chapter 10 copyright ©2007 by south-western, a division of thomson learning. all rights reserved...

Chapter 10Copyright ©2007 by South-Western, a division of Thomson Learning. All rights reserved

Chapter 9

1

Dr. Ellen A. Drost

DesigningAdaptiveOrganizations

Chapter 10Copyright ©2007 by South-Western, a division of Thomson Learning. All rights reserved 2

What Would You Do?

Where do you start to fix a company that has a $100 million loss, falling ad sales, plummeting stock prices, and an unmanageable organizational structure?

Yahoo has done a poor job in establishing relationships with customers

Yahoo Headquarters, Sunnyvale, California

What structure should Yahoo adopt? What should you do about the informal culture?How can better decisions be made for the company?


Organizational Structure

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.


Organizational StructureProcess View of Microsoft’s Organization

Exhibit 9.2


Designing Organizational Structures

After reading these sections, you should be able to:

1. describe the departmentalization approach to organizational structure.

2. explain organizational authority.


Departmentalization

CustomerCustomer GeographicGeographic MatrixMatrix

FunctionalFunctional ProductProduct

11


Functional Departmentalization

1.11.1


Advantages Disadvantages

Functional Departmentalization

Work done by highly skilled specialists

Lowers costs through reduced duplication

Communication and coordination problems are lessened

Cross-department coordination can be difficult

May lead to slower decision making

Produces managers with narrow experiences

1.11.1


Product Departmentalization

1.21.2

United TechnologiesUnited Technologies

CarrierCarrier

Hamilton Sundstrand

Hamilton Sundstrand

ChubbChubb

OtisOtis

Pratt & WhitneyPratt & Whitney

UTC PowerUTC Power

Adapted from Exhibit 9.4

--Administrative services--Communication & public relations--Customer service & support--E-Business--Engineering--etc…

SikorskySikorsky



Product Departmentalization

Managers specialize, but have broader experiences

Easier to assess work-unit performance

Decision-making is faster

Duplication of activities Difficult to coordinate

across departments

1.21.2


Customer Departmentalization

U.S. Businesses

U.S. Businesses

LocalServiceLocal

ServiceSupply Chain

IntegrationSupply Chain

IntegrationLocal

ServiceLocal

Service

SprintCorporation

SprintCorporation

InternationalBusinesses

InternationalBusinesses

Long-DistanceService


LogisticsNetwork

LogisticsNetwork



SolutionsSolutions WirelessServices

WirelessServices

DistributionCenters

DistributionCenters

Wireline &WirelessServices

Wireline &WirelessServices

BusinessSolutions

BusinessSolutions

ConsumerSolutions

ConsumerSolutions

SprintNorth Supply

SprintNorth Supply

Local TelecomDivision

Local TelecomDivision

(Partial Listing)


1.31.3



Customer Departmentalization

Focuses on customer needs

Products and services tailored to customer needs

Duplication of resources Difficult to coordinate

across departments Efforts to please

customers may hurt the company

1.31.3


Geographic Departmentalization

Exhibit 9.6

Co

ca-C

ola

En

terp

rise

sT

erri

tori

es o

f O

per

atio

n

Co

ca-C

ola

En

terp

rise

sT

erri

tori

es o

f O

per

atio

n

1.41.4



Geographic Departmentalization

Responsive to the demands of different market areas

Unique resources located close to the customer

Duplication of resources Difficult to coordinate

across departments

1.41.4


Matrix Departmentalization


CitiGroup InternationalCitiGroup International

North North AmericaAmerica

(excluding(excludingMexico)Mexico)

North North AmericaAmerica

(excluding(excludingMexico)Mexico)

Europe,Europe,Middle East,Middle East,

AfricaAfrica

Europe,Europe,Middle East,Middle East,

AfricaAfricaAsia PacificAsia PacificAsia PacificAsia Pacific

Global Corporate &Investment Bank

Global Corporate &Investment Bank

Global InvestmentManagement

Global InvestmentManagement

Global Consumer

Global Consumer

Smith BarneySmith Barney

Country Managers inSpain, UAE, Kenya, etc.

Country Managers inSpain, UAE, Kenya, etc.

Country Managers inChina, Australia, etc.

Country Managers inChina, Australia, etc.1.51.5



1.51.5




Efficiently manage large, complex tasks

Pool of available resources

Requires high levels of coordination

Conflict between bosses Requires high levels of

management skills

1.51.5


Organizational Authority

Delegationof Authority

Delegationof Authority

Degree ofCentralization

Degree ofCentralization

Chain ofCommand

Line versusStaff Authority

22


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 matrix organizations violate

this principle

2.12.1


Line versus Staff Authority

Line authority the right to command immediate subordinates

in the chain of command

Staff authority the right to advise but not command others

2.22.2


<click screenshot for video>

Rendition

1. How would you describe the workplace atmosphere in this scene? Would you say it demonstrates behavioral informality or formality?

2. Do you think the scene shows line authority or staff authority between these two men?

3. What kind of feedback is Alan Smith getting from Senator Hawkins? Is it primarily positive or negative?

© 2014 Cengage Learning


Delegation of Authority

2.32.3


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




2.32.3


How to be a More Effective Delegator

1. Trust your staff to be a good job

2. Avoid seeing perfection

3. Give effective job instructions

4. Know your true interests

5. Follow up on progress.

6. Praise the efforts of your staff.

7. Don’t wait to the last minute to delegate.

8. Ask questions, expect answers, assist employees.

9. Provide the resources you would provide if doing the assignment yourself.

10. Delegate to the lowest possible level.


2.32.3


Degree of Centralization

Centralization of authority primary authority is held by upper management

Decentralization significant authority is found in lower levels of

the organization

Standardization solving problems by applying rules, procedures,

and processes

2.42.4


Designing Organizational Processes

After reading these sections, you should be able to:

4. explain the methods that companies are usingto redesign international organizational processes(i.e., intraorganizational processes).

5. describe the methods that companies are using to redesign external organizational processes (i.e., interorganizational processes).


Intraorganizational Processes

ReengineeringReengineering EmpowermentEmpowerment

44


Reengineering

The fundamental rethinking and radical redesign of business processes

Intended to achieve dramatic improvements in performance

Change the orientation from vertical to horizontal

Changes task interdependence

4.14.1


Empowerment

A feeling of intrinsic motivation Workers perceive meaning in their work Employees are capable of self-determination

EmpoweringWorkers

EmpoweringWorkers

Permanently passing decision-makingauthority and responsibilities frommanagers to workers by giving themthe information and resources they need to make good decisions

Permanently passing decision-makingauthority and responsibilities frommanagers to workers by giving themthe information and resources they need to make good decisions

4.24.2


Interorganizational Processes

ModularOrganizations

ModularOrganizations

VirtualOrganizations

VirtualOrganizations

55


Modular Organizations

5.15.1

Exhibit 9.13


<click screenshot for video>

Modern Shed

1. Describe how Modern Shed functions as a modular organization.

2. What are the advantages and disadvantages of Modern Shed’s organizational structure?

© 2014 Cengage Learning


Modular Organizations


can cost less to run thantraditional organizations

lets organizations focuson core competencies

loss of control from outsourcing

may reduce their competitive advantage

5.15.1


Virtual Organizations

5.25.2

Exhibit 9.14


Virtual Organizations


let companies share costs

fast and flexible being the “best” should

provide better products

difficult to control the quality of partners

requires tremendous management skills

5.25.2http://www.agileweb.comWeb Link

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