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1、CHAPTER6ORGANIZATIONAL STRUCTURE AND DESIGNLEARNING OUTCOMES After reading this chapter students should be able to:1. Describe 6 key elements in organizational design. 2. Identify the contingency factors that favor the mechanistic model or the organic model.3. Compare and contrast traditional and co
2、ntemporary organizational designs. 4. Discuss the design challenges faced by todays organizations. Management Myth MYTH: Bureaucracies are inefficient.TRUTH: Bureaucratic organizations are still alive and well and continue to dominate most medium-sized and large organization. SUMMARYThis chapter dis
3、cusses the key concepts and their components and how managers create a structured environment where employees can work efficiently and effectively. Once the organizations goals, plans, and strategies are in place, managers must develop a structure that will best facilitate the attainment of those go
4、als.I. WHAT ARE THE SIX KEY ELEMENTS IN ORGANIZATIONAL DESIGN?Learning Catalytics Question: Instructor Directions and Follow-UpQuestion TypeQuestionAnswer/ResponseFor the InstructorWord CloudWhat are the six key elements in organizational design?Options: work specialization, departmentalization, aut
5、hority, responsibility and power, span of control, centralization and decentralization, and formalizationUse this at the start of class to aid students recall of the six key elements of organizational design.A. Introduction1. Organization design decisions are typically made by senior managers. 2. Or
6、ganization design applies to any type of organization.3. Formulated by management writers such as Henri Fayol and Max Weber in the early 1900s. 4. These principles still provide valuable insights into designing effective and efficient organizations. B. What Is Work Specialization? 1. Work specializa
7、tion is dividing work activities into separate jobs tasks. a) Individuals specialize in doing part of an activity.b) Work specialization makes efficient use of the diversity of skills that workers hold. 2. Some tasks require highly developed skills; others lower skill levels. 3. Excessive work speci
8、alization or human diseconomies, can lead to boredom, fatigue, stress, low productivity, poor quality, increased absenteeism, and high turnover. (See Exhibit 6-1.) 4. Todays view is that specialization is an important organizing mechanism for employee efficiency, but it is important to recognize the
9、 economies work specialization can provide as well as its limitations.C. What Is Departmentalization?1. Departmentalization is when common work activities are grouped back together so work gets done in a coordinated and integrated way. 2. There are five common forms of departmentalization (see Exhib
10、it 6-2).a) Functional Groups - employees based on work performed (e.g., engineering, accounting, information systems, human resources)b) Product Groups - employees based on major product areas in the corporation (e.g., womens footwear, mens footwear, and apparel and accessories)c) Customer Groups -
11、employees based on customers problems and needs (e.g., wholesale, retail, government)d) Geographic Groups - employees based on location served (e.g., North, South, Midwest, East)e) Process Groups - employees based on the basis of work or customer flow (e.g., testing, payment)3. With todays focus on
12、the customer, many companies are using cross-functional teams, which are teams made up of individuals from various departments and that cross traditional departmental lines.D. What are Authority and Responsibility? 1. The chain of command is the continuous line of authority that extends from upper o
13、rganizational levels to the lowest and clarifies who reports to whom. 2. An employee who has to report to two or more bosses might have to cope with conflicting demands or priorities. 3. Authority refers to the rights inherent in a managerial position, to give orders and expect the orders to be obey
14、ed.4. Each management position has specific inherent rights that incumbents acquire from the positions rank or title. a) Authority is related to ones position and ignores personal characteristics.5. When managers delegate authority, they must allocate commensurate responsibility. a) When employees a
15、re given rights, they assume a corresponding obligation to perform and should be held accountable for that performance.b) Allocating authority without responsibility creates opportunities for abuse.c) No one should be held responsible for something over which he or she has no authority.6. What are t
16、he different types of authority relationships? a) The early management writers distinguished between two forms of authority.(1) Line authority entitles a manager to direct the work of an employee. (a) It is the employer-employee authority relationship that extends from top to bottom.(b) See Exhibit
17、6-3. (c) A line manager has the right to direct the work of employees and make certain decisions without consulting anyone. (d) Sometimes the term “line” is used to differentiate line managers from staff managers.(e) Line emphasizes managers whose organizational function contributes directly to the
18、achievement of organizational objectives (e.g., production and sales). (2) Staff managers have staff authority (e.g., human resources and payroll). (a) A managers function is classified as line or staff based on the organizations objectives.(b) As organizations get larger and more complex, line mana
19、gers find that they do not have the time, expertise, or resources to get their jobs done effectively. (c) They create staff authority functions to support, assist, advice, and generally reduce some of their informational burdens. (d) Exhibit 6-4 illustrates line and staff authority. 7. What is Unity
20、 of Command?a) The chain of command is the continuous line of authority that extends from upper organizational levels to the lowest and clarifies who reports to whom. b) An employee who has to report to two or more bosses might have to cope with conflicting demands or priorities. c) Therefore, the e
21、arly management writers argued that an employee should have only one superior (Unity of command). d) If the chain of command had to be violated, early management writers always explicitly designated that there be a clear separation of activities and a supervisor responsible for each.e) The unity of
22、command concept was logical when organizations were comparatively simple.f) There are instances today when strict adherence to the unity of command creates a degree of inflexibility that hinders an organizations performance.8. How does the contemporary view of authority and responsibility differ fro
23、m the historical view?a) The early management writers assumed that the rights inherent in ones formal position in an organization were the sole source of influence. b) This might have been true 30 or 60 years ago. c) It is now recognized that you do not have to be a manager to have power, and that p
24、ower is not perfectly correlated with ones level in the organization.d) Authority is but one element in the larger concept of power.9. How do authority and power differ?a) Authority and power are frequently confused. b) Authority is a right, the legitimacy of which is based on the authority figures
