Describe the four characteristics common to all organizations.

Explain the difference between closed and open systems, and contrast the military/mechanical, biological, and cognitive systems metaphors for organizations.

Describe the four generic organizational effectiveness criteria.

Explain what the contingency approach to organizational design involves.

Discuss Burns and Stalker’s findings regarding mechanistic and organic organizations.

Describe new-style and old-style organizations, and list the keys to managing geographically-dispersed employees in virtual organizations.

Designing Effective Organizations

Learning Objectives

Chapter Fifteen

Organization: system of consciously coordinated activities of two or more people.

Unity of command principle: each employee should report to a single manager.

Organization chart: boxes-and-lines illustration showing chain of formal authority and division of labor.

15-1

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What is an Organization?

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15-2 Figure 15-1

Sample Organization Chart for a Hospital

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Board of Directors

Chief ExecutiveOfficer

StrategicPlanningAdvisor

LegalCounsel

PresidentCost-

ContainmentStaff

ExecutiveAdministrative

Director

ExecutiveMedicalDirector

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15-3 Figure 15-1

Sample Organization Chart for a Hospital (Cont.)

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ExecutiveAdministrative

Staff

ExecutiveMedicalDirector

Dir.Of

HumanResources

Dir.Of

Admissions

Dir.Of

Accounting

Dir.Of

Nutrition& Food

Services

Dir.Of

Patient& PublicRelations

Dir.X-Ray &

LabServices

Dir.Of

Surgery

Dir.Of

Pharmacy

ChiefPhysician

Dir.Of

Out-Patient

Services

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Span of control: the number of people reporting directly to a given manager.

Staff personnel: provide research, advice, and recommendations to line managers.

Line Managers: have authority to make organizational decisions.

15-4

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Span of Control

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15-5

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Needed: Open-System Thinking

Open system: “Depends on constant interaction with the surrounding environment for survival.” (For example, the human body.)

Closed System: “A self-sufficient entity, closed to the surrounding environment.” (For example, a battery-powered clock.)

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Bureaucracy: Max Weber’s idea of the most rationally efficient form of organization.

Weber’s Bureaucracy: four factors should make bureaucracies the epitome of efficiency Division of labor A hierarchy of authority A framework of rules Administrative personality

15-6

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Organizations as Military/Mechanical Bureaucracies

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15-7 Figure 15-2

The Organization as an Open System: The Biological Metaphor

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Goals and Values Subsystem

Technical Subsystems

Psychological Subsystem

Structural Subsystem

Managerial Subsystem

Feedback

Inputs Outputs

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“No single approach to the evaluation of effectiveness is appropriate to all circumstances or for all organization types.” Goal accomplishment Resource acquisition Internal processes Strategic constituencies satisfaction

Strategic constituency: any group of people with a stake in the organization’s operation or success.

15-8

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Generic Effectiveness Criteria

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15-9 Figure 15-3

Four Dimensions of Organizational Effectiveness

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Goal Accomplishment

Resource Acquisition

Strategic Constituencies

Satisfaction

Internal Processes

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Contingency approach to organization design: creating an effective organization-environment fit.

15-10

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The Contingency Approach to DesigningOrganizations

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15-11

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Mechanistic versus Organic Organizations

Mechanistic organizations: “Rigid bureaucracies with strict rules, narrowly defined tasks, and top-down communication.” (Tend toward centralized decision-making.)

Organic organizations: “Flexible networks of multitalented individuals who perform a variety of tasks.” (Tend toward decentralized decision making.)

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15-12 Table 15-1

New-Style versus Old-Style Organizations

Job requirements oriented

Hierarchical

Command/control oriented

Individual oriented

Job oriented

Functional

Large

Local

Information is scarce

Stable

Old

Customer oriented

Lateral/networked

Involvement oriented

Team oriented

Skills oriented

Product/customer oriented

Small and large

Global

Information rich

Dynamics learning

New

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The three keys are: sharing knowledge, building trust, and maintaining connectedness

Other steps include: Hire carefully Communicate regularly Practice “management by walking around” Conduct regular audits Use technology as a tool, not a weapon Achieve a workable balance between online and

live training

15-13

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Skills & Best Practices: How to ManageGlobally-Dispersed Employees

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