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Chapter 9 – Designing Adaptive Organizations
Copyright ©2017 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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Learning Outcomes Describe the departmentalization approach to organizational structure Explain organizational authority Discuss the different methods for job design Explain the methods that companies are using to redesign internal organizational processes (that is, intraorganizational processes) Describe the methods that companies are using to redesign external organizational processes (that is, interorganizational processes)
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Organizational Structure and Process
LO 1 Organizational structure: Vertical and horizontal configuration of departments, authority, and jobs within a company Based on some form of departmentalization Organizational process: Collection of activities that transforms inputs into outputs valued by customers
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Methods of Departmentalization
LO 1 Units are responsible for particular business functions Functional departmentalization Units are responsible for producing particular products or services Product departmentalization Units are responsible for particular kinds of customers Customer departmentalization
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Methods of Departmentalization (continued)
LO 1 Units are responsible for doing business in particular geographic areas Geographic departmentalization Hybrid organizational structure Simple matrix: Managers in different parts of the matrix negotiate conflicts and resources Complex matrix: Managers in different parts of the matrix report to matrix managers Matrix departmentalization
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9.8 Procter & Gamble’s Concentric Matrix
LO 1 9.8 Procter & Gamble’s Concentric Matrix
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Organizational Authority
LO 2 Organizations follow a chain of command Unity of command does not apply to matrix organizations Unity of command: Principle that workers should report to just one boss Line and staff authority Line authority: Right to command immediate subordinates in the chain of command Staff authority: Right to advise others who are not subordinates in the chain of command
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Organizational Authority (continued)
LO 2 Line and staff functions Line function: Contributes in creating or selling the company’s products Staff function: Supports line activities Delegation of authority: Assignment of authority and responsibility to a subordinate to complete a manager’s tasks Standardization is important in centralized companies Unimportant in decentralized companies
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9.9 Delegation: Responsibility, Authority, and Accountability
LO 2 Delegation: Responsibility, Authority, and Accountability
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Job Design and Specialization
LO 3 Job design: Number, kind, and variety of tasks that individual workers perform in doing their jobs Job specialization: Job composed of different parts of a complete task
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Methods Used to Improve Specialized Jobs
LO 3 Periodically moving workers from one specialized job to another Job rotation Increasing the number of tasks that a worker performs within one particular job Job enlargement Increasing the number of tasks in a particular job and giving workers the authority to make meaningful decisions about their work Job enrichment
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9.10 Job Characteristics Model
LO 3 9.10 Job Characteristics Model
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Organizational Designs
LO 4 Mechanistic organizations: Characterized by specialized jobs and responsibilities Follow centralized authority and vertical communication Organic organizations: Characterized by broadly defined jobs and responsibilities Decentralized authority and horizontal communication is based on task knowledge Concerned with intraorganizational process
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Ways to Redesign Intraorganizational Processes
LO 4 Reengineering Helps achieve dramatic improvements in critical measures of performance Changes work by changing task interdependence Empowerment Companies can provide decision-making authority and responsibility by giving workers the required resources to take effective decisions
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9.11 Reengineering and Task Interdependence
LO 4 9.11 Reengineering and Task Interdependence
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Interorganizational Process - Types
LO 5 Modular organizations: Outsource noncore business activities to outside companies, suppliers, specialists, or consultants Cost-effective Disadvantages - Loss of control and reduced competitive advantage Virtual organizations Part of a network of several companies working together to solve customer problems or provide specific products Allow cost sharing
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Interorganizational Process - Types (continued)
LO 5 Enable members to combine efforts Fast and flexible Disadvantages Difficulty in controlling the quality of work done by network partners Require tremendous managerial skills
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9.12 Modular Organizations
LO 5 9.12 Modular Organizations
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Key Terms Organizational structure Matrix departmentalization
Organizational process Departmentalization Functional departmentalization Product departmentalization Customer departmentalization Geographic departmentalization Matrix departmentalization Simple matrix Complex matrix Authority Chain of command Unity of command Line authority Staff authority Line function Staff function
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Key Terms (continued 1) Delegation of authority
Centralization of authority Decentralization Standardization Job design Job specialization Job rotation Job enlargement Job enrichment Job characteristics model (JCM) Internal motivation Skill variety Task identity Task significance Autonomy Feedback Mechanistic organization
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Key Terms (continued 2) Organic organization Empowering workers
Intraorganizational process Reengineering Task interdependence Pooled interdependence Sequential interdependence Reciprocal interdependence Empowering workers Empowerment Interorganizational process Modular organization Virtual organization
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Summary Departmentalization involves subdividing work into separate organizational units Types of authority - Line and staff Methods of job design - Job rotation, enlargement, and enrichment Reengineering and empowerment help redesign intraorganizational processes Modular and virtual organizations are forms of interorganizational processes
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