Bit120 m02 l01 - organization structures

CS440 (Advanced Information Modeling) Lecture 1

Organizational Structures That Support Strategic Initiatives

2011 Neumont University

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Strategic InitiativesOf all the possible directions a company could go, the best one is the direction that will maximize Core CompetenciesTop Line RevenueNet ProfitCustomer RetentionEmployee Retention2


Divides work to be done into specific jobs and departments.Assigns tasks and responsibilities associated with individual jobs.Coordinates diverse organizational tasks.Clusters jobs into units.Establishes relationships among individuals, groups, and departments.Establishes formal lines of authority.Allocates and deploys organizational resources.Purposes of Organizing


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Departmentalization by TypeFunctional Grouping jobs by functions performedProductGrouping jobs by product lineGeographicalGrouping jobs on the basis of territory or geographyProcess Grouping jobs on the basis of product or customer flowCustomerGrouping jobs by type of customer and needs


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AdvantagesEfficiencies from putting together similar specialties and people with common skills, knowledge, and orientationsCoordination within functional areaIn-depth specializationDisadvantagesPoor communication across functional areasLimited view of organizational goalsFunctional Departmentalization


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AdvantagesMore effective and efficient handling of specific regional issues that ariseServe needs of unique geographic markets betterDisadvantagesDuplication of functionsCan feel isolated from other organizational areasGeographic Departmentalization


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+Allows specialization in particular products and services+Managers can become experts in their industry+Closer to customersDuplication of functionsLimited view of organizational goalsProduct Departmentalization


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+More efficient flow of work activitiesCan only be used with certain types of productsProcess Departmentalization


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+ Customers needs and problems can be met by specialists- Duplication of functions- Limited view of organizational goalsCustomer Departmentalization


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Matrix Organization


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Organization DesignCentralized - The degree to which decision-making is concentrated at a single point in the organizations.Organizations in which top managers make all the decisions and lower-level employees simply carry out those orders.DecentralizedOrganizations in which decision-making is pushed down to the managers who are closest to the action.Employee EmpowermentIncreasing the decision-making authority (power) of employees.


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More CentralizationEnvironment is stable.Lower-level managers are not as capable or experienced at making decisions as upper-level managers.Lower-level managers do not want to have a say in decisions.Decisions are relatively minor.Organization is facing a crisis or the risk of company failure.Company is large.Effective implementation of company strategies depends on managers retaining say over what happens.Factors that Influence


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More DecentralizationEnvironment is complex, uncertain.Lower-level managers are capable and experienced at making decisions.Lower-level managers want a voice in decisions.Decisions are significant.Corporate culture is open to allowing managers to have a say in what happens.Company is geographically dispersed.Effective implementation of company strategies depends on managers having involvement and flexibility to make decisions.Factors that Influence


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Contingency FactorsStructural decisions are influenced by:Overall strategy of the organizationOrganizational structure follows strategySize of the organizationFirms change from organic to mechanistic organizations as they grow in sizeTechnology use by the organizationFirms adapt their structure to the technology they useDegree of environmental uncertaintyDynamic environments require more Agile structures & processes; whereas more stable environments require established structures & processes


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Define the primary IT roles along with their associated responsibilities. Discuss the gap between IT and business professionals.15EXAMPLE Structure of IT Department


IT Roles & ResponsibilitiesInformation technology is a relatively new functional area, having been around formally in most organizations only for about 40 years.Job titles, roles, and responsibilities often differ dramatically from organization to organization.Clear trends are developing toward elevating some IT positions within an organization to the strategic level.16


Traditional Strategic Positions17Chief Executive OfficerChief Financial OfficerChief Operating OfficerSTRATEGY MAKING LEVELChief Information OfficerChief Technology Officer


Technology Officers & Roles18


CIOs JobThe Chief Information Officer (CIO) is responsible for (1) overseeing all uses of information technology(2) ensuring the strategic alignment of IT with business goals and objectivesThe CIO often reports directly to the CEO19


The Gap Between Business & ITOne of the greatest challenges today is effective communication between business personnel and IT personnel.20


Business Benefits from ITAccurate and speedy processing of informationGlobalizationEffective Internal CommunicationEffective P.R. & Corporate News InitiativesRemote AccessibilityProfitable Supply ChainReliable H.R. FunctionsIncreased Marketing & Sales EffectivenessCreation of New JobsEnhanced Customer Service

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PrivacyIn todays electronic world, privacy has become a major ethical issue.Privacy is the right to be left alone when you want to be, to have control over your own personal possessions, and to not be observed without your consent.Privacy is one of the biggest ethical issues facing organizations today.22


Organization Design ChallengesKeeping Employees ConnectedWidely dispersed and mobile employeesBuilding a Learning OrganizationManaging Global Structural IssuesCultural implications of design elements
