Contemporary Management Chapter 10 PDF

Because learning changes everything. ® Chapter 10 Managing Organizational Structure and Culture © 2022 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written cons...

Because learning changes everything. ® Chapter 10 Managing Organizational Structure and Culture © 2022 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.  Learning Objectives 1. Identify the factors that influence managers’ choice of an organizational structure. 2. Explain how managers group tasks into jobs that are motivating and satisfying for employees. 3. Describe the types of organizational structures managers can design, and explain why they choose one structure over another. 4. Explain why managers must coordinate jobs, functions, and divisions using the hierarchy of authority and integrating mechanisms. 5. List the four sources of organizational culture, and explain why and how a company’s culture can lead to competitive advantage. © McGraw Hill 2  Organizational Structure Organizational architecture: The organizational structure, control systems, culture, and human resource management systems that together determine how efficiently and effectively organizational resources are used. © McGraw Hill 3  Designing Organizational Structure 1 Organizing: Process by which managers establish the structure of working relationships among employees to allow them to achieve an organization’s goals efficiently and effectively. © McGraw Hill 4  Designing Organizational Structure 2 Organizational structure: Formal system of task and reporting relationships that coordinates and motivates organizational members so they work together to achieve organizational goals. © McGraw Hill 5  Designing Organizational Structure 3 Organizational design: The process by which managers create a specific type of organizational structure and culture so that a company can operate in the most efficient and effective way. © McGraw Hill 6  Figure 10.1 Factors Affecting Organizational Structure © McGraw Hill 7  Designing Organizational Structure 4 The way an organization’s structure works depends on the choices managers make about: 1. How to group tasks into individual jobs. 2. How to group jobs into functions and divisions. 3. How to allocate authority and coordinate functions and divisions. © McGraw Hill 8  Grouping Tasks into Jobs: Job Design Job design: Job design is the process by which managers decide how to divide tasks into specific jobs (division of labor). The appropriate division of labor results in an effective and efficient workforce. © McGraw Hill 9  Job Design Job simplification: The process of reducing the number of tasks that each worker performs. Job enlargement: Increasing the number of different tasks in a given job by changing the division of labor. Job enrichment: Increasing the degree of responsibility a worker has over a job. © McGraw Hill 10  Job Enrichment 1. Empowering workers to experiment to find new or better ways of doing the job. 2. Encouraging workers to develop new skills. 3. Allowing workers to decide how to do the work. 4. Allowing workers to monitor and measure their own performance. © McGraw Hill 11  The Job Characteristics Model 1 Skill variety: Employee uses a wide range of skills. Task identity: Worker is involved in all tasks of the job from beginning to end of the production process. Task significance: Worker feels the task is meaningful to the organization. © McGraw Hill 12  The Job Characteristics Model 2 Autonomy: Employee has freedom to schedule tasks and carry them out. Feedback: Worker gets direct information about how well the job is done. © McGraw Hill 13  Grouping Jobs into Functions Functional structure: Organizational structure composed of all the departments that an organization requires to to produce its goods or services. © McGraw Hill 14  Figure 10.2 The Functional Structure of the Home Depot Access the text alternative for slide images. © McGraw Hill 15  Functional Structure 1 Advantages: Encourages learning from others doing similar jobs. Easy for managers to monitor and evaluate workers. Allows managers to create the set of functions they need in order to scan and monitor the competitive environment. © McGraw Hill 16  Functional Structure 2 Disadvantages: Difficult for departments to communicate with others. Preoccupation with own department and losing sight of organizational goals. © McGraw Hill 17  Divisional Structures: Product, Market, and Geographic Divisional structure: An organizational structure composed of separate business units within which are the functions that work together to produce a specific product for a specific customer. © McGraw Hill 18  Figure 10.3 Product, Geographic, and Market Structures Access the text alternative for slide images. © McGraw Hill 19  Types of Divisional Structures 1 Product structure: Managers place each distinct product line or business in its own self-contained division. Divisional managers have the responsibility for devising an appropriate business-level strategy to allow the division to compete effectively in its industry or market. GlaxoSmithKline groups research into 8 product divisions to focus on particular clusters of diseases. © McGraw Hill 20  Product Structure Advantages: Allows functional managers to specialize in one product area. Allows division managers to become experts in their area. Removes need for direct supervision of division by corporate managers. Allows divisional management to improve the use of resources. Puts divisional managers close to customers for a quick and appropriate response. © McGraw Hill 21  Types of Divisional Structures 2 Geographic structure: Divisions are broken down by geographic location. Global geographic structure: Managers locate different divisions in each of the world regions where the organization operates. This generally occurs when