1. ORGANIZATIONAL BEHAVIOR S T E P H E N P. R O B B I N S W W W. P R E N H A L L. C O M / R O B B I N S T E N T H E D I T I O N © 2003 Prentice Hall Inc. All rights reserved. PowerPoint Presentation by Charlie Cook

2. © 2003 Prentice Hall Inc. All rights reserved.15–2 AFTER STUDYING THIS CHAPTER, YOU SHOULD BE ABLE TO: 1.Identify the six key elements that define an organization’s structure. 2.Explain the characteristics of a bureaucracy. 3.Describe a matrix organization. 4.Explain the characteristics of a virtual organization. 5.Summarize why managers want to create boundaryless organizations. L E A R N I N G O B J E C T I V E S

3. © 2003 Prentice Hall Inc. All rights reserved.15–3 AFTER STUDYING THIS CHAPTER, YOU SHOULD BE ABLE TO: 6.Contrast mechanistic and organic structural models. 7.List the factors that favor different organizational structures. 8.Explain the behavioral implications of different organizational designs. L E A R N I N G O B J E C T I V E S (cont’d)

4. © 2003 Prentice Hall Inc. All rights reserved.15–4 What Is Organizational Structure? Key Elements: Work specialization Departmentalization Chain of command Span of control Centralization and decentralization Formalization Key Elements: Work specialization Departmentalization Chain of command Span of control Centralization and decentralization Formalization

5. © 2003 Prentice Hall Inc. All rights reserved.15–5 What Is Organizational Structure? (cont’d) Division of labor: Makes efficient use of employee skills Increases employee skills through repetition Less between-job downtime increases productivity Specialized training is more efficient Allows use of specialized equipment Division of labor: Makes efficient use of employee skills Increases employee skills through repetition Less between-job downtime increases productivity Specialized training is more efficient Allows use of specialized equipment

6. © 2003 Prentice Hall Inc. All rights reserved.15–6 Key Design Questions and Answers for Designing the Proper Organization Structure E X H I B I T 15-1

7. © 2003 Prentice Hall Inc. All rights reserved.15–7 Economies and Diseconomies of Work Specialization E X H I B I T 15-2

8. © 2003 Prentice Hall Inc. All rights reserved.15–8 What Is Organizational Structure? (cont’d) Grouping Activities By: Function Product Geography Process Customer Grouping Activities By: Function Product Geography Process Customer

9. © 2003 Prentice Hall Inc. All rights reserved.15–9 What Is Organizational Structure? (cont’d)

10. © 2003 Prentice Hall Inc. All rights reserved.15–10 What Is Organizational Structure? (cont’d) Narrow Span Drawbacks: Expense of additional layers of management. Increased complexity of vertical communication. Encouragement of overly tight supervision and discouragement of employee autonomy. Narrow Span Drawbacks: Expense of additional layers of management. Increased complexity of vertical communication. Encouragement of overly tight supervision and discouragement of employee autonomy. Concept: Wider spans of management increase organizational efficiency. Concept:

11. © 2003 Prentice Hall Inc. All rights reserved.15–11 Contrasting Spans of Control E X H I B I T 15-3

12. © 2003 Prentice Hall Inc. All rights reserved.15–12 What Is Organizational Structure? (cont’d)

13. © 2003 Prentice Hall Inc. All rights reserved.15–13 Common Organization Designs E X H I B I T 15-4 A Simple Structure: Jack Gold’s Men’s Store

14. © 2003 Prentice Hall Inc. All rights reserved.15–14 Common Organization Designs (cont’d)

15. © 2003 Prentice Hall Inc. All rights reserved.15–15 The Bureaucracy  Strengths –Functional economies of scale –Minimum duplication of personnel and equipment –Enhanced communication –Centralized decision making  Weaknesses –Subunit conflicts with organizational goals –Obsessive concern with rules and regulations –Lack of employee discretion to deal with problems

16. © 2003 Prentice Hall Inc. All rights reserved.15–16 Common Organization Designs (cont’d) Key Elements: + Gains advantages of functional and product departmentalization while avoiding their weaknesses. + Facilitates coordination of complex and interdependent activities. – Breaks down unity-of- command concept. Key Elements: + Gains advantages of functional and product departmentalization while avoiding their weaknesses. + Facilitates coordination of complex and interdependent activities. – Breaks down unity-of- command concept.

