Organizational Behavior, 14th Edition - Chapter 14, Organizational Structure And Design PDF

Organizational Behavior, 14e Chapter 14 Organizational Structure and Des...

Organizational Behavior, 14e Chapter 14 Organizational Structure and Design Griffin/Phillips, Organizational Behavior, 14th Edition. © 2024 Cengage Learning, Inc. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 1  Learning Outcomes After studying this chapter, you should be able to: 1. Identify the elements of organizational structure. 2. Describe mechanistic and organic structures. 3. Explain what influences an organization’s structure. 4. Describe the basic types of organizational structures. 5. Discuss four contemporary issues in organizational structure. Griffin/Phillips, Organizational Behavior, 14th Edition. © 2024 Cengage Learning, Inc. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 2  14-1 Elements of Organizational Structure Griffin/Phillips, Organizational Behavior, 14th Edition. © 2024 Cengage Learning, Inc. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 3  Organizational Design and Structure Organizational design – the process of selecting and managing aspects of organizational structure and culture to enable the organization to achieve its goals Organizational structure – the formal system of task, power, and reporting relationships − Influences employee behavior by enabling or restricting communication, teamwork, and cooperation as well as intergroup relationships Organizational chart – diagram of the chain of command and reporting relationships in a company Griffin/Phillips, Organizational Behavior, 14th Edition. © 2024 Cengage Learning, Inc. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 4  Figure 14.1 Organizational Chart— Narrow Span of Control An organizational chart illustrates the chain of command and reporting relationships in a company. If the span of control in an organization is relatively narrow, as shown here, the organization tends to have more levels. That is, it is relatively “tall.” Griffin/Phillips, Organizational Behavior, 14th Edition. © 2024 Cengage Learning, Inc. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 5  Table 14.1 Characteristics of Organizational Structure Division of labor: the extent to which employees specialize or generalize Span of control: the number of people reporting directly to an individual Hierarchy: the degree to which some employees have formal authority over others Formalization: the extent to which organizational rules, procedures, and communications are written down and closely followed Centralization: the degree to which power and decision-making authority are concentrated at higher levels of the organization rather than distributed Griffin/Phillips, Organizational Behavior, 14th Edition. © 2024 Cengage Learning, Inc. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 6  Figure 14.2 Organizational Chart— Wide Span of Control When an organization uses a relatively wider span of control, such as the organization illustrated here, its structure has fewer levels, and it tends to be somewhat “flat.” Griffin/Phillips, Organizational Behavior, 14th Edition. © 2024 Cengage Learning, Inc. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 7  Organizational Structures Centralized organization Decentralized organization Power and decision-making Lower levels have more autonomy authority concentrated at higher and authority for making decisions levels Flatter structures, less need for Clear lines of communication and middle management responsibility Promotes product innovation and Decision implementation tends to faster decision making be straightforward Best for nonroutine tasks in a complex environment Griffin/Phillips, Organizational Behavior, 14th Edition. © 2024 Cengage Learning, Inc. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 8  Mechanistic and Organic Designs Mechanistic organization Organic organization Rigid, traditional bureaucracy Flexible, decentralized Hierarchical communication Open communication channels Uniform job descriptions Focus on adaptability May minimize costs Faster response to market and Slow to capitalize on new competitive changes opportunities May increase job satisfaction and commitment Griffin/Phillips, Organizational Behavior, 14th Edition. © 2024 Cengage Learning, Inc. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 9  Figure 14.3 Nordstrom’s Employee Handbook Nordstrom’s has long been a pioneer in retailing. For years, its new employees received a “handbook” consisting of a simple gray card containing 75 words. Welcome to Nordstrom We’re glad to have you with our Company. Our number one goal is to provide outstanding customer service. Set both your personal and professional goals high. We have great confidence in your ability to achieve them. Nordstrom Rules: Rule #1: Use good judgment in all situations. There will be no additional rules. Please feel free to ask your department manager, store manager, or division general manager any question at any time. Griffin/Phillips, Organizational Behavior, 14th Edition. © 2024 Cengage Learning, Inc. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 10  Figure 14.4 Mechanistic/Organic Continuum While it is useful to describe mechanistic and organic forms of organizational structure, in reality, all organizations fall somewhere between these two extreme forms. Indeed, as shown here, we can think of mechanistic and organic characteristics as anchoring a continuum. Griffin/Phillips, Organizational Behavior, 14th Edition. © 2024 Cengage Learning, Inc. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 11  14-2 Determinants of Organizational Structure Griffin/Phillips, Organizational Behavior, 14th Edition. © 2024 Cengage Learning, Inc. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 12  Business Strategy Business strategy should be matched to organizational structure for best performance. Production technology: − Unit production – producing in small batches or making one-of-a-kind custom products o Flat structure with low managerial span of control − Mass production – producing large volumes of identical products o Tall, bureaucratic structure with large managerial span of control − Continuous production – machines constantly make the product o Employees monitor the machines and plan changes. o Tall and thin structure, or possibly an inverted pyramid Griffin/Phillips, Organizational Behavior, 14th Edition. © 2024 Cengage Learning, Inc. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 13 Table 14.2 What Influences Organizational Structure? Influence Example Business strategy Being a low-cost producer would require a more hierarchical, rigid structure than would pursuing an innovation strategy. External environment A rapidly changing environment requires a more flexible structure than a more stable environment. Nature of the organization’s If workers have professional skills (e.g., lawyers, scientists) and need to work talent together, then a flatter, team-based structure would be more appropriate than a taller, bureaucratic structure. Organizational size Larger organizations tend to have greater specialization, greater hierarchy, and more rules than do smaller firms. Expectations of how If employees are expected to follow explicit rules and procedures, a employees should behave hierarchical, centralized structure would be called for. Organization’s production If the firm uses unit production and makes custom products, a flat structure technology with a low managerial span of control is most appropriate. Organizational change As the environment and business strategies change, organizational structures also change. Griffin/Phillips, Organizational Behavior, 14th Edition. © 2024 Cengage Learning, Inc. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 14  14-3 Types of Organizational Structures Griffin/Phillips, Organizational Behavior, 14th Edition. © 2024 Cengage Learning, Inc. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 15  Early Organizational Structures Prebureaucratic structure – smaller organizations with low standardization, total centralization, and mostly one-on-one communication Bureaucratic structure – organizational structure with formal division of labor, hierarchy, and standardization of work procedures Bases for grouping employees into subunits: ‒ Employee knowledge and skills ‒ Output ‒ Business function ‒ Client ‒ Work process ‒ Location Griffin/Phillips, Organizational Behavior, 14th Edition. © 2024 Cengage Learning, Inc. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 16  Structures Based on Groupings (1 of 2) Functional structure Division Matrix structure Groups people with the A collection of functions Employees report to same skills or who use organized around a both a project or product similar tools or work particular geographic area, team leader and to a processes into product or service, or functional manager departments market Generates complex Works well in stable Improves communication reporting relationships environments Enables flexibility Enables quick responses Potential for poor Reduces economies of and more effective coordination and scale decision making communication Griffin/Phillips, Organizational Behavior, 14th Edition. © 2024 Cengage Learning, Inc. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 17 Figure 14.5 Organizational Chart—Matrix Structure A matrix structure is created by combining a functional structure with a project or product team structure. In a matrix structure, individuals usually report to more than one boss at the same time—their functional supervisor and a project or product team leader. Griffin/Phillips, Organizational Behavior, 14th Edition. © 2024 Cengage Learning, Inc. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 18  Structures Based on Groupings (2 of 2) Team-based structure Lattice structure Network organization Horizontal or vertical Cross-functional and cross- A collection of teams define part or all of level subteams are formed autonomous units or firms the organization and dissolved as necessary that act as a single larger Best when collaboration to complete specific projects entity, using social and inputs from several and tasks mechanisms for functional areas are Typical in consulting coordination and control required organizations Requires much Minimal hierarchy coordination and control Griffin/Phillips, Organizational Behavior, 14th Edition. © 2024 Cengage Learning, Inc. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 19  14-4 Contemporary Issues in Organizational Structure Griffin/Phillips, Organizational Behavior, 14th Edition. © 2024 Cengage Learning, Inc. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 20  Virtual Organizations Virtual organization – an organization that contracts out almost all of its functions except for the company name and managing the coordination among the contractors − Often uses virtual teams linked by technology − Tends to be complex − Formal contracts and legal agreements can help manage relationships. − Reduced costs and increased flexibility create competitive advantage. Griffin/Phillips, Organizational Behavior, 14th Edition. © 2024 Cengage Learning, Inc. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 21  Integrating Employees Segments employees into divisions, functional areas, or groups − Direct contact – managers from different units informally work together to coordinate or to identify and solve shared problems − Liaison role – a manager or team member is held formally accountable for communicating and coordinating with other groups − Task force – a temporary committee formed to address a specific project or problem − Cross-functional team – a permanent task force created to address specific problems or recurring needs Griffin/Phillips, Organizational Behavior, 14th Edition. © 2024 Cengage Learning, Inc. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 22  Communities of Practice Communities of practice – groups of people whose shared expertise and interest in a joint enterprise informally bind them together − People involved share their knowledge and experiences in open, creative ways. − Rarely shown on organizational charts − Often span company boundaries − Cultivated by identifying and bringing the right people together, building trust, and providing an appropriate infrastructure Griffin/Phillips, Organizational Behavior, 14th Edition. © 2024 Cengage Learning, Inc. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 23  Enabling Knowledge Networks Start with a clear area of business need. Start small. Recruit management involvement. Use technology that supports the community’s needs and that community members are able to use and are comfortable using. Respect and build on informal employee initiatives already underway. Celebrate contributions and build on small successes. Griffin/Phillips, Organizational Behavior, 14th Edition. © 2024 Cengage Learning, Inc. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 24  Effects of Restructuring on Performance Can improve a struggling firm’s performance Not a cure-all − Restructuring is stressful and can be demotivating if changes are poorly communicated. − Employees who survive downsizing suffer stress, decreased commitment, and higher turnover intentions. Needs to focus on positioning the organization for the future and to address the real cause of whatever the organization wants to change Griffin/Phillips, Organizational Behavior, 14th Edition. © 2024 Cengage Learning, Inc. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 25