Organizational Behavior and Management Sixth Edition lvanceyich Matteson
McGraw-Hill/Irwin Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved
CHAPT 15。 anizational Structur and Design .IDENTIFY the choices which must be made in designing an organization DEFINE what is meant by the term division oflabor o disCuSS the role of delegation of authority in design decisions DESCRIBE Several forms of departmentalization TER EXPLAIN the importance of span of control dEFIne three important dimensions of structure COMPARE mechanistic and organic organizational design IDENTIFY the major advantages of matrix organizational design DISCUSS multinational organizational structure and design issues eXPLaiN the meaning of the term virtualorganization
McGraw-Hill/Irwin Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved. 15 C H A P T E R Organizational Structure and Design ⚫IDENTIFY the choices which must be made in designing an organization. ⚫DEFINE what is meant by the term division of labor. ⚫DISCUSS the role of delegation of authority in design decisions. ⚫DESCRIBEseveral forms of departmentalization. ⚫EXPLAIN the importance of span of control. ⚫DEFINE three important dimensions of structure. ⚫COMPARE mechanistic and organic organizational design. ⚫IDENTIFY the major advantages of matrix organizational design. ⚫DISCUSS multinational organizational structure and design issues. ⚫EXPLAIN the meaning of the term virtual organization
15-3 Organizational Structure and Design Manager Subordinate Subordinate Subordinate Organizational Design Purposeful and goal-oriented process Decisions/actions to predetermine the way employees do their work Organizational Structure Relatively stable relationships and processes of the organization The anatomy of the organization providing a foundation within which the organization functions e Purpose is to regulate, or at least reduce, uncertainty Mcgraw-hillarwin Copyright o 2002 by The McGraw-Hill Companies, Inc. All rights reserved
McGraw-Hill/Irwin Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved. 15-3 Organizational Structure and Design Organizational Design ⚫ Purposeful and goal-oriented process ⚫ Decisions/actions to predetermine the way employees do their work Organizational Structure ⚫ Relatively stable relationships and processes of the organization. ⚫ “The anatomy of the organization, providing a foundation within which the organization functions.” ⚫ Purpose is to regulate, or at least reduce, uncertainty. Subordinate Subordinate Subordinate Manager
15-4 Organizational Design Decision process Managers must decide how to divide the overall tasks of the organization into successively smaller jobs Managers must decide the basis by which to group the individual jobs Managers must decide the appropriate size of the group reporting to each supervisor Managers must distribute authority among the jobs Mcgraw-hillarwin Copyright @2002 by The McGraw-Hill Companies, Inc. All rights reserved
McGraw-Hill/Irwin Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved. 15-4 Organizational Design Decision Process ⚫ Managers must decide how to divide the overall tasks of the organization into successively smaller jobs. ⚫ Managers must decide the basis by which to group the individual jobs. ⚫ Managers must decide the appropriate size of the group reporting to each supervisor. ⚫ Managers must distribute authority among the jobs
15-5 Organizational Design Components Components Design Decisions Division of Specialization Labor High Low Authority Delegation High Low Basis Departmentalization Homogenous Heterogeneous Span of Number Control F ew Many Mcgraw-hillarwin Copyright @2002 by The McGraw-Hill Companies, Inc. All rights reserved
McGraw-Hill/Irwin Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved. 15-5 Organizational Design Components Components Specialization High Low Division of Labor Number Few Many Span of Control Basis Homogenous Heterogeneous Departmentalization Delegation High Low Authority Design Decisions
15-6 Division of Labor The Extent to Which Jobs Are Specialized Ways that Division of Labor Can Occur Work can be divided into different personal specialties Occupational and professional specialties e Work can be divided into different activities necessitated by the natural sequence of the work the organization d oes Horizontal specialization Work can be divided along the vertical plane of an organization Hierarchy of authority McGraw-HillArwin Copyright@ 2002 by The McGraw-Hill Companies, Inc. All rights reserved
McGraw-Hill/Irwin Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved. 15-6 Division of Labor Ways that Division of Labor Can Occur: ⚫ Work can be divided into different personal specialties. ⚫ Occupational and professional specialties ⚫ Work can be divided into different activities necessitated by the natural sequence of the work the organization does. ⚫ Horizontal specialization ⚫ Work can be divided along the vertical plane of an organization. ⚫ Hierarchy of authority The Extent to Which Jobs Are Specialized
15-7 Delegation of Authority Extent to which managers allow subordinates to make decisions without approval of hign er management and exact obedience from others Reasons to Delegate or Reasons to Centralize Decentralize Authority Authority ● Encourages management iNcreases training costs development hEightens fear and resistance ● Leads to a more o Raises administrative competitive climate costs ● Enables managers t0 o Duplicates eforts and exercise more autonomy some functions Mcgraw-hillarwin Copyright @2002 by The McGraw-Hill Companies, Inc. All rights reserved
McGraw-Hill/Irwin Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved. 15-7 Reasons to Delegate or Decentralize Authority ⚫Encourages management development ⚫Leads to a more competitive climate ⚫Enables managers to exercise more autonomy Delegation of Authority Extent to which managers allow subordinates to make decisions without approval of higher management and exact obedience from others Reasons to Centralize Authority ⚫Increases training costs ⚫Heightens fear and resistance ⚫Raises administrative costs ⚫Duplicates efforts and some functions
15-8 Functional Departmentalization OMB Company Engineering Manufacturing Marketing finance Personnel Maior Advantage Major Disadvantage Creatingefficiency and more cost Sacrificing organizational goals effective units for departmentalones Mcgraw-hillarwin Copyright@ 2002 by The McGraw-Hill Companies, Inc. All rights reserved
McGraw-Hill/Irwin Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved. 15-8 Functional Departmentalization Major Advantage Creating efficiency and more cost effective units Engineering Finance Personnel Major Disadvantage Sacrificing organizational goals for departmental ones Manufacturing OMB Company Marketing
15-9 Territorial Departmentalization OMB Company Rocky Eastern Midwestern Southern Mountain Pacific Mcgraw-hillarwin Copyright @2002 by The McGraw-Hill Companies, Inc. All rights reserved
McGraw-Hill/Irwin Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved. 15-9 Territorial Departmentalization Eastern Southern Rocky Mountain Midwestern Pacific OMB Company
15-10 Product Departmentalization OMB Small Large Commercial Household Household Appliances Appliances Appliances Major Advantages Maior Disadvantages o Creating profit responsibility Creating redundant functions o Fostering innovation and .Increasing administrative autonomy cOStS Mcgraw-hillarwin Copyright o 2002 by The McGraw-Hill Companies, Inc. All/nts reserved
McGraw-Hill/Irwin Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved. 15-10 Product Departmentalization Small Household Appliances Commercial Appliances Major Advantages ⚫Creating profit responsibility ⚫Fostering innovation and autonomy Major Disadvantages ⚫Creating redundant functions ⚫Increasing administrative costs OMB Company Large Household Appliances