Transcript
Organizations and Structures
Module 7
LIS 580: Spring 2006
Instructor- Michael Crandall
April 18, 2006 LIS580- Spring 2006 2
Roadmap
• Organizing and organizations
• Structure of organizations
• Matrix organizations
• Networked organizations
• Learning organizations
• Challenges in organizations
April 18, 2006 LIS580- Spring 2006 3
What Is Organizing?
• Organizing– Arranging the
activities of the enterprise in such a way that they systematically contribute to the enterprise’s goals.
G.Dessler, 2003
April 18, 2006 LIS580- Spring 2006 4
Depicting the Organization
• Organization Chart– A chart that shows the
structure of the organization including the title of each manager’s position and, by means of connecting lines, who is accountable to whom and who has authority for each area.
G.Dessler, 2003
April 18, 2006 LIS580- Spring 2006 5
Organization Chart
In form ation S e rvices G roup
C a ta log er
C a ta log er
C u sto m e r L ia ison
T a xo n om y D es ign er
K n ow le dg e A rch ite ctu re Le ad
D ev e lo per
D ev e lo per
S yste m s A dm in
S e arch /S ys te m s Le ad
A ssis tan t D e s ign er
D e sign Le ad
K no w le dg e A rch ite ctu re M an ag er
April 18, 2006 LIS580- Spring 2006 6
Organization Design andStructure
• Organization design– A process in which managers develop or
change their organization’s structure
• Work specialization– A component of organization structure that
involves having each discrete step of a job done by a different individual rather than having one individual do the whole job
Prentice Hall, 2002
April 18, 2006 LIS580- Spring 2006 7
Economies of WorkSpecialization
Prentice Hall, 2002
April 18, 2006 LIS580- Spring 2006 8
Stages of OrganizationalDevelopment
• Simple structure– An organization that is low in specialization
and formalization but high in centralization
• Functional structure– An organization in which similar and related
occupational specialties are grouped together
• Divisional structure– An organization made up of self-contained
unitsPrentice Hall, 2002
April 18, 2006 LIS580- Spring 2006 9
Stages of OrganizationalDevelopment (cont’d)
• Matrix structure– An organization in which specialists from functional
departments are assigned to work on one or more projects led by a project manager
• Team-based structure– An organization that consists entirely of work
groups or teams
• Boundaryless organization– An organization that is not defined or limited by
boundaries or categories imposed by traditional structures
Prentice Hall, 2002
April 18, 2006 LIS580- Spring 2006 10
Mechanistic and OrganicOrganizations
• Mechanistic organization– The bureaucracy; a structure that is high in
specialization, formalization, and centralization
• Organic organization– An adhocracy; a structure that is low in
specialization, formalization, and centralization
• Structure follows strategyPrentice Hall, 2002
April 18, 2006 LIS580- Spring 2006 11
G.Dessler, 2003
Burns and Stalker
April 18, 2006 LIS580- Spring 2006 12
Structure Variables
• Principles– Chain of command– Span of control– Authority– Power– Responsibility
• Departmentalization– Functional– Divisional
• Product• Customer• Geographic• Process
Prentice Hall, 2002
April 18, 2006 LIS580- Spring 2006 13
Organizational Structure: Control
• Chain of command– The management principle that no person should report to
more than one boss
• Span of control– The number of subordinates a manager can direct efficiently
and effectively
• Authority– The rights inherent in a managerial position to give orders
and expect them to be obeyed
• Responsibility– An obligation to perform assigned activities
• Power– An individual’s capacity to influence decisions
Prentice Hall, 2002
April 18, 2006 LIS580- Spring 2006 14
Chain of Command
Prentice Hall, 2002
April 18, 2006 LIS580- Spring 2006 15
Tall And Flat Organizations, And The Span Of Control
• Span of Control– The number of subordinates reporting directly to a
supervisor.• Wide spans: larger number of direct reports.• Narrow spans: fewer number of direct reports.
