Redesigning

Work Systems
Approaches to Work System Design
Organization adopt different approaches for designing their work
systems. Some of this approaches are:

•Specialist approach

•Generalist approach

•Strategic approach
Specialist approach
A limited number of tasks constituted a particular job.
Employees were made to specialize in only those tasks. This was
done to increase efficiency and productivity.

Generalist approach
Management uses techniques like job rotation, job enlargement
and job enrichment to develop employees who have a wide range
of skills.
Strategic approach
In this approach, jobs are assigned keeping in mind
employee’s capability and nature of job . It can be further
categorized into two type:

1. Fitting People to Jobs

2. Fitting Jobs to People
Elements in Redesigning Work Systems
There are a three elements that need to be considered while
designing work systems. They are:

• Job Design

• Job inter-relationships

• Employee needs
Job Design
It is define as the “Delineation of task responsibility as dictated by
organizational strategy, technology and structure, and is a key
determinant of individual motivation and ultimately of
organizational success.” (De Cenzo)

Job inter-relationships
In an organization, no job is a stand alone job. Each employee job is
interrelated or interdependent on co-worker’s job. Hence, job are
interrelated or interdependent.
Job inter-relationships
In an organization, no job is a stand alone job. Each employee job is
interrelated or interdependent on co-worker’s job. Hence, job are
interrelated or interdependent.

Job Interdependence can be of three types:

1. Pooled Interdependence- It allows employees to work at own
pace.
2. Sequential Interdependence- An employee work is totally
dependent on the work of fellow employees . This kind of job
relationship is linear and follows definite structure.

3. Reciprocal Interdependence – It is an unstructured and non-linear

work relationship. This kind of work relationship develops in
organization where the work done in unpredictable and which requires
an organizations to adapt to different situations.
Employee needs
The Hawthorne experiments and the subsequent human relation
movements led management thinkers analyze employees
expectations from job. A study of the demographic of workforce
showed that employees came from different social and cultural
backgrounds. Hence, the workers required different type of
training, compensation and benefits programs.
Organizational Design Processes
It is the process by which an organization develop its
structure keeping in mind its goals and objectives.

Organizational design can be done in two ways.

• Differentiation
• Integration
Differentiation

Differentiation is the process by which various

organizational goals are broken into identified tasks.

The various dimensions of differentiation are:

1) Horizontal differentiation

2) Vertical differentiation

3) Spatial differentiation
1) Horizontal differentiation
Organizations are divided in to various sub-units. This division
is done on the basis of knowledge, training or on type of work
done by employees.
Horizontal differentiation increases the degree of specialization.

2) Vertical differentiation
Employees have different degree of authority and responsibility
because of the difference in their positions. Differentiation arising
due to the difference in levels or positions of employees called
vertical differentiation.
3) Spatial differentiation
When am organization sets up branches and offices in new areas,
the lateral expansion which increases its no. of business units is
called spatial differentiation.
Integration
Organizations usually have different various departments and
divisions which performs various functions. The extent of
coordination and collaboration between the divisions or
departments or sub-units called integration.

Integration is of two types:

1) Vertical Integration
2) Horizontal integration
Vertical Integration
As there are different levels in organization, there is a need
for coordinating employee activities to achieve
organizational goals. This process of coordinating activities
of different levels in an organization is called vertical
integration

Horizontal integration
Coordination of activities of the same level and within the
departments is called horizontal integration. Horizontal
integrators include communication tools like telephones, fax,
task forces and cross-functional teams.
Difference between Old and New Organizational Design
Old Organizational Design
One large corporation
Vertical communication
Centralized top down decision
making
Vertical Integration
Work on quality teams
Functional work teams
Minimal training
Specialized job design focused
on individual
New Organizational Design
Mini business units & cooperatives
relationships
Horizontal communication
Decentralized participative decision
making
Outsourcing and virtual organizations
Autonomous work teams
Cross-functional work teams
Extensive training
Value chain-team focused job design
 FORMALIZATION STANDERDIZATION
Extent to which SPECIALIZATION Extent to which
employees activities Extent of expertise activities in a
are guided by rules, needed in doing a job organization are
regulations and set performed in a
procedures. routine manner.

BASIC DESIGN DIMENSIONS

CENTRALIZATION HIERARCHY OF
Degree to which COMPLEXITY AUTHORITY
decisions are made at Indicates the variety Indication of span of
the higher level in of job performed in an control and degree of
organizations organization vertical differentiation

Six Basic Design Dimensions (Sources: Icfaian Center for Management Research)
FACTORS AFFECTING DESIGN PROCESS

1) Size

2) Technology

3) Environment

4) Strategies and goals

Size
It’s an indication of the no of employees working for the
organization. From Table 4.2 it’s evident that complexity
specialization and standardization are low in small organizations.
Larger organizations may have more level in their hierarchy and
hence may have tall structure when compared to smaller
organizations.
Table 4.2 Organizational Size and Design Dimensions
Basic Design Small Organizations Large Organizations
Dimensions
Formalizations Less More

Centralization High Low

Specialization Low High

Standardization Low High

Complexity Low High

Hierarchy of authority Flat Tall

Source: Debra Nelson and James Campbell, OB, 3rd Edition

Technology
Technology has redefined the way of organizations work.
Organizational structure varies according to the degree of usage of
technology.

