Chapter 9 Designing Adaptive Organizations 2014 Cengage Learning

9 -1 describe the departmentalization approach to organizational structure 9 -2 explain organizational authority

Structure and Process • Organizational structure • Organizational process © 2014 Cengage Learning

Departmentalization • Functional • Product • Customer • Geographic • Matrix © 2014 Cengage

Functional Departmentalization • Advantages – allows work done by highly qualified specialists – lowers

Product Departmentalization • Advantages – allows people to specialize in one area of expertise

Customer Departmentalization • Advantages – focuses organization on customer needs – allows companies to

Geographic Departmentalization • Advantages – helps companies respond to different markets – reduces costs

Matrix Departmentalization • Advantages – allows companies to efficiently manage large, complex tasks –

Chain of Command • Chain of command • Unity of command © 2014 Cengage

Authority • Line authority • Staff authority • Line function • Staff function ©

Degree of Centralization • Centralization of authority • Decentralization • Standardization 9 -2 ©

Advantages of Decentralization • Develops employee capabilities • Faster decision making • More satisfied

Job Specialization • Job comprises a smaller part of a larger task • Easy

Job Rotation, Enlargement, Enrichment • Rotation • Enlargement • Enrichment © 2014 Cengage Learning

Internal Motivation • Experience work as meaningful • Experience responsibility for work outcomes •

Core Job Characteristics • Skill variety • Task identity • Task significance • Autonomy

To Increase Internal Motivation • Combine tasks • Natural work units • Establish client

Intraorganizational Processes The collection of activities that take place within an organization to transform

Reengineering “the fundamental rethinking and radical redesign of business processes to achieve dramatic improvements

Empowerment • Empowering workers • Empowerment © 2014 Cengage Learning 9 -4

Interorganizational Processes A collection of activities that occur among companies to transform inputs into

Modular Organizations • Advantages – reduced costs • Disadvantages – loss of control –

Virtual Organizations • Advantages – shared costs – fast and flexible • Disadvantages –

Rendition <click screenshot for video> 1. How would you describe the workplace atmosphere in

Modern Shed <click screenshot for video> 1. Describe how Modern Shed functions as a

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9 -1 describe the departmentalization approach to organizational structure 9 -2 explain organizational authority 9 -3 discuss the different methods for job design 9 -4 explain the methods that companies are using to redesign internal organizational processes (i. e. , intraorganizational processes) 9 -5 describe the methods that companies are using to redesign external organizational processes (i. e. , interorganizational processes). © 2014 Cengage Learning

Functional Departmentalization • Advantages – allows work done by highly qualified specialists – lowers costs by reducing duplication – makes communication and coordination easier • Disadvantages – cross-department coordination can be difficult – may lead to slower decision making 9 -1 © 2014 Cengage Learning

Product Departmentalization • Advantages – allows people to specialize in one area of expertise – makes it easier to assess performance – makes decision making faster • Disadvantages – duplication – coordination across different product departments © 2014 Cengage Learning 9 -1

Customer Departmentalization • Advantages – focuses organization on customer needs – allows companies to specialize products and services to customer needs • Disadvantages – duplication of resources – workers might please customers but hurt business © 2014 Cengage Learning 9 -1

Geographic Departmentalization • Advantages – helps companies respond to different markets – reduces costs by locating unique resources closer to customers • Disadvantages – duplication of resources – difficult to coordinate departments © 2014 Cengage Learning 9 -1

Matrix Departmentalization • Advantages – allows companies to efficiently manage large, complex tasks – gives much more diverse set of expertise and experience • Disadvantages – requires a high level of duplication – confusion and conflict between project bosses – requires much more management skill © 2014 Cengage Learning 9 -1

Reengineering “the fundamental rethinking and radical redesign of business processes to achieve dramatic improvements in critical, contemporary measures of performance, such as cost, quality, service and speed. ” © 2014 Cengage Learning 9 -4

Modular Organizations • Advantages – reduced costs • Disadvantages – loss of control – noncore activities that are outsourced may become source of advantage – suppliers to whom work is outsourced can become competitors © 2014 Cengage Learning 9 -5

Virtual Organizations • Advantages – shared costs – fast and flexible • Disadvantages – difficult to control quality of work done by partners – requires tremendous managerial skills © 2014 Cengage Learning 9 -5

Rendition <click screenshot for video> 1. How would you describe the workplace atmosphere in this scene? Would you say it demonstrates behavioral informality or formality? 2. Do you think the scene shows line authority or staff authority between these two men? 3. What kind of feedback is Alan Smith getting from Senator Hawkins? Is it primarily positive or negative? © 2014 Cengage Learning

Modern Shed <click screenshot for video> 1. Describe how Modern Shed functions as a modular organization. 2. What are the advantages and disadvantages of Modern Shed’s organizational structure? © 2014 Cengage Learning