Org Structure & Design

1. Org Structure & Design Ch 15 Apr 29, 2008

2. Structure Basic Dimensions • Org structure – formal structure betw groups & people of allocation of tasks, responsibilities, authority • View w/org chart • Shows formal lines of authority • 2 basic requirements of org structure – • Divide labor into distinct tasks • Coordinate tasks so employees can work

3. Coordination Options • Can coordinate tasks by: • Using informal communication • Examples? • Use formal hierarchy (but…limited) • Use of standardization • Examples?

4. Dimensions of Org Structure • Hierarchy • Tall (many levels) vs flat (few levels) • Division of Labor • Specialization of tasks • Span of Control • Number of people reporting to ea manager • Wide (many people) vs narrow (few people) • What is this linked to?

5. Dimensions (cont.) • Line v staff positions • Line = decision making; staff = support • Decentralization • Level of delegation of power • Changes over time, as org grows • What is often assumed v. what is best?

6. Ways to structure orgs • Departmentalization – how to organize units • Functional orgs – departmentalize by task • Examples? • Disadvantages? • Product orgs – departmentalize by output • Examples? • Disadvantages?

7. Matrix Orgs • Matrix orgs – employees report to both project/product manager & functional / division manager • Combines function and product forms • Use of dual authority structure – 2 bosses • When does this work well?

8. Emerging forms of depts. • Team-based (lateral) structure • Very flat structure using cross-functional teams • Very little formalization w/ empowered teams • Advantages? Disadvantages?

9. Emerging forms • Network structure (aka ‘virtual org’) • Cisco Systems – network of suppliers, manufacturers, other partners • Outsourcing noncritical functions to those w/expertise, core org coordinates process • Advantages? Disadvantages?

10. Org Design • Process of coordinating the structure elements • Range of theories • Classical org theory – assume one best way to design/structure org (early 1900s) • What was presumed to be best? • Neoclassical theory – human relations focus w/goal of ee satisfaction • What was preferred?

11. Org Design • Contingency Approaches – Lawrence& Lorsch (1969); now most accepted org design • Design depends on org’s environment • Including economy, competitors, geography, suppliers, workforce • Studies comparing orgs in stable v unstable environments resulted in models of ‘mechanistic’ v ‘organic’ orgs

12. Org Design • Mechanistic Orgs – stable environments with little change in product, market, or technology • What is their strength? • Organic Orgs – unstable environments • What are their features? • What is most effective, according to Lawrence & Lorsch?

13. Mintzberg’s Theory • Orgs composed of 5 basic elements; which one is dominant determines most effective design for that situation • How are each defined? • Operating Core: • Strategic Apex: • Middle Line: • Technostructure: • Support Staff:

14. Mintzberg (cont.) • Mintzberg specifies 5 designs based on which of the 5 groups dominates… • How is each structured? • 1) Simple structure: • 2) Machine bureaucracy: • 3) Professional bureaucracy: • 4) Divisional structure: • 5) Adhocracy: