Organizational Structure and Design PDF

Chapter 5 Organizational Structure and Design Chapter 9, Stephen P. Robbins, Mary Coulter, and Nancy Langton, Management, Eighth Canadian Edition. Copyright © 2005 Pearson Education Canada Inc....

Chapter 5 Organizational Structure and Design Chapter 9, Stephen P. Robbins, Mary Coulter, and Nancy Langton, Management, Eighth Canadian Edition. Copyright © 2005 Pearson Education Canada Inc. 1 1. Organizing is the process of creating an organization’s structure. 2. An organizational structure is the formal arrangement of jobs within an organization. 3. Organizational design is the process of developing or changing an organization’s structure. 2  Organizational Design A process involving decisions about six key elements: 1. Work specialization 2. Departmentalization 3. Chain of command 4. Span ‫ مدى‬of control 5. Centralization and decentralization 6. Formalization 3  Purposes of Organizing Divides work to be done into specific jobs and departments Assigns ‫ تحديد‬tasks and responsibilities associated with individual jobs Coordinates diverse ‫ متنوع‬organizational tasks Clusters‫ مجموعات صعيرة‬jobs into units Establishes relationships among individuals, groups, and departments Establishes formal lines of authority‫سلطة‬ Allocates ‫ توظيف‬and deploys ‫ توزيع‬organizational resources 4  1. Work Specialization The degree to which tasks in the organization are divided into separate jobs with each step completed by a different person Overspecialization can result ‫ يؤدى‬in human diseconomies ‫ عدم االستقرار‬from boredom ‫الملل‬, fatigue,‫ تعب‬stress, poor quality, increased absenteeism ‫غياب‬, and higher turnover‫اعادة تدوير‬ 5  2. Departmentalization by Type A- Functional Grouping jobs by functions D- Process performed Grouping jobs on the basis of product or customer flow B- Geographical Grouping jobs on the basis of E- Customer territory ‫ ِإق ِليم‬or geography Grouping jobs by type of customer and needs C- Product Grouping jobs by product line 6  A- Functional Departmentalization Plant Manager Manager, Manager, Manager, Manager, Manager, Engineering Accounting Manufacturing Human Resources Purchasing + Efficiencies from putting together similar specialties and people with common skills, knowledge, and orientations + Coordination within functional area + In-depth ‫ دقيق‬specialization – Poor communication across functional areas – Limited view of organizational goals 7 B- Geographical Departmentalization Vice President for Sales Sales Director, Sales Director, Sales Director, Sales Director, Western Region Prairies Region Central Region Eastern Region + More effective and efficient handling of specific regional issues that arise‫تنشأ‬ + Serve needs of unique geographic markets better – Duplication of functions – Can feel isolated from other organizational areas 8  C- Product Departmentalization Bombardier, Ltd. Mass Transit Sector Recreational and Rail Products Utility Vehicles Sector Sector Mass Transit Bombardier–Rotax Rail and Diesel Division (Vienna) Products Division Recreational Logistic Industrial Bombardier–Rotax Products Division Equipment DivisionEquipment Division(Gunskirchen) + 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 9  D- Process Departmentalization Plant Superintendent Sawing Assembling Lacquering Finishing Inspection Planing and Departmen Department and Sanding Department and Milling t Manager Department Manager Shipping Departmen Manager Manager Department t Manager Manager + More efficient flow of work activities – Can only be used with certain types of products 10  E- Customer Departmentalization Director of Sales Manager, Manager, Manager, Retail Accounts Wholesale Accounts Government Accounts + Customers’ needs and problems can be met by specialists – Duplication of functions – Limited view of organizational goals 11  3. Chain of Command The continuous line of authority that extends from upper levels of an organization to the lowest levels of the organization and clarifies who reports to whom 12 3. Chain of Command 2 Authority The rights inherent ‫ حق اصيل‬in a managerial position to tell people what to do and to expect them to do it Responsibility The obligation ‫ التزام‬or expectation to perform ‫ينجز‬. Responsibility brings with it accountability (the need to report and justify work to manager’s superiors) Unity of Command The concept that a person should have one boss and should report only to that person Delegation ‫تفويض‬ The assignment of authority to another person to carry out specific duties 13 3. Chain of Command 3 Line and Staff Authority – Line managers are responsible for the essential activities of the organization, including production and sales. Line managers have the authority to issue orders to those in the chain of command The president, the production manager, and the sales manager are examples of line managers – Staff managers have advisory ‫استشارية‬authority, and cannot issue orders to those in the chain of command (except those in their own department) 14  4. Span ‫ مدى‬of Control – The number of employees who can be effectively and efficiently supervised by a manager – Width of span is affected by: Skills and abilities of the manager and the employees Characteristics of the work being done Similarity of tasks Complexity of tasks Physical proximity of subordinates ‫القرب الجسدي من المرؤوسين‬ Standardization of tasks Sophistication ‫رقى‬of the organization’s information system Strength of the organization’s culture Preferred style of the manager 15 5. Centralization and Decentralization Centralization – The degree to which decision making is concentrated at a single point in the organization Organizations in which top managers make