1. Designing Adaptive Organizations
Chapter 10
Designing Adaptive Organizations

2. The deployment of organizational resources to achieve strategic goals
Organizing
The deployment of organizational resources to achieve strategic goals
Division of labor
Lines of authority
Coordination
All organizations wrestle with structural design and reorganization
Organizing is important because it follows from strategy
Copyright ©2012 by South-Western, a division of Cengage Learning. All rights reserved.

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
Copyright ©2012 by South-Western, a division of Cengage Learning. All rights reserved.

4. Organizing Concepts
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
Copyright ©2012 by South-Western, a division of Cengage Learning. All rights reserved.

5. Authority, Responsibility, and Delegation
Authority is vested in organizational positions, not people
Authority is accepted by subordinates
Authority flows down the vertical hierarchy
Authority Responsibility
Copyright ©2012 by South-Western, a division of Cengage Learning. All rights reserved.

6. Authority, Responsibility, and Delegation
Accountability – people with authority & responsibility are subject to reporting and justifying task outcomes to superiors
is the mechanism through which authority and responsibility are aligned
Delegation is the process managers use to transfer authority and responsibility down the chain
Copyright ©2012 by South-Western, a division of Cengage Learning. All rights reserved.

7. 10.1 Sample Organization Chart
Copyright ©2012 by South-Western, a division of Cengage Learning. All rights reserved.

8. The number of employees reporting to a supervisor
Span of Management
The number of employees reporting to a supervisor
Tall Organizations have more levels and narrow span
Flat Organizations have a wide span and fewer levels
Copyright ©2012 by South-Western, a division of Cengage Learning. All rights reserved.

9. 10.2 Reorganization and Span of Management
Copyright ©2012 by South-Western, a division of Cengage Learning. All rights reserved.

10. Less Supervision/Larger Spans of Control
Work is stable and routine
Subordinates perform similar work
Subordinates are in one location
Highly trained/require little direction
Rules and procedures are defined
Few planning or nonsupervisory activities
Manager’s preference
Copyright ©2012 by South-Western, a division of Cengage Learning. All rights reserved.

11. Centralization and Decentralization
Centralization – decision authority is located near the top of the organization
Decentralization – decision authority is pushed downward to all levels
Factors that influence centralization versus decentralization:
Change and uncertainty are usually associated with decentralization
Strategic fit
Crisis requires centralization
Copyright ©2012 by South-Western, a division of Cengage Learning. All rights reserved.

12. Departmentalization: Functional and 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
Geographic or Customer-Based Divisions group activities by geography or customer
Copyright ©2012 by South-Western, a division of Cengage Learning. All rights reserved.

13. 10.4 Functional Versus Divisional Structures
Copyright ©2012 by South-Western, a division of Cengage Learning. All rights reserved.

14. 10.5 Geographic-Based Global Organization Structure
Copyright ©2012 by South-Western, a division of Cengage Learning. All rights reserved.

15. Departmentalization: Matrix and Team Approach
Matrix combines functional and divisional approaches
Improve coordination and information
Dual lines of authority
Team approach is a very widespread trend
Allows managers to delegate authority
Flexible, responsive
Copyright ©2012 by South-Western, a division of Cengage Learning. All rights reserved.

16. 10.6 Dual-Authority in a Matrix Organization
Copyright ©2012 by South-Western, a division of Cengage Learning. All rights reserved.

17. 10.7 Global Matrix Structure
Copyright ©2012 by South-Western, a division of Cengage Learning. All rights reserved.

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
Copyright ©2012 by South-Western, a division of Cengage Learning. All rights reserved.

19. 10.8 Network Approach to Departmentalization
Copyright ©2012 by South-Western, a division of Cengage Learning. All rights reserved.

20. 10.9 Structural Advantages and Disadvantages
Copyright ©2012 by South-Western, a division of Cengage Learning. All rights reserved.

21. Structure Follows Strategy
Business performance is influenced by structure
Strategic goals should drive structure
Structure should facilitate strategic goals
Copyright ©2012 by South-Western, a division of Cengage Learning. All rights reserved.

22. 10.12 Factors Affecting Organization Structure
Copyright ©2012 by South-Western, a division of Cengage Learning. All rights reserved.

23. 10.13 Relationship of Structural Approach to Strategy
Copyright ©2012 by South-Western, a division of Cengage Learning. All rights reserved.