99Chapter

Managing Organizational Managing Organizational StructureStructure

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Chapter #9 Learning ObjectivesChapter #9 Learning ObjectivesChapter #9 Learning ObjectivesChapter #9 Learning Objectives

• By the conclusion of this discussion you will By the conclusion of this discussion you will understand:understand: How jobs are designed and grouped How jobs are designed and grouped

together to achieve optimal organizational together to achieve optimal organizational performance.performance.

The various job grouping options and the The various job grouping options and the advantages and disadvantages of each.advantages and disadvantages of each.

The way authority is allocated between and The way authority is allocated between and within functions.within functions.

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Designing Organizational StructureDesigning Organizational StructureDesigning Organizational StructureDesigning Organizational Structure

• Organizing: the process of establishing Organizing: the process of establishing working relationships among employees to working relationships among employees to achieve goals.achieve goals.Organizational StructureOrganizational StructureOrganizational DesignOrganizational Design

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Factors Affecting Organizational StructureFactors Affecting Organizational StructureFactors Affecting Organizational StructureFactors Affecting Organizational Structure

Figure 9.1

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Job DesignJob DesignJob DesignJob Design

• Job Design: group tasks into specific jobs.Job Design: group tasks into specific jobs.Job simplificationJob simplificationJob enlargementJob enlargementJob enrichmentJob enrichment

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The Job Characteristics ModelThe Job Characteristics ModelThe Job Characteristics ModelThe Job Characteristics Model

Figure 9.2Source: Adapted from J. R. Hackman and G. R. Oldham, Work Redesign (Reading, MA: Addison-Wesley, 1980).

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Grouping Jobs into FunctionsGrouping Jobs into FunctionsGrouping Jobs into FunctionsGrouping Jobs into Functions

• Functional Structure - Functional Structure - people working together people working together with similar skills, tools or techniques to with similar skills, tools or techniques to perform their jobsperform their jobs..

AdvantagesAdvantages• Encourages learning from others doing similar jobs.Encourages learning from others doing similar jobs.

• Easy for managers to monitor and evaluate workers.Easy for managers to monitor and evaluate workers.

DisadvantagesDisadvantages• Difficult for departments to communicate with others.Difficult for departments to communicate with others.

• Preoccupation with own department and losing sight Preoccupation with own department and losing sight of organizational goals.of organizational goals.

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The The Functional Functional

Structure of Structure of Pier 1 Pier 1

ImportsImports

The The Functional Functional

Structure of Structure of Pier 1 Pier 1

ImportsImports

Figure 9.3

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Grouping JobsGrouping JobsGrouping JobsGrouping Jobs

• Divisional: A division is a collection of Divisional: A division is a collection of functions working together to produce a functions working together to produce a product.product.Divisions create smaller, manageable parts Divisions create smaller, manageable parts

of a firm.of a firm.• Divisions develop a business-level strategy to Divisions develop a business-level strategy to

compete.compete.

• A division has marketing, finance, and other A division has marketing, finance, and other functions.functions.

• Functional managers report to divisional managers Functional managers report to divisional managers who then report to corporate management.who then report to corporate management.

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Product, Product, Market, and Market, and Geographic Geographic StructuresStructures

Product, Product, Market, and Market, and Geographic Geographic StructuresStructures

Figure 9.4

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Viacom’s 2001 Viacom’s 2001 Product Product

StructureStructure

Viacom’s 2001 Viacom’s 2001 Product Product

StructureStructure

Figure 9.5

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Global Geographic and Global Product Global Geographic and Global Product StructuresStructures

Global Geographic and Global Product Global Geographic and Global Product StructuresStructures

Figure 9.6

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Matrix StructureMatrix StructureMatrix StructureMatrix Structure

Figure 9.7

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Product Team StructureProduct Team StructureProduct Team StructureProduct Team Structure

Figure 9.7

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Hybrid StructuresHybrid StructuresHybrid StructuresHybrid Structures

• Hybrid StructureHybrid StructureThe structure of a large organization that has The structure of a large organization that has

many divisions an simultaneously uses many many divisions an simultaneously uses many different organizational structuresdifferent organizational structures

• Managers can select the best structure for a Managers can select the best structure for a particular divisionparticular division—o—one division may use a functional ne division may use a functional structure, another division may have a geographic structure, another division may have a geographic structure.structure.

• The ability to break a large organization into smaller The ability to break a large organization into smaller units makes it easier to manage.units makes it easier to manage.

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Target’s Hybrid StructureTarget’s Hybrid StructureTarget’s Hybrid StructureTarget’s Hybrid Structure

Figure 9.8

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Coordinating FunctionsCoordinating FunctionsCoordinating FunctionsCoordinating Functions

• Hierarchy of authority: describes the relative Hierarchy of authority: describes the relative authority each manager has from top to authority each manager has from top to bottom.bottom.Span of ControlSpan of ControlLine authorityLine authorityStaff authorityStaff authority

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Tall and Flat OrganizationsTall and Flat OrganizationsTall and Flat OrganizationsTall and Flat Organizations

• Tall structures have many levels of authority Tall structures have many levels of authority and narrow spans of control.and narrow spans of control.As hierarchy levels increase, communication As hierarchy levels increase, communication

gets difficult creating delays in the time gets difficult creating delays in the time being taken to implement decisions.being taken to implement decisions.

Communications can also become garbled as Communications can also become garbled as it is repeated through the firm.it is repeated through the firm.

• Flat structures have fewer levels and wide Flat structures have fewer levels and wide spans of control.spans of control.Structure results in quick communications Structure results in quick communications

but can lead to overworked managers.but can lead to overworked managers.

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Flat OrganizationsFlat OrganizationsFlat OrganizationsFlat Organizations

Figure 9.10a

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Tall OrganizationsTall OrganizationsTall OrganizationsTall Organizations

Figure 9.10b

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Centralized vs. DecentralizedCentralized vs. DecentralizedCentralized vs. DecentralizedCentralized vs. Decentralized

• Centralized operations Centralized operations allocates authority at allocates authority at the top.the top.

• Decentralized operations Decentralized operations puts more authority puts more authority at lower levels and leads to flat organizationsat lower levels and leads to flat organizations..Workers must be able to reach decisions.Workers must be able to reach decisions.Divisions and functions can begin to lose Divisions and functions can begin to lose

sight of organizational goals and focus only sight of organizational goals and focus only on their small area.on their small area.

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ConclusionConclusionConclusionConclusion

• Jobs should be designed and Jobs should be designed and organizations should be structured organizations should be structured through careful planning.through careful planning.

• There is no one best structure/design.There is no one best structure/design.

• Design and structure is based on Design and structure is based on organizational goals and culture.organizational goals and culture.