1. Organizational Behavior 15th Ed
Chapter 15
Robbins and Judge
Foundations of
Organizational Structure
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2. Chapter 15 Learning Objectives
After studying this chapter you should be able to:
Identify the six elements of an organization’s structure.
Identify the characteristics of a bureaucracy.
Describe a matrix organization.
Identify the characteristics of a virtual organization.
Show why managers want to create boundaryless organizations.
Demonstrate how organizational structures differ and contrast mechanistic and organic structural models.
Analyze the behavioral implications of different organizational designs.
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3. Identify the six elements of an organization’s structure
LO 1
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4. Identify the six elements of an organization’s structure
LO 1
Work Specialization
By the late 1940s, most manufacturing jobs in industrialized countries were being done this way.
Managers also looked for other efficiencies that could be achieved through work specialization.
Repetition of work
Training for specialization
Increasing efficiency through invention
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5. Identify the six elements of an organization’s structure
LO 1
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6. Identify the six elements of an organization’s structure
LO 1
Departmentalization
Grouping jobs together so common tasks can be coordinated is called departmentalization.
By functions performed
By type of product or service the organization produces
By geography or territory
By process differences
By type of customer
A final category of departmentalization is by type of customer. Microsoft, for instance, recently reorganized around four customer markets: consumers, large corporations, software developers, and small businesses.
The assumption is that customers in each department have a common set of problems and needs that can best be met by having specialists for each.
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7. Identify the six elements of an organization’s structure
LO 1
Chain of Command
Once a cornerstone in design of organizations,
"an unbroken line of authority that extends from the top of the organization to the lowest echelon and clarifies who reports to whom."
Two complementary concepts: authority and unity of command.
Authority
Unity-of-command
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8. Identify the six elements of an organization’s structure
LO 1
Chain of Command
Less relevant today because of technology and the trend of empowering employees.
Operating employees make decisions previously reserved for management.
The popularity of self-managed and cross-functional teams.
Many organizations find that enforcing the chain of command is most productive
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9. Identify the six elements of an organization’s structure
LO 1
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10. Identify the six elements of an organization’s structure
LO 1
Centralization and Decentralization
Centralization refers to the degree to which decision-making is concentrated at a single point in the organization.
A decentralized organization can act more quickly to solve problems, more people provide input into decisions, and employees are less likely to feel alienated from those who make decisions that affect their work lives.
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11. Identify the six elements of an organization’s structure
LO 1
Formalization refers to the degree to which jobs within the organization are standardized.
A highly formalized job gives the job incumbent a minimum amount of discretion.
The greater the standardization, the less input the employee has into how the job is done.
Low formalization—job behaviors are relatively nonprogrammed, and employees have a great deal of freedom to exercise discretion in their work.
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12. Identify the characteristics of a bureaucracy
LO 2
A bureaucracy is characterized by:
Highly routine operating tasks.
Very formalized rules and regulations.
Tasks grouped into functional departments.
Centralized authority.
Narrow spans of control.
Decision-making that follows the chain of command.
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13. Identify the characteristics of a bureaucracy
LO 2
Its primary strength is in its ability to perform standardized activities in a highly efficient manner.
Weaknesses include subunit conflicts, unit goals dominate, obsessive behavior, covering weak management.
The bureaucracy is efficient only as long as employees confront familiar problems with programmed decision rules.
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14. Describe a matrix organization
LO 3
The Matrix Structure
It combines two forms of departmentalization—functional and product:
The strength of functional is putting specialists together.
Product departmentalization facilitates coordination.
It provides clear responsibility for all activities related to a product, but with duplication of activities and costs.
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15. Describe a matrix organization
LO 3
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16. Identify the characteristics of a virtual organization
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17. Show why managers want to create boundaryless organizations
LO 5
The boundaryless organization seeks to eliminate the chain of command, have limitless spans of control, and replace departments with empowered teams.
Uses cross-hierarchical teams
Uses participative decision-making practices
Uses 360-degree performance appraisals
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18. Show why managers want to create boundaryless organizations
LO 5
Functional departments create horizontal boundaries.
