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CHAPTER EIGHT

Effective Management 3 rd Edition Chuck Williams. CHAPTER EIGHT. Designing Adaptive Organizations. 1. What Would You Do?. Yahoo Headquarters Sunnyvale, CA.

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CHAPTER EIGHT

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  1. Effective Management 3rd Edition Chuck Williams CHAPTER EIGHT Designing Adaptive Organizations 1

  2. What Would You Do? Yahoo HeadquartersSunnyvale, CA Where do you start to fix a company that has a $100 million loss, falling ad sales, plummeting stock prices, and an unmanageable organizational structure? Yahoo has done a poor job in establishing relationships with customers What structure should Yahoo adopt? What should you do about the informal culture? How can better decisions be made for the company? 2

  3. Organizational Structure Organizational Structure The vertical and horizontal configuration of departments, authority, and jobs within a company. Organizational Process The collection of activities that transform inputs into outputs that customers value. 3

  4. Organizational Structure Process View of Microsoft’s Organization 4 Adapted from Exhibit 8.1

  5. Designing Organizational Structures After reading the next three sections, you should be able to: describe the departmentalization approach to organizational structure explain organizational authority discuss the different methods for job design 5

  6. Functional Product Customer Geographic Matrix Departmentalization 1 6

  7. Functional Departmentalization 1.1 7

  8. Advantages Disadvantages • Work done by highly skilled specialists • Lowers costs through reduced duplication • Communication and coordination problems are lessened • Cross-department coordination can be difficult • May lead to slower decision making • Produces managers with narrow experiences Functional Departmentalization 1.1 8

  9. United Technologies Carrier Chubb Hamilton Sundstrand Otis Pratt & Whitney Sikorsky --Administrative services --Communication & public relations--Customer service & support --E-Business--Engineering--etc… UTC Power Adapted from Exhibit 8.4 Product Departmentalization 1.2 9

  10. Advantages Disadvantages • Managers specialize, but have broader experiences • Easier to assess work-unit performance • Decision-making is faster • Duplication of activities • Difficult to coordinate across departments Product Departmentalization 1.2 10

  11. SprintCorporation BusinessSolutions ConsumerSolutions SprintNorth Supply Local TelecomDivision U.S. Businesses LocalService Supply Chain Integration Local Service InternationalBusinesses Long-DistanceService LogisticsNetwork Long-DistanceService Solutions WirelessServices DistributionCenters Wireline &WirelessServices (Partial Listing) Customer Departmentalization 1.3 11 Adapted from Exhibit 8.5

  12. Advantages Disadvantages • Focuses on customer needs • Products and services tailored to customer needs • Duplication of resources • Difficult to coordinate across departments • Efforts to please customers may hurt the company Customer Departmentalization 1.3 12

  13. Geographic Departmentalization Coca-Cola EnterprisesTerritories of Operation 1.4 13 Exhibit 8.6

  14. Advantages Disadvantages • Responsive to the demands of different market areas • Unique resources located close to the customer • Duplication of resources • Difficult to coordinate across departments Geographic Departmentalization 1.4 14

  15. CitiGroup International Global Consumer North America (excludingMexico) Europe,Middle East, Africa Asia Pacific Global Corporate &Investment Bank Country Managers inSpain, UAE, Kenya, etc. Country Managers in China, Australia, etc. Global InvestmentManagement Smith Barney Matrix Departmentalization 1.5 15 Adapted from Exhibit 8.7

  16. Advantages Disadvantages • Efficiently manage large, complex tasks • Pool of available resources • Requires high levels of coordination • Conflict between bosses • Requires high levels of management skills Matrix Departmentalization 1.5 16

  17. Chain ofCommand Line versusStaff Authority Delegationof Authority Degree of Centralization Organizational Authority 2 17

  18. Chain of Command • The vertical line of authority in an organization • Clarifies who reports to whom • Unity of command • workers report to only one boss • matrix organizations violate this principle 2.1 18

  19. Line Authority the right to command immediate subordinates in the chain of command Staff Authority the right to advise but not command others LINE VERSUS STAFF AUTHORITY versus 2.2 19

  20. Delegation of Authority Delegation of Authority The assignment of direct authority and responsibility to a subordinate to complete tasks for which the manager is normally responsible. 2.3 20

  21. Delegation of Authority 2.3 21 Adapted from Exhibit 8.8

  22. How to Be a More Effective Delegator Trust your staff to do a good job Avoid seeking perfection Give effective job instructions Know your true interests Follow up on progress. Praise the efforts of your staff. Don’t wait to the last minute to delegate. Ask questions, expect answers, assist employees. Provide the resources you would provide if doing the assignment yourself. Delegate to the lowest possible level. 2.3 22 Adapted from Exhibit 8.9