17. © 2003 Prentice Hall Inc. All rights reserved.15–17 Matrix Structure (College of Business Administration) E X H I B I T 15-5 (Dean) (Director) Employee

18. © 2003 Prentice Hall Inc. All rights reserved.15–18 New Design Options Characteristics: Breaks down departmental barriers. Decentralizes decision making to the team level. Requires employees to be generalists as well as specialists. Creates a “flexible bureaucracy.” Characteristics: Breaks down departmental barriers. Decentralizes decision making to the team level. Requires employees to be generalists as well as specialists. Creates a “flexible bureaucracy.”

19. © 2003 Prentice Hall Inc. All rights reserved.15–19 New Design Options (cont’d) Concepts: Provides maximum flexibility while concentrating on what the organization does best. Disadvantage is reduced control over key parts of the business. Concepts: Provides maximum flexibility while concentrating on what the organization does best. Disadvantage is reduced control over key parts of the business.

20. © 2003 Prentice Hall Inc. All rights reserved.15–20 A Virtual Organization E X H I B I T 15-7

21. © 2003 Prentice Hall Inc. All rights reserved.15–21 New Design Options (cont’d) T-form Concepts: Eliminate vertical (hierarchical) and horizontal (departmental) internal boundaries. Breakdown external barriers to customers and suppliers. T-form Concepts: Eliminate vertical (hierarchical) and horizontal (departmental) internal boundaries. Breakdown external barriers to customers and suppliers.

22. © 2003 Prentice Hall Inc. All rights reserved.15–22 Why Do Structures Differ?

23. © 2003 Prentice Hall Inc. All rights reserved.15–23 Why Do Structures Differ?

24. © 2003 Prentice Hall Inc. All rights reserved.15–24 Mechanistic Versus Organic Models E X H I B I T 15-8

25. © 2003 Prentice Hall Inc. All rights reserved.15–25 Why Do Structures Differ? – Strategy

26. © 2003 Prentice Hall Inc. All rights reserved.15–26 The Strategy-Structure Relationship E X H I B I T 15-9

27. © 2003 Prentice Hall Inc. All rights reserved.15–27 Why Do Structures Differ? – Technology Characteristics of routineness (standardized or customized) in activities: Routine technologies are associated with tall, departmentalized structures and formalization in organizations. Routine technologies lead to centralization when formalization is low. Nonroutine technologies are associated with delegated decision authority. Characteristics of routineness (standardized or customized) in activities: Routine technologies are associated with tall, departmentalized structures and formalization in organizations. Routine technologies lead to centralization when formalization is low. Nonroutine technologies are associated with delegated decision authority.

28. © 2003 Prentice Hall Inc. All rights reserved.15–28 Why Do Structures Differ? – Environment Key Dimensions: Capacity: the degree to which an environment can support growth. Volatility: the degree of instability in the environment. Complexity: the degree of heterogeneity and concentration among environmental elements. Key Dimensions: Capacity: the degree to which an environment can support growth. Volatility: the degree of instability in the environment. Complexity: the degree of heterogeneity and concentration among environmental elements.

29. © 2003 Prentice Hall Inc. All rights reserved.15–29 The Three Dimensional Model of the Environment E X H I B I T 15-10 Complexity Volatility Capacity

30. © 2003 Prentice Hall Inc. All rights reserved.15–30 Organizational Designs and Employee Behavior Research Findings: Work specialization contributes to higher employee productivity, but it reduces job satisfaction. The benefits of specialization have decreased rapidly as employees seek more intrinsically rewarding jobs. The effect of span of control on employee performance is contingent upon individual differences and abilities, task structures, and other organizational factors. Participative decision making in decentralized organizations is positively related to job satisfaction. Research Findings: Work specialization contributes to higher employee productivity, but it reduces job satisfaction. The benefits of specialization have decreased rapidly as employees seek more intrinsically rewarding jobs. The effect of span of control on employee performance is contingent upon individual differences and abilities, task structures, and other organizational factors. Participative decision making in decentralized organizations is positively related to job satisfaction.

31. © 2003 Prentice Hall Inc. All rights reserved.15–31 Organization Structure: Its Determinants and Outcomes E X H I B I T 15-11