1. Designing Adaptive Organizations
Chapter 7

2. Organizing
The deployment of organizational resources to achieve strategic goals
Division of labor
Lines of authority
Coordination

3. 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

4. Organizing the Vertical Structure
Work Specialization is the degree to which organizational tasks are subdivided into individual jobs; also called division of labor
Chain of Command is an unbroken line of authority that links all individuals in the organization and specifies who reports to whom

5. Organization Chart

6. Authority, Responsibility, and Delegation
Authority is vested in positions, not people
Authority is accepted by subordinates
Authority flows down the vertical hierarchy
Accountability is the mechanism through which authority and responsibility are aligned
Delegation is the process managers use to transfer authority and responsibility down the chain

7. Line and Staff Authority
Line departments perform primary tasks
Sales
Production
Staff departments support line departments
Marketing
Human Resources
Accounting
Research

8. Span of Management
Span of management = the number of employees reporting to a supervisor
The span of management determines if the organization is a:
Tall Structure
Flat Structure

9. Reorganization and Span of Management

10. Centralization and Decentralization
Centralization – decision authority is located near the top of the organization
Decentralization – decision authority is pushed downward to lower organization levels
Factors:
Greater change and uncertainty are usually associated with decentralization
Centralization or decentralization should fit the firm’s strategy

11. Departmentalization: Functional & Divisional
Vertical Functional Approach
Grouping of positions into departments based on skills, expertise, work activities and resource use
Divisional Approach
Grouping based on organizational output
Product, Program, Business (self-contained unit)
Geographic- or Customer-Based Divisions

12. Functional Versus Divisional Structures

13. Geographic-Based Global Organization Structure

14. Departmentalization: Matrix & Team Approach
Matrix combines functional and divisional approaches
Improve coordination and information
Dual lines of authority
Team approach is very widespread trend
Allows managers to delegate authority
Flexible, responsive

15. Matrix Structure

16. Global Matrix Structure

17. Team Approach Widespread trend in departmentalization
Allows managers to delegate authority to lower levels
Use of crossfunctional teams which include members from various departments
Permanent teams are organized like a department for a specific task or project

18. 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.

19. Network Approach to Departmentalization

20. Structural Advantages and Disadvantages

21. Organizing for Horizontal Coordination
Companies need more flexibility than vertical structure can offer
Meet fast-shifting environment
Break down barriers between departments
Need integration and coordination
Lack of coordination and cooperation can cause information problems
Growing global challenge

22. Task Forces, Teams, and Project Management
Task Force – 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

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

24. Example of Project Manager Relationships to Other Departments

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 include consulting companies, airlines, hotels, amusement parks and educational organizations
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.