OB_07_AAU.Orgaizational Behaviour Orgaizational Behaviour pdf
- 1. ORGANIZATIONAL BEHAVIOR ORGANIZATIONAL BEHAVIOR S T E P H E N P. R O B B I N S S T E P H E N P. R O B B I N S E L E V E N T H E D I T I O N E L E V E N T H E D I T I O N W W W . P R E N H A L L . C O M / R O B B I N S W W W . P R E N H A L L . C O M / R O B B I N S Chapter 4 Chapter 4 Foundations of Organization Structure
- 2. 4-2 What Is Organizational Structure? What Is Organizational Structure? Key Elements: • Work specialization • Departmentalization • Chain of command • Span of control • Centralization and decentralization • Formalization Key Elements: • Work specialization • Departmentalization • Chain of command • Span of control • Centralization and decentralization • Formalization Organizational Structure How job tasks are formally divided, grouped, and coordinated.
- 3. 4–3 What Is Organizational Structure? (cont’d) What Is Organizational Structure? (cont’d) Division of labor: • Makes efficient use of employee skills • Increases employee skills through repetition • Less between-job downtime increases productivity • Specialized training is more efficient. • Allows use of specialized equipment. Division of labor: • Makes efficient use of employee skills • Increases employee skills through repetition • Less between-job downtime increases productivity • Specialized training is more efficient. • Allows use of specialized equipment. Work Specialization The degree to which tasks in the organization are subdivided into separate jobs.
- 4. 4–4 What Is Organizational Structure? (cont’d) What Is Organizational Structure? (cont’d) Grouping Activities By: • Function • Product • Geography • Process • Customer Departmentalization The basis by which jobs are grouped together.
- 5. 4–5 What Is Organizational Structure? (cont’d) What Is Organizational Structure? (cont’d) Chain of Command The unbroken line of authority that extends from the top of the organization to the lowest echelon and clarifies who reports to whom. Authority The rights inherent in a managerial position to give orders and to expect the orders to be obeyed. Unity of Command A subordinate should have only one superior to whom he or she is directly responsible.
- 6. 4–6 What Is Organizational Structure? (cont’d) What Is Organizational Structure? (cont’d) Narrow Span Drawbacks: • Expense of additional layers of management. • Increased complexity of vertical communication. • Encouragement of overly tight supervision and discouragement of employee autonomy. Narrow Span Drawbacks: • Expense of additional layers of management. • Increased complexity of vertical communication. • Encouragement of overly tight supervision and discouragement of employee autonomy. Concept: Concept: Concept: Concept: Wider spans of management increase organizational Wider spans of management increase organizational efficiency. efficiency. Span of Control The number of subordinates a manager can efficiently and effectively direct.
- 7. 4–7 What Is Organizational Structure? (cont’d) What Is Organizational Structure? (cont’d) Centralization The degree to which decision making is concentrated at a single point in the organization. Formalization The degree to which jobs within the organization are standardized. Decentralization The degree to which decision making is spread throughout the organization.
- 8. 4–8 Common Organization Designs Common Organization Designs Simple Structure A structure characterized by a low degree of departmentalization, wide spans of control, authority centralized in a single person, and little formalization.
- 9. 4–9 Common Organization Designs (cont’d) Common Organization Designs (cont’d) Bureaucracy A structure of highly operating routine tasks achieved through specialization, very formalized rules and regulations, tasks that are grouped into functional departments, centralized authority, narrow spans of control, and decision making that follows the chain of command.
- 10. 4–10 The Bureaucracy The Bureaucracy Strengths – Functional economies of scale – Minimum duplication of personnel and equipment – Enhanced communication – Centralized decision making Weaknesses – Subunit conflicts with organizational goals – Obsessive concern with rules and regulations – Lack of employee discretion to deal with problems
- 11. 4–11 Common Organization Designs (cont’d) Common Organization Designs (cont’d) Key Elements: + Gains the advantages of functional and product departmentalization while avoiding their weaknesses. + Facilitates coordination of complex and interdependent activities. – Breaks down unity-of-command concept. Key Elements: + Gains the advantages of functional and product departmentalization while avoiding their weaknesses. + Facilitates coordination of complex and interdependent activities. – Breaks down unity-of-command concept. Matrix Structure A structure that creates dual lines of authority and combines functional and product departmentalization.
- 12. 4–12 New Design Options New Design Options Characteristics: • Breaks down departmental barriers. • Decentralizes decision making to the team level. • Requires employees to be generalists as well as specialists. • Creates a “flexible bureaucracy.” Characteristics: • Breaks down departmental barriers. • Decentralizes decision making to the team level. • Requires employees to be generalists as well as specialists. • Creates a “flexible bureaucracy.” Team Structure The use of teams as the central device to coordinate work activities.
- 13. 4–13 New Design Options (cont’d) New Design Options (cont’d) Concepts: Advantage: Provides maximum flexibility while concentrating on what the organization does best. Disadvantage: Reduced control over key parts of the business. Virtual Organization A small, core organization that outsources its major business functions. Highly centralized with little or no departmentalization.
- 14. 4–14 New Design Options (cont’d) New Design Options (cont’d) T-form Concepts: Eliminate vertical (hierarchical) and horizontal (departmental) internal boundaries. Breakdown external barriers to customers and suppliers. Boundaryless Organization An organization that seeks to eliminate the chain of command, have limitless spans of control, and replace departments with empowered teams.
- 15. 4–15 Why Do Structures Differ? Why Do Structures Differ? Mechanistic Model A structure characterized by extensive departmentalization, high formalization, a limited information network, and centralization. Organic Model A structure that is flat, uses cross-hierarchical and cross-functional teams, has low formalization, possesses a comprehensive information network, and relies on participative decision making.
- 16. 4–16 Why Do Structures Differ? – Strategy Why Do Structures Differ? – Strategy Innovation Strategy A strategy that emphasizes the introduction of major new products and services. Imitation Strategy A strategy that seeks to move into new products or new markets only after their viability has already been proven. Cost-minimization Strategy A strategy that emphasizes tight cost controls, avoidance of unnecessary innovation or marketing expenses, and price cutting.
- 17. 4–17 Why Do Structures Differ? – Size Why Do Structures Differ? – Size Characteristics of large organizations: • More specialization • More vertical levels • More rules and regulations Characteristics of large organizations: • More specialization • More vertical levels • More rules and regulations Size How the size of an organization affects its structure. As an organization grows larger, it becomes more mechanistic.
- 18. 4–18 Why Do Structures Differ? – Technology Why Do Structures Differ? – Technology Characteristics of routineness (standardized or customized) in activities: • Routine technologies are associated with tall, departmentalized structures and formalization in organizations. • Routine technologies lead to centralization when formalization is low. • Nonroutine technologies are associated with delegated decision authority. Characteristics of routineness (standardized or customized) in activities: • Routine technologies are associated with tall, departmentalized structures and formalization in organizations. • Routine technologies lead to centralization when formalization is low. • Nonroutine technologies are associated with delegated decision authority. Technology How an organization transfers its inputs into outputs.
- 19. 4–19 Why Do Structures Differ? – Environment Why Do Structures Differ? – Environment Key Dimensions- • Capacity: the degree to which an environment can support growth. • Volatility: the degree of instability in the environment. • Complexity: the degree of heterogeneity and concentration among environmental elements. Environment Institutions or forces outside the organization that potentially affect the organization’s performance.