pearson Education Canada

37. Summary and Implications
What are the key elements of organizational structure?
There are six key elements that managers need to address when they design their organization’s structure: work specialization, departmentalization, chain of command, span of control, centralization and decentralization, and formalization.
How flexible can organizational structures be?
There are two models that determine how flexible an organizations can be: mechanistic and organic.
Material pertinent to this discussion is found at the end of the chapter.
Langton, Robbins and Judge, Organizational Behaviour, Fifth Cdn. Ed.
Copyright © 2010 Pearson Education Canada

38. Summary and Implications
What are some examples of traditional organizational designs?
Some of the more common organizational designs found in use are the simple structure, the bureaucracy, and the matrix structure.
What do newer organizational structures look like?
The new structural options for organizations involve breaking down the boundaries in some fashion, either internally, externally, or a combination of the two.
Why do organizational structures differ?
Strategy, organizational size, technology, and environment determine the type of structure.
Material pertinent to this discussion is found at the end of the chapter.
Langton, Robbins and Judge, Organizational Behaviour, Fifth Cdn. Ed.
Copyright © 2010 Pearson Education Canada

39. OB at Work
Langton, Robbins and Judge, Organizational Behaviour, Fifth Cdn. Ed.
Copyright © 2010 Pearson Education Canada

40. For Review
1. Why isn’t work specialization an unending source of increased productivity?
2. What are the different forms of departmentalization?
3. All things being equal, which is more efficient, a wide or narrow span of control? Why?
4. What is a matrix structure? When would management use it?
5. How does a family business differ from other organizational structures?
Material pertinent to this discussion is found at the end of the chapter.
Langton, Robbins and Judge, Organizational Behaviour, Fifth Cdn. Ed.
Copyright © 2010 Pearson Education Canada

41. For Review
6. Contrast the virtual organization with the boundaryless organization.
7. What type of structure works best with an innovation strategy? A cost-minimization strategy? An imitation strategy?
8. Summarize the size-structure relationship.
9. Define and give an example of what is meant by the term technology.
10. Summarize the environment-structure relationship.
Material pertinent to this discussion is found at the end of the chapter.
Langton, Robbins and Judge, Organizational Behaviour, Fifth Cdn. Ed.
Copyright © 2010 Pearson Education Canada

42. For Critical Thinking
1. How is the typical large corporation of today organized, in contrast with how that same organization was probably organized in the 1960s?
2. Do you think most employees prefer high formalization? Support your position.
3. If you were an employee in a matrix structure, what pluses do you think the structure would provide? What about minuses?
Material pertinent to this discussion is found at the end of the chapter.
Langton, Robbins and Judge, Organizational Behaviour, Fifth Cdn. Ed.
Copyright © 2010 Pearson Education Canada

43. For Critical Thinking
4. What could management do to make a bureaucracy more like a boundaryless organization?
5. What behavioural predictions would you make about people who worked in a “pure” boundaryless organization (if such a structure were ever to exist)?
Material pertinent to this discussion is found at the end of the chapter.
Langton, Robbins and Judge, Organizational Behaviour, Fifth Cdn. Ed.
Copyright © 2010 Pearson Education Canada

44. Breakout Group Exercises
Form small groups to discuss the following:
1. Describe the structure of an organization in which you worked. Was the structure appropriate for the tasks being done?
2. Have you ever worked in an organization with a structure that seemed inappropriate to the task? What would have improved the structure?
3. You are considering opening up a coffee bar with several of your friends. What kind of structure might you use? After the coffee bar becomes successful, you decide that expanding the number of branches might be a good idea. What changes to the structure might you make?
Material pertinent to this discussion is found at the end of the chapter.
Langton, Robbins and Judge, Organizational Behaviour, Fifth Cdn. Ed.
Copyright © 2010 Pearson Education Canada

45. Words-in-Sentences Company
Raw materials
Letters
Product
Words
Packaging
Sentences (words go out the door in sentences rather than boxes)
Production run
All sentences created during a ten minute period. No word repeated in any sentence.
Material pertinent to this discussion is found at the end of the chapter.
This gives a general overview of the game.
Langton, Robbins and Judge, Organizational Behaviour, Fifth Cdn. Ed.
Copyright © 2010 Pearson Education Canada

46. Rules to Pass Quality Control
A letter may appear only as often in a manufactured word as it appears in the raw material phrase; for example, “organizational behaviour is fun” has one L and one E. Thus “steal” is legitimate, but not “teller”. It has too many l’s and e’s.
Raw material letters can be used again in different manufactured words.
A manufactured word may be used only once during a production run; once a word (e.g., “the”) is used in a sentence, it is out of stock for the rest of the production run. No other sentence may use the word “the”.
A new word may not be made by adding “s” to form the plural of an already used manufactured word.
Sentences must make grammatical and logical sense.
All words must be in the English language.
Names and places are acceptable.
Slang is not acceptable.
Writing must be legible. Any illegible sentence will be disqualified.
Only sentences that have a minimum of three words and a maximum of six words will be considered.
Material pertinent to this discussion is found at the end of the chapter.
Slide can be used to go over the rules with the class.
Langton, Robbins and Judge, Organizational Behaviour, Fifth Cdn. Ed.
Copyright © 2010 Pearson Education Canada

47. Raw Materials
Outside, the wind teased the palm fronds into rattling conspiracies.
Material pertinent to this discussion is found at the end of the chapter.
These slides give you sample raw material phrases for the exercise.
Langton, Robbins and Judge, Organizational Behaviour, Fifth Cdn. Ed.
Copyright © 2010 Pearson Education Canada

48. Raw Materials
The place had bevelled windowpanes, pecan paneling and traditional furniture in mahogany.
Material pertinent to this discussion is found at the end of the chapter.
These slides give you sample raw material phrases for the exercise.
Langton, Robbins and Judge, Organizational Behaviour, Fifth Cdn. Ed.
Copyright © 2010 Pearson Education Canada

49. Raw Materials
A Connecticut Yankee said “parsley, sage, rosemary and thyme.”
Material pertinent to this discussion is found at the end of the chapter.
These slides give you sample raw material phrases for the exercise.
Langton, Robbins and Judge, Organizational Behaviour, Fifth Cdn. Ed.
Copyright © 2010 Pearson Education Canada

50. Raw Materials King Arthur’s court feared the wrath of Khan.
Material pertinent to this discussion is found at the end of the chapter.
These slides give you sample raw material phrases for the exercise.
Langton, Robbins and Judge, Organizational Behaviour, Fifth Cdn. Ed.
Copyright © 2010 Pearson Education Canada

51. Learning Points What structure did you use at first?
What structure evolved?
How did the task affect structure?
Material pertinent to this discussion is found at the end of the chapter.
Use this slide to de-brief the exercise.
Langton, Robbins and Judge, Organizational Behaviour, Fifth Cdn. Ed.
Copyright © 2010 Pearson Education Canada

52. Concepts to Skills: Delegating Authority
Clarify the assignment.
Specify the employee’s range of discretion.
Allow the employee to participate.
Inform others that delegation has occurred.
Establish feedback controls.
Material pertinent to this discussion is found at the end of the chapter.
Langton, Robbins and Judge, Organizational Behaviour, Fifth Cdn. Ed.
Copyright © 2010 Pearson Education Canada