管理学第五章概要

Basic Organization Designs

Where We Are

Organization design means to develop or change (create) the organization’s structure:

?How specialized job be allocated

?Rules to guide employees behavior

?At what level decisions to be made

It is the top manager’s main concern, while others managers ... Chapter guide

We will discuss in this chapter

?6 basic structural elements

?4 contingency variables

?5 types of designs

?10 characteristics of culture

6 Basic Elements of Structure

?By definition, an organization is a systematic arrangement of

people to accomplish some specific purpose, where the

systematic arrangement is what we call structure here.

?How can you say 2 organizations are different ---- the difference between organizations in term of their structure?

?The bases of organization design formulated in 1900s, most of

them still apply

Work Specialization

?Work specialization, or Division of labor describes the degree

to which organizational tasks are subdivided into separate jobs.

In 1700s Adam Smith found dividing job into small pieces can increase the productivity. (Wealth of Nations). An entire job is not done by one person. Instead, it is divided into discrete steps, each one completed by a different person. In his pin factory story: ?1-20 per day each worker when work independently,

?48000 per day when 10 workers work together but each

only do a part of 200---5000 times!

?Why can division of labor increase productivity?

Individual: skill and training, tools and special equipment, focus, ….

Group: use labor skill

Ex: PC assembly line

?The changes of people’s belief and attitude towards the

economies of work specialization:

Early proponents believed that work specialization could lead to indefinitely increasing productivity. Since specialization was not widely practiced at the turn of the twentieth century, their belief was reasonable.

By the late 1940s, work specialization enabled manufacturing firms to make the most effective use of their employees’ skills. So, managers believed that division of labor offered an unending source of increased productivity.

By the 1960s, however, the human diseconomies resulting from work specialization began to offset the economic advantages. Managers today realize that while division of labor is appropriate for some jobs, productivity in other jobs can be increased through enlarging, not narrowing, job activities. ---- Job enriching trend Chain of Command

?Chain of command: the route of orders go through in the

organization ---- the mechanism make the organization a whole ?Chain of Command Principle: No person should report to more than one boss

Past: a logical concept to simple structure organizations

Now: sound for most organizations/many cases but too strict adherence may lead to inflexibility

Span of Control

?Span of control: the number of subordinates a manager directly

supervise

?Small spans of control helps managers maintain close control;

but, there are several drawbacks:

they require more managers and are more costly, they retard

vertical communication, and they foster tight controls and

limited employee autonomy.

Wide spans of control reduce costs, cut overhead, expedite

decision making, increase flexibility, empower employees,

and promote customer contact.

?Narrow -- > taller: All things being equal, the broader the span

of control, the more efficient the organization

?How many employees can a manager efficiently and effectively direct? --- a question draw a lot of attention of researches for

long time

Magic number 6 ? GE: 10~12, Now: It depends…

Span of Control determinants

?similarity and complexity of employee tasks

?the proximity of employees

?the presence of standardized procedures

?the capabilities of the information management system

?the strength of the firm’s value system

?the preferred style of management.

Authority and Responsibility

?Authority refers to the rights inherent in a managerial position,

such as giving orders and expecting that the orders will be

obeyed. Authority, therefore, is related to one’s position within an organization and ignores the personal characteristics of the

individual manager. When managers delegate authority, they

must allocate commensurate responsibility to perform.

?Stanley Milgram (Yale U )Experiment: How far [people follow the commands they admit Line vs. Staff Authority

Early management writers distinguished between two forms of authority: line and staff.

?Line: direct supervisory, order/report and responsibility,

employer vs employees, chain of command

?Staff: support, assistant, advise, especially in technical area, “on behalf”

Early management scholars assumed that the authority and rights inherent in one’s formal position were the sole source of influence; so, managers were all powerful. But, organizations were simpler then, staff was less important, and management was only minimally dependent on technical specialists. Modern theorists now realize that nonmanagers can have power and that power is not perfectly correlated with one’s job.

Define power and authority

?Power: an individual’s capability to influence decisions/other

people’s behavior.

?Authority, therefore, is a part of the larger concept of power, It goes with the job.