managers are pursuing a multidomestic strategy. © McGraw Hill 22  Figure 10.4 Global Geographic and Global Product Structures Access the text alternative for slide images. © McGraw Hill 23  Types of Divisional Structures 3 Market structure Groups divisions according to the particular kinds of customers they serve. Allows managers to be responsive to the needs of their customers and act flexibly in making decisions in response to customers’ changing needs. © McGraw Hill 24  Matrix Structure A matrix structure is an organizational structure that simultaneously groups people and resources by function and product. The structure is very flexible. Each employee has two bosses. © McGraw Hill 25  Figure 10.5 Matrix Structure Figure 10.5 Matrix and Product Team Structures Access the text alternative for slide images. © McGraw Hill 26  Product Team Structure 1 Product team structure: Structure in which employees are permanently assigned to a cross-functional team and report only to the product team manager or to one of the manager’s direct subordinates. Does away with dual reporting relationships and two-boss managers. © McGraw Hill 27  Product Team Structure 2 Cross-functional team: A group of managers brought together from different departments to perform organizational tasks. Example: Northwestern Mutual’s work on redesigning visuals for customers. © McGraw Hill 28  Figure 10.5 Product Team Structure Access the text alternative for slide images. © McGraw Hill 29  Allocating Authority 1 Authority: Power to hold people accountable for their actions and to make decisions concerning the use of organizational resources. Hierarchy of authority: An organization’s chain of command, specifying the relative authority of each manager. © McGraw Hill 30  Allocating Authority 2 Span of control: The number of subordinates who report directly to a manager. Access the text alternative for slide images. © McGraw Hill 31  Allocating Authority 3 Line manager: Someone in the direct line or chain of command who has formal authority over people and resources at lower levels. Staff manager: Someone responsible for managing a specialist function, such as finance or marketing. © McGraw Hill 32  Tall and Flat Organizations 1 Tall structures have many levels of authority and narrow spans of control. As hierarchy levels increase, communication gets difficult, creating delays in the time being taken to implement decisions. Communications can also become distorted as they are repeated through the firm. Tall structures can become expensive. © McGraw Hill 33  Tall Organizations Access the text alternative for slide images. © McGraw Hill 34  Tall and Flat Organizations 2 Flat structures have fewer levels and wide spans of control. Results in quick communications but can lead to overworked managers. Access the text alternative for slide images. © McGraw Hill 35  The Minimum Chain of Command The organizing principle: Top managers should always construct a hierarchy with the fewest levels of authority necessary to efficiently and effectively use organizational resources. David Novak of Yum Brands: aGOLead. Plexus Corp.: Empowered work teams. © McGraw Hill 36  Centralization and Decentralization of Authority Decentralizing authority: Giving lower-level managers and non-managerial employees the right to make important decisions about how to use organizational resources. Flexible and responsive. © McGraw Hill 37  Figure 10.8 Types and Examples of Integrating Mechanisms Access the text alternative for slide images. © McGraw Hill 38  Organizational Culture 1 Organizational culture: The shared set of beliefs, expectations, values, and norms that influence how members of an organization relate to one another and cooperate to achieve organizational goals. Organizational values: The shared standards that its members use to evaluate whether they have helped the company achieve its vision and goals © McGraw Hill 39  Organizational Culture 2 Organizational culture: Organizational norms: Specify or prescribe the kinds of shared beliefs, attitudes, and behaviors that its members should observe and follow. Informal, but powerful, rules about how employees should behave or conduct themselves. © McGraw Hill 40  Figure 10.9 Sources of an Organization’s Culture © McGraw Hill 41  Organizational Culture 3 Organizational ethics: The moral values, beliefs, and rules that establish the appropriate way for an organization and its members to deal with each other and with people outside the organization. © McGraw Hill 42  Employment Relationship Human resource policies: Can influence how hard employees will work to achieve the organization’s goals. How attached they will be to the organization. Whether or not they will buy into its values and norms. © McGraw Hill 43  Organizational Culture Different kinds of structure give rise to different kinds of culture. Tall organizations have little personal autonomy, perhaps a focus on authority. Flat organizations might have more freedom with a focus on creativity. Centralized or decentralized might lead to difference values. © McGraw Hill 44  Strong, Adaptive Cultures versus Weak, Inert Cultures Adaptive cultures: Values and norms help an organization to build momentum and to grow and change as needed to achieve its goals and be effective. Inert cultures: Those that lead to values and norms that fail to motivate or inspire employees. Lead to stagnation and often failure over time. © McGraw Hill 45  Example: A.C. Moore Arts & Crafts A.C. Moore is organized with a functional structure. Examples of divisions are marketing and merchandising, stores and loss prevention, store operations, merchandise administration, real estate, and legal. © McGraw Hill 46  End of Main Content Because learning changes everything. ® www.mheducation.com © 2022 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill.