Management A Practical Introduction Third Edition

1. Management A Practical IntroductionThird Edition Angelo Kinicki & Brian K. Williams

2. Chapter 8: Organizational Culture, Structure, & Design Building Blocks of the Organization • What Kind of Organizational Culture Do We Have? • Developing High Performance Cultures • What is an Organization? • Elements of an Organization • Types of Organizational Cultures • Creating the Best Structure • Building a Learning Organization

3. 8.1 What Kind Of Organizational Culture Will You Be Operating In? WHAT IS AN ORGANIZATIONAL CULTURE? • Organizational culture (also called corporateculture) is a system of shared beliefs and values that develops within an organization and guides the behavior of its members • It is the organization’s personality There are two levels of corporate culture: • At the invisible level, the core culture consists of values, beliefs, and assumptions • Core culture might be associated with “it’s the way we do things around here”

4. 8.1 What Kind Of Organizational Culture Will You Be Operating In? • At the visible level, culture is expressed in symbols, stories, heroes, and rites and rituals where: • -symbols are objects, acts, qualities, or events that convey meaning to others • -stories are narratives based on true events which are repeated and sometimes embellished to emphasize a particular value • -heroes are people whose accomplishments embody the values of the organization • -rites and rituals are the activities and ceremonies, planned and unplanned, that celebrate important occasions and accomplishments in the organization’s life

5. 8.1 What Kind Of Organizational Culture Will You Be Operating In? WHY IS CULTURE IMPORTANT? • Culture serves four important functions: 1. Culture provides an opportunity to reinforce the company’s message 2. Culture helps to get everyone on board 3. Culture helps companies manage conflict and change effectively 4. Culture helps employees understand why the company does what it does and how it will achieve its long term goals

6. 8.1 What Kind Of Organizational Culture Will You Be Operating In? Figure 8.1: Four Functions Of Organizational Culture

7. 8.2 Developing High-Performance Cultures WHAT ORGANIZATIONAL CULTURE ENHANCES ECONOMIC PERFORMANCE? There are three perspectives of how culture can enhance performance: 1. The strength perspective assumes that the strength of a corporate culture is related to a firm’s long-term financial success 2. The fit perspective assumes that an organization’s culture must align or fit with its business or strategic context 3. The adaptive perspective assumes that the most effective cultures help organizations anticipate and adapt to environmental changes • Studies show that in the long-term, financial performance is highest for firms with an adaptive culture

8. 8.2 Developing High-Performance Cultures HOW CAN CULTURE BE EMBEDDED IN AN ORGANIZATION? • Cultural values and beliefs are shared within the organization using: 1. Formal Statements 2. Slogans & Sayings 3. Stories, Legends, & Myths 4. Leader Reactions to Crises 5. Role Modeling, Training, & Coaching 6. Physical Design 7. Rewards, Titles, Promotions, & Bonuses 8. Organizational Goals & Performance Criteria 9. Measurable & Controllable Activities 10. Organizational Structure 11. Procedures For Self-Development

9. 8.3 What Is An Organization? HOW ARE ORGANIZATIONS STRUCTURED? • An organization is a system of consciously coordinated activities or forces of two or more people • Organizations are formed for three purposes: for-profit (formed to make money), nonprofit (formed to offer services, but not make a profit), and mutual-benefit (formed to promote members’ interests) • Organizations can be represented in an organization chart (a box-and-lines illustration showing the formal lines of authority and the organization’s official positions)

10. 8.3 What Is An Organization? Figure 8.2: Organization Chart

11. 8.4 The Major Elements Of An Organization WHAT ARE THE COMMON ELEMENTS OF AN ORGANIZATION? • There are seven elements common to all organizations: 1. Common Purpose 2. Coordinated Effort 3. Division Of Labor 4. Hierarchy Of Authority 5. Span Of Control 6. Authority, Responsibility, & Delegation 7. Centralization Versus Decentralization

12. 8.5 Basic Types Of Organizational Structures WHAT ARE THE BASIC TYPES OF ORGANIZATIONAL STRUCTURES? • There are eight types of organizational structures: 1. The simple structure 2. The functional structure 3. The divisional structure 4. The conglomerate structure 5. The hybrid structure 6. The matrix structure 7. The team-based structure 8. The network structure or virtual organization

13. 8.5 Basic Types Of Organizational Structures Figure 8.4: Simple Structure: An Example

14. 8.5 Basic Types Of Organizational Structures Figure 8.5: Functional Structure: Two Examples

15. 8.5 Basic Types Of Organizational Structures Figure 8.6: Divisional Structure: Three Examples

16. 8.5 Basic Types Of Organizational Structures Figure 8.7: Conglomerate Structure

17. 8.5 Basic Types Of Organizational Structures Figure 8.8: Hybrid Structure

18. 8.5 Basic Types Of Organizational Structures Figure 8.9 Matrix Structure

19. 8.5 Basic Types Of Organizational Structures Figure 8.10: Team-Based Structure

20. 8.5 Basic Types Of Organizational Structures Figure 8.11: Network Structure

21. 8.6 Contingency Design: Factors In Creating The Best Structure WHAT IS THE BEST STRUCTURE? • Contingency design is the process of fitting the organization to its environment Firms must consider: 1. The environment (mechanistic versus organic) 2. The environment (differentiation versus integration) 3. Size 4. Technology 5. Organizational life cycle

22. 8.7 Toward Building A Learning Organization WHY DO ORGANIZATIONS RESIST LEARNING? Some firms unconsciously resist learning because: • -people believe that competition is always better than collaboration • -fragmentation leads to specialized fiefdoms that resist learning • -unless encouraged, people won’t take risks, the basis for learning

23. 8.7 Toward Building A Learning Organization WHAT IS THE NEW PARADIGM? • A new paradigm suggests that everyone in an organization is business together- and everyone has a responsibility for working toward common goals