BOH4M - 4-5a - LN, Advanced Organizational Structures.ppt.pptx

Organizational Structures BOH4M Success Criteria ● I can draw examples of functional, divisional, and matrix organizational charts. ● I can create depictions of ideal organizations that fit into traditional and emerging organizational structures. Management Fundamentals - Chapter 10 2 Planning...

Organizational Structures BOH4M Success Criteria ● I can draw examples of functional, divisional, and matrix organizational charts. ● I can create depictions of ideal organizations that fit into traditional and emerging organizational structures. Management Fundamentals - Chapter 10 2 Planning Ahead — Chapter 10 Study Questions ➢What is organizing as a management function? ➢What are the major types of organization structures? ➢What are the new developments in organization structures? Management Fundamentals - Chapter 10 3 Study Question 1: What is organizing as a management function? ➢Organizing and organization structure – Organizing • The process of arranging people and other resources to work together to accomplish a goal. – Organization structure • The system of tasks, workflows, reporting relationships, and communication channels that link together diverse individuals and groups. Management Fundamentals - Chapter 10 4 Figure 10.1 Organizing viewed in relationship with the other management functions. Management Fundamentals - Chapter 10 5 FORMAL AND INFORMAL STRUCTURES Management Fundamentals - Chapter 10 6 ➢Formal structures … – The structure of the organization in its official state. – An organization chart identifies the following aspects of formal structure: • • • • • The division of work. (who does what) Supervisory relationships. (who reports to whom) Communication channels. (where information comes from) Major subunits. (smaller organizations within an organization) Levels of management. (upper, middle, lower) 7 ➢Informal structures … – A “shadow” organization made up of the unofficial, but often critical, working relationships between organization members. – Potential advantages of informal structures: • Helping people accomplish their work. • Overcoming limits of formal structure. • Gaining access to interpersonal networks. • Informal learning. Management Fundamentals - Chapter 10 8 ➢Informal structures (cont.) … – Potential disadvantages of informal structures: • May work against best interests of entire organization. • Susceptibility to rumor. • May carry inaccurate information. • Diversion of work efforts from important objectives. • Feeling of alienation by outsiders. Management Fundamentals - Chapter 10 9 Activity - Formal v. Informal 1. Draw a formal organizational structure for our class 2. Draw an informal organizational structure for our class (you decide how) Management Fundamentals - Chapter 10 10 Types of Org’l Structures ● The rest of the lesson is based on looking at the different types of organizational structures. ● We are now getting more advanced than simply calling it “tall” or “flat” ● There are the traditional ones: (1) Functional, (2) Divisional, (3) Matrix ● There are also the modern ones: (4) Team Structures, (5) Network Structures, (6) Boundaryless Structures Management Fundamentals - Chapter 10 11 Functional Divisional Matrix TRADITIONAL TYPES OF ORGANIZATIONAL STRUCTURES 12 ➢#1 – Functional structures – People with similar skills and performing similar tasks are grouped together into formal work units. – Members work in their functional areas of expertise. (e.g., marketing, sales, accounting) – Are not limited to businesses. – Works well for small organizations producing few products or services. Can you think about why? Management Fundamentals - Chapter 10 13 Figure 10.2 Functional structures examples Management Fundamentals - Chapter 10 14 Functional Structures ➢Potential advantages of functional structures: – Economies of scale (more people doing the same task together in a department allows you to do more for less). – Task assignments consistent with expertise and training. – High-quality technical problem solving – In-depth training and skill development. – Clear career paths within functions. Management Fundamentals - Chapter 10 15 Functional Structures ➢Potential disadvantages of functional structures: – Difficulties in pinpointing responsibilities. • Who is responsible for a specific division of a task? • E.g., who is responsible for the sales tasks in Asia if you only divide based on task function? – Sense of cooperation and common purpose break down. – Narrow view of performance objectives. 16 ➢#2 - Divisional structures ➢Divisional structures – Group together people who work on the same product or process, serve similar customers, and/or are located in the same area or geographical region. – Common in complex organizations. – Avoid problems associated with functional structures. Management Fundamentals - Chapter 10 17 Divisional Structures ➢ Types of divisional structures and how they group job and activities: – Product structures focus on a single product or service. – Geographical structures focus on the same location or geographical region. – Customer structures focus on the same customers or clients. – Process structures focus on the same processes. Management Fundamentals - Chapter 10 18 Divisional Structures Examples Management Fundamentals - Chapter 10 19 Divisional Structures ➢Potential advantages of divisional structures: – More flexibility in responding to environmental changes. – Clear points of responsibility. – Expertise focused on specific customers, products, and regions. Management Fundamentals - Chapter 10 20 Divisional Structures ➢Potential disadvantages of divisional structures: – Duplication of resources and efforts across divisions. • We might do the same task in 2 different geographic regions that could have been done in 1. – Competition and poor coordination across divisions. – Emphasis on divisional goals at expense of organizational goals. 