Chapter 2:

Designing an organization requires choosing an organizational structure that will help the company achieve its goals
most effectively. The three basic types of organizational structure are:
 Bureaucratic Organization Companies that adopt a defender business strategy are likely to choose the
bureaucratic organizational structure. This pyramid-shaped structure consists of hierarchies with many
levels of management. It uses a top-down or “command-and-control” approach to management in which
managers provide considerable direction to and have considerable control over their subordinates. The
classic example of a bureaucratic organization is the military, which has a long chain of command of
intermediate officers between the generals (who initiate combat orders) and the troops (who do the fighting
on the battlefield).
o A bureaucratic organization is based on a functional division of labor. Employees are divided into
divisions based on their function
 Flat Organization A company that selects the prospector business strategy is likely to choose the flat
organizational structure. A flat organization has only a few levels of managers and emphasizes a
decentralized approach to management. Flat organizations encourage high employee involvement in
business decisions.
o Flat organizations are likely to be divided into units or teams that represent different products,
services, or customers.
 Boundaryless Organization A boundaryless organizational structure enables an organization to form
relationships with customers, suppliers, and/or competitors, either to pool organizational resources for
mutual benefit or to encourage cooperation in an uncertain environment. Such relationships often take the
form of joint ventures,
Work-flow analysis can also help a company make major performance improvements through a program called
business process reengineering:
 business process reengineering (BPR) is not a quick fix but rather a fundamental rethinking and radical
redesign of business processes to achieve dramatic improvements in cost, quality, service, and speed.12
Reengineering examines the way a company conducts its business by closely analyzing the core processes
involved in producing its product or delivering its service to the customer. By taking advantage of
computer technology and different ways of organizing human resources, the company may be able to
reinvent itself.13
 BPR uses work-flow analysis to identify jobs that can be eliminated or recombined to improve company
performance.
A team is a small number of people with complementary skills who work toward common goals for which they hold
themselves mutually accountable.16(team A small number of people with complementary skills who work toward
common goals for which they hold themselves mutually accountable)
The type that is having the most impact on U.S. companies is the self-managed team:
 self-managed team (SMT) A team responsible for producing an entire product, a component, or an
ongoing service.
o Organizations are implementing self-managed work teams primarily to improve quality and
productivity and to reduce operating costs. Self-managed teams (SMTs) are responsible for
producing an entire product, a component, or an ongoing service. In most cases, SMT members
are cross-trained on the different tasks assigned to the team.19 Some SMTs have members with a
set of complex skills—for example, scientists and engineers with training in different disciplines.
 problem-solving team team consisting of volunteers from a unit or department who meet one or two hours
per week to discuss quality improvement, cost reduction, or improvement in the work environment.
 special-purpose team A team or task force consisting of workers who span functional or organizational
boundaries and whose purpose is to examine complex issues.
 virtual team A team that relies on interactive technology to work together when separated by physical
distance

motivation That which energizes, directs, and sustains human behavior. In HRM, a person’s desire to do the best
possible job or to exert the maximum effort to perform assigned tasks.
 Two-Factor Theory attempts to identify and explain the factors that employees find satisfying and
dissatisfying about their jobs.39 The first set of factors, called motivators, are internal job factors that lead
to job satisfaction and higher motivation Some examples of motivators are the work itself, achievement,
recognition, responsibility, and opportunities for advancement. Notice that salary is not included in the
motivator list. pay belongs among the second set of factors, which he calls hygiene or maintenance factors.
Hygiene factors are external to the job; they are located in the work environment.
  Work Adjustment Theory Every worker has unique needs and abilities. Work adjustment theory suggests
that employees’ motivation levels and job satisfaction depend on the fit between their needs and abilities
and the characteristics of the job and the organization.
 Goal-Setting Theory suggests that employees’ goals help to explain motivation and job performance.41
The reasoning is as follows: Because motivation is goal-directed behavior, goals that are clear and
challenging will result in higher levels of employee motivation than goals that are ambiguous and easy.
 job characteristics theory states that employees will be more motivated to work and more satisfied with
their jobs to the extent that jobs contain certain core characteristics
Job Design
 Work Simplification Work simplification assumes that work can be broken down into simple, repetitive
tasks that maximize efficiency.
 job enlargement The process of expanding a job’s duties.
 job rotation The process of rotating workers among different narrowly defined tasks without disrupting the
flow of work.
 Job enlargement and job rotation are used to redesign jobs to reduce fatigue and boredom among workers
performing simplified and highly specialized work. Job enlargement expands a job’s duties. For example,
auto workers whose specialized job is to install carpets on the car floor may have their job enlarged to
include the extra duties of installing the car’s seats and instrument panel.49 Job rotation rotates workers
among different narrowly defined tasks without disrupting the flow of work. On an auto assembly line, for
example, a worker whose job is installing carpets would be rotated periodically to a second workstation
where he or she would install only seats in the car. At a later time period the worker might be rotated to a
third workstation, where the job would be to install only the car’s instrument panels. During the course of a
day on the assembly line, the worker might be shifted at two-hour intervals among all three workstations.
 job enrichment The process of putting specialized tasks back together so that one person is responsible for
producing a whole product or an entire service. For example, at Motorola’s Communications Division,
individual employees are now responsible for assembling, testing, and packaging the company’s pocket
radio-paging devices. Previously, these products were made on an assembly line that broke the work down
into 100 different steps and used as many workers
 Team-Based Job Designs Team-based job designs focus on giving a team, rather than an individual, a
whole and meaningful piece of work to do.5Team members are empowered to decide among themselves
how to accomplish the work.56 They are cross-trained in different skills, then rotated to do different tasks
within the team. Team-based job designs match best with flat and boundaryless organizational structures.
McDonald’s uses team-based job designs in the operations of a fast-food restaurant. A team of McDonald’s
employees performs various functions such as food preparation; order taking; operating the cash register;…
job description A written document that identifies, defines, and describes a job in terms of its duties,
responsibilities, working conditions, and specifications.
contingent workers Workers hired to deal with temporary increases in an organization’s workload or to do work
that is not part of its core set of capabilities.
 Temporary Employees Temporary employment agencies provide companies with temporary employees
(or “temps”) for short-term work assignments. Temps work for the temporary employment agency and are
simply reassigned to another employer when their current job ends. ManpowerGroup, the largest U.S.
temporary employment agency, placed 3.5 million people in positions in 2011.76
 Part-Time Employees Part-time employees work fewer hours than full-time core employees and receive
far fewer employee benefits, thus providing substantial savings to employers. According to the U.S. Bureau
of Labor Statistics, a part-time employee is defined as an individual who works less than 35 hours per week
due to economic, voluntary, or involuntary reasons
 Outsourcing/Subcontracting is the process by which employers transfer routine or peripheral work to
another organization that specializes in that work and can perform it more efficiently. Employers that
outsource some of their nonessential work gain improved quality and cost savings. Outsourcing agreements
may result in a long-term relationship between an employer and the subcontractor, though it is the
employer who has the flexibility to renew or end the relationship at its convenience
 Contract Workers Contract workers are employees who develop work relationships directly with an
employer (instead of with a subcontractor through an outsourcing arrangement) for a specific piece of work
or time period.97 They are likely to be self-employed, supply their own tools, and determine their hours of
employment. Sometimes contract workers are called consultants or freelancers.
 College Interns One of the newest developments in the contingency work area is the use of college
interns, college students who work on full-time or part-time assignments of short duration (usually for one
academic semester or summer) to obtain work experience. Some interns are paid, some are not. Employers
use interns to provide support to professional staff. Sometimes interns work a trial run for consideration as
a potential core employee after graduation from college