Common Organizational Designs Traditional Designs Simple Structure Low

Common Organizational Designs • Traditional Designs – Simple Structure • Low departmentalization, wide spans of control, centralized authority, little formalization – Functional Structure • Departmentalization by function – Operations, finance, human resources, and product research and development – Divisional Structure • Composed of separate business units or divisions with limited autonomy under the coordination and control of the parent corporation Chapter 9, Stephen P. Robbins, Mary Coulter, and Nancy Langton, Management, Ninth Canadian Edition Copyright © 2009 Pearson Education Canada 29

Exhibit 9. 7 Strengths and Weaknesses of Common Traditional Organizational Designs Chapter 9, Stephen P. Robbins, Mary Coulter, and Nancy Langton, Management, Ninth Canadian Edition Copyright © 2009 Pearson Education Canada 30

Organizational Designs • Contemporary Organizational Designs – Team Structures • The entire organization is made up of work groups or self -managed teams of empowered employees – Matrix Structures • Specialists for different functional departments are assigned to work on projects led by project managers • Matrix participants have two managers – Project Structures • Employees work continuously on projects, moving on to another project as each project is completed Chapter 9, Stephen P. Robbins, Mary Coulter, and Nancy Langton, Management, Ninth Canadian Edition Copyright © 2009 Pearson Education Canada 31

Exhibit 9. 8 Contemporary Organizational Designs Chapter 9, Stephen P. Robbins, Mary Coulter, and Nancy Langton, Management, Ninth Canadian Edition Copyright © 2009 Pearson Education Canada 32

Exhibit 9. 9 A Matrix Organization in an Aerospace Firm Design Engineering Manufacturing Contract Administration Purchasing Accounting Human Resources (HR) Alpha Project Design Group Manufacturing Group Contract Group Purchasing Group Accounting Group HR Group Beta Project Design Group Manufacturing Group Contract Group Purchasing Group Accounting Group HR Group Gamma Project Design Group Manufacturing Group Contract Group Purchasing Group Accounting Group HR Group Omega Project Design Group Manufacturing Group Contract Group Purchasing Group Accounting Group HR Group Chapter 9, Stephen P. Robbins, Mary Coulter, and Nancy Langton, Management, Ninth Canadian Edition Copyright © 2009 Pearson Education Canada 33

Organizational Designs • Contemporary Organizational Designs – Boundary-less Organization • A flexible and an unstructured organizational design that is intended to break down external barriers between the organization and its customers and suppliers • Removes internal (horizontal) boundaries: – Eliminates the chain of command – Has limitless spans of control – Uses empowered teams rather than departments • Eliminates external boundaries: – Uses virtual, network, and modular organizational structures to get closer to stakeholders Chapter 9, Stephen P. Robbins, Mary Coulter, and Nancy Langton, Management, Ninth Canadian Edition Copyright © 2009 Pearson Education Canada 34

Removing Boundaries • Virtual Organization – An organization that consists of a small core of full-time employees and that temporarily hires specialists to work on opportunities that arise • Network Organization – A small core organization that outsources its major business functions (e. g. , manufacturing) in order to concentrate on what it does best • Modular Organization – A manufacturing organization that uses outside suppliers to provide product components for its final assembly operations Chapter 9, Stephen P. Robbins, Mary Coulter, and Nancy Langton, Management, Ninth Canadian Edition Copyright © 2009 Pearson Education Canada 35

Outsourcing Issues • Problems in Outsourcing – – – – Choosing the wrong activities to outsource Choosing the wrong vendor Writing a poor contract Failing to consider personnel issues Losing control over the activity Ignoring the hidden costs Failing to develop an exit strategy (for either moving to another vendor, or deciding to bring the activity back inhouse) Chapter 9, Stephen P. Robbins, Mary Coulter, and Nancy Langton, Management, Ninth Canadian Edition Copyright © 2009 Pearson Education Canada 36

Organizational Designs • Learning Organization – An organization that has developed the capacity to continuously learn, adapt, and change through the practice of knowledge management by employees – Characteristics of a learning organization: • An open team-based organization design that empowers employees • Extensive and open information sharing • Leadership that provides a shared vision of the organization’s future; support; and encouragement • A strong culture of shared values, trust, openness, and a sense of community Chapter 9, Stephen P. Robbins, Mary Coulter, and Nancy Langton, Management, Ninth Canadian Edition Copyright © 2009 Pearson Education Canada 37

Summary and Implications • What are the major elements of organizational structure? – Six key elements: work specialization, departmentalization, chain of command, span of control, centralization and decentralization, formalization • What are the factors that affect organizational structure? – Organizational strategy, size, technology, degree of environmental uncertainty Chapter 9, Stephen P. Robbins, Mary Coulter, and Nancy Langton, Management, Ninth Canadian Edition Copyright © 2009 Pearson Education Canada 38

Summary and Implications • Beyond traditional organizational designs, how else can organizations be structured? – Simple, functional and divisional – Team structure, matrix, project structures, boundary-less organizations Chapter 9, Stephen P. Robbins, Mary Coulter, and Nancy Langton, Management, Ninth Canadian Edition Copyright © 2009 Pearson Education Canada 39