© 2008 by nelson, a division of thomson canada limited 1 management second canadian edition chuck...

© 2008 by Nelson, a division of Thomson Canada Limited 1

Management Second Canadian Edition

Chuck WilliamsAlex Z. KondraConor Vibert

Slides Prepared by:Kerry Rempel, Okanagan College


Chapter 11

Organizational Structures and Processes


What Would You Do?

Alex MacBeath of Grant Thornton credits their growth and success to the following factors:

They are first and foremost a professional services firm

Strict attention to client service and evolving client needs

A focus on people


Learning Objectives:Designing Organizational Structures

After reading the next three sections, you should be able to:

1. describe the departmentalization approach to organizational structure

2. explain organizational authority3. discuss the different methods for job

design


Departmentalization

Functional Product Customer Geographic Matrix


Functional Departmentalization

Exhibit 11.1


Functional Departmentalization

Advantages creates highly

skilled specialists lowers costs

through reduced duplication

communication and coordination problems are lessened

Disadvantages cross-department

coordination can be difficult

may lead to slower decision making

produces managers with narrow experiences


Product Departmentalization

Easy Food Market

Cheese Milk Ice cream


Product Departmentalization

Advantages managers

specialize but have broader experience

easier to assess work-unit performance

decision making is faster

Disadvantages duplication often

increases costs difficult to

coordinate across departments


Customer Departmentalization

American Express

Cards Travel Financial Services Business Services

Adapted from Exhibit 11.3


Customer Departmentalization

Advantages focuses on

customer needs products and

services tailored to specific customers

Disadvantages duplication of

resources difficult to achieve

coordination across departments

decisions that please the company but may hurt the company


Geographic Departmentalization

Coca-Cola Enterprises

Central NorthAmerica

Eastern North America

Western NorthAmerica Europe


Geographic Departmentalization

Advantages responsive to

demand of different markets

reduce costs by locating resources close to customers

Disadvantages duplication of

resources difficult to

coordinate across departments


Matrix Departmentalization

A hybrid structure in which two or more forms of departmentalization are used together

most common forms combine product and functional

employees report to two bosses increased cross-functional interaction significant interaction between

functional and project managers required


Matrix Departmentalization

Advantages efficiently manage

large, complex tasks

effectively manage large, complex tasks

Disadvantages requires high

levels of coordination

increased conflict levels

requires high level of management skills


Organizational Authority

Chain of command Line versus staff authority Delegation of authority Degree of centralization


Chain of Command The vertical line of

authority in an organization clarifies who reports to whom

Unity of command workers report to only one boss violated by matrix structure

Span of control Number of people reporting to a

specific supervisor


Line Versus Staff Authority Line authority-function

the right to command immediate subordinates in the chain of command

an activity that contributes directly to creating or selling a company’s products

Staff authority-function the right to advise but not command

others an activity that supports line activities


Delegation of Authority

The assignment of direct authority and responsibility to a subordinate to complete tasks for which the manager is normally responsible Three transfers from manager to subordinate

transfer of full responsibility of assignment transfer of authority over required resources transfer of accountability


How to Be a More Effective Delegator

1. Trust your staff to do a good job2. Avoid seeking perfection3. Give effective instructions4. Know your true interests5. Follow up on progress

Adapted from Exhibit 11.9


How to Be a More Effective Delegator

6. Praise the efforts of your staff7. Don’t wait until the last minute to

delegate8. Ask questions, expect answers, and

assist employees9. Provide sufficient resources10. Delegate to the lowest possible

levelAdapted from Exhibit 11.9


Degree of Centralization Centralization of authority

most authority is held at the upper levels of the organization

Decentralization significant authority is found in lower levels

of the organization Standardization

Solving problems by applying rules, procedures, and processes


Job Design Job specialization Job rotation Job enlargement Job enrichment


Job Design

Job specialization breaking jobs into smaller tasks simple, easy-to-learn, and economical can lead to low job satisfaction, high

absenteeism, and turnover


Job Design Job rotation

periodically moving workers from one job to another

Job enlargement increasing the number of tasks

performed by a worker Job enrichment

adding more tasks and authority to a worker’s job


Learning Objectives:Designing Organizational Processes

After reading these next two sections, you should be able to:

4. explain the methods that companies are using to redesign internal organizational processes (i.e., intraorganizational processes)5. describe the methods that companies are

using to redesign external organizational processes (i.e., interorganizational

processes)


Types of Organizations

Mechanistic

Organic


Intraorganizational Processes

Reengineering

Empowerment

Behavioural informality


Reengineering

Fundamental rethinking of business processes

Intended to achieve dramatic improvements in performance

Changes the organization’s orientation form vertical to horizontal

Changes task interdependence


Task Interdependence

The extent to which collective action is required to complete an entire piece of work

Three types pooled sequential reciprocal


Empowerment Permanently passing decision-

making authority and responsibility from managers to workers workers need information and

resources to make good decisions workers should be rewarded for

taking initiative


Behavioural Informality

Behavioural informality

spontaneity casualness interpersonal

familiarity

Behavioural formality

routine and regimen

specific rules impersonal

detachment


Interorganizational Processes

Modular organizations

Virtual organizations

Boundaryless organizations


Modular Organization

Exhibit 11.12


Modular Organizations

Advantages Can cost

significantly less to run

Allows the company to focus on the core activities they do best

Disadvantages Loss of control

when outsourcing key business activities

May end up outsourcing a competitive advantage


Virtual Organization

Exhibit 11.13


Virtual Organizations

Advantages Allow companies

to share costs Fast and flexible Should provide

better products and services because each is “best” at what they do

Disadvantages Loss of control when

outsourcing key business activities

Requires tremendous managerial skills to make a network of independent organizations work well together


Boundaryless Organization

Exhibit 11.14


Boundaryless Organizations

Advantages A focus on results

instead of reporting makes much better use of employee skills, knowledge, and abilities

Lead to much closer relationships with the external environment

Disadvantages Transition can be

threatening to managers and employees

There is no clear way to achieve a boundaryless organization


What Really Happened?

Grant Thornton maintains it’s differences through:

Leaders managing through influence, not position

A collaborative culture that facilitates knowledge sharing

Shared workspaces

© 2008 by nelson, a division of thomson canada limited 1 management second canadian edition chuck...

Documents

matrix departmentalization

forms of departmentalization

departmentalization

okanagan college slide

job design slide

costs difficult

organizational structures

organizational authority