This document is posted to help you gain knowledge. Please leave a comment to let me know what you think about it! Share it to your friends and learn new things together.
After studying this chapter, you should be able to:– Identify the basic nature of organization design.– Identify the two basic universal perspectives on organization
design.– Identify and explain several situational influences on
organization design.– Discuss how an organization’s strategy and its design are
interrelated.– Describe the basic forms of organization design that
characterize many organizations.– Describe emerging issues in organization design.
After studying this chapter, you should be able to:– Identify the basic nature of organization design.– Identify the two basic universal perspectives on organization
design.– Identify and explain several situational influences on
organization design.– Discuss how an organization’s strategy and its design are
interrelated.– Describe the basic forms of organization design that
characterize many organizations.– Describe emerging issues in organization design.
Basic Forms of Organization Basic Forms of Organization DesignDesign
• Functional or U-form (Unitary) Design– Organizational members and units are grouped into
functional departments such as marketing and production.– Coordination is required across all departments.– Design approach resembles functional departmentalization in
its advantages and disadvantages.
• Functional or U-form (Unitary) Design– Organizational members and units are grouped into
functional departments such as marketing and production.– Coordination is required across all departments.– Design approach resembles functional departmentalization in
Issues in InternationalIssues in InternationalOrganization DesignOrganization Design
• The trend toward internationalization of business• How to design a firm to deal most effectively with
international forces and to compete in global markets:– Create an international division?– Establish an international operating group?– Make international operations an autonomous subunit?
• The trend toward internationalization of business• How to design a firm to deal most effectively with
international forces and to compete in global markets:– Create an international division?– Establish an international operating group?– Make international operations an autonomous subunit?
Analysts such as industrial engineers, accountants, planners, and human resource managers
– Operating core
Workers who actually carry out the organization’s tasks
– Middle line
Middle and lower-level management
– Support staff
Units that provide support to the organization outside of the operating workflow (for example, legal counsel, executive dining room staff, and consultants.)
• Key Part of Organization
– Strategic apex
Top management and its support staff
– Technostructure
Analysts such as industrial engineers, accountants, planners, and human resource managers
– Operating core
Workers who actually carry out the organization’s tasks
– Middle line
Middle and lower-level management
– Support staff
Units that provide support to the organization outside of the operating workflow (for example, legal counsel, executive dining room staff, and consultants.)
The simple structure uses direct supervision as its primary
coordinating mechanism, has as its most important part its strategic apex, and employs vertical and horizontal centralization. Relatively small corporations controlled by aggressive entrepreneurs, new government departments, and medium-sized retail stores are all likely to exhibit a simple structure. These organizations tend to be relatively young. The CEO (often the owner) retains much of the decision-making power. The organization is relatively flat and does not emphasize specialization. Many smaller U-form organizations are structured in this fashion. Trilogy Software would be an example of a firm using this approach.
The Simple Structure
The simple structure uses direct supervision as its primary
coordinating mechanism, has as its most important part its strategic apex, and employs vertical and horizontal centralization. Relatively small corporations controlled by aggressive entrepreneurs, new government departments, and medium-sized retail stores are all likely to exhibit a simple structure. These organizations tend to be relatively young. The CEO (often the owner) retains much of the decision-making power. The organization is relatively flat and does not emphasize specialization. Many smaller U-form organizations are structured in this fashion. Trilogy Software would be an example of a firm using this approach.
The machine bureaucracy uses standardization of work processes as
its prime coordinating mechanism; the technostructure is its most important part; and limited horizontal decentralization is established. The machine bureaucracy is quite similar to Burns and Stalker’s mechanistic design discussed in Chapter 12 of Griffin’s Management, Seventh Edition. Examples include McDonald’s and most large branches of the U.S. government. This kind of organization is generally mature in age, and its environment is usually stable and predictable. A high level of task specialization and a rigid pattern of authority are also typical. Spans of management are likely to be narrow, and the organization is usually tall. Large U-form organizations are also likely to fall into this category.
The Machine Bureaucracy
The machine bureaucracy uses standardization of work processes as
its prime coordinating mechanism; the technostructure is its most important part; and limited horizontal decentralization is established. The machine bureaucracy is quite similar to Burns and Stalker’s mechanistic design discussed in Chapter 12 of Griffin’s Management, Seventh Edition. Examples include McDonald’s and most large branches of the U.S. government. This kind of organization is generally mature in age, and its environment is usually stable and predictable. A high level of task specialization and a rigid pattern of authority are also typical. Spans of management are likely to be narrow, and the organization is usually tall. Large U-form organizations are also likely to fall into this category.
The third form of organization design suggested by Mintzberg is the
professional bureaucracy. Examples of this form of organization include universities, general hospitals, and public accounting firms. The professional bureaucracy uses standardization of skills as its prime coordinating mechanism, has the operating core as its most important part, and practices both vertical and horizontal decentralization. It has relatively few middle managers. Further, like some staff managers, its members tend to identify more with their professions than with the organization. Coordination problems are common.
The Professional Bureaucracy
The third form of organization design suggested by Mintzberg is the
professional bureaucracy. Examples of this form of organization include universities, general hospitals, and public accounting firms. The professional bureaucracy uses standardization of skills as its prime coordinating mechanism, has the operating core as its most important part, and practices both vertical and horizontal decentralization. It has relatively few middle managers. Further, like some staff managers, its members tend to identify more with their professions than with the organization. Coordination problems are common.
The divisionalized form, Mintzberg’s fourth design, exhibits
standardization of output as its prime coordinating mechanism, the middle line as its most important part, and limited vertical decentralization. This design is the same as both the H-form and the M-form described earlier. Limited and Disney are illustrative of this approach. Power is generally decentralized down to middle management—but no further. Hence each division itself is relatively centralized and tends to structure itself as a machine bureaucracy. As might be expected, the primary reason for an organization to adopt this kind of design is market diversity.
The Divisionalized Form
The divisionalized form, Mintzberg’s fourth design, exhibits
standardization of output as its prime coordinating mechanism, the middle line as its most important part, and limited vertical decentralization. This design is the same as both the H-form and the M-form described earlier. Limited and Disney are illustrative of this approach. Power is generally decentralized down to middle management—but no further. Hence each division itself is relatively centralized and tends to structure itself as a machine bureaucracy. As might be expected, the primary reason for an organization to adopt this kind of design is market diversity.
The adhocracy uses mutual adjustment as a means of coordination,
has at its most important part the support staff, and maintains selective patterns of decentralization. Most organizations that use a fully-developed matrix design are adhocracies. An adhocracy avoids specialization, formality, and unit of command. Even the term itself, derived from “ad hoc,” suggests a lack of formality. Sun Microsystems is an excellent example of an adhocracy.
The Adhocracy
The adhocracy uses mutual adjustment as a means of coordination,
has at its most important part the support staff, and maintains selective patterns of decentralization. Most organizations that use a fully-developed matrix design are adhocracies. An adhocracy avoids specialization, formality, and unit of command. Even the term itself, derived from “ad hoc,” suggests a lack of formality. Sun Microsystems is an excellent example of an adhocracy.