Organizational Behavior: Robbins & Judge

Robbins & Judge
Organizational Behavior
13th Edition
Chapter 16: Foundations of

Organization Structure
Student Study Slideshow
Bob Stretch
2009 Prentice-Hall Inc. All rights reserved.
Southwestern College
16-1
Chapter Learning Objectives

After studying this chapter, you should be able to:
Identify the six elements of an organizations
structure.
Identify the characteristics of a bureaucracy.
Describe a matrix organization.
Identify the characteristics of a virtual organization.
Show why managers want to create boundaryless
organizations.
Demonstrate how organizational structures differ, and
contrast mechanistic and organic structural models.
Analyze the behavioral implications of different
organizational designs.
Show how globalization affects organizational
structure.
16-2
What Is Organizational
Structure?
Organizational Structure
How job tasks are formally divided,
grouped, and coordinated
Key Elements:
1. Work specialization
2. Departmentalization
3. Chain of command
4. Span of control
5. Centralization and decentralization
6. Formalization
16-3
1. Work Specialization
The degree to which tasks in the organization
are subdivided into separate jobs
Division of Labor
Makes efficient use of employee skills
Increases employee skills through repetition
Less between-job downtime increases
productivity
Specialized training is more efficient
Allows use of specialized equipment
Can create greater economies and

efficiencies but not always
Exhibit 16-1
16-4
Work Specialization Economies

and Diseconomies
Specialization can reach a point of
diminishing returns
Then job enlargement gives greater
efficiencies than does specialization
Exhibit 16-2
16-5
2. Departmentalization
The basis by which jobs are grouped
together
Grouping Activities by:
Function
Product
Geography
Process
Customer
16-6
3. Chain of Command
Authority
The rights inherent in a managerial position
to give orders and to expect the orders to be
obeyed
Chain of Command
The unbroken line of authority that extends
from the top of the organization to the lowest
echelon and clarifies who reports to whom
Unity of Command
A subordinate should have only one superior
to whom he or she is directly responsible
16-7
4. Span of Control
The number of subordinates a manager
can efficiently and effectively direct
Wider spans of management increase
organizational efficiency
Narrow span drawbacks:
Expense of additional layers of management
Increased complexity of vertical communication
Encouragement of overly tight supervision and
discouragement of employee autonomy
Exhibit 16-3
16-8
5. Centralization and
Decentralization
Centralization
The degree to which decision making is
concentrated at a single point in the
organization.
Decentralization
The degree to which decision making is
spread throughout the organization.
16-9
6. Formalization
The degree to which jobs within the
organization are standardized.
High formalization
Minimum worker discretion in how to get the
job done
Many rules and procedures to follow
Low formalization
Job behaviors are nonprogrammed
Employees have maximum discretion
16-10
Common Organization Designs:

Simple Structure
Simple Structure
A structure characterized by a low
degree of departmentalization, wide
spans of control, authority centralized in
a single person, and little formalization
Exhibit 16-4
16-11
Common Organizational
Designs: Bureaucracy
Bureaucracy
A structure of highly operating routine
tasks achieved through specialization,
very formalized rules and regulations,
tasks that are grouped into functional
departments, centralized authority,
narrow spans of control, and decision
making that follows the chain of
command
16-12
An Assessment of
Bureaucracies
Strengths
Functional economies
of scale
Minimum duplication
of personnel and
equipment
Enhanced
communication
Centralized decision
making
Weaknesses
Subunit conflicts with
organizational goals
Obsessive concern
with rules and
regulations
Lack of employee
discretion to deal with
problems
16-13
Common Organizational
Designs: Matrix
Matrix Structure
A structure that creates dual lines of authority and
combines functional and product
departmentalization
Key Elements
Gains the advantages of functional and product
departmentalization while avoiding their
weaknesses
Facilitates coordination of complex and
interdependent activities
Breaks down unity-of-command concept
Exhibit 16-5
16-14
New Design Options: Virtual

Organization
A small, core organization that outsources its major
business functions
Highly centralized with little or no
departmentalization
Provides maximum flexibility while concentrating
on what the organization does best
Reduced control over key parts of the business
Exhibit 16-6
16-15
New Design Options:

Boundaryless Organization
An organization that seeks to eliminate
the chain of command, have limitless
spans of control, and replace
departments with empowered teams
T-form Concepts
Eliminate vertical (hierarchical) and
horizontal (departmental) internal
boundaries
Break down external barriers to customers
and suppliers
16-16
Four Reasons Structures

Differ
Two extreme forms of organization
1. Strategy
(Exhibit 16-7)
Innovation Strategy
A strategy that emphasizes the introduction of major new
products and services
Organic structure best
Cost-minimization Strategy
A strategy that emphasizes tight cost controls, avoidance of
unnecessary innovation or marketing expenses, and price
cutting
Mechanistic model best
Imitation Strategy
A strategy that seeks to move into new products or new
markets only after their viability has already been proven
Mixture of the two types of structure
Exhibit 16-8
16-17
Why Structures Differ

2. Organizational Size
As organizations grow, they become more
mechanistic, more specialized, with more rules and
regulations
3. Technology
How an organization transfers its inputs into outputs
The more routine the activities, the more mechanistic the

structure with greater formalization
Custom activities need an organic structure
4. Environment
Institutions or forces outside the organization that
potentially affect the organizations performance
Three key dimensions: capacity, volatility, and
complexity
16-18
Three-Dimensional
Environment Model
Capacity
The degree to which an environment can
support growth
Volatility
The degree of instability in the environment
Complexity
The degree of heterogeneity and
concentration among environmental
elements
Exhibit 16-9
16-19
Organizational Designs and

Employee Behavior
Impossible to generalize due to individual
differences in the employees
Research Findings
Work specialization contributes to higher employee
productivity, but it reduces job satisfaction.
The benefits of specialization have decreased rapidly
as employees seek more intrinsically rewarding jobs.
The effect of span of control on employee performance
is contingent upon individual differences and abilities,
task structures, and other organizational factors.
Participative decision making in decentralized
organizations is positively related to job satisfaction.
People seek and stay at organizations that match

their needs.
16-20
Global Implications
Culture and Organizational Structure
Many countries follow the U.S. model
U.S. management may be too individualistic
Culture and Employee Structure Preferences

Cultures with high-power distance may prefer
mechanistic structures
Culture and the Boundaryless Organization

May be a solution to regional differences in global
firms
Breaks down cultural barriers, especially in
strategic alliances
Telecommuting also blurs organizational boundaries
16-21
Summary and Managerial

Implications
Structure impacts both the attitudes
and behaviors of the people within it
Impact of Technology
Makes it easier to change structure to fit
employee and organizational needs
Exhibit 16-10
16-22
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Copyright 2009 Pearson

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Robbins & Judge

Chapter 16: Foundations of

Chapter Learning Objectives

Can create greater economies and

2009 Prentice-Hall Inc. All rights reserved.

Work Specialization Economies

2009 Prentice-Hall Inc. All rights reserved.

2009 Prentice-Hall Inc. All rights reserved.

Common Organization Designs:

2009 Prentice-Hall Inc. All rights reserved.

2009 Prentice-Hall Inc. All rights reserved.

New Design Options: Virtual

New Design Options:

Four Reasons Structures

Why Structures Differ

The more routine the activities, the more mechanistic the

Organizational Designs and

People seek and stay at organizations that match

Culture and Employee Structure Preferences

Culture and the Boundaryless Organization

Summary and Managerial

All rights reserved. No part of this publication

Copyright 2009 Pearson

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