Transcript Organization Structure - Mississippi State University

MGT 4153
Dr. Rebecca Long
Managing By Design Questions
1.
A popular form of organizing is to have employees work on
what they want in whatever department they choose so
that motivation and enthusiasm stay high.
Disagree. (page 91)
2
Long
What is Structure?
 Designates formal reporting relationships
 Identifies grouping of individuals into units and units
into the organization
 Includes design of systems to ensure communication,
coordination and integration of effort
(page 90)
3
Long
Designed for efficiency: Centralized
Designed for learning: Decentralized
(page 93)
4
Long
Efficiency vs. Learning Design (page 93)
Horizontal Organization
Designed for Learning
Horizontal structure is dominant
• Shared tasks, empowerment
• Relaxed hierarchy, few rules
• Horizontal, face-to-face communication
• Many teams and task forces
• Decentralized decision making
Dominant
Structural
Approach
Vertical structure is dominant
• Specialized tasks
• Strict hierarchy, many rules
• Vertical communication and reporting systems
• Few teams, task forces or integrators
• Centralized decision making
Vertical Organization
Designed for Efficiency
5
Long
Information-sharing Perspective on
Structure
Design: Provide both vertical and horizontal information flow
to accomplish organizational goals. If structure doesn’t fit,
people will have either too little information or spend time
processing information not vital to their tasks.
Vertical linkages are designed primarily for control. Horizontal
linkages are designed for coordination and collaboration, which
usually means reducing control.
(page 93)
6
Long
Information Processing & Structure
(page 93)
 Horizontal Linkages – Coordination and communication across organizational
departments to achieve unity of effort and objectives
 Information Systems
 Direct Contact
 Task Forces
 Full-Time Integrator
 Teams
7
Long
Horizontal Information Sharing
Overcomes barriers between departments and provides
opportunities for coordination among employees to achieve
unity of effort and organizational objectives. Horizontal
linkage refers to communication and coordination
horizontally across organizational departments.
(See italicized paragraph bottom of page 95!)
8
Long
Vertical Information Sharing
Hierarchical referral: (exhibit 3.1, page 91) Hierarchy
itself. If problem arises, information goes up the hierarchy ,
answer passed back down.
Rules and plans: Problems and decisions can be repetitious,
so employees can be taught how to respond without
communicating directly with their manager.
Vertical information system: Periodic reports, written
information, and computer-based information systems. Is
efficient in this type of system.
(pages 93-94)
9
Long
Managing By Design Questions
2.
Committees and task forces whose members are from
different departments are often worthless for getting things
done.
Disagree. (page 97)
10
Long
Design Options for Grouping Employees
into Departments (page 103)
Functional
Grouping
CEO
Engineering
Marketing
Divisional
Grouping
CEO
Division A
11
Manufacturing
Division B
Long
Division C
Full-time Integrator (page 97)
Product Manager, Project Manager, Program Manager, Brand
Manager. Located outside any of the departments and does
not report to one being coordinated.
Can also be responsible for or change project. See Exhibit 3.3,
page 98.
12
Long
Strengths & Weaknesses of Functional
Design (page 102)
 STRENGTHS:
 Economies of scale within
functions
 In-depth knowledge and skill
development
 Enables accomplishment of
functional goals
 Best with only one or a few
products
13
Long
 WEAKNESSES:
 Slow response time
 May cause decisions to pile up
hierarchy overload
 Poor horizontal coordination across
departments
 Less innovation
 Restricted view of organizational
goals
Economies of scale: Results when all employees are located
in the same place and can share facilities. Producing all
products in a single plant, for example, enables the plant to
acquire the latest machinery.
14
Long
Strengths & Weaknesses of Divisional
Design (page 102)
 STRENGTHS:
 Fast change
 Client satisfaction
 High coordination across functions
 Allows adaptation to differences in
products, regions, clients
 Best in large organizations with
several products
 Decentralizes decision-making
15
Long
 WEAKNESSES:
 Eliminates economies of scale in
departments
 Poor coordination across product
lines
 No in-depth competence
 Integration and standardization
across product lines difficult
Matrix Design (pages 110-115)
Multifocused
Grouping
CEO
Marketing
Product
Division A
Product
Division B
16
Long
Manufacturing
Strengths & Weaknesses of Matrix
Design (page 112)
 STRENGTHS:
 Coordination necessary to meet
dual demands from customers
 Flexible sharing of human
resources across products
 Complex decisions and frequent
changes
 Opportunity for both functional
and product skill development
 Best in medium-sized
organizations with multiple
products
17
Long
 WEAKNESSES:
 Dual authority, frustrating and confusing
 Participants need good interpersonal
skills and training
 Time consuming; frequent meetings and
conflict resolution sessions
 Participants understand it and adopt
collegial rather than vertical-type
relationships
 Requires great effort to maintain power
balance
A Horizontal Design (pages 115-119)
Top
Management
Team
Process
Owner
Team
1
Market
Analysis
Research
Team
2
Product
Planning
Team
3
Testing
Customer
New Product Development Process
Process
Owner
Team
1
Analysis
Purchasing
Team
2
Material
Flow
Team
3
Distrib.
Procurement and Logistics Process
18
Long
Customer
Strengths & Weaknesses of
Horizontal Design (page 118)
 STRENGTHS:
 Flexibility and rapid response to
customer needs
 Attention directed toward
production and delivery of value to
the customer
 Employee has a broader view of
organizational goals
 Promotes focus on teamwork
 Improves quality of life; opportunity
to share responsibility, make
decisions, and be accountable
19
Long
 WEAKNESSES:
 Determining core processes to
organize around is difficult and timeconsuming
 Must change culture, job design,
management philosophy,
information and reward systems
 Managers have to give up power and
authority
 Requires significant training
 Can limit in-depth skill development
Symptoms of Structural Deficiency
(page 126)
 Decision making is delayed or lacking in quality
 The organization does not respond innovatively to a changing
environment
 Too much conflict is evident
20
Long
Managing By Design Questions
3.
Top managers are smart to maintain organizational control
over the activities of key work units rather than contracting
out some work unit tasks to other firms.
Disagree (page 125)
21
Long