Principles of Management Chapter 10

MANAGING ORGANIZATIONAL STRUCTURE AND

CULTURE

Presenter: Aira May T. Terrible

Organizational Structure■ An organizational structure defines how activities such as

task allocation, coordination and supervision are directed toward the achievement of organizational aims. It can also be considered as the viewing glass or perspective through which individuals see their organization and its environment.

Footnote: https://en.wikipedia.org/wiki/Organizational_structure

Types of Organizational Structures

Image Courtesy: 4.bp.blogspot.com/-0ZYemAhPloA/T47ig8Dbc4I/AAAAAAAAHoc/q1SBYoMF5Qo/s1600/

Formal+and+informal+organizations.png

Footnote: http://www.yourarticlelibrary.com/organization/formal-and-informal-organization-features-advantages-and-disadvantages/8654/

Types of Organizational StructuresFormal: The official structure of the organization, which is normally displayed on an organizational chart, and which denotes the hierarchical relationships between members of the firm. It is beyond the scope of this site to offer a discussion on the various formal organizational structures.

Advantages1. Systematic Working2. Achievement of Organizational Objectives3. No Overlapping of Work4. Co-ordination5. Creation of Chain of Command6. More Emphasis on Work

Disadvantages1. Delay in Action2. Ignores Social Needs of Employees3. Emphasis on Work Only

Footnote: http://www.yourarticlelibrary.com/organization/formal-and-informal-organization-features-advantages-and-disadvantages/8654/

■ Informal: The interlocking social structure that governs how people work together in practice. It is the aggregate of behaviors, interactions, norms, and personal/professional connections through which work gets done and relationships are built among people.

Advantages 1. Fast Communication 2. Fulfills Social Needs 3. Correct Feedback

Disadvantages 1. Spread Rumors 2. No Systematic Working 3. May Bring Negative Results 4. More Emphasis to Individual Interest

Types of Organizational Structures

Footnote: http://www.yourarticlelibrary.com/organization/formal-and-informal-organization-features-advantages-and-disadvantages/8654/

Designing Organizational Structure■Organizing

– The process by which managers establish working relationships among employees to achieve goals.

Footnote: https://en.Wikipedia.org/wiki

Factors Affecting Organizational Structure

Designing Organizational Structure■Organizational design

– The process by which managers create a specific type of organizational structure and culture so that a company can operate in the most efficient and effective way

Footnote: https://en.Wikipedia.org/wiki

The Job Characteristics Model

Grouping Jobs into Functions

■Functional Structure– An organizational structure composed of all

the departments that an organization requires to produce its goods or services.

Footnote: https://en.Wikipedia.org/wiki

Allocating Authority

■Authority– power to hold people accountable for their

actions and to make decisions concerning the use of organizational resources.

Footnote: https://en.Wikipedia.org/wiki

Flat Organizations

Tall Organizations

Organizational Culture

■ A system of shared assumptions, values, and beliefs, which governs how people behave in organizations. These shared values have a strong influence on the people in the organization and dictate how they dress, act, and perform their jobs.

Footnote: https://en.Wikipedia.org/wiki/Organizational_culture

Sources of an Organization’s Culture

7 Primary Characteristics of Organizational Culture1. Innovation and Risk Taking

The degree to which employees are encouraged to be innovative and take risks. 2. Attention to Detail

The degree to which employees are expected to exhibit precision, analysis, and attention to detail. 3. Outcome Orientation

The degree to which management focuses on results or outcomes rather than on the techniques and processes used to achieve those outcomes. 4. People Orientation

The degree to which management decisions take into consideration the effect of outcomes on people within the organization.

5. Team OrientationThe degree to which work activities are organized around teams

rather than individuals.6. Aggressiveness

The degree to which people are aggressive and competitive rather than easy- going. 7. Stability

The degree to which organizational activities emphasize maintaining the status quo in contrast to growth.

7 Primary Characteristics of Organizational Culture

Organizational Culture versus Job Satisfaction

1. Organizational culture describes how employees perceive the characteristics of an organization’s culture, not whether or not they like those characteristics. It is a descriptive term.

2. Job satisfaction seeks to measure affective responses to the work environment: it is concerned with how employees feel about the organization. It is an evaluative term.

Layers of Organizational Culture1. Dominant Culture

This is the overall organizational culture as expressed by the core values held by the majority of the organization's members. When people are asked to portray an organization's culture, they normally describe the dominant culture: a macro view that gives an organization its distinct personality.2. Subcultures

These subsets of the overall culture tend to develop in larger organizations to reflect the common problems, situations, or experiences that are unique to members of certain departments or geographical areas. The subculture retains the core values of the dominant culture but modifies them to reflect their own distinct situation.

Strong versus Weak Cultures

1. Strong CultureThis exists when an organization's core values are both intensely

held and widely shared. The greater the number of members who accept the core values and the greater their commitment to these values, the stronger the culture is. A strong culture creates an internal climate of high behavioral control and builds cohesiveness, loyalty, and organizational commitment.2. Weak Culture

In this case, the organization's core values are not widely held or intensely felt. These cultures have little impact on member behavior.

Functions and Liabilities of Organizational Culture1. The Functions of Organizational Culture.

a.Defines Boundariesb.Identity c.Commitmentd.Social Stabilitye.Control Mechanism

2. Culture as a Liabilityf. Barrier to Changeg.Barrier to Diversityh.Barrier to Acquisitions and Mergers

CREATING, SUSTAINING & TRANSMITTING CULTURE

■How a culture begins– Founders

■Keeping culture alive– Selection practices, Top management,

Socialization■How employees learn culture

– Stories, Rituals, Languange, Material Symbols

Footnote: http://www.slideshare.net/arianking/managing-organizational-culture-presentation

■Time and conditions Foreign competition Changes in government regulations Rapid economic shifts New technologies

Factors that support changes in cultures

Footnote: http://www.slideshare.net/arianking/managing-organizational-culture-presentation

Factors that are against changes in culture:■ Cultures are entrenched and resistant to change efforts.■ Employees become committed to them■ Written statements about mission and philosophy■ Design of physical spaces & buildings■ Dominant leadership pattern■ Past selection practices■ Organization’s formal structure■ Popular stories about key peopleand events

Footnote: http://www.slideshare.net/arianking/managing-organizational-culture-presentation

Culture Creation Model

THANK YOU!