14 1 Essentials of Organizational Behavior 11e Global
14 - 1 Essentials of Organizational Behavior, 11/e Global Edition Stephen P. Robbins & Timothy A. Judge Chapter 14 Structure and Organizational Behavior Copyright © 2012 Pearson Education
After studying this chapter, you should be able to: 14 - 2 1. Identify the six elements of an organization’s structure. 2. Describe the common organizational designs. 3. 4. 5. 6. Compare and contrast the virtual and boundary-less organizations. Demonstrate how organizational structures differ. Analyze the behavioral implications of different organizational designs. Show globalization affects organizational structure. Copyright © 2012 Pearson Education
What is Organization Structure? 14 - 3 It defines how job tasks are formally divided, grouped, and coordinated Key elements to be addressed: � Work specialization � Departmentalization � Chain of command � Span of control � Centralization � Decentralization � Formalization Copyright © 2012 Pearson Education
Element 1: Work Specialization 14 - 4 Also known as division of labor Describes the degree to which activities in the organization are subdivided into separate jobs Benefits: � Greater efficiency and lower costs Costs: � Human costs when carried too far � Job enlargement as a solution Copyright © 2012 Pearson Education
Element 2: Departmentalization 14 - 5 Basis by which jobs are grouped together so that common tasks can be coordinated Common bases: � Function � Product � Geography � Process � Customer Copyright © 2012 Pearson Education
Departmentalization Functional Departmentalization � Product Departmentalization � Separate departments are established for each of the territories in which the enterprise does business. Process Departmentalization � Grouping departments around a firm’s products or services, or each family of products or services; also referred to as a “divisional” organization. Geographic (Territorial) Departmentalization � A form of organization that groups a company’s activities around essential functions such as manufacturing, sales, or finance. Departmentalization by process groups jobs on the basis of product or customer flow. Each process requires particular skills and offers a basis for homogeneous categorizing of work activities. Customer Departmentalization � Self-contained departments are organized to serve the needs of specific groups of customers. Copyright © 2012 Pearson Education
Element 3: Chain of Command 14 - 7 Unbroken line of authority that extends from the top of the organization to the lowest echelon and clarifies who reports to whom Authority: positional rights Unity of Command principle: one boss Fewer organizations find this is relevant Copyright © 2012 Pearson Education
Element 4: Span of Control 14 - 8 The number of employees a manager is expected to effectively and efficiently direct Determines the number of levels and managers an organization has � Trend is toward wider spans of control � Wider span depends on knowledgeable employees � Affects speed of communication and decision making Copyright © 2012 Pearson Education
Contrasting Spans of Control 14 - 9 Copyright © 2012 Pearson Education
Element 5: Centralization and Decentralization 1410 Centralization - degree to which decision making is concentrated at a single point in the organization � Only includes formal authority: positional rights � Highly centralized when top managers make all the decisions � Decentralized when front line employees and supervisors make decisions � Trend is toward increased decentralization Copyright © 2012 Pearson Education
Element 6: Formalization 14 - 11 Degree to which jobs within the organization are standardized � Formal = minimum discretion over what is to be done, when it is done, and how � Informal = freedom to act is necessary Copyright © 2012 Pearson Education
Common Organizational Designs 14 - 12 Copyright © 2012 Pearson Education Simple structure Bureaucracy Matrix structure
Simple Structure 14 - 13 Low degree of departmentalization Wide spans of control Authority centralized in a single person Little formalization Difficult to maintain in anything other than small organizations Copyright © 2012 Pearson Education
Bureaucracy 14 - 14 Highly routine operating tasks achieved through specialization � Formal rules and regulations � Centralized � Narrow � Tasks authority spans of control grouped by functional departments � Decision making follows the chain of command Copyright © 2012 Pearson Education
Matrix Structure 14 - 15 Combines two forms of departmentalization � Functional � Product Dual chain of command Advantages: � Facilitates coordination and efficient allocation of specialists Disadvantages: � Possible confusion, fosters power struggles, stress Copyright © 2012 Pearson Education
Matrix Structure for a College of Business Administration 14 - 16 Copyright © 2012 Pearson Education
New Design Options - Virtual 14 - 17 • A small, core organization that outsources its major business functions • Highly centralized with little or no departmentalization • Provides maximum flexibility while concentrating on what the organization does best • Reduced control over key parts of the business Copyright © 2012 Pearson Education
The Boundryless Organization 14 - 18 • 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 Copyright © 2012 Pearson Education
The Leaner Organization: Downsizing 14 - 19 • Downsizing: A systematic effort to make an organization leaner by selling off business units, closing locations or reducing staff. • Controversial because of the negative impact on employees • Impact on organizational performance has been very controversial Copyright © 2012 Pearson Education
Models of Organizational Design 14 - 20 Mechanistic Organization A rigid and tightly controlled structure Copyright © 2012 Pearson Education Organic Organization Highly flexible and adaptable structure
The Four Forces that Influence Structure 14 - 21 1. Strategy � � � 2. Organization Size � 3. Bigger becomes mechanistic Technology � 4. Innovation – introduce new offerings - organic Cost-Minimization – cost control - mechanistic Imitation – minimal risk and maximum profit - both Routine equals mechanistic, nonroutine is organic Environment � Dynamic environments lead to organic structures Copyright © 2012 Pearson Education
Organizational Designs and Employee Behavior 14 - 22 Cannot generalize any link between structure and performance Too much individual variance Consider employee preferences for: � Work Specialization � Span of Control � Centralization Copyright © 2012 Pearson Education
Global Implications 14 - 23 Culture and Organizational Structure: Insufficient research at this point Culture and Employee Structure Preferences: National culture does influence High power distance cultures accept mechanistic structure Culture and the Boundaryless Organization: Natural avenue for modern global companies Copyright © 2012 Pearson Education
Implications for Managers 14 - 24 Structural relationships impact attitude and behavior Structure constrains employee behaviors Copyright © 2012 Pearson Education
Keep in Mind… 14 - 25 As tasks become more complex and required skills more diverse, more use of cross-functional teams Simple structures are easy to create but difficult to grow External boundaries can be reduced through globalization, strategic alliances, customerorganizational links, and telecommuting Copyright © 2012 Pearson Education
Summary 14 - 26 1. Identified the six elements of an organization’s structure. 2. Described the common organizational designs. 3. Compared and contrasted the virtual and boundaryless organizations. 4. Demonstrated how organizational structures differed. 5. Analyzed the behavioral implications of different organizational designs. 6. Showed how globalization affects organizational structure. Copyright © 2012 Pearson Education
14 - 27 All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of the publisher. Printed in the United States of America. Copyright © 2012 Pearson Education
- Slides: 27