• Tall vs. Flat Organizations– Tall organizations: more management layers and
more hierarchical controls.– Flat organizations: fewer management layer and
decision making closer to the customer.G.Dessler, 2003
April 18, 2006 LIS580- Spring 2006 16
FIGURE 6–9
Spans of Control in Country-Based Organization
G.Dessler, 2003
April 18, 2006 LIS580- Spring 2006 17
Types of Organizational Authority
• Line authority– The position authority (given and defined by
the organization) that entitles a manager to direct the work of operative employees
• Staff authority– Positions that have some authority (e.g.,
organization policy enforcement) but that are created to support, assist, and advise the holders of line authority
Prentice Hall, 2002
April 18, 2006 LIS580- Spring 2006 18
Authority Versus Power
Prentice Hall, 2002
April 18, 2006 LIS580- Spring 2006 19
Types of Power
LegitimatePower based on one’s position in the formal hierarchy
Coercive Power based on fear
RewardPower based on the ability to distribute something that others value
ExpertPower based on one’s expertise, special skill, or knowledge
ReferentPower based on identification with a person who has resources or traits
Prentice Hall, 2002
April 18, 2006 LIS580- Spring 2006 20
Checklist 7.3Principles of Delegation
The manager can delegate authority but cannot delegate responsibility.
Clarify the assignment.
Delegate, don’t abdicate.
Know what to delegate.
Specify the subordinate’s range of discretion.
Authority should equal responsibility.
Make the person accountable for results.
Beware of backward delegation.G.Dessler, 2003
April 18, 2006 LIS580- Spring 2006 21
Departmentalization:Creating Departments
• Departmentalization– The process through which an
organization’s activities are grouped together and assigned to managers; the organizationwide division of work.
G.Dessler, 2003
April 18, 2006 LIS580- Spring 2006 22
Departmentalization
• Functional– The grouping of activities by functions performed
• Product– The grouping of activities by product produced
• Customer– The grouping of activities by common customers
• Geographic– The grouping of activities by territory
• Process– The grouping of activities by work or customer flow
April 18, 2006 LIS580- Spring 2006 23
Organizing Departments by Function
• Functional Departmentalization– A form of organization that groups a
company’s activities around essential functions such as
manufacturing, sales, or finance.
G.Dessler, 2003
April 18, 2006 LIS580- Spring 2006 24
Functional Departmentalization
FIGURE 6–1G.Dessler, 2003
April 18, 2006 LIS580- Spring 2006 25
Organizing Departments by Self-Contained Divisions/Purposes
• Product Departmentalization– Grouping departments around a firm’s
products or services, or each family of products or services; also referred to as a “divisional” organization.
• Customer Departmentalization– Self-contained departments are organized
to serve the needs of specific groups of customers.
G.Dessler, 2003
April 18, 2006 LIS580- Spring 2006 26
Divisional Organizationfor a Pharmaceuticals Company
FIGURE 6–2G.Dessler, 2003
April 18, 2006 LIS580- Spring 2006 27
FIGURE 6–3
Customer Departmentalization,Grayson Steel Company
G.Dessler, 2003
April 18, 2006 LIS580- Spring 2006 28
Organizing Departments by Self-Contained Divisions/Purposes (cont’d)
• Marketing-channel Departmentalization– Departments focus on particular marketing
channels, such as drugstores or grocery stores.
• Geographic (Territorial) Departmentalization– Separate departments are established for
each of the territories in which the enterprise does business.
G.Dessler, 2003
April 18, 2006 LIS580- Spring 2006 29
FIGURE 6–4
Marketing Channel Departmentalization
G.Dessler, 2003
April 18, 2006 LIS580- Spring 2006 30
FIGURE 6–5
Divisional OrganizationsFacilitate Coordination
G.Dessler, 2003
April 18, 2006 LIS580- Spring 2006 31
Checklist 6.1Functional vs. Divisional Organizations Functional Organization Advantages
1. It is simple, obvious, and logical.2. It fosters efficiency.3. It can simplify executive hiring and training.4. It can facilitate the top manager’s control.
