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Organizational Behavior: Foundations of Organizational Structure
Organizational Behavior: Foundations of Organizational Structure
Organizational Behavior
13th Edition
Foundations
Foundations of
of
Organizational
Organizational Structure
Structure
Bob Stretch
Southwestern College
16-1
Chapter
Chapter Learning
Learning Objectives
Objectives
After studying this chapter, you should be able to:
16-2
What
What Is
Is Organizational
Organizational Structure?
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.
6.
Formalization
16-3
1.
1. Work
Work Specialization
Specialization
The degree to which tasks in the organization are
subdivided into separate jobs
Division of Labor
16-4
Work
Work Specialization
Specialization Economies
Economies and
and
Diseconomies
Diseconomies
16-5
2.
2. Departmentalization
Departmentalization
The basis by which jobs are grouped together
Grouping Activities by:
Function
Product
Geography
Process
Customer
16-6
3.
3. Chain
Chain of
of Command
Command
Authority
Chain of Command
Unity of Command
16-7
4.
4. Span
Span of
of Control
Control
The number of subordinates a manager can efficiently and effectively direct
16-8
Contrasting
Contrasting Spans
Spans of
of Control
Control
E X H I B I T 16-3
E X H I B I T 16-3
16-9
5.
5. Centralization
Centralization and
and
Decentralization
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.
16-10
6.
6. Formalization
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
16-11
Common
Common Organization
Organization Designs:
Designs: Simple
Simple
Structure
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
E X H I B I T 16-4
E X H I B I T 16-4
16-12
Common
Common Organizational
Organizational Designs:
Designs:
Bureaucracy
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
16-13
An
An Assessment
Assessment of
of Bureaucracies
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
16-14
Common
Common Organizational
Organizational Designs:
Designs:
Matrix
Matrix
Matrix Structure
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
E X H I B I T 16-5
E X H I B I T 16-5
16-15
New
New Design
Design Options:
Options: Virtual
Virtual
Organization
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
E X H I B I T 16-6
E X H I B I T 16-6
16-16
New
New Design
Design Options:
Options: Boundaryless
Boundaryless
Organization
Organization
16-17
Two
Two Extreme
Extreme Models
Models of
of Organizational
Organizational
Design
Design
E X H I B I T 16-7
E X H I B I T 16-7
16-18
Four
Four Reasons
Reasons Structures
Structures Differ
Differ
1. Strategy
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
E X H I B I T 16-8
E X H I B I T 16-8
16-19
Why
Why Structures
Structures Differ
Differ
2. Organizational Size
3. Technology
4. Environment
16-20
Organizational
Organizational Designs
Designs and
and Employee
Employee
Behavior
Behavior
16-22
Summary
Summary and
and Managerial
Managerial
Implications
Implications
Structure impacts both the attitudes and behaviors of
the people within it
Associated
with
Impact of Technology
Makes it easier to change structure to fit employee and
organizational needs
E X H I B I T 16-10
E X H I B I T 16-10
16-24