Organization Behavior- Organization structure

8/10/2019 Organization Behavior- Organization structure

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Kelli J. SchutteWilliam Jewell College

Robbins & Judge

Organizational Behavior14th Edition

Foundations of Organization

Structure

15-0Copyright 2011 Pearson Education, Inc. publishing as Prentice Hall


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Chapter Learning Objectives

After studying this chapter, you should be able to: Identify the six elements of an organizations structure.

Identify the characteristics of a bureaucracy.

Describe a matrix organization.

Identify the characteristics of a virtual organization. Show why managers want to create boundaryless

organizations.

Demonstrate how organizational structures differ, and

contrast mechanistic and organic structural models.

Analyze the behavioral implications of different

organizational designs.

Show how globalization affects organizational structure.

Copyright 2011 Pearson Education, Inc. publishing as Prentice Hall 15-1


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What Is Organizational Structure?

Organizational Structure How job tasks are formally divided, grouped, and

coordinated

Key Elements:

1. Work specialization

2. Departmentalization

3. Chain of command

4. Span of control5. Centralization and decentralization

6. Formalization



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1. Work Specialization

The degree to which tasks in the organization aresubdivided into separate jobs

Division of Labor

Makes efficient use of employee skills

Increases employee skills through repetition Less between-job downtime increases productivity

Specialized training is more efficient

Allows use of specialized equipment

Can create greater economies and efficienciesbut notalways


E X H I B I T 15-1


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Work Specialization Economies and Diseconomies

Specialization can reach a point of diminishing returns

Then job enlargement gives greater efficiencies than

does specialization


E X H I B I T 15-2


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2. Departmentalization

The basis by which jobs are grouped together

Grouping Activities by:

Function

Product

Geography

Process

Customer



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3. Chain of Command

Authority

The rights inherent in a managerial position to give orders

and to expect the orders to be obeyed

Chain of Command

The unbroken line of authority that extends from the top of

the organization to the lowest echelon and clarifies who

reports to whom

Unity of Command

A subordinate should have only one superior to whom he or

she is directly responsible



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4. Span of Control

The number of subordinates a manager can efficiently and

effectively direct

Wider spans of management

increase organizational

efficiency

Narrow span drawbacks:

Expense of additional layers of

management

Increased complexity of vertical

communication Encouragement of overly tight

supervision and discouragement

of employee autonomy



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Contrasting Spans of Control


E X H I B I T 15-3


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5. Centralization and Decentralization

Centralization The degree to which decision making is concentrated at a

single point in the organization.

Decentralization

The degree to which decision making is spread throughout

the organization.



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6. Formalization

The degree to which jobs within the organization arestandardized.

High formalization

Minimum worker discretion in how to get the job done

Many rules and procedures to follow

Low formalization

Job behaviors are nonprogrammed

Employees have maximum discretion



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Common Organization Designs: Simple Structure

Simple Structure

A structure characterized by a low degree of

departmentalization, wide spans of control, authority

centralized in a single person, and little formalization


E X H I B I T 15-4


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Common Organizational Designs: Bureaucracy

Bureaucracy A structure of highly operating

routine tasks achieved through

specialization, very formalized

rules and regulations, tasks that

are grouped into functional

departments, centralized

authority, narrow spans of control,

and decision making that follows

the chain of command



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An Assessment of Bureaucracies

Strengths

Functional economies of

scale

Minimum duplication ofpersonnel and equipment

Enhanced communication

Centralized decision

making

Weaknesses

Subunit conflicts with

organizational goals

Obsessive concern withrules and regulations

Lack of employee

discretion to deal with

problems



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Common Organizational Designs: Matrix

Matrix Structure A structure that creates dual lines of authority and combines

functional and product departmentalization

Key Elements

Gains the advantages of functional and productdepartmentalization while avoiding their weaknesses

Facilitates coordination of complex and interdependent

activities

Breaks down unity-of-command concept


E X H I B I T 15-5


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New Design Options: Virtual Organization

A small, core organizationthat outsources its major

business functions

Highly centralized withlittle or no

departmentalization Provides maximumflexibility whileconcentrating on whatthe organization does

best Reduced control over

key parts of the business


E X H I B I T 15-6


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New Design Options: Boundaryless Organization

An organization that seeks to eliminate the chain of

command, have limitless spans of control, and replace

departments with empowered teams

T-form Concepts

Eliminate vertical (hierarchical) and horizontal (departmental)

internal boundaries Breakdown external barriers to customers and suppliers



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Two Extreme Models of Organizational Design


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Four Reasons Structures Differ

1. Strategy

Innovation Strategy

A strategy that emphasizes the introduction of major newproducts and services

Organic structure best

Cost-minimization Strategy A strategy that emphasizes tight cost controls, avoidance ofunnecessary innovation or marketing expenses, and pricecutting

Mechanistic model best

Imitation Strategy A strategy that seeks to move into new products or newmarkets only after their viability has already been proven

Mixture of the two types of structure


E X H I B I T 15-8


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Why Structures Differ

2. Organizational Size

As organizations grow, they become more mechanistic,

more specialized, with more rules and regulations

3. Technology

How an organization transfers its inputs into outputs

The more routine the activities, the more mechanistic the

structure with greater formalization

Custom activities need an organic structure

4. Environment

Institutions or forces outside the organization thatpotentially affect the organizations performance

Three key dimensions: capacity, volatility, and complexity



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Three-Dimensional Environment Model

Capacity The degree to which an environment can support growth

Volatility The degree of instability in the environment

Complexity The degree of heterogeneity and concentration among

environmental elements


Complexi ty

Volati l i ty

Capacity

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Organizational Designs and Employee Behavior

Impossible to generalize due to individual differences inthe employees

Research findings

Work specialization contributes to higher employeeproductivity, but it reduces job satisfaction.

The benefits of specialization have decreased rapidly asemployees seek more intrinsically rewarding jobs.

The effect of span of control on employee performance iscontingent upon individual differences and abilities, taskstructures, and other organizational factors.

Participative decision making in decentralized organizationsis positively related to job satisfaction.

People seek and stay at organizations that match theirneeds.



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Global Implications

Culture and Organizational Structure

Many countries follow the U.S. model

U.S. management may be too individualistic

Culture and Employee Structure Preferences

Cultures with high-power distance may prefer mechanisticstructures

Culture and the Boundaryless Organization

May be a solution to regional differences in global firms

Breaks down cultural barriers, especially in strategic alliances

Telecommuting also blurs organizational boundaries



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Summary and Managerial Implications

Structure impacts both the attitudes and behaviors of

the people within it

Impact of Technology

Makes it easier to change structure to fit employee and

organizational needs


Associated

with

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means, electronic, mechanical, photocopying, recording, or otherwise,without the prior written permission of the publisher. Printed in the

United States of America.

Copyright 2011 Pearson Education,Inc. Publishing as Prentice Hall


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Organization Behavior- Organization structure