Functional Organization Disadvantages1. It increases the workload on the executive to
whom the functional department heads report.
2. It may reduce the firm’s sensitivity to and service to the customer.
3. It produces fewer general managers.
G.Dessler, 2003
April 18, 2006 LIS580- Spring 2006 32
Checklist 6.1 (cont’d)Functional vs. Divisional Organizations Divisional Organization Advantages
1. The product or service gets the single-minded attention of its own general manager and unit, and its customers may get better, more responsive service.
2. It’s easier to judge performance.3. It develops general managers.4. It reduces the burden for the
company’s CEO.
G.Dessler, 2003
April 18, 2006 LIS580- Spring 2006 33
Checklist 6.1 (cont’d)Functional vs. Divisional Organizations Divisional Organization
Disadvantages1. It creates duplication of effort.2. It may diminish top management’s
control.3. It requires more managers with
general management abilities.4. It can breed compartmentalization.
G.Dessler, 2003
April 18, 2006 LIS580- Spring 2006 34
Creating Matrix Organizations
• Matrix Organization– An organization structure in which
employees are permanently attached to one department but also simultaneously have ongoing assignments in which they report to project, customer, product, or geographic unit heads.
G.Dessler, 2003
April 18, 2006 LIS580- Spring 2006 35
FIGURE 6–6
Matrix Organization Departmentalization
G.Dessler, 2003
April 18, 2006 LIS580- Spring 2006 36
Matrix Organizations
Advantages• Access to expertise.• Stability of
permanent department assignments for employees.
• Allows for focus on specific projects, products, or customers.
Disadvantages• Confusion of
command.• Power struggles and
conflicts.• Lost time in
coordinating.• Excess overhead for
managing matrix functions.
G.Dessler, 2003
April 18, 2006 LIS580- Spring 2006 37
Departmentalization in Practice: A Hybrid
• Why mix the types of departmentalization?– Hierarchical considerations
• The relationship of top level departments to their subsidiary departments.
– Efficiency• Product, customer, and territorial departments tend to
result in duplicate sales, manufacturing, and other functional departments.
– Common sense• Departmentalizing is still more an art than a science.
G.Dessler, 2003
April 18, 2006 LIS580- Spring 2006 38
FIGURE 6–8
The New Summer Tour Organization
G.Dessler, 2003
April 18, 2006 LIS580- Spring 2006 39
Network-based Organizations
• Organizational Network– A system of interconnected or cooperating
individuals.
• Informal Networks– Communication pathways and relationships
between individuals in an organization that do not necessarily conform to the formal chain of command and communication networks of an organization.
G.Dessler, 2003
April 18, 2006 LIS580- Spring 2006 40
Network-based Organizations (cont’d)
• Formal Organizational Network– A recognized group of managers or other
employees assembled by the CEO and the other senior executive team, drawn from across the company’s functions, business units, geography, and levels.
• Electronic Organizational Networks– Networking through technology-supported
devices such as e-mail, video-conferencing, and collaborative computing software like Lotus Notes.
G.Dessler, 2003
April 18, 2006 LIS580- Spring 2006 41
Formal vs. Social Structure
Cross, Rob. A bird's-eye view: Using social network analysis to improve knowledge creation and sharing. IBM Executive strategy report 04Jun2002 http://www-1.ibm.com/services/us/index.wss/xs/imc/a1001262
Rarely do the communication patterns match the formal structure
April 18, 2006 LIS580- Spring 2006 42
Network-based Organizations (cont’d)
• Team-Based Organizations– Team
• A group of people committed to a common purpose, set of performance goals, and approach for which they hold themselves mutually accountable.
• Horizontal Corporations– A structure that is organized around customer-
oriented processes performed by multidisciplinary cross-functional teams rather than by formal functional departments.