Boundaryless organizations break down geographic barriers.
Culture can be a boundary element.
Customers perform functions done by management.
Telecommuting blurs organizational boundaries.
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19. Organizational Downsizing
LO 5
The Learner Organization: Organizational Downsizing
The goal of the new organizational forms we’ve described is to improve agility by creating a lean, focused, and flexible organization.
Downsizing is a systematic effort to make an organization leaner by selling off business units, closing locations, or reducing staff.
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20. Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall
Demonstrate how organizational structures differ and contrast mechanistic and organic structural models
LO 6
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21. Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall
Demonstrate how organizational structures differ and contrast mechanistic and organic structural models
LO 6
An organization’s structure is a means to help management achieve its objectives.
Most current strategy frameworks focus on three strategy dimensions:
innovation,
cost minimization, and
imitation.
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22. Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall
Demonstrate how organizational structures differ and contrast mechanistic and organic structural models
LO 6
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23. Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall
Demonstrate how organizational structures differ and contrast mechanistic and organic structural models
LO 6
There is considerable evidence to support that an organization’s size significantly affects its structure.
The impact of size becomes less important as an organization expands.
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24. Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall
Demonstrate how organizational structures differ and contrast mechanistic and organic structural models
LO 6
Technology refers to how an organization transfers its inputs into outputs.
Every organization has at least one technology.
Numerous studies have examined the technology-structure relationship.
Organizations engaged in nonroutine activities tend to prefer organic structures.
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25. Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall
Demonstrate how organizational structures differ and contrast mechanistic and organic structural models
LO 6
An organization’s environment includes outside institutions or forces that can affect its performance.
Dynamic environments create significantly more uncertainty for managers than do static ones.
Any organization’s environment has three dimensions: capacity, volatility, and complexity.
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26. Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall
Demonstrate how organizational structures differ and contrast mechanistic and organic structural models
LO 6
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27. Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall
Analyze the behavioral implications of different organizational designs
LO 7
Organization’s structure can have significant effects.
A review of the evidence leads to a pretty clear conclusion: you can’t generalize!
Not everyone prefers the freedom and flexibility of organic structures.
Some people are most productive and satisfied when work tasks are standardized and ambiguity minimized.
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28. Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall
Analyze the behavioral implications of different organizational designs
LO 7
Let’s consider employee preferences for work specialization, span of control, and centralization.
Work specialization contributes to higher employee productivity.
No evidence supports a relationship between span of control and employee satisfaction or performance.
Fairly strong evidence links centralization and job satisfaction, meaning that less centralization is associated with higher satisfaction.
It is probably safe to say no evidence supports a relationship between span of control and employee satisfaction or performance. Although it is intuitively attractive to argue that large spans might lead to higher employee performance because they provide more distant supervision and more opportunity for personal initiative, the research fails to support this notion. Some people like to be left alone; others prefer the security of a boss who is quickly available at all times. Consistent with several of the contingency theories of leadership discussed in Chapter 12, we would expect factors such as employees’ experiences and abilities and the degree of structure in their tasks to explain when wide or narrow spans of control are likely to contribute to their performance and job satisfaction. However, some evidence indicates that a manager’s job satisfaction increases as the number of employees supervised increases.
We find fairly strong evidence linking centralization and job satisfaction. In general, less centralized organizations have a greater amount of autonomy. And autonomy appears positively related to job satisfaction. But, again, while one employee may value freedom, another may find autonomous environments frustratingly ambiguous.
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29. Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall
Analyze the behavioral implications of different organizational designs
LO 7
Although research is slim, it does suggest national culture influences the preference for structure.
So consider cultural differences along with individual differences when predicting how structure will affect employee performance and satisfaction.
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30. Summary and Implications for Managers
The theme of this chapter is that an organization’s internal structure contributes to explaining and predicting behavior.
That is, in addition to individual and group factors, the structural relationships in which people work has a bearing on employee attitudes and behavior.
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31. Summary and Implications for Managers
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32. Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall
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Copyright © 2013 Pearson Education, Inc.   publishing as Prentice Hall
All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of the publisher. Printed in the United States of America.
Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall