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Organizational Design Fundamentals. Contemplative Questions. In what type of company would I like to work? How do organizations process information? Are all organizations the same? How are they different? What career paths can I pursue?. Management Functions.

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Contemplative questions
Contemplative Questions

  • In what type of company would I like to work?

  • How do organizations process information?

    • Are all organizations the same?

    • How are they different?

  • What career paths can I pursue?


Management functions
Management Functions

Designing organizational structures is part of organizing, one of the four basic management functions.

Planning Organizing Leading Controlling

Lead to

Achieving the

organization’s

stated

purpose

Defining

goals, estab-

lishing

strategy, and

developing

subplans to

coordinate

activities

Determining

what needs

to be done,

how it will

be done,

and who is

to do it

Directing

and moti-

vating all

involved

parties and

resolving

conflicts

Monitoring

activities

to ensure

that they are

accomplished

as planned


Org chart example
Org chart example

Chief Executive

Officer

Executive

Vice-President

Executive

Vice-President

President

Vice-

President

Vice-

President

Vice-

President

Vice-

President

Vice-

President

Region

1

Region

2

Region

3

Region

4

Region

5

District

A

District

B

District

C

District

D

District

E

District

F

District

G


Alternate org form a matrix organization
Alternate Org. Form:A Matrix Organization

Design

Engineering

Manu-

facturing

Contract

Admin.

Human

Resources

Purchasing

Accounting

Alpha

Project

Design

Group 1

Mftg.

Group 1

Contract

Group 1

Purch.

Group 1

Acctg.

Group 1

HR

Group 1

Beta

Project

Design

Group 2

Mftg.

Group 2

Contract

Group 2

Purch.

Group 2

Acctg.

Group 2

HR

Group 2

Gamma

Project

Design

Group 3

Mftg.

Group 3

Contract

Group 3

Purch.

Group 3

Acctg.

Group 3

HR

Group 3

Omega

Project

Design

Group 4

Contract

Group 4

Purch.

Group 4

Acctg.

Group 4

HR

Group 4

Mftg.

Group 4


An is department org chart
An ISDepartment Org Chart

Fig. 1-3.

IS professionals frequently work in project-based teams.

Only 1 team works on a project, usually.

People work on many projects, however (e.g. a matrix organization).

Teams are comprised of diverse group of members from several areas, and may include users, managers, analysts, programmers, etc.


Organizations
Organizations

  • Whether you are a programmer, analyst, user or manager, it will help your career if you can understand how organizations work.

    • Analysts, especially, need to understand how organizations process information.

  • There are literally millions of organizations in the world.

    • When is a group of people considered an organization?

    • An organization is a ________ with some form of ___________ who collectively possess some ___________ .


Organizations1
Organizations

  • In what type of organization would you like to work?

  • All organizations vary in terms of their strategy, their structure, their processes, their culture.

  • Organizational structure is almost always predetermined. It is there on your first day on the job.

  • What works at one company may not work in another, therefore it would be helpful to classify organizations into certain types.

    • Then we can make general statements about the types.


Organizations2
Organizations

  • In what type of organization would you like to work?

  • Think of organizations in terms of 3 dimensions:

    • Degree of complexity

    • Formalization

    • Centralization

  • These dimensions will help you assess prospective employers

    • They generate great questions for job interviews.

    • They also help to determine how information is processed within the organization.


Degree of complexity
Degree of Complexity

  • Two dimensions of organizational design

    • Vertical (the number of layers of management)

      • Span of control = avg. # employees / manager

    • Horizontal (how jobs are differentiated)

      Unity of Command says everyone should report to one and only one superior (this is often not the case in IS).

  • IS positions commonly require team work

    • You may have a superior who advises you and team leaders or project managers who give you specific direction


Vertical complexity contrasting spans of control

Assuming Span of 4

Vertical complexityContrasting Spans of Control

(Highest)

Assuming Span of 8

1

1

1

4

8

2

16

64

3

Organization Level

64

512

4

256

4,096

5

1,024

6

7

4,096

(Lowest)

Span of 4:

4,096 Operatives. 1,365 Managers

Span of 8:

4,096 Operatives. Only 585 Managers!

Which organization looks more appealing to you?


Horizontal complexity functional departmentalization
Horizontal complexityFunctional Departmentalization

Plant Manager

Manager,

Human

Resources

Manager,

Engineering

Manager,

Accounting

Manager,

Manufacturing

Manager,

Purchasing

Castings

Dept. Mgr.

Press

Dept. Mgr.

Tube

Dept. Mgr.

Finishing

Dept. Mgr.

Inspection

Dept. Mgr.


Horizontal complexity product departmentalization
Horizontal complexityProduct Departmentalization

Bombardier, Inc.

Mass Transit

Sector

Recreational and Utility

Vehicles Sector

Rail Products

Sector

Mass Transit

Division

Bombardier-Rotax

(Vienna)

Rail and Diesel Products

Division

Recreational

Products

Division

Logistic

Equipment

Division

Industrial

Equipment

Division

Bombardier-

Rotax

(Gunskirchen)


Horizontal complexity customer departmentalization
Horizontal complexityCustomer Departmentalization

Figure 10-7

Director

of Sales

Manager,

Retail Accounts

Manager,

Wholesale Accounts

Manager,

Government Accounts


Horizontal complexity geographic departmentalization
Horizontal complexityGeographic Departmentalization

Vice President

for Sales

Sales Director,

Western Region

Sales Director

Southern Region

Sales Director,

Midwest Region

Sales Director

Eastern Region


Centralization and decentralization
Centralization and Decentralization

DEGREE OF CENTRALIZATION

DEGREE OF DECENTRALIZATION

Judging by the size of the desk, where do decisions get made?

Which organization looks more appealing to you?


Two extremes for organizational types
Two Extremes for Organizational Types

Organic

Mechanistic

Rigid hierarchical

relationships

Fixed duties

High formalization

Formalized

communication

channels

Centralized

decision authority

Vertical and horizontal

collaboration

Adaptable duties

Low formalization

Informal

communication

Decentralized

decision authority


Types of organizations
Types of Organizations

Mechanistic

Organic

Rigid hierarchical

relationships

Fixed duties

High formalization

Formalized

communication

channels

Centralized

decision authority

Vertical and horizontal

collaboration

Adaptable duties

Low formalization

Informal

communication

Decentralized

decision authority

In which type of organization would you like to work?

Do you like to take orders?

Are you risk-averse, i.e. do you avoid risk?

Do you prefer to be aware of the ‘big picture’?


Woodward s findings on technology structure and effectiveness
Woodward’s Findings on Technology, Structure, and Effectiveness

Unit

Production

Mass

Production

Process

Production

Structural

characteristics

Low vertical

differentiation

Moderate vertical

differentiation

High vertical

differentiation

Low horizontal

differentiation

High horizontal

differentiation

Low horizontal

differentiation

Low

formalization

High

formalization

Low

formalization

Most effective

structure

Organic

Mechanistic

Organic


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