1. Designing Adaptive Organizations
Week 9

2. Chapter Outline Organizing Evolution of Organization Structure
Vertical and Horizontal
Advantages/ Disadvantages
Evolution of Organization Structure
Structure and Strategy
Structure and Technology
Types of Technology
Manufacturing, service, digital

3. Organizing What? Organizational resources to achieve strategic goals
Division of labor
Lines of authority
Coordination
Link to Planning

4. Organizing the Vertical Structure
Organizing Structure Defines:
The set of formal tasks assigned to individuals and departments
Formal reporting relationships
The design of the systems to ensure effective coordination

5. Organizing the Vertical Structure
Work Specialization
Chain of Command

6. Organization Chart

7. Authority, Responsibility, and Delegation
What is Authority?
Formal and legitimate right of a manager to make decisions, issue orders, and allocate resources to achieve organizational outcomes.
Authority is vested in positions, not people
Authority is accepted by subordinates
Authority flows down the vertical hierarchy
Accountability
Delegation

8. Line and Staff Authority
Line departments perform primary tasks
Ex: Shoes, clothing
Sales
Production
Line Authority: Direct & control subordinates
Staff departments support line departments
Finance
Human Resources
Research
Staff authority: advise, recommend specialist expertise

9. Span of Management Span of management?
Determinants
Subordinates similar work, single location, skills of subordinates, etc.
Determines if the organization is a:
Tall Structure
Flat Structure

10. Reorganization and Span of Management

11. Centralization and Decentralization
Factors:
Greater change and uncertainty are usually associated with decentralization
Centralization or decentralization should fit the firm’s strategy

12. Departmentalization: Functional & Divisional
Functional Approach?
Divisional Approach
Grouping based on organizational output
Product, Program, Business (self-contained unit)
Geographic- or Customer-Based Divisions

13. Functional Versus Divisional Structures

14. Geographic-Based Global Organization Structure

15. Departmentalization: Matrix & Team Approach
Matrix combines functional and divisional approaches
Improve coordination and information
Dual lines of authority

16. Matrix Structure

17. Global Matrix Structure

18. Team Approach Widespread trend in departmentalization Types
Allows managers to delegate authority to lower levels, Flexible, responsive
Types
Cross-functional
Permanent teams
Horizontal coordination & communication

19. Virtual Network Approach
Extends idea of horizontal coordination and collaboration
Partnerships
Alliances
Could be a loose interconnected group
i.e. outsourcing
Virtual network structure means that the firm subcontracts most of its major functions to separate companies.

20. Network Approach to Departmentalization

21. Structural Advantages and Disadvantages

22. Organizing for Horizontal Coordination
Lack of coordination and cooperation can cause information problems
Horizontal
Meet fast-shifting environment
Break down barriers between departments
Need integration and coordination

23. Task Forces, Teams, and Project Management
a temporary team or committee formed to solve a specific short-term problem involving several departments
Project Manager –
a person responsible for coordinating the activities of several departments on a full-time basis for the completion of a specific project
Cross-functional Team –
furthers horizontal coordination by including members across the organization

24. Evolution of Organization Structures
Traditional Vertical
Structure
Cross-Functional Teams and
Project Managers
Reengineering to
Horizontal Teams

25. Structure Follows Strategy
Business performance is influenced by the company’s structure
Strategic goals should drive structure
Structure should be used to facilitate strategic goals

26. Factors Affecting Organization Structure

27. Relationship of Structural Approach to Strategy and the Environment

28. Structure Fits the Technology
Technology - knowledge, tools, techniques and activities
Technology varies but it can impact structure
Difference among three manufacturing technologies is technical complexity:
Small-batch and unit production
Large-batch and mass production
Continuous process production

29. Manufacturing Technology and Organization Structure

30. Service Technology Service organizations:
Examples.
Service technology defined as:
Intangible output
Direct contact with customers
Need more interaction/horizontal communication
Digital technology is the use of the Internet and other digital processes to support business online.