Comparison of power and authority

?Authority goes with job, power come out of individual

?authority is a two-dimensional concept: that is, the higher one is in an organization, the more authority he or she has. power is a three-dimensional concept: that is, it includes not only the

functional and hierarchical dimensions, but also a third

dimension called centrality or one’s distance from t he center --- the core of power.

?Example of core of power

?administrative assistance/secretary: gate keeper to access boss/passing information ----structure related

?personal friends, scare/important skill: 20 years experience

vs. new graduates, seniority---- not structure related ?The cone analogy acknowledges two facts:

?the higher one moves in an organization, the closer he or she is to the power core; and

?even those without authority can wield power because one can move horizontally inward toward the power core

without moving up.

The core of power can be described or further analyzed by the concepts of sources of power: coercive, reward, legitimate, expert, and referent. These five sources are presented in the next slide. Sources of power

John French and Bertram Raven:

?Coercive power is based on fear and threat

?Reward power is based on the ability to distribute something

that others value. (Punishment = negative rewards)

?Legitimate power i s based on one’s position in the formal

hierarchy. (“authority is legitimated power”)

?Expert power is based on one’s expertise, special skill, or

knowledge.

?Referent power is based on identification with a person who has desirable resources or personal traits.

Can you provide an example of each power you see in y our life ……Management workshop: developing your power base skill ?Similar Chinese sayings

?Respect others ----Treat others the way you would like to be

treated：己所不欲勿施于人

?Build power relationships ---- bird of feather flock together：物以类聚人以群分

?Develop associations ---- there is strength in numbers：拧起的绳不易断

?Control information --- knowledge is power：知情就是权力

?Gain seniority: 多年的媳妇熬成婆

?Build power in stages：千里之行始于足下

Degree of Centralization

?Degree of centralization/decentralization refers to place the

authority ---- where should a particular decision should be

made)

?The term centralization means the decision making is

concentrated at a single point in the organization. The term

decentralization means that significant input is provided by

lower-level personnel.

A general present trend now is to pushdown --- push decision points down make them close to the problems, but at the same time brings the risk of lost control, what we called empowerment. Movement of Decentralization

Traditional organizations were structured in a pyramid, with power and authority centralized at the top. In order to respond to the dynamics of the contemporary marketplace, organizations today are more decentralized to solve problems more quickly and to obtain increased employee input and commitment to organizational goals.

5 Ways to Departmentalize

?It is hard to think to put several thousands people in one

group

?Department refers to a group of specialists under the direction of a manager, Departmentalization is to group activities, thus

people and recourses.

?Work specialization breaks the job, departmentization put

pieces of job together in other ways way

?The department is based on work functions, the product or

service, the target customer or client, the geographic territory,

or the production process.

?Functional: by function performed

?Product: by product produced/served provide

?Customer: by common customers

?Geography: by territory

?Process: by work plow

Product vs. Customer or Geographic

Tasks can be grouped according to a specific product, thus placing all activities related to the product under one manager. Jobs may be grouped according to the type of customer served by the organization. If an organization’s customers are geographically dispersed, it can group jobs based on geography (territory). Functional vs. Process

Activities can also e grouped according to function to pursue economies of scale by placing employees with shared skills and knowledge into work-groups. Since each process requires different skills, process departmentalization allows homogenous activities to be categorized.

Contemporary View on Departmentalization

?Most of the traditional departmental groupings are in use

?More use of interdepartmental teams.

?Intense competition force the management pay more attention

on the needs of customers and responding to them. Organizational Forms: 2 generic structure

?Mechanic organizations: characterized by high specialization, extensive departmentalization, narrow spans of control, high

formalization, downward communication, high centralization, and little participation by low-level members in decision

making.

Jobs are standardized, simple, and routine, and strict

adherence to the chain of command. In its ideal form, the

mechanistic organization is an “efficiency machine,” well

lubricated by rules, regulations, and routines.

?Organic organization: characterized by a flat structure,

flexibility, use of cross-functional teams, adaptability,

comprehensive information networking, and decentralization.

Jobs are not standardized, and employees are

well-trained and empowered to make job-related decisions. The net effect is that workers need a minimal degree of formal rules and little direct supervision.

