1. Organizational Design and Structure
Chapter 15 Organizational Behavior: Foundations, Realities, & Challenges Nelson & Quick, 5th edition
Organizational Design and Structure

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 2

3. Key Organizational Design Processes
Differentiation
Integration 3

4. Differentiation 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

5. Horizontal Differentiation
The degree of differentiation between organizational subunits
Based on employee’s specialized knowledge, education, or training

6. Vertical Differentiation
The difference in authority and responsibility in the organizational hierarchy
Greater in tall, narrow organizations than in flat, wide organizations

7. Spatial Differentiation
Geographic dispersion of an organization’s offices, plants, and personnel
Complicates organizational design, but may simplify goal achievement or protection

8. Differentiation Between Marketing and Engineering
Basis for Difference
Marketing
Engineering
Goal orientation
Time orientation
Interpersonal
orientation
Structure
Sales volume
Long run
People
oriented
Less formal
Design
Medium run
Task
oriented
More formal
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9. Integration The process of coordinating the different parts
of an organization
Integration
Designed to achieve unity among individuals and groups
Supports a state of dynamic equilibrium – elements of organization are integrated, balanced

10. Vertical Integration Integration Hierarchical referral
Rules and procedures
Plans and schedules
Positions added to the organization structure
Management information systems

11. Horizontal Integration
Liaison roles
Task forces
Integrator positions
Teams

12. Hierarchy of Authority – Basic Design Dimensions
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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13. Professional Bureaucracy –
Simple Structure – a
centralized form of
organization that
emphasizes the upper
echelon and direct
supervision
Machine Bureaucracy –
a moderately
decentralized form of
organization that
emphasizes the
technical staff and
standardization of
work processes
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by South-Western, a division of Thomson Learning.
All rights reserved
Structural
Configurations of
Organizations
Adhocracy – a
selectively
decentralized
form of
organization that
emphasizes the
support staff and
mutual adjustment
among people
Professional
Bureaucracy –
a decentralized
form of
organization that
emphasizes the
operating level
and standardization
of skills
Divisional Form – a
moderately decentralized
form of organization
that emphasizes the
middle level and
standardization of outputs

14. 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

15. The Relationship among Key Organizational Design Elements
Context of the organization
Correct size
Current technology
Perceived environment
Current strategy and 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

16. Differentiation and Integration Context of the organization
Which characterize the organizational processes
Differentiation and 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
Context of the organization

17. 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

18. 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 and
flexibility
7. Coaching one’s workers
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Management Review, January 1991, Thomas R. Horton.