1. Chapter 15 Organizational Behavior Nelson & Quick 6th edition
Organizational Design and Structure
Chapter 15 Organizational Behavior Nelson & Quick 6th edition

2. Organizational Design
Organizational Design - the process of constructing and adjusting an organization’s structure to achieve its goals.
organization’s structure
the linking of
departments and
jobs within an
organization
Contextual variables – a set of characteristics that influence the organization’s design processes 2

3. Ministerial Conference
General Council
Meeting as
Dispute Settlement
Body
General Council
Meeting as
Trade Policy Review
Body
General Council
Appellate Body
Dispute Settlement Panels
Council for
Trade-related Aspects of
Intellectual Property Rights
Council for
Trade in Goods
Council for
Trade in Services
Committees
Working
parties
groups
Committees
Working parties
Committees
Working parties
Plurilaterals
Doha Development Agenda
TNC and its bodies
Plurilaterals
Trade Negotiations Committee
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Taken from WTO Organizational Chart.
http:
Special Sessions & Negotiating groups

4. Key Organizational Design Processes
Differentiation
Integration
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5. Differentiation The process of deciding how to divide the work
The process of deciding
how to divide the work
in an organization
Differentiation
Four Dimensions
Manager’s goal orientation
Time orientation
Interpersonal orientation
Formality of structure
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6. Horizontal Differentiation
Differentiation
The degree of differentiation between organizational subunits
Based on employee’s specialized knowledge, education, or training
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7. Vertical Differentiation
Differentiation
The difference in authority and responsibility in the organizational hierarchy
Greater in tall, narrow organizations than in flat, wide organizations
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8. Spatial Differentiation
Differentiation
Geographic dispersion of an organization’s offices, plants, and personnel
Complicates organizational design, but may simplify goal achievement or protection
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9. Differentiation & Complexity in an Organization
Differentiation & Complexity in an Organization
The Greater the
. . . Differention
The Greater the
need for structural . . .
Horizontal
Vertical
Spatial
Width
Height
Breadth
The more structurally differentiated
an organization is, the more complex it is
Complexity refers to the number of activities,
subunits, or subsystems within an organization
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10. Integration The process of coordinating the different parts
Integration
The process of coordinating
the different parts
of an organization
Designed to achieve unity among individuals and groups
Supports a state of dynamic equilibrium - elements of organization are integrated, balanced
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11. Vertical Integration Integration Hierarchical referral
Vertical Integration
Hierarchical referral
Rules and procedures
Plans and schedules
Positions added to the organization structure
Management information systems
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12. Horizontal Integration
Integration
Horizontal Integration
Liaison roles
Task forces
Integrator positions
Teams
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13. Hierarchy of Authority - Specialization -
Formalization -
the degree to which the
organization has official rules,
regulations and procedures
Centralization - the degree
to which decisions are
made at the top of the
organization
Hierarchy of
Authority -
the degree of
vertical
differentiation
across
levels of
management
Specialization -
the degree to
which jobs are
narrowly
defined and
depend on
unique
expertise
Basic
Design
Dimensions
Complexity - the degree
to which many different types
of activities occur in the
organization
Standardization - the
degree to which work activities
are accomplished in a
routine fashion
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14. Machine Bureaucracy - Professional Bureaucracy -
Machine Bureaucracy -
a moderately
decentralized form of
organization that
emphasizes the
technical staff &
standardization of
work processes
Simple Structure -
a centralized form of
organization that
emphasizes the upper
echelon & direct
supervision
Structural
Configurations of
Organizations
Adhocracy -
a selectively
decentralized
form of
organization that
emphasizes the
support staff &
mutual adjustment
among people
Professional
Bureaucracy -
a decentralized
form of
organization that
emphasizes the
operating level
& standardization
of skills
Divisional Form -
a moderately decentralized
form of organization
that emphasizes the
middle level &
standardization of outputs
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15. Standardization of Work Processes
Five Structural Configurations of Organization
Structural
Configuration
Prime
Coordinating
Mechanism
Key Part of
Organization
Type of
Decentralization
Simple Structure
Direct
Supervision
Upper
Echelon
Centralization
Limited
Horizontal
Decentralization
Standardization of Work Processes
Machine
Bureaucracy
Technical
Staff
Vertical &
Horizontal
Decentralization
Professional
Bureaucracy
Standardization
of Skills
Operating
Level
Divisionalized
Form
Standardization
of Outputs
Middle
Level
Limited Vertical
Decentralization
Mutual Adjustment
Support
Staff
Selective
Decentralization
Adhocracy
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16. Mintzberg’s Five Basic Parts of an Organization
Middle
Line
Strategic
Apex
Operating Core
Support
Staff
Techno-
structure
Mintzberg’s Five Basic Parts of an Organization
From H. Mintzberg, The Structuring of Organizations (Upper Saddle
River, N.J.: Prentice-Hall, 1979): 20. Reprinted with permission.

17. Contextual Variables – a set of characteristics that influences the organization’s design processes
Technology
Strategy & Goals
Environment
Size
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18. Basic Design Small Large Dimensions Organizations Organizations
Size
Basic Design Small Large
Dimensions Organizations Organizations
Formalization
Centralization
Specialization
Standardization
Complexity
Hierarchy of authority
Less
High
Low
Flat
More
Low
High
Tall
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19. the degree of interrelatedness of the organization’s various
Technology
Technological
Interdependence -
the degree of interrelatedness
of the organization’s various
technological elements 4

20. Relationship Between Technology and Basic Design Dimensions
Task Variability
Few Exceptions Many Exceptions
Ill-defined &
Unanalyzable
Craft
1. Moderate
2. Moderate
3. Moderate
4. Low-moderate
5. High
6. Low
Nonroutine
1. Low
2. Low
3. Low
4. Low
5. High
6. Low
Problem Analyzability
Well-defined &
Analyzable
Routine
1. High
2. High
3. Moderate
4. High
5. Low
6. High
Engineering
1. Moderate
2. Moderate
3. High
4. Moderate
5. Moderate
6. Moderate
Key
1 Formalization 4 Standardization
2 Centralization 5 Complexity
3 Specialization 6 Hierarchy of Authority
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Built from C. Perrow, “A Framework for the Comparative Analysis of Organization,” American Sociological Review, April 1967,

21. Environment - anything outside the boundaries of an organization
Environment - anything outside the boundaries of an organization
Task Environment - the elements of an organization’s environment that are related to its goal attainment
Environmental Uncertainty - the
amount and rate of change
in the organization’s
environment
Environment
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22. Extremes of Environmental Uncertainty
Mechanistic Structure - an organizational design that emphasizes structured activities, specialized tasks, and centralized decision making
Organic Structure - an organizational design that emphasizes teamwork, open communication, and decentralized decision making

23. Structural & Strategic Dimensions
Strategic Dimension Predicted Structural
Characteristics
Innovation--to understand Low formalization
and manage new processes Decentralization
and technologies Flat hierarchy
Market differentiation--to Moderate to high complexity
specialize in customer Moderate to high preferences formalization
Moderate centralization
Cost control--to produce High formalization
standardized products High centralization
efficiently High standardization
Low complexity
Strategy & Goals
Miller’s Integrative
Framework of
Structural & Strategic Dimensions
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D. Miller, “The Structural and Environmental Correlates of Business Strategy,” Strategic Management Journal 8 (1987):
John Wiley & Sons Limited. Reproduced with permission. 4 23

24. The Relationship among Key Organizational Design Elements
Context of the organization
Correct size
Current technology
Perceived environment
Current strategy & goals
Influences how manager perceive structural needs
Structural dimensions
Level of formalization
Level of centralization
Level of specialization
Level of standardization
Level of complexity
Hierarchy of authority
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25. Which characterize the organizational processes
Differentiation & Integration
Which influence how well the structure meets its
Purposes
Designate formal
lines of authority
information-
processing patterns
Which influence how well the structure fits the
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Context of the organization

26. Forces Reshaping Organizations
Organization Life Cycle - the differing stages of an organization’s life from birth to death
Globalization
Changes in Information-Processing Technologies
Demands on Organizational Processes
Emerging Organizational Structures

27. Structural Roles of Managers
Roles of Managers Today
1. Strictly adhering to boss
-employee relationships
2. Getting things done by
giving orders
3. Carrying messages up
and down the hierarchy
4. Performing a set of tasks
according to a job description
5. Having a narrow functional
focus
6. Going through channels,
one by one by one
7. Controlling subordinates
Roles of Future Managers
1. Having hierarchical
relationships subordinated
2. Getting things done by
negotiating
3. Solving problems and
making decisions
4. Creating the job through
entrepreneurial projects
5. Having a broad cross-
functional collaboration
6. Emphasizing speed &
flexibility
7. Coaching one’s workers
Management Review, January 1991, Thomas R. Horton.
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28. HD’s Circle Organization
HD’s Circle Organization
Create
Demand
Produce
Product
Provide
Support
Leadership and
Strategy Council
(LSC)
From R. Teerlink and L. Ozley, More than a Motorcycle: The Leadership Journey at Harley-Davidson. Boston, MA, P. 139.
Copyright © 2000 by the Harvard Business School Publishing Corporation; all rights reserved.

29. Four Symptoms of Structural Weakness
Overloaded hierarchy;
information funneling limited
to too few channels
Delay in decision making
Poor quality
decision making
Lack of innovative
response to changing
environment
High level of conflict
Right information not
reaching right people in
right format
No coordinating effort
Departments work against each other, not for organizational goals

30. Personality/Organization
Depressive
Paranoid
Dramatic
Dysfunctional
Personality/Organization
Combinations
Schizoid
Compulsive
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31. Chapter 15: Reflect & Discuss
Casino Video Clip
What to Watch for and Ask Yourself
Which type or form of organizational design does this scene show?
Does this scene show the results of the differentiation and integration organizational design processes?
Does this scene show any behavioral demands of organizational design? What are they?
Casino
Martin Scorcese’s lengthy, complex, and beautifully photographed study of 1970s’ Las Vegas gambling casinos and their organized crime connections completes his trilogy that includes Mean Streets (1973) and the 1990 Goodfellas. Ambition, greed, drugs, and sex destroy the mob’s gambling empire. The film includes strong performances by Robert De Niro, Joe Pesci, and Sharon Stone. The violence and expletive-filled dialogue give Casino its R rating.
The Casino scene is part of “The Truth about Las Vegas” sequence early in the film. It follows the scenes of deceiving the Japanese gambler. It starts with a close-up of Sam “Ace” Rothstein (Robert De Niro) standing between his two casino executives (Richard Amalfitano, Richard F. Strafella). His voice-over says, “In Vegas, everybody’s gotta watch everybody else.” The scene ends after Sam Rothstein describes the ex-cheaters who monitor the gambling floor with binoculars. The film continues with the introduction of Ginger (Sharon Stone).
What to Watch for and Ask Yourself
Which type or form of organizational design does this scene show?
Does this scene show the results of the differentiation and integration organizational design processes?
Does this scene show any behavioral demands of organizational design? What are they? 31