1. MANAGEMENT
RICHARD L. DAFT

2. Designing Adaptive Organizations
Designing Adaptive Organizations
CHAPTER 9

3. Learning Outcomes
Discuss the fundamental characteristics of organizing, including such concepts as work specialization, chain of command, span of management, and centralization versus decentralization.
Describe functional and divisional approaches to structure.
Explain the matrix approach to structure and its application to both domestic and international organizations.
Describe the contemporary team and virtual network structures and why they are being adopted by organizations.
Explain why organizations need coordination across departments and hierarchical levels, and describe mechanisms for achieving coordination.
Identify how structure can be used to achieve an organization’s strategic goals.
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4. What are Your Leadership Beliefs?
Personal beliefs about the role of leadership impact a new manager
A manager’s work is influenced by how the organization is organized
Organizational systems should be compatible with leadership beliefs
Good managers understand and learn to work within a variety of structural configurations
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5. Organizing Organizing follows from strategy
Organizing follows from strategy
Strategy dictates what you do
Organization dictates how you do it
Organizing is the deployment of organizational resources to achieve strategic goals
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6. Organizing The Vertical Structure
The set of formal tasks assigned to individuals and departments
Formal reporting relationships, including lines of authority, decision responsibility, number of levels and span of control
The design of systems to ensure effective coordination of employees across departments
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7. Organizing Concepts
Work Specialization – the division tasks into individual jobs called division of labor
Chain of Command – a line of authority that links individuals and direct reports
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8. Authority, Responsibility, and Delegation
The chain of command illustrates authority
Authority is the formal and legitimate right to make decisions and issues orders
Authority is vested in organizational positions, not people
Authority is accepted by subordinates
Authority flows down the vertical hierarchy
Responsibility is the duty to perform the task or activity assigned
Delegation is the process managers use to transfer authority and responsibility to others
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9. Line and Staff Authority
Line departments perform the tasks that reflect the organization’s primary goals
They work directly with customers/products
Staff departments are those departments that provide specialized skills in support of line departments
Legal, Human Resources, Marketing
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10. Organizing Chart for a Water Bottling Plant
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11. Span of Management
The number of employees reporting to a supervisor is span of management
Factors associated with less supervisor involvement and larger span of control
Work is stable and routine
Subordinates perform similar work
Subordinates in single location
Highly trained and need little direction
Rules and procedures are defined
Support systems and personnel are available to manager
Little supervision is required
Managers’ personal preference favor a large span
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12. Reorganization to Increase Span of Management
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13. Centralization and Decentralization
Centralization means that
decision authority
is located near the
top of the organization
Decentralization means
decision authority is
pushed downward to lower
organizational levels
Change and uncertainty are usually associated with decentralization
The amount of centralization or decentralization should fit the firm’s strategy
During crisis or risk of company failure, authority may be centralized
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14. Departmentalization Basis for grouping positions into departments
Basis for grouping positions into departments
Choices regarding chain of command
Five traditional approaches:
Functional
Divisional
Matrix
Innovative approaches:
Teams
Virtual Networks
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15. Approaches to Structural Design
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16. Approaches to Structural Design
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17. Vertical Functional Approach
Grouping into departments based on skills, expertise, work activities and resource use
Departmentalized by organizational resources
Accounting
Human resources
Engineering
Manufacturing
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18. Divisional Approach Departments are grouped based on outputs
Departments are grouped based on outputs
Product structure, program structure, self-contained unit structure
Many large corporations have multiple divisions for different business lines
Organizations may assign division responsibility by geographic region or customer group
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19. Functional Versus Divisional Approach
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20. Geographic-Based Global Organization Structure
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21. Matrix Approach
Combines aspects of both functional and divisional structures simultaneously
Improves coordination and information sharing
A key challenge is the dual lines of authority
Employees report to two supervisors
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22. Dual-Authority Structure in a Matrix Organization
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23. Global Matrix Structure
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24. Team Approach Teamwork is a growing trend
Teamwork is a growing trend
Teams allow organizations to delegate authority
Become flexible and competitive in global environment
Organizations may use cross-functional and/or permanent team strategies
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25. The Virtual Network Approach
Extending the boundaries of collaboration beyond the organization
Subcontracting functions to other companies
Coordinate activities
Interconnected groups of companies
partnerships and collaborations
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26. Network Approach to Departmentalization
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27. Structural Advantages and Disadvantages
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28. The Need for Coordination
Organizations grow and evolve
Organizations need systems to process information and enable communication
Coordination is the quality of collaboration across departments
Coordination is required, regardless of the structure
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29. Evolution of Organization Structures
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30. Task Forces, Teams, and Project Management
Project Managers are
responsible for
coordinating
the activities of
several departments on
a full-time basis for
the completion
of a specific project
Task Force
A temporary team or
committee formed to
solve a specific
short-term
problem
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31. Examples of Project Manager Relationships
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32. Reengineering Reengineering or business process reengineering
Reengineering or business process reengineering
Radical redesign of business processes to achieve dramatic improvements
Cost
Quality
Service
Speed
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33. Reengineering at Michigan Casting Center
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34. Structure Follows Strategy
The right structure is designed to fit the organization’s strategy
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