1. Chapter 7 and 8
Organizational Structure and Managing Change

2. Designing Organizational Structure
Organizing
The process by which managers establish the structure of working relationships among employees to achieve goals
Organizational Structure
Formal system of task and reporting relationships that coordinates and motivates organizational members so that they work together to achieve organizational goals

3. Factors Affecting Organizational Structure
Figure 7.1
The Organizational Environment
The quicker the environment changes, the more problems face managers.
Structure must be more flexible (i.e., decentralized authority) when environmental change is rapid.
Strategy
Different strategies require the use of different structures
A differentiation strategy needs a flexible structure, low cost may need a more formal structure
Increased vertical integration or diversification also requires a more flexible structure
Technology
The combination of skills, knowledge, tools, equipment, computers and machines used in the organization
More complex technology makes it harder for managers to regulate the organization
Managers must take into account all four factors (environment, strategy, technology and human resources) when designing the structure of the organization

4. Job Design Job Design Job Enlargement Job Enrichment
The process by which managers decide how to divide tasks into specific jobs
Job Enlargement
Increasing the number of different tasks in a given job by changing the division of labor
Job Enrichment
Increasing the degree of responsibility a worker has over a job

5. Departmentalization- by Function
Functional Structure
An organizational structure composed of all the departments that an organization requires to produce its goods or services
Advantages
Encourages learning from others doing similar jobs
Easy for managers to monitor and evaluate workers
Disadvantages
Difficult for departments to communicate with others
Preoccupation with own department and losing sight of organizational goals

6. Departmentalization: by Divisions
Divisional Structure
An organizational structure composed of separate business units within which are the functions that work together to produce a specific product for a specific customer
Divisions create smaller, manageable parts of a firm
Divisions develop a business-level strategy to compete
Divisions have marketing, finance, and other functions
Functional managers report to divisional managers who then report to corporate management

7. Departmentalization: by Product Structure
Each product line or business is handled by a self-contained division
Advantages
Allows functional managers to specialize in one product area
Division managers become experts in their area
Removes need for direct supervision of division by corporate managers
Divisional management improves the use of resources

8. Product, Market, and Geographic Structures
Figure 7.4
Product, Market, and Geographic Structures

9. Departmentalization: by Geographic
Geographic Structure
Each region of a country or area of the world is served by a self-contained division
Global geographic structure
Managers locate different divisions in each of the world regions where the organization operates
Generally, occurs when managers are pursuing a multi-domestic strategy

10. Departmentalization Global Product Structure
Each product division, not the country or regional managers, takes responsibility for deciding where to manufacture its products and how to market them in foreign countries

11. Global Geographic and Global Product Structures
Figure 7.5

12. Departmentalization: By market
Market Structure
Each kind of customer is served by a self-contained division
Also called customer structure
Matrix Structure
An organizational structure that simultaneously groups people and resources by function and product

13. Matrix Structure Figure 7.6
The matrix structure is very flexible and can respond rapidly to the need for change
Each employee has two bosses (functional manager and product manager) and possibly cannot satisfy both

14. Product Team Structure
Employees are permanently assigned to a cross-functional team and report only to the product team manager or to one of his direct subordinates
Cross-functional team
group of managers brought together from different departments to perform organizational tasks

15. Coordinating Functions and Divisions
Authority
The power to hold people accountable for their actions and to make decisions concerning the use of organizational resources
Hierarchy of Authority
An organization’s chain of command, specifying the relative authority of each manager

16. Allocating Authority Span of Control Line Manager Staff Manager
The number of subordinates that report directly to a manager
Line Manager
someone in the direct line or chain of command who has formal authority over people and resources
Staff Manager
Someone responsible for managing a specialist function, such as finance or marketing.

17. Tall & Flat Organizations
Figure 7.9
Tall structures have many levels of authority and narrow spans of control
Flat structures have fewer levels and wide spans of control

18. Tall & Flat Organizations
Figure 7.9

19. Tall and Flat Organizations
Decentralizing authority
giving lower-level managers and nonmanagerial employees the right to make important decisions about how to use organizational resources.

20. Organization Change Organization Change Top-down change
Movement of an organization away from its present state and toward some desired future state to increase its efficiency and effectiveness
Top-down change
A fast, revolutionary approach to change in which top managers identify what needs to be changed, decide what to do, and then move quickly to implement changes throughout the organization
Bottom-up change
A gradual approach to change in which managers at all levels work together to develop a plan for change

21. Four Steps in the Organizational Change Process

22. Description on Organizational Change Process
1.Recognize the need for change: The change agent can use a variety of techniques to diagnose problems in need of changes to solve them.
2.Identify possible resistance to the change and plan how to overcome it: Follow the guidelines in step 1.
3.Plan the change interventions: Based on the diagnosis of the problem, the appropriate intervention must be selected.
4.Implement the change interventions: The change agent, or someone selected, conducts the intervention to bring about the desired change.
5.Control the change: Follow up to ensure that the change is implemented and maintained. Make sure the objective is met. If not, take corrective action.

23. Resistance to Change and Ways to Overcome Resistance
Why employees resist change?
Uncertainty--- Fear of the unknown outcome of change
Learning anxiety--- Nervousness or fear of change that requires learning new ways of working
Self-interest--- People resist change that threatens their own self interest
Loss --- Lost job or change in salary/benefits
Control --- Change can also result in an actual or perceived loss of power, status, security and control, feeling that someone else is controlling their destiny

24. Overcome Resistance to Change
Ways to overcome resistance to change:
Develop a positive trust climate for change --- Develop and maintain good human relations
Plan --- Take good planning. Identify the possible resistance to change and plan how to overcome it.
Communication ---Clearly state why the change is needed and how it will affect company or employees
Create a win-win situation --- Company should guarantee that employees will not lose jobs, pay or other loses, at least within a short period of time
Involve employees --- Employees who have participated in developing changes are more committed to them than those who have not
Provide support --- Give advance notice and providing training before the change take place.