21 ➢#3 - Matrix structure ➢ Matrix structure – Combines functional and divisional structures to gain advantages and minimize disadvantages of each. – Used commonly in: • Manufacturing • Service industries • Professional fields • Non-profit sector • Multi-national corporations Management Fundamentals - Chapter 10 22 Figure 10.4 Matrix structure in a small multiproject business firm. Management Fundamentals - Chapter 10 23 ➢Matrix structure ➢ Potential advantages of matrix structures: – Better cooperation across functions. – Improved decision making. – Increased flexibility when restructuring. – Better customer service. – Better performance accountability. – Improved strategic management. Management Fundamentals - Chapter 10 24 ➢Matrix structure ➢ Potential disadvantages of matrix structures: – Two-boss system is susceptible to power struggles. – Two-boss system can create task confusion and conflict in work priorities. – Team meetings are time consuming. – Increased costs. Management Fundamentals - Chapter 10 25 Research At each table, find and share one image of each traditional type of organizational structure. 26 Activity ● By hand, draw a functional structure, a divisional structure, and a matrix structure. ● Pretend that these are real structures. Make up titles for the organizations and the jobs. Do not make up names of employees for this activity. Management Fundamentals - Chapter 10 27 THREE CURRENT DEVELOPMENTS TO ORGANIZATIONAL STRUCTURES 28 #4 - Team structures ➢New Development A – Team structures – Extensively use permanent and temporary teams to solve problems, complete special projects, and accomplish day-to-day tasks. – Often useManagement cross-functional teams. Fundamentals - Chapter 10 29 Figure 10.5 How a team structure uses cross-functional teams for improved lateral relations. Management Fundamentals - Chapter 10 30 Team structures ➢Potential advantages of team structures: – Eliminates difficulties with communication and decision making. – Eliminates barriers between operating departments. – Improved morale. – Greater sense of involvement and identification. – Increased enthusiasm for work. – Improved quality and speed of decision making. Management Fundamentals - Chapter 10 31 Team structures ➢Potential disadvantages of team structures: – Conflicting loyalties among members. – Excessive time spent in meetings. – Effective use of time depends on quality of interpersonal relations, group dynamics, and team management. Management Fundamentals - Chapter 10 32 #5 - Network structures ➢New Development B – Network structures – A central core that is linked through networks of relationships with outside contractors and suppliers of essential services. – Own only core components and use strategic alliances or outsourcing to provide other components. Management Fundamentals - Chapter 10 33 Figure 10.6 A network structure for a Web-based retail business. Management Fundamentals - Chapter 10 34 Network structures ➢Potential advantages of network structures: – Firms can operate with fewer full-time employees and less complex internal systems. – Reduced overhead costs and increased operating efficiency. – Permits operations across great distances. Management Fundamentals - Chapter 10 35 Network structures ➢Potential disadvantages of network structures: – Control and coordination problems may arise from network complexity. – Potential loss of control over outsourced activities. – Potential lack of loyalty among infrequently used contractors. – Excessively aggressive outsourcing can be dangerous. Management Fundamentals - Chapter 10 36 Network structures ➢ Deadly sins of outsourcing (Negative Possibilities): – – – – – – Outsourcing activities that are part of the core. Outsourcing to untrustworthy vendors. Not having good contracts with the vendor. Overlooking impact on existing employees. Not maintaining oversight; losing control to vendors. Failing to anticipate need to change vendors, cease outsourcing. Management Fundamentals - Chapter 10 37 ➢#6 - Boundaryless organizations ➢ New Development C – Boundaryless organizations – Eliminate internal boundaries among subsystems and external boundaries with the external environment. – A combination of team and network structures, with the addition of “temporariness.” – Key requirements: • • • • Absence of hierarchy. Empowerment of team members. Technology utilization. Acceptance of impermanence (that things change) Management Fundamentals - Chapter 10 38 Figure 10.7 The boundaryless organization eliminates internal and external barriers. Management Fundamentals - Chapter 10 39 ➢Boundaryless organizations – Encourage creativity, quality, timeliness, flexibility, and efficiency. – Knowledge sharing is both a goal and essential component. – Virtual organization. • A special form of boundaryless organization. • Operates in a shifting network of external alliances that are engaged as needed, using IT and the Internet. Management Fundamentals - Chapter 10 40