Joan Woodward, a sociologist identified three tiers of technologies

which affected organizational designing (See Table 4.3)

1) Unit and Small Batch Production

2) Large Batch and Mass Production
3) Continuous Process Productions
Table 4.3 Woodward’s Findings on Effect on Technology on
Organizational Structure
Small Batch Mass Production Continuous
(Unit) (Large) Process
Level of Management 3 4 6

Executive span of 4 7 10
control
Supervisory span of 23 48 15
control

Industrial workers vs 8.0:1 5.5:1 2.0:1

staff
Formalization Low High Low

Centralization Low High Low

Source: Debra Nelson and James Campbell, OB, 3rd Edition

Environment
Tom Burns and G.M. Stalker hold the credit for finding the
relationship between environment and organization design, they
divided the organization design into two types. (See Table 4.4)

1) Mechanistic
This organizational design characterized by a bureaucratic
system, tall structures, highly centralized decisions making, with
rules and regulations for every activity.
2) Organic
Its an organizational design characterized by a high degree of
flexibility, flat structures and delegation of authority.
Table 4.4 Relationship between Environment and
Organizational Design
Characteristics Mechanistic Organic
Environment Stable Unstable
Decision-making Centralized Decentralized
Rules and Regulations Many Few
Forms of Communication Instructions and Information and advice
decisions imposed by provided by superiors
superiors
Communication channels Top-down Top-down and Lateral
Tasks Specialized Generalized
Structure of control Hierarchical Networked
Emphasis on Loyalty and obedience to Commitment to goals
superiors

Source: Debra Nelson and James Campbell, OB, 3rd Edition

Strategies and goals
Organizational design is greatly affected by an organization’s
strategy. Both corporate and business strategy have a say in the
organizational design.

Corporate strategy and organizational design

Corporate strategy is the overall strategy adopted by an organization
to manage all its strategic business unites.

Business Strategy
The mapping of business strategy to the organizational structure has
been done by Danny Miller. He suggested suitable structures for
Michael Porter’s different business strategy. (See Table 4.5)
1) Focus
2) Cost Leadership
3) Differentiation
Table 4.5 Competitive Strategies and HR Practices
Strategy Structure Design Dimension
Focus Functional High formalization, centralization and
low complexity

Cost Leadership Functional High formalization, centralization and

low complexity

Market Divisional Moderate complexity, centralization and

Differentiation /Hybrid formalization

Innovative Matrix Low formalization, decentralization, and

Differentiation flat hierarchy

Source: Debra Nelson and James Campbell, OB, 3rd Edition

TYPES OF ORGANIZATIONAL STRUCTURES
They are two types of organizational structures. They are

1) Traditional structures
2) Emerging structures

Traditional structures can be further divided into

• Functional structures
• Divisional structures
• Hybrid structures

Emerging structures can be divided into

• Matrix structures
• Network structures
1) Traditional structures
(a)Functional structures
Grouping of positions in an organization on the basis of the
function performed is called functional grouping and the structured
called functional structure.

Advantages
1) Employee working in the functional departments become
experts in their field over a period of time.
2) Better coordination

Disadvantage
3) Functional departments are bureaucratic hence the decision
making takes a lots of time.
4) Difficulty in measuring an employee performance.
(b)Divisional structures
Some organization offer a variety of products and services to their
customers. These products and services may result from related or
unrelated diversification. The structure that result from this type of
grouping based on the similarity in products , services markets etc.
is known as divisional structure.
Advantages
• Organization more proactive
• Focus on needs and demand

Disadvantages
• Increase in expenditure
Organization Divisions and their Focus
Type of Focus
division
Product Every product the company offers has its
divisions product division. Aim is to concentrate well on
all the products lines.
Customer To take care of particular type of customers . For
divisions examples a division may be set up particularly
to deal with corporate clients
Geographic To take care of the markets in different
division geographic areas in which the company
operates.
Source: Icfaian Center for Management Research
(c)Hybrid structures
A hybrid structure combines the best attributes of both functional
and divisional structure.

Advantages
The functional expertise combined with divisional focus is a great
advantage for big firms with multiple products and markets.

Disadvantage
• Possibility of conflict between employees of the functional and
divisional structure.
• Leads to duplication of resources.
2) Emerging structures
(a)Matrix structures

Matrix and Hybrid structure are often confused for each other. In
case of matrix structure functional and divisional forms as
superimposed and hence they both loose their identities.

Advantages
• Decision making pushed to lower level in the organization.
• Encourages team work

Disadvantage
• It violets “Unity of Command” .
• It leads to conflict & confusion because of the dual reporting
relationship.
Network structures
Network structure also known as ‘nonstructure’, are new and
emerging structures which are characterized by the complete absence
of in-house business functions.
Structure at Ford

CEO

North European Pacific Rim

American Operations Operations
Operations

Source : Hill W.L. Charles, International Business, 2nd Edition, McGraw Hill Publications