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OrganizingforAction

LearningObjectivesLO1

Definethefundamentalcharacteristicsoforganizationstructure.LO2

Distinguishbetweenthefourdimensionsofanorganization’sverticalstructure.LO3

Giveexamplesoffourbasicformsofhorizontalstructuresoforganizations.LO4

Describeimportantmechanismsusedtocoordinatework.LO5

Discusshoworganizationscanimprovetheiragilitythroughtheirstrategy,commitmenttocustomers,anduseoftechnologyFundamentalsofOrganizingOrganizationchartThereportingstructureanddivisionoflaborinanorganizationConventionalOrganizationChartFigure7.1FundamentalsofOrganizingDifferentiation

theorganizationiscomposedofmanydifferentunitsthatworkondifferentkindsoftasks,usingdifferentskillsandworkmethods.Integration

thesedifferentiatedunitsareputbacktogethersothatworkiscoordinatedintoanoverallproductDifferentiationCreates

SpecializedJobsDivisionoflaborTheassignmentofdifferenttaskstodifferentpeopleorgroupsSpecialization

AprocessinwhichdifferentindividualsandunitsperformdifferenttasksIntegrationCoordinates

Employees’EffortsCoordinationTheproceduresthatlinkthevariouspartsofanorganizationforthepurposeofachievingtheorganization’soverallmissionAuthorityisGrantedFormally

andInformallyAuthorityThelegitimaterighttomakedecisionsandtotellotherpeoplewhattodo.AuthorityinOrganizationsSpanofControlSpanofcontrolThenumberofsubordinateswhoreportdirectlytoanexecutiveorsupervisorTall,flatQuestion Whatistheassignmentofneworadditionalresponsibilitiestoasubordinate?SubordinationDelegationDesignationAllocation

DelegationDelegationTheassignmentofneworadditionalresponsibilitiestoasubordinateResponsibility,Authority,andAccountabilityDelegationResponsibilityTheassignmentofataskthatanemployeeissupposedtocarryoutAccountabilityTheexpectationthatemployeeswillperformajob,takecorrectiveactionwhennecessary,andreportupwardonthestatusandqualityoftheirperformanceAdvantagesofDelegationLeveragesmanagers’energyandtalentDevelopsmanagerialskillsandknowledgeinsubordinatesConservesmanagers’mostvaluableasset:timePromotessubordinates’senseofimportanceandcommitmenttoorganizationStepsinEffectiveDelegationFigure7.4DecentralizationSpreads

Decision-MakingPowerCentralizedorganizationAnorganizationinwhichhigh-levelexecutivesmakemostdecisionsandpassthemdowntolowerlevelsforimplementationDecentralizedorganizationAnorganizationinwhichlower-levelmanagersmakeimportantdecisionsTheHorizontalStructureLinedepartmentsUnitsthatdealdirectlywiththeorganization’sprimarygoodsandservicesStaffdepartmentsUnitsthatsupportlinedepartmentsTheFunctionalOrganizationFunctionalorganizationDepartmentalizationaroundspecializedactivitiessuchasproduction,marketing,andhumanresources.TheFunctionalOrganizationFigure7.5AdvantagesofFunctionalOrganizationsEconomiesofscalecanberealizedEffectivemonitoringoftheenvironmentPerformancestandardsbettermaintainedGreateropportunityforspecializedtrainingandskilldevelopmentTechnicalspecialistsarerelativelyfreeofadministrativeworkDecisionmakingandlinesofcommunicationaresimpleandclearlyunderstoodTheDivisionalOrganizationDivisionalorganizationDepartmentalizationthatgroupsunitsaroundproducts,customers,orgeographicregions.AdvantagesoftheProductApproachInformationneedsaremanagedmoreeasilyPeoplehaveafull-timecommitmenttoaparticularproductlineTaskresponsibilitiesareclearPeoplereceivebroadertrainingTheDivisionalOrganizationFigure7.6TheMatrixOrganizationMatrixorganizationAnorganizationcomposedofdualreportingrelationshipsinwhichsomemanagersreporttotwosuperiors—afunctionalmanagerandadivisionalmanagerMatrixOrganizationalStructureFigure7.7AdvantagesofaMatrixDesignCross-functionalproblemsolvingleadstobetter-informedandmorecreativedecisionsDecisionmakingisdecentralizedExtensivecommunicationsnetworkshelpprocesslargeamountsofinformationHighermanagementlevelsarenotoverloadedwithoperationaldecisionsResourceutilizationisefficientDisadvantagesofaMatrixDesignConfusioncanarisebecausepeopledonothaveasinglesuperiorEncouragesmanagerswhosharesubordinatestojockeyforpower,soconflictcanoccur.CanleadtoslowerdecisionmakingToomuchdemocracycanleadtonotenoughactionTheNetworkOrganizationNetworkorganizationAcollectionofindependent,mostlysingle-functionfirmsthatcollaborateonagoodorserviceTheNetworkOrganizationFigure7.8TheNetworkOrganizationModularnetworkTemporaryarrangementsamongpartnersthatcanbeassembledandreassembledtoadapttotheenvironmentBrokerApersonwhoassemblesandcoordinatesparticipantsinanetworkQuestion ___________isestablishingcommonroutinesandproceduresthatapplyuniformlytoeveryone.CoordinationbystandardizationCoordinationbyplanCoordinationbymutualadjustmentCoordinationbyservice

StandardizationCoordinatesWorkThroughRulesandRoutinesStandardizationEstablishingcommonroutinesandproceduresthatapplyuniformlytoeveryone.FormalizationThepresenceofrulesandregulationsgoverninghowpeopleintheorganizationinteract.PlansSetaCommon

DirectionCoordinationbyplanInterdependentunitsarerequiredtomeetdeadlinesandobjectivesthatcontributetoacommongoalMutualAdjustmentAllows

FlexibleCoordinationCoordinationbymutualadjustmentUnitsinteractwithoneanothertomakeaccommodationstoachieveflexiblecoordinationManagingHighInformation-

ProcessingDemandsFigure7.9ReducingtheNeedforInformationSlackresourcesextraresourcesonwhichorganizationscanrelyinapinchsothatiftheygetc

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