organizational structure and culture
DESCRIPTION
Structure and Culture of the OrganisationTRANSCRIPT
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Michael A. HittC. Chet Miller
Adrienne Colella
Chapter 13 Organizational Organizational
Structure Structure and Cultureand Culture
Slides by Ralph R. Braithwaite
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Integrated Portfolio at FedExIntegrated Portfolio at FedEx
Exploring Behavior in Action
With all the acquisitions by FedEx, there was a need to change their structure. It adopted a multi-divisional structure. Corporate provides strategic direction and consolidated financial reporting. Significant authority has been delegated to the divisions. Each division manages its own specialized network of services.Do you know of other companies that operate in a similar fashion?Is this a good model for organizations to follow as they grow and develop?
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FedExFreight
FedExSupplyChain
FedExKinko’sServices
FedExExpress
FedExFedExCorp.Corp.
FedExCustomCritical
FedExTrade
Network
FedExGround
FedEx OrganizationFedEx Organization
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Organizational Structure and Organizational Structure and CultureCulture
OrganizationalStructure
OrganizationalCulture
The formal system of work roles andauthority relationships that govern
how associates and managersinteract with one another.
Involves the values and normsshared by managers and associates
that influence behavior. It is apowerful force in organizations.
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Knowledge ObjectivesKnowledge Objectives1. Define key elements of organizational structure,
including both structural and structuring dimensions.2. Explain how corporate and business strategies relate
to structure.3. Explain how environment, technology, and size relate
to structure.4. Define organizational culture, and discuss the
competing-values cultural framework.5. Discuss socialization.6. Describe cultural audits and subcultures.7. Explain the importance of a fit between individual
values and organizational culture.
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Fundamental Elements of Fundamental Elements of Organizational StructureOrganizational Structure
Structural Characteristics
Structuring Characteristics
Hierarchy
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Span of ControlSpan of Control
Adapted from Exhibit 13-1: Average Span of Control: Effects on Height of the Hierarchy
Average span of Four Average span of TenHighest
Lowest
Org
aniz
atio
nal L
evel
1000
100
10
1
Associates250
63
17
4
1
Associates
1000
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Functional OrganizationFunctional Organization
Adapted from Exhibit 13-2: Simplified Functional Organization
VPResearch andDevelopment
VPResearch andDevelopment
VPOperations
VPHuman
Resources
VPFinance
VPMarketing
CEO
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Divisional OrganizationDivisional Organization
Adapted from Exhibit 13-3: Simplified Divisional Organization
CEO
Head of Operations
Head of R&D
Head of Human
Resources
Head of Finance
Head of Marketing
V.P. Product/Service
Area 1
Head of Operations
Head of R&D
Head of Human
Resources
Head of Finance
Head of Marketing
V.P. Product/Service
Area 1
Head of Operations
Head of R&D
Head of Human
Resources
Head of Finance
Head of Marketing
V.P. Product/Service
Area 1
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Structuring CharacteristicsStructuring Characteristics
Centralization Standardization
Formalization Specialization
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The Modern OrganizationThe Modern OrganizationFlexible empowering type of structure
Organic
Learning
Boundaryless
Mechanistic
Non-Learning
Traditional
Fewer management levels, broader spans of control, less centralization, standardization, formalization and specialization.
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FreedomFreedomSubstantial freedom may exist, but1. Freedom is not unlimited2. Alternative mechanisms are used to ensure that
individuals are working for the good of the organization
3. Values are shared4. Reward systems are used to promote appropriate
behavior
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Factors Affecting StructureFactors Affecting Structure
CorporateStrategy Growth
Diversification
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Diversification Strategy and Diversification Strategy and StructureStructure
Adapted from Exhibit 13-4: Matches between Diversification Strategy and Structure
Holding CompanyUnrelated product
DivisionalUnrelated product
DivisionalRelated product
DivisionalDominant product (several products)
FunctionalDominant product (few products)
FunctionalSingle product
StructureDiversification
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Business StrategyBusiness Strategy
• Low cost/low price• Product/service differentiation• Supporting structure including strategic
business units – SBUs
How a firm competes for success against other organizations in a particular market.
13-17ExperiencingStrategic OB
IDEO and Differentiation StrategyIDEO and Differentiation StrategyIDEO demonstrates a differentiation strategy, highlights that occasionally organizations supplement their human capital, and they value teams with diverse members.Is this an effective approach to business?How can this approach help other businesses and organizations?What are your thoughts about IDEO’s approaches:
• Form a diverse team• Team members brainstorm• Team members engage in rapid prototyping• Team members implement the fruits of their
labors
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Environment and Basic Environment and Basic StructureStructure
• Effective organizations experiencing high environmental uncertainty tend to be more organic.
• Effective organizations experiencing low environmental uncertainty tend to be less organic.
Environmental uncertainty – the degree to which an environment is complex and changing; uncertain environments are difficult to monitor and understand.
Jay W. Lorsch
Paul R. Lawrence
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Environment and IntegrationEnvironment and Integration
Adapted from Exhibit 13-5: Integration in Organizations
Slack Resources
Self-Contained Tasks
Information Technology
Lateral Relations
Increasing Implementation Complexity
Incr
easi
ng R
ichn
ess
of
Info
rmat
ion
Proc
essi
ng
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Alternative Lateral ProcessesAlternative Lateral ProcessesLiaison RolesDirect Contact
Matrix Designs
Managerial Linking Roles
Integrating Roles
Teams
Taskforces
Lateral Processes
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Technology and Technology and StructureStructure
Small-Batch Technology
Mass Production Technology
Process Production Technology
Mass Customization
Manufacturing
Joan Woodward
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Technology and StructureTechnology and Structure
Charles Perrow
Task VariabilityTask Variability Task AnalyzabilityTask Analyzability
Four categories of technology
Routine Craft
Engineering Nonroutine
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Organizations and TechnologyOrganizations and Technology
Adapted from Exhibit 13-6: Organizations and Technology
High LowTask Analyzability
High
Low
Task
Var
iabi
lity
Specialized Engineering
Consulting Firm
Engineering
Public School
Craft
Research and Development
Firm
Non-Routine
Mass-Production Firm
Routine
13-24ExperiencingStrategic OB
Google Culture Attracts Google Culture Attracts High-Quality AssociatesHigh-Quality Associates
Larry Page and Sergy Brin
Do you think Google would have enjoyed its success had a different type of structure and culture been introduced?What types of organizations could benefit with a similar structure and culture? What types of organizations might have difficulty?As Google continues to grow, will the culture survive or will it possibly be replaced by a more traditional culture?
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Developing Organizational CultureDeveloping Organizational Culture
Adapted from Exhibit 13-7: Process of Developing Organizational Culture
Organizational Culture
NormsReinforcing Outcomes
Shared Values
Individual and Group Behavior
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Organizational CultureOrganizational Culture
Adapted from Exhibit 13-8: Competing Values Model of Organizational Culture
EffectivenessCohesion and Morale
LeadershipMentors and Coaches
Clan
EffectivenessCreativity and Innovation
LeadershipEntrepreneurs and
Innovators
Adhocracy
EffectivenessGoal Achievement and
Winning
LeadershipHard Drivers and
Competitors
Market
EffectivenessEfficiency and Order
LeadershipMonitors and Organizers
Hierarchy
Internal Focus/Integration External Focus/Differentiation
Stab
ility
/Con
trol
Flex
ibili
ty/
Dis
cret
ion
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Cultural SocializationCultural SocializationA process through which an organization imparts its
values to newcomers
Context Content
SocialDynamics
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Cultural AuditCultural AuditA tool for assessing and understanding the culture of an organization. Use these five steps for conducting the cultural audit:
Analyze process
and content
Analyze responses to critical incidents
Analyze values
and beliefs of culture
creators
Explore anomalies
or puzzling features
Examine linkage – culture
with goals
Subcultures – groups that share values that differ from the main values of the
organization.
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ManagerialAdvice
Finding a Fit at Finding a Fit at Home DepotHome Depot
Robert Nardelli
Do you agree that an individual’s management style and values should agree with the organization’s culture? Why or why not?Do you think Nardelli is what Home Depot needed at the time?Have you worked with a leader whose style was very different than the culture of the organization? What was that like?Can some organizations benefit from a major change in leadership philosophy?
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Person-Organization FitPerson-Organization Fit
Abstract ideals that relate to proper life
goals and methods for reaching those goals.
Values
Types of personal goalsTypes of personal goalsthat one ought to havethat one ought to have
Types of behaviors thatTypes of behaviors thatone ought to use in one ought to use in reaching those goalsreaching those goals
End-Means Dimension
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Types of Personal ValuesTypes of Personal Values
Means(Behavior)
Values
End(Goal)Values
Adapted from Exhibit 13-9: Types of Personal Values
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The Strategic LensThe Strategic Lens1. Consider an organization of which you are a member
or an associate. What is the structure in this organization? Is it centralized or decentralized? Is it organic and flexible? How would you change the structure in this organization to make it more effective?
2. How would you describe the culture in the organization discussed in question #1? How does the culture affect members’ behavior in the organization?
3. When you become a manager, what type of culture will you establish in your unit? What values do you want to emphasize? Why?