25、position in the organization.(1) Authority goes with the job. c) Power refers to an individuals capacity to influence decisions. (1) Authority is part of the larger concept of power. (2) Exhibit 6-5 visually depicts the difference. d) Power is a three-dimensional concept.(1) It includes not only the
26、 functional and hierarchical dimensions but also centrality. (2) While authority is defined by ones vertical position in the hierarchy, power is made up of both ones vertical position and ones distance from the organizations power core, or center.e) Think of the cone in Exhibit 6-5 as an organizatio
27、n. (1) The closer you are to the power core, the more influence you have on decisions. (2) The existence of a power core is the only difference between A and B in Exhibit 6-5.f) The cone analogy explicitly acknowledges two facts: (1) The higher one moves in an organization (an increase in authority)
28、, the closer one moves to the power core.(2) It is not necessary to have authority in order to wield power because one can move horizontally inward toward the power core without moving up. (a) Example, administrative assistants, “powerful” as gatekeepers with little authority.(3) Low-ranking employe
29、es with contacts in high places might be close to the power core. (4) So, too, are employees with scarce and important skills.(a) The lowly production engineer with twenty years of experience might be the only one in the firm who knows the inner workings of all the old production machinery. g) Power
30、 can come from different areas.(1) John French and Bertram Raven have identified five sources, or bases, of power.(a) See Exhibit 6-6. (b) Coercive power -based on fear; Reward power - based on the ability to distribute something that others value; Legitimate power - based on ones position in the fo
31、rmal hierarchy; Expert power - based on ones expertise, special skill, or knowledge; Referent power -based on identification with a person who has desirable resources.E. What is Span of Control? 1. How many employees can a manager efficiently and effectively direct?2. This question received a great
32、deal of attention from early management writers. 3. There was no consensus on a specific number but early writers favored small spans of less than six to maintain close control.4. Level in the organization is a contingency variable. a) Top managers need a smaller span than do middle managers, and mi
33、ddle managers require a smaller span than do supervisors. 5. There is some change in theories about effective spans of control.6. Many organizations are increasing their spans of control. 7. The span of control is increasingly being determined by contingency variables.a) The more training and experi
34、ence employees have, the less direct supervision needed. 8. Other contingency variables should also be considered; similarity of employee tasks, the task complexity, the physical proximity of employees, the degree of standardization, the sophistication of the organizations management information sys
35、tem, the strength of the organizations value system, the preferred managing style of the manager, etc.A Question of EthicsA small percentage of companies are revealing to employees details about everything from financials to staff performance reviews. Advocates of this approach say it is a good way
36、to build trust and allow employees to see how they are making contributions to the company. Critics say open management can be expensive and time consuming. As work becomes more collaborative the sharing of details may become inevitable.Questions for students to consider: What ethical issues they se
37、e in the case? What are the implications for (a) managers and (b) employees?F. How Do Centralization and Decentralization Differ? 1. Centralization is a function of how much decision-making authority is pushed down to lower levels in the organization. 2. Centralization-decentralization is a degree p
38、henomenon. 3. By that, we mean that no organization is completely centralized or completely decentralized. 4. Early management writers felt that centralization in an organization depended on the situation.a) Their objective was the optimum and efficient use of employees. b) Traditional organizations
39、 were structured in a pyramid, with power and authority concentrated near the top of the organization. c) Given this structure, historically, centralized decisions were the most prominent. 5. Organizations today are more complex and are responding to dynamic changes.a) Many managers believe that dec
40、isions need to be made by those closest to the problem.6. Today, managers often choose the amount of centralization or decentralization that will allow them to best implement their decisions and achieve organizational goals. 7. One of the central themes of empowering employees was to delegate to the
41、m the authority to make decisions on those things that affect their work.a) Thats the issue of decentralization at work. b) It doesnt imply that senior management no longer makes decisions.G. What is Formalization?1. Formalization refers to how standardized an organizations jobs are and the extent t
42、o which employee behavior is guided by rules and procedures.2. Early management writers expected organizations to be fairly formalized, as formalization went hand-in-hand with bureaucratic-style organizations.3. Today, organizations rely less on strict rules and standardization to guide and regulate
43、 employee behavior.II. WHAT CONTINGENCY VARIABLES AFFECT STRUCTURAL CHOICE?Learning Catalytics Question: Instructor Directions and Follow-UpQuestion TypeQuestionAnswer/ResponseFor the InstructorRegionFamilies are organizations that function best when roles and responsibilities are clearly defined. W
44、as your family more mechanistic or organic?There is no correct answer.Use the structure of the college/university to explain how organizations function.A. Introduction1. The most appropriate structure to use will depend on contingency factors. 2. The more popular contingency variables are strategy,
45、size, technology, and environment.B. How Is a Mechanistic Organization Different from an Organic Organization? 1. Exhibit 6-7 describes two organizational forms. 2. The mechanistic organization (or bureaucracy) was the natural result of combining the six elements of structure. a) The chain-of-comman
46、d principle ensured the existence of a formal hierarchy of authority.b) Keeping the span of control small created tall, impersonal structures. (1) Top management increasingly imposed rules and regulations. c) The high degree of work specialization created simple, routine, and standardized jobs. d) D
47、epartmentalization increased impersonality and the need for multiple layers of management.3. The organic form is a highly adaptive form that is a direct contrast to the mechanistic one. a) The organic organizations loose structure allows it to change rapidly as needs require. (1) Employees tend to b
48、e professionals who are technically proficient and trained to handle diverse problems. (2) They need very few formal rules and little direct supervision.b) The organic organization is low in centralization.4. When each of these two models is appropriate depends on several contingency variables.C. How Does Strategy Affect Structure?1. An organizations structure should facilitate goal achievement. a) Strategy and structure should be closely l