all the decisions and lower-level employees simply carry out those orders Decentralization – The degree to which lower-level employees provide input or actually make decisions – Employee Empowerment ‫التمكين‬ Increasing the decision-making discretion ‫تقدير‬of employees 16 5.1 Factors that Influence the Amount of Centralization More Centralization – Environment is stable – Lower-level managers are not as capable or experienced at making decisions as upper-level managers – Lower-level managers do not want to have a say in decisions – Decisions are significant ‫ذو أهمية‬ – Organization is facing a crisis ‫ ازمة‬or the risk of company failure – Company is large – Effective implementation of company strategies depends on managers retaining say over what happens 17 5.2 Factors that Influence the Amount of Decentralization More Decentralization – Environment is complex, uncertain – Lower-level managers are capable and experienced at making decisions – Lower-level managers want a voice in decisions – Decisions are relatively minor – Corporate culture is open to allowing managers to have a say in what happens – Company is geographically dispersed ‫مشتت‬ – Effective implementation of company strategies depends on managers having involvement and flexibility to make decisions 18 6. Formalization ‫التشكيل‬ The degree to which jobs within the organization are standardized and the extent ‫ مدى‬to which employee behaviour is guided by rules and procedures. 19  Organizational Design Decisions Mechanistic Organization Organic Organization A rigid and tightly ‫احكام‬ Highly flexible and controlled structure adaptable ‫ تكيف‬structure Mechanistic Organic High Specialization Cross ‫ متعدد‬-Functional Teams Rigid Departmentalization Cross-Hierarchical ‫ هرمى‬Teams Clear Chain of Command Free Flow of Information Narrow Spans of Control Wide Spans of Control Centralization Decentralization High Formalization Low Formalization 20  Structural Contingency ‫طارئ‬Factors 1- Overall strategy of the organization Strategy Frameworks: – Innovation Pursuing ‫ السعى‬competitive advantage through meaningful ‫هادفة‬ and unique innovations favours ‫ يفضل‬an organic structuring – Cost minimization Focusing on tightly controlling costs requires a mechanistic structure for the organization – Imitation Minimizing risks and maximizing profitability by copying market leaders requires both organic and mechanistic elements in the organization’s structure 21  Structural Contingency Factors2 2- Size of the organization Firms change from organic to mechanistic organizations as they grow in size 3- Technology use by the organization – Routine technology = mechanistic organizations – Non–routine technology = organic organizations 4- Degree of environmental uncertainty Dynamic environments require organic structures; mechanistic structures need stable environments 22  Common Organizational Designs Traditional Designs 1- Simple Structure Low departmentalization, wide spans of control, centralized authority, little formalization 2- Functional Structure Departmentalization by function such as: Operations, finance, human resources, and product research and development 3- Divisional Structure Composed of separate business units or divisions with limited autonomy ‫ استقالل‬under the coordination and control of the parent corporation 23  Strengths and Weaknesses of Common Traditional Organizational Designs Chapter 9, Stephen P. Robbins, Mary Coulter, and Nancy Langton, Management, Eighth Canadian Edition. Copyright © 2005 Pearson Education Canada Inc. 24  Contemporary ‫ معاصر‬Organizational Designs 1- Team Structures The entire organization is made up of work groups or self- managed teams of empowered employees 2- Matrix Structures Specialists for different functional departments are assigned to work on projects led by project managers Matrix participants have two managers 3- Project Structures Employees work continuously on projects, moving on to another project as each project is completed 25 4- Boundaryless Organization A flexible and an unstructured organizational design that is intended to break down external barriers ‫حواجز‬between 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 ‫وحدات‬ organizational structures to get closer to stakeholders 26  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 ‫منظمة تتكون من مجموعة صغيرة من الموظفين بدوام كامل وتقوم بتعيين متخصصين مؤقتًا للعمل على‬ ‫الفرص التي تنشأ‬ Network Organization A small core organization that outsources ‫مصادر خارجية‬its major business functions (e.g., manufacturing) in order to concentrate on what it does best ‫منظمة أساسية صغيرة تقوم باالستعانة بمصادر خارجية لوظائفها التجارية الرئيسية (مثل التصنيع) من‬ ‫أجل التركيز على ما تفعله بشكل أفضل‬ Modular Organization A manufacturing organization that uses outside suppliers to provide product components for its final assembly operations ‫منظمة تصنيع تستخدم موردين خارجيين لتوفير مكونات المنتج لعمليات التجميع‬ 27 ‫النهائية‬ 5- Learning Organization An organization that has developed the capacity to continuously learn, adapt, and change through the practice of knowledge management by employees Organizational Design Boundaryless Teams Empowerment Organizational Culture Information Sharing Strong Mutual Relationships THE LEARNING Open Sense of Community ORGANIZATION Timely Caring Accurate Trust Leadership Shared Vision Collaboration Chapter 9, Stephen P. Robbins, Mary Coulter, and Nancy Langton, Management, Eighth Canadian Edition. Copyright © 2005 Pearson Education Canada Inc. 28 Contemporary Organizational Designs Chapter 9, Stephen P. Robbins, Mary Coulter, and Nancy Langton, Management, Eighth Canadian Edition. Copyright © 2005 Pearson Education Canada Inc. 29