ORGANIZATIONAL DESIGN AND CULTURE Dynamics of Organizational Behavior
ORGANIZATIONAL DESIGN AND CULTURE Dynamics of Organizational Behavior Virginia Tech MBA Program Andrew Watson
Agenda • Erik Peterson at Biometra • Summary and discussion of (B) and beyond • Organizational Design: Ch. 16 • Break • Jones Lang La. Salle (A) • Why did JLL reorg? How wisely? • What advice would you give? • Organizational Culture: Ch. 17 • Looking forward
The Org Chart and How We Get There • Organizational structure • Formal system of task and reporting relationships • Often represented by org chart, although there’s more to structure • Organizational design • Process to arrive at organizational structure (and culture? ) so that the organizational can achieve its goals • Q: But what is the best organizational structure for this? • Contingency theory is a response to Q • Design to match contingencies • Which contingencies? • What other responses to Q might there be?
Contingencies: Three and Counting • GJ emphasize three contingencies: • Organization’s environment • Organization’s technology • Human resources • What other contingencies might we consider? • I’ll provide at least one • So you should provide at least thirty-one
The Contingency of Environment • Consider the environmental attribute of stability • And consider its implications for structure • Low environmental stability • Allow members to respond to changes • High level of decentralization • Low level of formalization • Organic structure • High environmental stability • More bureaucratic • Low level of decentralization (so high centralization) • High level of formalization • Mechanistic structure
The Contingency of Technology • Consider three types of production technology • Small-batch/customized products • Organic structure • Mass production • Mechanistic structure • Continuous process • Organic structure • Most of the human work is exception handling • This contingency theory is from the manufacturing-based economy (and research) of almost 50 years ago • What about now?
The Contingency of Human Resources • GJ: highly skilled workers • → empowerment, teams, etc. • → organic structure • GJ: less skilled workers → etc. • Comments on this HR contingency theory? • Note from the previous bullet that “contingency theory” is more of a family of theories than a theory itself • Any comments on contingency theory?
Organizational Structures • Functional • Divide into: marketing, finance, R&D, etc… • Key pros and cons? • Divisional • Divide by products, or geography, or other market, … • Division typically big enough to need its own org design effort • Key pros and cons? • Matrix • “group people and resources in two ways simultaneously” (p. 480) • Key pros and cons?
Authority, Breadth, and Depth • Authority: power vested in a person/position to make decisions and use resources • Similar to legitimate power • Span of control: number of subordinates who report directly to a manager • Width, may vary throughout the org chart • Minimum chain of command • Principle: minimum number of levels necessary to organize and control • Depth should be minimized • This suggests that width (span of control) should be high
Coordination • Described organizational structure in terms of specialization • By function, by geography, etc. • Sometimes called differentiation • Need to balance with coordination between specialized parts of organization • Sometimes called integration • Integrating mechanisms include: • Formalization/standardization and centralization • Mutual adjustment: great if it works • Liason roles • Cross-functional teams
Organizational Culture • Organizational culture: • Shared values, beliefs, and norms • Influences the way think, feel and behave • Toward each other and to toward people outside the organization • How is organizational culture related to national culture?
Values and Norms • Values: determine which types of behavior, outcomes, etc. , are desirable • Terminal value: a desired outcome • Instrumental value: a desired mode of behavior • Norms: standards of styles of behavior • Acceptable or typical • Largely informal • We’ve seen each of these concepts at a different level • Values at individual level • Norms at group level • Each applies also at organizational level
How Is Culture Transmitted? • Socialization, as for groups (ch 10) • Rites (and wrongs? ) • Rites of passage, integration, etc. • GJ omit negative examples, such as hazing • Symbols • Buildings, outside and in • We’ll discussion some inside the building material later in this meeting
How is Culture Shaped? • By people • Founder(s), other leaders • Sometimes, but not always, a good thing • By society • This implies by nation/state—but how? • The HQ nation/state? • The nation/state in which the employee/group is based? • By formal aspects of the organization • Human Resource Management policies • Structure
An Ethical Culture • Let’s look at, and think about, the GJ textbook • Ethics is at the end of ch 17 (and at the end of ch 12): why? • “Creating an Ethical Culture” section covers issues including: • Why should an organization have an ethical culture? • Why does unethical behavior occur in organizations? • How can an organization create an ethical culture? • Whistleblowing
Culture: Hofstede’s Framework • Geert Hofstede • Culture’s Consequences (1980) • Established four-dimensional framework to describe and compare cultures • Subsequent work • Added two dimensions to the framework • Recent summary of the 30+ years of research in Hofstede (2011) • More at geert-hofstede. com • Including page summarizing the dimensions • Next slide also provides summary of the six dimensions • Starting with original four
Hofstede’s Dimensions Hofstede Dimension (Abbreviation) HBR/Steelcase Terms Power Distance Index (PDI) Autocratic – Consultative Individualism versus Collectivism (IDV) Individualist – Collectivist Masculinity versus Femininity (MAS) Masculine – Feminine Uncertainty Avoidance Index (UAI) Tolerant of uncertainty - security oriented Pragmatic versus Normative (PRA) Short term - Long term Indulgence versus Restraint (IND) Low context - High context
Looking Forward • Next week: Presentations (2) • A few slides on format follow this one • Further forward • Paper (2) drawn from chapter 13 or 18 (or both) • So these chapters won’t be on the final
Group Presentations (2) • Each group will present on a chapter of Influence • Similar to first group presentations • Eight minutes, not including Q&A • Syllabus identifies other points of similarity • Different from first presentations • Each based on a chapter of Influence • From here on, I’ll refer to this assignment as GP 2
GP 2 and Co-Opetition • GP 2 is an exercise on competition • Not that I intend to do either of the following • Grade on a forced curve • Have awards following the presentations • But it may be hard to remember all the presentations after class • Yours should be one of the memorable ones—in a good way • GP 2 is an exercise in cooperation • We will help each other understand the whole book • Even though some of us might not read all the chapters right now • We will use time efficiently • Your group’s eight minutes belongs to the audience
GP 2 and Assignment Definition • Assignment definition • Describing what you want done • GP 2 needs definition, and already has some • An important skill for managers • Including teachers • How much detail should the assigner provide? • It depends… • Arguments for lots of detail? • Arguments for little detail? • I’ll provide more detail on GP 2 than I do on most assignments • Why is this appropriate? • Or not?
GP 2 Logistics • Post your slides to Canvas Discussion • Reply to the GP 2 post, attaching your slides by noon on the day of class • Chapters, in order: 2, 3, … • The two-group chapter won’t be split • Change of plan, suggested by one of the groups • Epilogue: AW
GP 2 Content Checklist • Introduction • Group members • Chapter topic: very clear • Sub-topics • May correspond to headings within chapter • Examples • Some not from Influence • How to say No • 1 st group of two • 2 nd group of two • As opposite
GP 2 Sample Format • Opening • Title slide • Topic introduction slide • May include agenda for rest of presentation • Sub-topic 1 • A slide or two, including at least one example • Another sub-topic or two, then… • How to say No • May make a good last slide or two • Or may be followed by Summary and/or Questions? slide(s) • Q&A, not included in the eight minutes
GP 2 and Goodnight • You don’t have to follow that format, but: • I think it would work well • It would give you about eight slides • Do use the checklists • Content and Logistics • Questions on GP 2 or on anything else? • Likely to be of interest to others? • Usual closing
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