Organizing Structure

1. Organizing Structure 3 Chapter 8

2. Learning Objectives • Explain the purpose of an organization chart. • Describe factors and changes that affect an organizations structure. • Define a contingency approach. • Identify the different types of departmentalization. • Describe the different types of organizational structure, including a virtual organization. • Discuss the types and effective use of committees.

3. Organizing Structure • Reflects how groups compete • Helps foster good performance Organizing Growth Stages • 3 stages – Family, Entrepreneurial, and Professional Management • Structure must allows adaptation to change Organizing Charts • Series of boxes • Identifies relationships

4. Factors Affecting Organization • Important factors – strategy, size, environment, and technology Strategy • Appropriate structure will not guarantee success • Structure can help or hinder implementation • Alfred D. Chandler – structure follows strategy • Not the only variable to impact structure • Matching strategy to structure is complex

5. Factors Affecting Organization Size • Sales volume • Small versus large organizations • Change occurs naturally as an organization grows in size Environment • Tom Burns and G. M. Stalker • Mechanistic versus Organic systems • Paul Lawrence and Jay Lorsch

6. Factors Affecting Organization Organization and Technology • Joan Woodward • Three modes of production • Some findings • Edward Harvey • Findings similar to Woodward’s • General conclusion • Clear relationship

7. Changes Affecting Organization Structure Outsourcing • Used by large and small companies • Numerous potential benefits • Potential drawbacks • Not a cure-all • Can work well in right situations

8. A Contingency Approach • Several factors affect • No one best way to organize • Process of assessing • Analyze and appraise

9. Departmentalization • Grouping jobs into related work units Work Functions • Functional departmentalization • Primary advantage • Negative effects • Conflict

10. Departmentalization • Product • Employees identify with product • Opportunities • Problems • Geographic • Use of local employees • Creates customer goodwill • Lead to high service level

11. Departmentalization • Customer • Common example • Advantages and disadvantages • Other Types – several others • Simple numbers • Process or equipment • Time or shift • Hybrid Departmentalization • Departmentalize on one basis then another as the organization grows

12. Types of Organizational Structures • Several basic structures – line, line and staff, and matrix • New structures horizontal and virtual Line Structure • Authority moves top to bottom • Simplest organization structure • Advantage • Disadvantage • Exists in small organizations

13. Types of Organizational Structures Line and Staff Structures • Staff functions • Line functions Line and Staff Conflicts • Staff specialists versus Line managers

14. Types of Organizational Structures Matrix Structure • Project teams • Temporary life • Advantages • Serious problem • violates unity of command

15. Types of Organizational Structures Horizontal Structure • Pure form creates two groups • Characteristics • Advantages The Virtual Organization • 3 common types • Network of collaborators • Technology plays a central role

16. Trends in Organization Structure • Flat structure versus Tall structure • No clear conclusion • Japanese have fewer managers and flatter structures • Peters and Waterman – In Search of Excellence • Simple form and lean staff • Today’s trend

17. Committees • Permanent or temporary Using Committees Effectively • First step – function, scope, authority • Careful thought – selection of members and chair Boards of Directors • Inside and Outside boards • More active • Today’s trend