1. Organization Structure

2. The Organization Goals and Strategy Environment Size Culture
Technology
Structure
Formalization
Specialization
Hierarchy of Authority
Centralization
Professionalism
Personnel Ratios

3. Organization Structure
Defines how tasks are divided, resources are deployed, and departments are coordinated
The set of formal tasks assigned to individuals & depts.
Formal reporting relationships
The design of systems to ensure effective coordination of employees across departments
Organizing process leads to the creation of organization structure

4. Organizing the Vertical Structure:Work Specialization
Tasks are subdivided into individual jobs
Division of labor concept
Employees perform only the tasks relevant to their specialized function
Jobs tend to be small, but they can be performed efficiently

5. Organizing the Vertical Structure: Chain of Command
Unbroken line of authority that links all persons in an organization
Shows who reports to whom
Associated with two underlying principles
Unity of Command: (each employee is held responsible to only one supervisor)
Scalar Principle:(clearly defined line of authority)

6. Organizing the Vertical Structure: Authority
Formal and legitimate right of a manager to make decisions and issue orders
Allocate resources to achieve organizationally desired outcomes
Authority is distinguished by three characteristics
Authority is vested in organizational positions, not people
Authority is accepted by subordinates
Authority flows down the vertical hierarchy

7. Organizing the Vertical Structure: Accountability
Mechanism through which authority and responsibility are brought into alignment
People are subject to reporting and justifying task outcomes to those above them in the chain of command
Can be built into the organization structure

8. Organizing the Vertical Structure: Delegation
Give thorough instructions
Maintain feedback
Evaluate and reward performance
Techniques for Delegation
Delegate the whole task
Ensure that authority equals responsibility (empowerment)
Select the right person

9. Organizing the Vertical Structure: Span of Management/Span of Control
Number of employees who report to a supervisor
Traditional view, about seven subordinates per manager
Many lean organizations today have 30, 40, or even higher subordinates
When supervisors must be closely involved with subordinates, the span should be small
Supervisors need little involvement with subordinates, it can be large

10. Tall versus Flat Structure
Span of Control used in an organization determines whether the structure is tall or flat
Tall structure has a narrow span and more hierarchical levels
Flat structure has a wide span, is horizontally dispersed and fewer hierarchical levels
The trend has been toward wider spans of control

11. Organizing the Vertical Structure:Formalization
Written document used to direct & control employees

12. Departmentalization The basis on which individuals are grouped into departments
Five structural alternatives
Vertical functional approach. People are grouped together in departments by common skills.
Divisional approach. Grouped together based on a common product, program, or geographical region.
Horizontal matrix approach. Functional and divisional chains of command. Some employees report to two bosses
Team-based approach. Created to accomplish specific tasks
Network approach. Small, central hub electronically connected to their other organizations that perform vital functions. Departments are independent, and can be located anywhere.

13. Advantages of Functional Approach
Efficient use of resources
In-depth skill specialization
Career progress within the department
Top manager has direction and control
Excellent coordination
High-quality problem solving
Simplifies training 24

14. Disadvantages of Functional Approach
Poor communication among functional departments
Slow response to external changes
Centralized decision making
Responsibility for problems difficult to identify
Employees have limited view
Limited general management training 25

15. Divisional Approach
Departments are grouped together based on organizational outputs
Diverse departments are brought together to produce a single organizational output
Encourages decentralization 26

16. Advantages of Geographic Divisions
Responsive in an unstable environment
Shows concern for customer
Coordinates across functional departments
Identifies responsibility for product
Emphasizes overall product and division goals
Develops general management skills
Minimizes travel costs 28

17. Disadvantages of Geographic Divisions
Duplication of resources across divisions
Less specialization in divisions
Poor coordination across divisions
Less top management control
Competition for resources among divisions
More managers needed 29

18. Matrix Approach
Functional and divisional chains of command simultaneously
Dual lines of authority
Functional hierarchy of authority runs vertically
Divisional hierarchy runs laterally
Violates the unity of command concept 31

19. Advantages of Matrix
More efficient use of resources than single hierarchy
Adaptable to changing environment
Development of both general and specialists management skills
Expertise available to all divisions
Enlarged tasks for employees 32

20. Disadvantages of Matrix
Dual chain of command
High conflict between two sides of matrix
Many meetings to coordinate activities
Need for human relations training
Power domination by one side of matrix 33

21. Team Approach
Cross-functional teams consist of employees from various functional departments
Interdisciplinary approach to management
Permanent team solve ongoing problems
Reengineering radical redesign for improvements in cost, quality, service and speed 34

22. Advantages of Teams Same advantages as functional structure
Reduced barriers among departments
Quicker response time
Better morale
Reduced administrative overhead 35

23. Disadvantages of Teams
Dual loyalties and conflict
Time and resources spent on meetings
Unplanned decentralization 36

24. Network Approach
Organization divides major functions into separate companies brokered by a small headquarters organization
"Where is the organization?"
Especially appropriate for international operations
Held together with phones, faxes, and other electronic technology 37

25. Advantages of Network Approach
Global competitiveness
Work force flexibility
Reduced administrative overhead 38

26. Disadvantages of Network Approach
No hands-on control
Loss of part of the organization severely impacts remainder of organization
Employee loyalty weakened 39

27. Quality of collaboration across departments
Coordination
Quality of collaboration across departments

28. Structural Design Project Management Task Forces Teams
Task Force...A temporary team or committee formed to solve a specific short-term problem
Team…Participants from several departments who meet to solve ongoing problems
Project Manager…A person responsible for coordinating the activities of several departments

29. Reengineering One of the most popular management concepts
Complete rethinking and transformation of key business processes
Leads to greater flexibility
Often involves a shift to horizontal structure based on teams
Requires identifying customer needs and then designing processes and aligning people to meet those needs
Can squeeze out the dead space and time lags in work flows
May lead to redesigning information systems to cut across departmental lines

30. Differences in Mechanistic versus Organic Organizations
Contemporary Loose, Organic Organization
Traditional Tight,
Mechanistic Organization
Horizontal structure is dominant
1. Shared tasks Relaxed hierarchy, authority by expertise, few rules Horizontal communication, face-to-face Many teams, task forces, and integrators Informal, decentralized decision making
Dominant Structural Approach
Vertical Structure is dominant
1. Specialized tasks Strict hierarchy authority, many rules Vertical communication and reporting systems Few teams, task forces, or integrators Centralized decision making