Designing Adaptive Organizations

1. Designing Adaptive Organizations Week 9

2. Chapter Outline • Organizing • Vertical and Horizontal • Advantages/ Disadvantages • Evolution of Organization Structure • Structure and Strategy • Structure and Technology • Types of Technology • Manufacturing, service, digital

3. Organizing What? Organizational resources to achieve strategic goals • Division of labor • Lines of authority • Coordination Link to Planning

4. Organizing the Vertical Structure Organizing Structure Defines: • The set of formal tasks assigned to individuals and departments • Formal reporting relationships • The design of the systems to ensure effective coordination

5. Organizing the Vertical Structure Work Specialization Chain of Command

6. Organization Chart

7. Authority, Responsibility, and Delegation • What is Authority? Formal and legitimate right of a manager to make decisions, issue orders, and allocate resources to achieve organizational outcomes. • Authority is vested in positions, not people • Authority is accepted by subordinates • Authority flows down the vertical hierarchy • Accountability • Delegation

8. Line and Staff Authority Line departments perform primary tasks Ex: Shoes, clothing • Sales • Production Line Authority: Direct & control subordinates Staff departments support line departments • Finance • Human Resources • Research • Staff authority: advise, recommend specialist expertise

9. Span of Management • Span of management? • Determinants • Subordinates similar work, single location, skills of subordinates, etc. • Determines if the organization is a: • Tall Structure • Flat Structure

10. Reorganization and Span of Management

11. Centralization and Decentralization • Centralization • Decentralization • Factors: • Greater change and uncertainty are usually associated with decentralization • Centralization or decentralization should fit the firm’s strategy

12. Departmentalization:Functional & Divisional • Functional Approach? • Divisional Approach • Grouping based on organizational output • Product, Program, Business (self-contained unit) • Geographic- or Customer-Based Divisions

13. Functional Versus Divisional Structures

14. Geographic-Based Global Organization Structure

15. Departmentalization: Matrix & Team Approach • Matrix combines functional and divisional approaches • Improve coordination and information • Dual lines of authority

16. Matrix Structure

17. Global Matrix Structure

18. Team Approach • Widespread trend in departmentalization • Allows managers to delegate authority to lower levels, Flexible, responsive • Types • Cross-functional • Permanent teams • Horizontal coordination & communication

19. Virtual Network Approach • Extends idea of horizontal coordination and collaboration • Partnerships • Alliances • Could be a loose interconnected group • i.e. outsourcing Virtual network structure means that the firm subcontracts most of its major functions to separate companies.

20. Network Approach to Departmentalization

21. Structural Advantages and Disadvantages

22. Organizing for Horizontal Coordination • Lack of coordination and cooperation can cause information problems • Horizontal • Meet fast-shifting environment • Break down barriers between departments • Need integration and coordination

23. Task Forces, Teams, and Project Management Task Force – a temporary team or committee formed to solve a specific short-term problem involving several departments Project Manager – a person responsible for coordinating the activities of several departments on a full-time basis for the completion of a specific project Cross-functional Team – furthers horizontal coordination by including members across the organization

24. Evolution of Organization Structures Traditional Vertical Structure Cross-Functional Teams and Project Managers Reengineering to Horizontal Teams

25. Structure Follows Strategy Business performance is influenced by the company’s structure Strategic goals should drive structure Structure should be used to facilitate strategic goals

26. Factors Affecting Organization Structure

27. Relationship of Structural Approach to Strategy and the Environment

28. Structure Fits the Technology • Technology - knowledge, tools, techniques and activities • Technology varies but it can impact structure • Difference among three manufacturing technologies is technical complexity: • Small-batch and unit production • Large-batch and mass production • Continuous process production

29. Manufacturing Technology and Organization Structure

30. Service Technology Digital technology is the use of the Internet and other digital processes to support business online. • Service organizations: • Examples. • Service technology defined as: • Intangible output • Direct contact with customers • Need more interaction/horizontal communication