G.Dessler, 2003
April 18, 2006 LIS580- Spring 2006 43
FIGURE 6–11
The Horizontal Corporation
Source: John A. Byrne, “The Horizontal Corporation,” Business Week, 20 December 1993, p. 80. G.Dessler, 2003
April 18, 2006 LIS580- Spring 2006 44
Checklist 6.2Building Horizontal Organizations Make responsibilities overlap. Design
individual jobs as broadly as possible, and keep the number of job titles to a minimum.
Base rewards on unit performance to emphasize the importance of working together.
Change the physical layout to promote collective responsibility. Let people see each other’s work.
Redesign work procedures, provide computer terminals, use the e-mail network, and make sure managers are available.
G.Dessler, 2003
April 18, 2006 LIS580- Spring 2006 45
FIGURE 6–12
How to Create a Horizontal Corporation
Source: Source: Reprinted from the December 20, 1993, issue of Business Week by special permission. Copyright © 1993 by the McGraw-Hill Companies, Inc. G.Dessler, 2003
April 18, 2006 LIS580- Spring 2006 46
Other Organization Types
• Federal Organization– An organization in which power is distributed
between a central unit and a number of constituents, but the central unit’s authority is intentionally limited.
• Virtual Organization– A temporary network of independent companies
that use information technology to share skills, reduce costs, and provide access to one another’s markets.
– Its success depends on each of the individual firms’ responsibility and self-interest to accomplish the network’s purpose.
G.Dessler, 2003
April 18, 2006 LIS580- Spring 2006 47
G.Dessler, 2003
Effect of Technology on Structure
April 18, 2006 LIS580- Spring 2006 48
When Organizing:Always Keep Your Goals in Mind
• Business environments are in a constant state of change.
• An organization’s strategy must be adapted to changes in its competitive environment.
• Structure follows strategy.– Strategic change creates the need for restructuring
the organization to acquire new and different knowledge, skills and abilities.
G.Dessler, 2003
April 18, 2006 LIS580- Spring 2006 49
Checklist 7.1What Determines Organization Structure
Environment. Fast-changing environments require organic structures; slowly changing environments favor mechanistic structures.
Technology. Unit and continuous production processes favor organic structures. Mass production processes favor mechanistic structures.
Goals. Ask, “What are the main goals we want to achieve via this organization?”
Pros and cons. Each approach to departmentalization has pros and cons.
Logic and common sense.
G.Dessler, 2003
April 18, 2006 LIS580- Spring 2006 50
What Are Learning Organizations?
1. Adopt an organic, networked organizational form.
2. Encourage their employees to learn and to confront their assumptions
3. Have employees who share a common vision4. Have the capacity
• to adapt to unforeseen situations• to learn from their own experiences• to shift their shared mindsets• to change more quickly, broadly, and deeply than
ever before.
G.Dessler, 2003
April 18, 2006 LIS580- Spring 2006 51
Organizational Learning as aDynamic Process
Crossan, Lane, & White (1999)
April 18, 2006 LIS580- Spring 2006 52
Abolishing Organizational Boundaries
• Boundaryless Organization– An organization in which management
strips away the “walls” which typically separate organizational functions and hierarchical levels, through
the widespread use of teams, networks, and similar structural mechanisms.
G.Dessler, 2003
April 18, 2006 LIS580- Spring 2006 53
FIGURE 0–3
The Four Organizational Boundaries That Matter
Source: Reprinted by permission of Harvard Business Review. “The Four Organizational Boundaries that Matter,” from “The New Boundaries of the Boundaryless Company,” by Larry Hirschorn and Thomas Gilmore, May–June 1992. Copyright © 1992 by the President and Fellows of Harvard College. All rights reserved.
G.Dessler, 2003
April 18, 2006 LIS580- Spring 2006 54
Managing Learning Organizations
• How to Streamline Organizational Decision Making– Downsize– Reduce management layers– Establish miniunits
• How to Cultivate Employees’ Personal Mastery– Provide continuous learning opportunities.– Foster inquiry and dialogue.– Establish mechanisms to ensure that the
organization is continuously aware of and can interact with its environment.
