ORGANIZATION SYSTEM STRUCTURE AND CULTURE Dr Crazys Problems

ORGANIZATION SYSTEM, STRUCTURE, AND CULTURE

Dr. Crazy’s Problems - 1 n n Dr. Crazy left his university to open his own management consulting firm The firm provides training and consulting services on management to organizations in Hanoi The firm has 4 people – 2 of them are trainers and consultants, 1 is secretary. The firm contracts outside trainers when needed. How do Dr. Crazy and his friends organize his firm in order to run his business?

Dr. Crazy’s Problems - 2 n n After 1 year, the firm has many customers It now has 5 trainers/ consultants and contracts outside trainers if needed It also has a number of people who help with marketing, accounting, personnel, and administration works How would Dr. Crazy organize his firm?

Functional Departmentalization • Advantages • Efficiencies from putting together similar specialties and people with common skills, knowledge, and orientations • Coordination within functional area • In-depth specialization • Disadvantages • Poor communication across functional areas • Limited view of organizational goals Figure 10. 2 a

Dr. Crazy’s Problems - 3 n n After 5 year, the firm has a good reputation It now has 20 trainers/ consultants and contracts outside trainers if needed It also provides different training/consulting services - management/marketing, financial/investment, and legal – to organizations How would Dr. Crazy organize his firm?

Product Departmentalization + + + – – Allows specialization in particular products and services Managers can become experts in their industry Closer to customers Duplication of functions Limited view of organizational goals Source: Bombardier Annual Report. Figure 10. 2 c

Dr. Crazy’s Problems - 4 n n After 10 years, the firm has good reputation internationally It now provides these services in different countries: Laos, Mainland China, Vietnam, and Cambodia Different countries require different ways of management: customers/ local trainers/ level of requirements, etc. How would Dr. Crazy organize his firm?

Geographical Departmentalization • Advantages • More effective and efficient handling of specific regional issues that arise • Serve needs of unique geographic markets better • Disadvantages • Duplication of functions • Can feel isolated from other organizational areas Figure 10. 2 b

Defining Organizational Structure n Organizational Structure q n The formal arrangement of jobs within an organization. Organizational Design q A process involving decisions about six key elements: n n n Work specialization Departmentalization Chain of command Span of control Centralization and decentralization Formalization

Exercise: NEU Structure n n n Describe the organizational structure of NEU. Compare the structure in 2007 and today. Evaluate advantages and disadvantages of this structure Offer your recommendation for improvement

The Organization’s Culture n Organizational Culture q q A system of shared meanings and common beliefs held by organizational members that determines, in a large degree, how they act towards each other. “The way we do things around here. ” n q Values, symbols, rituals, myths, and practices Implications: n Culture is a perception. n Culture is shared. n Culture is descriptive.

Dimensions of Organizational Culture Exhibit 3. 2

Benefits of a Strong Culture n Creates a stronger employee commitment to the organization. n Aids in the recruitment and socialization of new employees. n Fosters higher organizational performance by instilling and promoting employee initiative.

Organizational Culture n Sources of Organizational Culture q The organization’s founder n q Past practices of the organization n q n Vision and mission The way things have been done The behavior of top management Continuation of the Organizational Culture q q Recruitment of like-minded employees who “fit” Socialization of new employees to help them adapt to the culture

Three Dot. Companies n n n How do you describe these companies’ structure, cultures? How do these companies develop their cultures? What are the pros and cons of these cultures?

The Old and New Ways – Examples from Three Dot. com Companies n n n The old way Security Detachment Hierarchy Work and fun don’t mix It’s just a job The new way Opportunity Total commitment We’re all equal Pamper me It’s so much more