Organizational Structure and Organizational Structure ... - USU OCW

The Decentralization of Coca. The Decentralization of Coca-Cola. Coca-Cola decentralized its organizational structure by cutting half of ... span of c...

24 downloads 782 Views 429KB Size
C H A P T E R

17 Organizational Structure and Design

McShane/ Von Glinow 2/e

Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved.

The Decentralization of CocaCoca-Cola Coca-Cola decentralized its organizational structure by cutting half of the staff at its Atlanta headquarters and moving the regional chieftains closer to their local markets. In India, decision making has been moved further down to different areas of that diverse country. McShane/ Von Glinow 2/e

© AFP/CORBIS

Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved.

Division of Labor Subdivision of work into separate jobs assigned to different people Potentially increases work efficiency Necessary as company grows and work becomes more complex

McShane/ Von Glinow 2/e

© AFP/CORBIS

Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved.

Forms of Work Coordination Informal communication  Sharing information  High media-richness  Important in teams

Formal hierarchy

 Direct supervision  Common in larger firms  Problems -- costly, slow, less popular with young staff

Standardization

© AFP/CORBIS

 Formal instructions  Clear goals/outputs  Training/skills

McShane/ Von Glinow 2/e

Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved.

Elements of Organizational Structure

DepartmentDepartmentalization

Span of Control

Organizational Structure Elements Formalization

McShane/ Von Glinow 2/e

Centralization

Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved.

Span of Control Number of people directly reporting to the next level Assumes coordination through direct supervision Wider span of control possible when:  with other coordinating methods  subordinates’ tasks are similar  tasks are routine

Flatter structures require wider span (if same # of people in the firm) McShane/ Von Glinow 2/e

Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved.

Span of Control at Ducks Unlimited

Ducks Unlimited/Darin Langhorst

McShane/ Von Glinow 2/e

Ducks Unlimited Canada recently flattened its organizational structure by removing layers of management. The environmental conservation group wanted the flatter structure to empower employees, and let them make decisions quickly without having to go up the hierarchy.

Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved.

Forces for (De)centralization Centralization • Organizational crises • Management desire for control • Increase consistency, reduce costs • Complexity -- size, diversity • Desire for empowerment

Decentralization McShane/ Von Glinow 2/e

Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved.

Mechanistic vs. Organic Structures Mechanistic

Organic

• High formalization

• Low formalization

• Narrow span of control

• Wide span of control

• High centralization

• Low centralization

McShane/ Von Glinow 2/e

Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved.

Effects of Departmentalization Establishes work teams and supervision structure Creates common resources, measures of performance, etc Encourages informal communication among people and subunits

McShane/ Von Glinow 2/e

Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved.

Functional Organizational Structure Organizes employees around skills or other resources (marketing, production)

President

Finance

McShane/ Von Glinow 2/e

Production

Marketing

Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved.

Divisionalized Structure Organizes employees around geographic areas, products, or clients

President

Enterprise Systems

McShane/ Von Glinow 2/e

Laserjet Solutions

Consumer Products

Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved.

Project--Based Matrix Structure Project Employees are temporarily assigned to a specific project team and have a permanent functional unit President Engineering Manager

Marketing Manager

Software Manager

Project A Manager Project B Manager Project C Manager McShane/ Von Glinow 2/e

Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved.

Team Structure at Jabil Circuits Jabil Circuits relies on a teambased organizational structure at its manufacturing operations. Each production team is responsible for a specific customer group. Team members have a high degree of autonomy and are cross-trained.

McShane/ Von Glinow 2/e

Courtesy of Jabil Circuits

Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved.

Features of TeamTeam-Based Structures Self-directed work teams Teams organized around work processes Very flat span of control Very little formalization Usually found within divisionalized structure Courtesy of Jabil Circuits

McShane/ Von Glinow 2/e

Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved.

Network Organizational Structure Product Development Firm (France)

Marketing Firm (U.K.)

Core Firm (U.S.A.) Customer Service Firm (Canada)

McShane/ Von Glinow 2/e

Production Firm (China) Accounting Firm (U.S.A.)

Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved.

Types of Organizational Technology High Analyzability

Low Analyzability

McShane/ Von Glinow 2/e

Assembly Line

Engineering Projects

Skilled Trades

Scientific Research

Low Variety

High Variety

Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved.

Org. Environment & Structure Dynamic • High rate of change • Use organic structure

Complex • Many elements (such as stakeholders) • Decentralize

McShane/ Von Glinow 2/e

Stable • Steady conditions, predictable change • Use mechanistic structure

Simple • Few environmental elements • Less need to decentralize

Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved.

Org. Environment & Structure (con’t) Diverse • Variety of products, clients, locations • Divisional form aligned with the diversity

Hostile • Competition and resource scarcity • Use organic structure for responsiveness

McShane/ Von Glinow 2/e

Integrated • Single product, client, location • Don’t need divisional form

Munificent • Plenty of resources and product demand • Less need for organic structure

Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved.

C H A P T E R

17 Organizational Structure and Design

McShane/ Von Glinow 2/e

Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved.