Chapter 11 Contemporary Organization Designs Hellriegel, Jackson, and Slocum MANAGEMENT: A Competency-Based Approach South-Western College Publishing Copyright

Chapter 11

Contemporary Contemporary Organization DesignsOrganization Designs

Hellriegel, Jackson, and SlocumMANAGEMENT: A Competency-Based ApproachSouth-Western College PublishingCopyright © 2002


Learning Objectives After reading this chapter, you should be able to:

State the role of strategic and environmental factors in the development and adoption of contemporary organization designs

Describe the role of technology in organization design

Discuss the impact of two basic information processing factors in the use of four design strategies

Explain the features of three contemporary organization designs

11.1


Key Factors in Contemporary Organization Design

TechnologyFactors

Strategic and Environmental

Factors

InformationProcessing

Factors

Adapted from Figure 11.1

11.2

Contemporary Designs•Matrix Organization•Network Organization•Virtual Organization


Characteristics of Organic Structure

Tasks tend to be interdependent Tasks are continually adjusted and redefined

through interaction and as situations change Generalized roles are accepted Network structure of control, authority, and

communication Communication and decision making are both

vertical and horizontal depending on where needed information and expertise reside

Communication emphasizes the forms of mutual influence and advice among all levels

11.3

Adapted from Table 11.1


Characteristics of Mechanistic Structure

Tasks are highly specialized Tasks tend to remain rigidly defined unless

changed by top management Specific roles are prescribed for each

employee Hierarchical structure of control, authority,

and communication Communication and decision making are

primarily vertical, top-down Communication emphasizes directions and

decisions issued by superiors

11.4



Three Types of Technological Interdependence

Input Input Input

Output

a) Pooled interdependencea) Pooled interdependence b) Sequential interdependenceb) Sequential interdependence

OutputInput

c) Reciprocal interdependencec) Reciprocal interdependence

OutputInput OutputInput

OutputInput


11.5


Service Technology

High

High

Low

LowCustomer ParticipationCustomer Participation

CCuussttoommiizzaattiioonn

ooff

sseerrvviiccee


A

Sequential CustomizedService

Car repairDry cleaningFreight transportation

B

Reciprocal Service

PsychotherapyAlcohol/drug rehabLegal assistance

D

Pooled Service

BankingCar RentalInsurance

C

Sequential StandardizedService

LaundromatFast-food restaurantSelf-service conveniencestore

11.6


Information Processing Strategies

Increase the

organization’s

ability to process

information

Decrease the

need to process

information

StrategyStrategy


FactorsFactors

Vertical information

design

Lateral information

design

Slack resources

design

Self-contained

design

11.7


Vertical Information Design Strategy

11.8

Information processing Sends information up and

down the organizational chain of command

Provides the right information at the right time


Lateral Information Design Strategy

Fosters horizontal communications and decision making

Creates new positions to integrate information and decision making

G

E F

B CA D

11.9


Slack Resources Design Strategy

11.10

Stockpiling of resources to better respond to environmental changes

Includes materials, funds, and time

Minimizes the problems that are likely to arise

Can reduce the need to process information


Self-Contained Design Strategy

11.11

Assigns all activities concerning a specific project, product, or geographical region to one group, team, or strategic business unit (SBU)

Emphasizes product or place versus function

Allows greater flexibility and adaptability

Reduces the amount of information a manager needs to process


Matrix Organization DesignHigh

Low

RReellaattiivvee

IInnfflluueennccee

Functionaldepartment’s influencein decision making

Product department’s influence in decision making

Functional organizationFunctional organization

Functional authority structureFunctional authority structure

Product organizationProduct organizationProduct authority Product authority

structurestructure

Matrix organizationMatrix organization

Dual authorityDual authority


11.12


A Three-Firm Alliance Network


Disney

McDonalds Coca-Cola

11.13

Common Vision

Formal long-term alliance

Formal marketing alliance

Documents

Chapter 11 Contemporary Organization Designs Hellriegel, Jackson, and Slocum MANAGEMENT: A Competency-Based Approach South-Western College Publishing Copyright