UGBA 105Sections 102, 104, 106Week 3: Organizational Structure

In the news

Ford names new CEOStruggling No. 2 automaker says Bill Ford Jr. will be succeeded as CEO by Alan Mulally, from Boeing.September 5 2006: 6:05 PM EDT

NEW YORK (CNNMoney.com) -- Ford Motor Co. Tuesday surprised the auto industry by tapping senior Boeing executive Alan Mulally as its new chief executive officer, succeeding current CEO Bill Ford, who will stay on as chairman. Mulally, 61, who heads Boeing's commercial airplane unit, will become president and CEO of Ford immediately as the struggling automaker gets set to unveil a huge overhaul of its North American auto operations.Mulally was most recently executive vice president at Boeing (Charts).Shares of Ford (Charts) rose about 1.5 percent on the New York Stock Exchange Tuesday and surged another 2 percent or so in after-hours trading. The announcement came after the close of regular trading.Industry analysts said that Bill Ford, the 49-year-old great-grandson of company founder Henry Ford, was making a smart move but that more would be needed to halt the slide in market share for the nation's No. 2 automaker."I think Bill Ford was under some pressure to bring in additional leadership," Tim Ghriskey at Solaris Asset Management, an investment firm, told Reuters. "He remains as executive chairman, still very much in control, but I think this step to bring in new management from outside the company is a smart, mature action ... to move the company on to the next step." Ghriskey noted that GM has made more headway in restructuring than has Ford. "My point with Ford is and always has been, they wouldn't be in this position if they didn't have these problems on the product side," Erich Merkle, analyst at IRN Inc., told the news agency. "What Ford has to do on the product side is to get back to an understanding of why people purchase cars and take more risks in terms of design." Bill Ford told employees just recently that the company needs a new business model and is considering turning to outside executives and making alliances with other carmakers, according to a Financial Times report on Sunday citing a memo it said was sent to staff.Asked why he chose someone from outside the organization, Ford said that wasn't one of the central criteria guiding his decision.

It wasn't about inside versus outside. I was more focused on who was the best candidate, he told reporters. "Business skills are by and large transferable, especially with someone with an industrial background who's focused on the customer."

Alan Mulally

AgendaReview: Formal organizationTypes of org structuresAllentownNext weeks coming attractions Team assignments

1. Review: Formal orgStrategic grouping: How work is divided

FunctionalDivisionalMatrixProcessNetworkHybrid

This is one of the most difficult topics its really abstract

1. Review (cont.)Strategic linking: How work is coordinated

HierarchyMutual adjustmentRules & standardsCulture

This is one of the most difficult topics its really abstract

1. Review (cont.)How do you decide: Considerations

Task interdependenceCongruence! (environment, informal org, people, etc.)

This is one of the most difficult topics its really abstract

2. Types of structure

R&DEngineer-ingManu-facturingGeneral ManagerHuman resourcesSales ProductA

ProductBProduct CFunctional grouping

CEOCarsPrefabHousesElectronicsHRMfgMktHRMfgMktHRMfgMktProduct grouping

CEONorth AmericaEuropeAsia PacificHRMfgMktHRMfgMktHRMfgMktRegional grouping

Product ZmanagerEngineer-ingManufac-turingMarketingGeneral ManagerZ EngZ MfgZ Mkt

Matrix organization

Issue of product region balance in global matrix organizations

Top ManagementTeamTeamProcessCoordinatorsTeamTeamProcessCoordinatorsTeamTeamProcessCoordinatorsNew product development processOrder fulfillment processProcurement, logistics process

DesignersCore Firm

ProducersDistributorsSuppliersManagersSuppliersDistributors

ITServicesProducers

Producers

Designers

Distributors

Suppliers

BrokersFull Vertical Integration Full Network OrganizationNetworked Firm

HR Services

IT Services

HR Services

Designers

Marketers

HR Services

IT Services

Managing process & network organizationsAbandonment of the manager as engineer (vertical, mechanistic) model

Less hierarchical command & controlFewer rules, standards, and proceduresLess detailed and rigid division of labor No more vertical career

Embrace of manager as leader (horizontal, organic) model

Teamwork (coordination through mutual adjustment) Networking and political maneuvering Leadership and cultureEntrepreneurial

1.bin

2.bin

Refers to supplier relations GMs top down approach to supplier relations. However, note Wal-mart or Microsfot monopsony power allows command and control.

