Chapter 9

Chapter 9 – Designing Adaptive
Organizations
9
Designing
Adaptive
Organizations
Copyright ©2019 Cengage Learning. All Rights Reserved. May not be

scanned, copied or duplicated, or posted to a publicly accessible
website, in whole or in part.
Learning Outcomes
LEARNING OUTCOMES
1. Describe the departmentalization approach to

organizational structure
2. Explain organizational authority
3. Discuss the different methods for job design
4. Explain the methods that companies are using to
redesign internal organizational processes (that is,
intraorganizational processes)
5. Describe the methods that companies are using to
redesign external organizational processes (that is,
interorganizational processes)
Copyright ©2019 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly
accessible website, in whole or in part. MGMT11 | CH9 2
LO 1
Organizational Structure and Process
• Organizational structure: Vertical and

horizontal configuration of departments,
authority, and jobs within a company
• Based on some form of departmentalization
• Organizational process: Collection of
activities that transform inputs into outputs
that are valued by customers
LO 1
Methods of Departmentalization
Functional departmentalization
• Units are responsible for particular business functions
Product departmentalization
• Units are responsible for producing particular products or
services
Customer departmentalization
• Units are responsible for particular kinds of customers
LO 1
Methods of Departmentalization (continued)
Geographic departmentalization
• Units are responsible for doing business in particular

geographic areas
Matrix departmentalization
• Hybrid organizational structure

• Simple matrix: Managers in different parts of the matrix
negotiate conflicts and resources
• Complex matrix: Managers in different parts of the matrix
report to matrix managers
LO 1
Exhibit 9.8 Procter & Gamble’s Concentric

Matrix
Source: “Corporate Structure,” Procter & Gamble, accessed April 11, 2017, http://
us.pg.com/who_we_are/structure_governance/corporate_structure.
LO 2
Organizational Authority
• Organizations follow a chain of command

• Unity of command does not apply to matrix
➖ Unity of command: Principle that workers

organizations
should report to just one boss

• Line and staff authority
• Line authority: Right to command immediate
subordinates in the chain of command
LO 2
Organizational Authority (continued 1)
• Staff authority: Right to advise others who are

not subordinates in the chain of command
• Line and staff functions
• Line function: Contributes to creating or selling
the company’s products
• Staff function: Supports line activities
LO 2
Organizational Authority (continued 2)
• Delegation of authority: Assignment of

authority and responsibility to a subordinate
to complete a manager’s tasks
• Companies should:
• Centralize where standardization is important
• Decentralize where standardization is
unimportant
LO 2
Exhibit 9.9 Delegation: Responsibility, Authority, and

Accountability
LO 3
Job Design and Specialization
• Job design: Number, kind, and variety of

tasks that individual workers perform in
doing their jobs
• Job specialization: Job composed of a
smaller part of a larger task or process
LO 3
Methods Used to Improve Specialized Jobs
Job rotation
• Periodically moving workers from one specialized job to another
Job enlargement
• Increasing the number of tasks that a worker performs within
one particular job
Job enrichment
• Increasing the number of tasks in a particular job and giving
workers the authority to make meaningful decisions about their
work
LO 3
Exhibit 9.10 Job Characteristics Model
LO 4
Organizational Designs
• Mechanistic organizations
• Characterized by specialized jobs and
responsibilities and follow centralized authority
and vertical communication
• Organic organizations
• Characterized by broadly defined jobs and
responsibilities and are concerned with
intraorganizational process
• Decentralized authority and horizontal
communication are based on task knowledge
LO 4
Ways to Redesign Intraorganizational

Processes
• Reengineering
• Helps achieve dramatic improvements in critical
measures of performance
• Changes work by changing task
interdependence
• Empowering workers
• Passing decision-making authority and
responsibility from managers to workers
• Involves providing the required resources to
make effective decisions
LO 4
Exhibit 9.11 Reengineering and Task

Interdependence
LO 5
Interorganizational Process - Types
• Modular organizations: Outsource noncore

business activities to outside companies,
suppliers, specialists, or consultants
• Cost-effective, but disadvantages include loss of
control and reduced competitive advantage
LO 5
Interorganizational Process - Types (continued 1)
• Virtual organizations
• Part of a network in which many companies
share skills, costs, capabilities, markets, and
➖ Collectively solve customer problems

customers to:
➖ Provide specific products or services

• Allow cost sharing
• Enable members to combine efforts
LO 5
Interorganizational Process - Types (continued 2)
• Fast and flexible
➖ Difficulty in controlling the quality of work

• Disadvantages
➖ Require tremendous managerial skills

done by network partners
LO 5
Exhibit 9.12 Modular Organizations
Key Terms
KEY TERMS
• Organizational • Customer
structure departmentalization
• Organizational • Geographic
process departmentalization
• Departmentalization • Matrix
• Functional departmentalization
departmentalization • Simple matrix
• Product • Complex matrix
departmentalization • Authority
• Chain of command
accessible website, in whole or in part.
MGMT11 | CH9 21
Key Terms (continued
KEY TERMS (continued 1)
1)
• Unity of command • Job specialization
• Line authority • Job rotation
• Staff authority • Job enlargement
• Delegation of • Job enrichment
authority • Job characteristics
• Centralization of model (JCM)
authority • Internal motivation
• Decentralization • Skill variety
• Standardization • Task identity
• Job design
Copyright ©2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. MGMT11
HIST4 | CH6
CH9 22
Key Terms (continued
2)
• Task significance • Intraorganizational
• Autonomy process
• Feedback • Reengineering
• Line function • Task interdependence
• Staff function • Empowering workers
• Mechanistic • Pooled interdependence
organization • Sequential
• Organic organization interdependence
HIST4 | CH6
CH9 23
KEY TERMS (continued
3)
• Reciprocal
interdependence
• Empowerment
• Interorganizational
process
• Modular
organization
• Virtual organization
HIST4 | CH6
CH9 24
Summary
SUMMARY
• Departmentalization involves subdividing

work into separate organizational units
• Types of authority - Line and staff
• Methods of job design - Job rotation,
enlargement, and enrichment
• Reengineering and empowerment help
redesign intraorganizational processes
• Modular and virtual organizations are
forms of interorganizational processes
HIST4 | CH6
CH9 25

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Chapter 9

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Chapter 9 – Designing Adaptive

Copyright ©2019 Cengage Learning. All Rights Reserved. May not be

1. Describe the departmentalization approach to

Organizational Structure and Process

• Organizational structure: Vertical and

Methods of Departmentalization (continued)

• Units are responsible for doing business in particular

• Hybrid organizational structure

Exhibit 9.8 Procter & Gamble’s Concentric

• Organizations follow a chain of command

➖ Unity of command: Principle that workers

should report to just one boss

Organizational Authority (continued 1)

• Staff authority: Right to advise others who are

Organizational Authority (continued 2)

• Delegation of authority: Assignment of

Exhibit 9.9 Delegation: Responsibility, Authority, and

Job Design and Specialization

• Job design: Number, kind, and variety of

Methods Used to Improve Specialized Jobs

Exhibit 9.10 Job Characteristics Model

Ways to Redesign Intraorganizational

Exhibit 9.11 Reengineering and Task

Interorganizational Process - Types

• Modular organizations: Outsource noncore

Interorganizational Process - Types (continued 1)

➖ Collectively solve customer problems

➖ Provide specific products or services

Interorganizational Process - Types (continued 2)

• Fast and flexible

➖ Difficulty in controlling the quality of work

➖ Require tremendous managerial skills

Exhibit 9.12 Modular Organizations

• Departmentalization involves subdividing

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