  23. Centralization of authority • primary authority is held by upper management • Decentralization • significant authority is found in lower levels of the organization • Standardization • solving problems by applying rules, procedures, and processes Degree of Centralization 2.4 23

  24. SpecializedJobs Job Rotation, Enlargement, Enrichment JobCharacteristicsModel JOB DESIGN 3 24

  25. A job that is a small part of a larger task or process • Jobs are simple, easy to learn, and economical • Can lead to low satisfaction, high absenteeism, & • employee turnover Job Specialization 3.1 25

  26. Job Rotation, Enlargement, and Enrichment • Job Rotation • periodically moving workers from one specialized job to another • Job Enlargement • increasing the number of tasks performed by a worker • Job Enrichment • adding more tasks and authority to an employee’s job 3.2 26

  27. Job Characteristics Model • A job redesign approach that seeks to increase employee motivation • Emphasizes internal motivation • experience work as meaningful • experience responsibility for work outcomes • knowledge of results 3.3 27

  28. Job Characteristics Model 3.3 28 Adapted from Exhibit 8.10

  29. Biz Flix Does David Spade consider his job intrinsically motivating? Reality Bites Take Two Video CLICK 29

  30. Job Satisfaction Task Identity 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% probability of success 66% Task Significance 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% probability of success 69% Skill Variety 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% probability of success 70% The Job Characteristics Model What Really Works 3.3 30

  31. The Job Characteristics Model Job Satisfaction What Really Works Autonomy 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% probability of success 73% Provide Feedback 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% probability of success 70% 3.3 31

  32. The Job Characteristics Model Job Satisfaction What Really Works High Growth Need Strength/Job Satisfaction 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% probability of success 84% Low Growth Need Strength/Job Satisfaction 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% probability of success 69% 3.3 32

  33. Workplace Absenteeism Task Identity 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% probability of success 63% Task Significance 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% probability of success 68% Skill Variety 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% probability of success 72% The Job Characteristics Model What Really Works 3.3 33

  34. The Job Characteristics Model Workplace Absenteeism What Really Works Autonomy 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% probability of success 74% Provide Feedback 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% probability of success 72% 3.3 34

  35. Redesigning Jobs Combining Tasks Forming Natural Work Units Establishing Client Relationships Vertically Loading the Job Opening Feedback Channels JOB REDESIGN TECHNIQUES 3.3 35

  36. Designing Organizational Processes After reading the next two sections, you should be able to: explain the methods that companies are using to redesign international organizational processes (i.e., intraorganizational processes) describe the methods that companies are using to redesign external organizational processes (i.e., interorganizational processes) 36

  37. Reengineering Empowerment BehavioralInformality Intraorganizational Processes 4 37

  38. Reengineering • The fundamental rethinking and radical redesign of business processes • Intended to achieve dramatic improvements in performance • Change the orientation from vertical to horizontal • Changes task interdependence 4.1 38

  39. Reengineering and Task Interdependence 4.1 39 Adapted from Exhibit 8.11

  40. EmpoweringWorkers Permanently passing decision-making authority and responsibilities frommanagers to workers by giving them the information and resources they need to make good decisions Empowerment • A feeling of intrinsic motivation • Workers perceive meaning in their work • Employees are capable of self-determination 4.2 40

  41. Behavioral Informality Behavioral Formality • Spontaneity • Casualness • Interpersonal familiarity • Routine & regimen • Specific behavior rules • Impersonal detachment Behavioral Informality 4.3 41

  42. Behavioral Informality Popular ways to increase behavioral informality Casual Dress and Open Offices 42

  43. Doing the Right Thing • Don’t Scavenge That Office If • Somebody Is Still in It • It’s roadkill in the animal kingdom: coworkers • scavenge for office leftovers…often before an • employee leaves • Do the right thing by maintaining the dignity of departing coworkers: Wait until the office is empty 4.3 43

  44. Modular Organizations VirtualOrganizations Interorganizational Processes 5 44

  45. Modular Organizations 5.1 Adapted from Exhibit 8.12` 45

  46. Advantages Disadvantages • can cost less to run thantraditional organizations • lets organizations focuson core competencies • loss of control from outsourcing • may reduce their competitive advantage Modular Organizations 5.1 46

  47. Virtual Organizations 5.2 47 Adapted from Exhibit 8.13

  48. Advantages Disadvantages • let companies share costs • fast and flexible • being the “best” shouldprovide better products • difficult to control the quality of partners • requires tremendous management skills Web Link http://www.agileweb.com Virtual Organizations 5.2 48

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