G.Dessler, 2003
April 18, 2006 LIS580- Spring 2006 55
Challenges in Organization
• Merging separate organizations with different structures
• Changing an existing organization to meet external or internal changes in conditions
• Conflicts between departments or groups• Interdependence between organizational units• Centralization vs. decentralization
April 18, 2006 LIS580- Spring 2006 56
FIGURE 7–5
Part of the “Independent Integrator” Challenge Facing the Homeland Security Director
Source: Alison Mitchell, “Disputes Erupt over Ridges Needs for His Job,” New York Times, 9 November 2001, p. B7. G.Dessler, 2003
April 18, 2006 LIS580- Spring 2006 57
Methods for Achieving Coordination
• Mutual Adjustment– Achieving coordination
through face-to-face interpersonal interaction.
• Use Rules and Procedures
• Standardize• Exercise Direct
Supervision: Use the Chain of Command
• Divisionalize
• Appoint Staff Assistants
• Appoint Liaisons• Appoint Committees• Organize Independent
Integrators– An individual or a group
that coordinates the activities of several interdependent departments, but is independent of them.
G.Dessler, 2003
April 18, 2006 LIS580- Spring 2006 58
Managing Organizational Conflict
• Line–Staff Conflict– Disagreements between a line manager
and the staff manager who is giving him or her advice.
• How to Organize to Reduce Interunit Conflict– Appeal to power and the chain of command– Reduce interdependence– Exchange personnel
G.Dessler, 2003
April 18, 2006 LIS580- Spring 2006 59
FIGURE 7–6
Types of Interdependence
Source: Based on James Thompson, Organizations in Action (New York: McGraw-Hill, 1967), Chapter 2.
G.Dessler, 2003
April 18, 2006 LIS580- Spring 2006 60
Centralization and Decentralization
• Centralization– A function of how much decision-making
authority is pushed down to lower levels in an organization; the more centralized an organization, the higher the level at which decisions are made
• Decentralization– The pushing down of decision-making
authority to the lowest levels of an organization
Prentice Hall, 2002
April 18, 2006 LIS580- Spring 2006 61
Decentralize?• Decentralized Organization
– Organizational authority for most departmental decisions is delegated to the department heads.
– Control for major companywide decisions is maintained at the headquarters office.
• Decentralization Rules:– Decentralize decisions that affect only one division
or area and that would take a long time for upper management to make.
– Centralize decisions that could adversely affect the entire firm and that upper management can fairly quickly and easily.
G.Dessler, 2003
April 18, 2006 LIS580- Spring 2006 62
Problems With Size
• “There is a fairly common perception that large organizations tend to behave much less “intelligently” than their size suggests. They often lose the decisiveness seen in small groups and may seem "stupid" to people within them who work with ideas and knowledge.”
• “There appears to be a fundamental upper limit on the average per capita decision rate that an organization can sustain, depending inversely on the organization's entropy. If the limit is broached, impaired productivity among knowledge managers may result and large organizations may be disadvantaged when performing knowledge-intensive tasks that require efficient use of intellectual capital.”
Janow, R. Shannon “Entropy and Productivity: Why Big Organizations Can Seem Stupid”. Analytic Solutions Group, LLC. 2/28/2004 http://physics.njit.edu/~janow/Paper20040228njit.pdf
April 18, 2006 LIS580- Spring 2006 63
Hammer vs. Deming
• What tradeoffs did Deming and Hammer make in their approaches to designing organizations?
• Did you notice who was given power in Deming’s approach vs. Hammer?
• What is driving NYNEX to make changes in their organization structure?
• What component of the organization is hardest to change?
• Do you see the same issues arising in the “War at Work” article?
April 18, 2006 LIS580- Spring 2006 64
Next Time
• Managing People– Read Chapter 9 (not 8!!) and the articles
• Discussion group questions:– How can relations be improved between Stanley
and the reference librarians?– How, without simply complaining about Stanley,
can you persuade Joanna to listen to the reference department’s perspective?
– Who defines the responsibilities of each department, and how can you, as an interested party, help accomplish this?
top related