Designing Adaptive

Organizations
 Structure and Process
• Organizational structure
– the vertical and horizontal configuration of
departments, authority, and jobs within a company

• Organizational process
– the collection of activities that transform inputs into
outputs that customers value
Sony Corporation’s
Organizational Chart
Process View of
Microsoft’s Organization
 Departmentalization
• Functional

• Product

• Customer

• Geographic

• Matrix
 Functional
Departmentalization
• Advantages
– allows work done by highly qualified specialists
– lowers costs by reducing duplication
– makes communication and coordination easier

• Disadvantages
– cross-department coordination can be difficult
– may lead to slower decision making
Functional
Departmentalization
 Product Departmentalization
• Advantages
– allows people to specialize in one area of expertise
– makes it easier to assess performance
– makes decision making faster

• Disadvantages
– duplication
– coordination across different product departments
Product Departmentalization:
United Technologies
 Customer Departmentalization
• Advantages
– focuses organization on customer needs
– allows companies to specialize products and services
to customer needs

• Disadvantages
– duplication of resources
– workers might please customers but hurt business
Customer Departmentalization:
Swisscomm AG
 Geographic Departmentalization
• Advantages
– helps companies respond to different markets
– reduces costs by locating unique resources closer to
customers

• Disadvantages
– duplication of resources
– difficult to coordinate departments
Geographic Departmentalization:
AB InBev Company
 Matrix Departmentalization
• Advantages
– allows companies to efficiently manage large,
complex tasks
– gives much more diverse set of expertise and
experience

• Disadvantages
– requires a high level of duplication
– confusion and conflict between project bosses
– requires much more management skill
Matrix Departmentalization: Procter &
Gamble
 Chain of Command
• Chain of command
– the vertical line of authority that clarifies who reports
to whom throughout the organization

• Unity of command
– workers should report to just one boss
 Authority
• Line authority
• Staff authority

• Line function
• Staff function
Delegation: Responsibility, Authority,
and Accountability
 Degree of Centralization
• Centralization of authority

• Decentralization

• Standardization
 Advantages of Decentralization
• Develops employee capabilities

• Faster decision making

• More satisfied employees and customers

• Better employee performance

 Job Specialization
• Job comprises a smaller part of a larger task

• Easy to learn

• Low variety

• High repetition
 Job Rotation, Enlargement,
Enrichment
• Rotation

• Enlargement

• Enrichment
Job Characteristics Model
 Internal Motivation
• Experience work as meaningful

• Experience responsibility for work outcomes

• Knowledge of results
 Core Job Characteristics
• Skill variety

• Task identity

• Task significance

• Autonomy

• Feedback
 To Increase Internal Motivation
• Combine tasks

• Natural work units

• Establish client relationships

• Vertical loading

• Open feedback channels

 Intraorganizational Processes
The collection of activities that take place within an
organization to transform inputs into outputs that
customers value.
 Reengineering

“the fundamental rethinking and radical

redesign of business processes to
achieve dramatic improvements in
critical, contemporary measures of
performance, such as cost, quality,
service and speed.”
Reengineering and Task
Interdependence
 Empowerment
• Empowering workers

• Empowerment
 Interorganizational Processes
A collection of activities that occur among
companies to transform inputs into outputs that
customers value.
Modular Organizations
 Modular Organizations
• Advantages
– reduced costs

• Disadvantages
– loss of control
– noncore activities that are outsourced may become
source of advantage
– suppliers to whom work is outsourced can become
competitors
Virtual Organizations
 Virtual Organizations
• Advantages
– shared costs
– fast and flexible

• Disadvantages
– difficult to control quality of work done by
partners
– requires tremendous managerial skills