The Formal Organization

Organizational Structure
how individuals and groups are formally
arranged with respect to tasks they
perform and the distribution of
authority towards pursuing
organizational goals

Human Resources, Law and Management Department - September 2009

ORGANIZATIONAL/OPERATING DESIGN

The process of
defining and
operating an
organizational
structure

Human Resources, Law and Management Department - September 2009

Integration Diffentiation

Organizational Structure
Hierarchy

Vertical differentiation
Centralization
the degree
to which decisions are
made at the top of the
organization

Roles

Horizontal differentiation
Integration : the process of
coordinating the different parts of
Purposes
an
organization towards pursuing
organizational goals

Specialization the degree to which jobs

are narrowly defined and
depend on unique
expertise

Human Resources, Law and Management Department - September 2009

Differentiation and Integration are

Opposing Structural Forces
T y p e t it le h e r e
T y p e n a m e h e re
T y p e t it le h e r e
t h u is
a d fjh k

ta th k h
a d fa f

T y p e n a m e h e re
T y p e t it le h e r e
ta t
s ta t

at
at

at
ast

at
st

Differentiation
Fragments the organization
through specialization of labor

Integration
Pulls the organization together through
the coordination of specialties
Human Resources, Law and Management Department - September 2009

Option 1: Functional Design

General manager

Marketing

Manufacturing

R&D

Finance

Human Resources, Law and Management Department - September 2009

Option 2: Multi-Divisional
Design
General Manager

Division A
MKG

FI

R&D

Division B
MKG

FI

R&D

Division C
MKG

FI

R&D

Human Resources, Law and Management Department - September 2009

Option 3: Matrix Design

General manager

MKG

MFG

R&D

Fi.

Project A
Project B
Project C
Project D
Human Resources, Law and Management Department - September 2009

Four Symptoms of Structural

Weakness
Delay in decision Overloaded hierarchy; information
funneling limited to too few channels
making
Poor quality
Right information not reaching
decision making
right people in right format
Lack of innovative
response to changing
No coordinating effort
environment
High level of conflictDepartments work against each
other, not for organizational goals
Human Resources, Law and Management Department - September 2009

Conclusion
1. The basic objective of OD is to balance
differentiation and integration
2. No one best way: each structural
configuration has its pros and cons:
compromising vs. optimizing
3. Contemporary Reality: de-differentiated
& integrated flat organizations seem to
be imperative
Human Resources, Law and Management Department - September 2009

The Informal Organization

Organizational Culture: A pattern of shared basic assumptions that
the group learned as it solved its problems of external adaptation and
internal integration, that has worked well enough to be considered
valid and, therefore, to be taught to new members as the correct way
to perceive, think, and feel in relation to those problems (Schein,
1992)

A Naturally-Occurring Phenomenon inherent to Surviving

Organizations learning from their Experience
A shared Perceptual/Cognitive Construct and thus Implicit & Informal
Perceived as a both Internally & Externally Valid Recipe for
Organizational Success
A Point-of-Reference for the Cognitive-Affective Socialization of
Organizational Newcomers
Human Resources, Law and Management Department - September 2009

Organizational Culture
the basic tacit assumptions about how the world is and ought to
be that a group of people share and that determines their
perceptions, thoughts, feelings, and, their overt behavior
(Schein, 1996)
Whats new here?

Organizational Culture informally aggregating both a Realistic & an Idealistic

Worldview is a Range-Restriction/Control Mechanism of the CognitionAffection & Overt Behavior of Organizational Members

As such Rigid/Strong OCs have been accused of causing:

Competency Traps
Organizational Myopia/Groupthink
Organizational Inertia

Range Restriction of the People

&
Attracted/Recruited
Selected & Socialized

Human Resources, Law and Management Department - September 2009

Levels of Organizational Culture

Human Resources, Law and Management Department - September 2009

Organizational Culture is an Outcome of a LongTerm, Multi-Level Interaction

Organizational Culture shares to a certain extend attributes with the

National/Societal Culture
(GLOBE Project)

Organizational Culture is a Long-term Operationalization of the

Personality of the Founder/Entrepreneur and/or of the Dominant
Coalition/Top Management
(Argyris, 1958; Bass & Avolio, 1993; McGregor, 1960; Pinfield, 1995;
Schein 1985, 1992, 1993).

Organizational Culture is a function of the aggregate attributes of

Organizational Members
(Schneider, 1987)

Organizational Culture is influenced also by the industry of operation

Organizational Culture is a function of any Sub-Cultures

(DiMaggio & Powell, 1983; Hannan & Freeman, 1977)

(Martin, 1992; Trice & Beyer, 1993)
Human Resources, Law and Management Department - September 2009

The Informal Organization

Organizational Climate: the shared perception of the
way things are around here (Reichers and Schneider,
1990)

Organizational climate is informal and represents the

shared perceived reality of organizational practice by
organizational members
Organizational climate is a cognitive construct
Organizational climate reflects both organizational
culture and politics (power)
Human Resources, Law and Management Department - September 2009

Climate Strength
the intra-organizational variability (level of agreement) in
organizational climate perceptions (Schneider, Salvaggio &
Subirats, 2002).
the more organizational members agree in climate perceptions
climate strength increases
the less organizational members agree in climate perceptions
climate strength decreases
Climate strength expresses the situational strength to which
individuals and groups in organizations are subject to and its
level is crucial in determining behavior
Strong situations emerge when situational characteristics drive
people to perceive events uniformly, equate expectations about
the most appropriate behavior and entail the means to perform
that behavior (Mischel, 1976)
Human Resources, Law and Management Department - September 2009

Conclusion

The Elements/Characteristics of the Organizational

Structure, Culture & Climate are the Situational
Variables that OB studies because those are
contributing in determining (predicting) Individual,
Group & Organizational behavior
Organizational Structure entails formal & actual
variables while in contrast Culture & Climate
perceived/cognitive variables and thus represent the
informal organizational structure
Climate Strength is crucial in determining (predicting)
the scale of the effect that situational variables have on
individual, group & organizational behavior
Human Resources, Law and Management Department - September 2009