4. Allentown Materials

5. RecapDefine and describe the different types of organizational structures Understand the pros/cons and the tradeoffs made in eachIdentify some of the considerations managers weigh when making decisions about structure

5. Wrap-up/Next weekDid everyone sign in?For next week, prep the case The Team that WasntBe sure youre doing the readings

TEAMS - 102Team 1

Minette Jessica Vivian RichardTeam 2

KatherineEric Roger Melanie Team 3

BrandonKevinAngelaAlfonsoTeam 4

Angelo Stephanie Paul YuetTeam 5

DianaWDeanKei ManSepidehTeam 6

LauraMargarethaJennifer Michael Team 7

AnthonyJean Samuel Veronique

Gone: Sean from Team 6

TEAMS - 104Team 1

Jennifer Keng WaiAlexanderRuoh-WeiMichaelTeam 2

ClaudiaVerena Sarah Sofia Ha KyungTeam 3

JasonRosalvaAngieHannah KatherineTeam 4

Claire Erick HamedJosephine IanTeam 5

DanielleSeema RamonLouise JosephTeam 6

AlbertGeorge Wing YanKazumaWang Team 7

Brian MaryanneAntonReilly Erica Team 8

Terri Nicholai James EdwardZarina

Moved: Michael Ual to Team 1; Ha Kyung to Team 2

TEAMS - 106Team 1

SaminJennifer Kirstin KatyaTeam 2

AndyEthan Christopher Brian Team 3

IanWayneDavid JunTracyTeam 4

Cindy Alex F.JonanthanJosephineBenTeam 5

Martine Alex H.YanivJaime CherieTeam 6

Anthony Andrew HamedSagar NicholasTeam 7

Douglas PavShirleyYangJin Team 8

Maria Priya Elizabeth Amy Shiyuan

Gone: Rian from Team 1; Eileen from Team 2; Robert from Team 6Added: Hamed to Team 6

All problems involve one or more disconnects, or incongruencies, between 4 major components of organizations:In turn, solutions involve the analytic - and creative - achievement of congruence. Input

Environment(Competition, change)

Resources(munificence)History (age, conditions at founding) OutputSystemsUnitIndividualInformal Org(culture, politics leadership, networks)Tasks (technologies, work flows)People(ability, skills, motivation, biases)Formal Org (job titles, depts, reporting hierarchy, IT & HR systems) The Congruence Model

Shifting into analysisStudent mentioned KKR as an investment bank where people never left. Lots of synergies; tight cultures.

EmailTeleconferencingGroupwareKnowledge management ERPIs information technology the answer?It facilitates teamwork and networking

IT and the managers jobFolklore: IT has made organizations flatter, leaner, more flexible, more virtual, more global, less integrated, empowered people, reduced need for rigid control systems

Fact: The effects of IT have been complex & contradictory. It has also disempowered employees by intensifying surveillance, increased written communication and some forms of standardization, created information overloads and shortened attention spans

Note IT may enable firms to grow larger see murray piece on bigness

This is one of the most difficult topics its really abstractThis is one of the most difficult topics its really abstractThis is one of the most difficult topics its really abstract

Issue of product region balance in global matrix organizations

Refers to supplier relations GMs top down approach to supplier relations. However, note Wal-mart or Microsfot monopsony power allows command and control.

Gone: Sean from Team 6Moved: Michael Ual to Team 1; Ha Kyung to Team 2Gone: Rian from Team 1; Eileen from Team 2; Robert from Team 6Added: Hamed to Team 6Shifting into analysisStudent mentioned KKR as an investment bank where people never left. Lots of synergies; tight cultures.

Note IT may enable firms to grow larger see murray piece on bigness