With the two models in mind, we are now going to address the question why are some organizations structured along more mechanistic lines while others lean toward organic characteristics?

4 Determinants of structure

?Strategy

Structure follows the strategy:After studying nearly 100 large companies, Alfred Chandler concluded that changes in

corporate strategy foster changes in an organization’s

structure.

To exemplify this structure-strategy relationship, consider that organizations pursuing a differentiation strategy must

innovate to survive; so an organic structure complements this

strategy due to its flexibility and adaptability. A cost-leadership strategy, on the other hand, seeks stability and efficiency, a

mechanistic structure would be best for this type of strategy.

?Size

While the size of an organization significantly influences its structure, the relationship is non-linear.

Large organizations (2,000+ employees) have more specialization, departmentalization, vertical levels, rules, and

regulations than do smaller organizations. Size affects the

organization at a decreasing rate and becomes less important

as an organization expands.

?Technology

The British scholar, Joan Woodward, studied small manufacturing firms in England and reached two conclusions:

(1) distinct relationships exist between a firm’s technology

classification and its structure; (2) organizational effectiveness is contingent upon “fit” between technology and structure.

In Woodward study, the technology have been classified according to the degree of routineness.

?Environment

Organic organizations are most effective in dynamic, uncertain environments. Mechanistic organizations are

ill-equipped to function in such environments and are most

effective in stable environments. To compete in the global

village, many managers have redesigned their organizations to make them more organic.

Organization design application: 5 common structure

Placing organizations into only two categories ---- mechanistic and organic ---- does not capture the nuances and realities of modern organizations. Now we are gonging to present a number of practical organization design options and will start with the simple structure ---- the form that almost all new organizations begin with and that continues to be used by managers of small businesses.

The business historian Alfred Chandler in his study he found that organizations usually begin with a single product or line. The simplicity of the strategy requires only a simple form of structure. As organizations grow, their strategies become more elaborate and ambitious.

Simple Structure

?Simple structure has several characteristics:

?low degree of departmentalization,

?wide spans of control, centralized authority,

?little formalization, and

?flat structure.

?Its main advantages

?low cost,

?clear accountability

?flexible

?The major disadvantage is overload on top person, it is risky if

everything depends on one person

?Not an elaborate structure, often what a young firm starts

As firms growing, more formal structural elements introduced make them appear similar to majority of organizations. It is called a bureaucracy paradigm of business structures.

The Bureaucracy

?Major characteristics

?Specialize operating tasks ---- high specialization

?Formalize rules and regulations ----

?Centralize authority ---- high centralization

?Narrow spans of control

?Chain of command principle ---- downward communication ?Functional department ---- extensive departmentalization ?Main advantages

?Efficient to carry out standardized activities

?Rules and regulations allow bureaucracies to substitute less-talented (less-costly) managers for creative,

experienced decision makers

?This structure does have several drawbacks

?Unit goals may override the goals of the organization.

?Bureaucrats tend to resist change and avoid outcome accountability

?Two basic forms

?Functional: grouping similar and related occupational specialist together

?Divisional: form autonomous self-contained unit ---- customer, product, or geographic

Matrix Structure

The structure assigns functional specialists to interdisciplinary teams that are supervised by project leaders. It combines product departmentalization and functional departmentalization. It can be seen also as a combination of functional and divisional structure. Almost all large organizations now use the structure at various degrees.

Good and bad side of Matrix Structure

?Strong points of the matrix

?Facilitate coordination between multiple projects that are complex and interdependent

?Allocates specialists of the organization have efficiently

?Weaknesses of the matrix

?Breaks the unity-of-command concept

?Create confusion, foster power struggles, and increase employee stress.

the problem main come from the fact an employee may have two or more bosses. And the structure has got mixed success Team-Based structure

Team is a task focused, cross functional, self managed group. A team structure (“Project driven” and “informal”)

?breaks down departmental barriers

?flattens the organization

?decentralizes decision making

?empowers employees

?promotes accountability

?requires employees to be generalists as well as specialists

?Team vs. work group: a tam engaged in collective work that

requires joint effort and generate

? a positive synergy

?share responsibility

?complementary skill

?no rigid chain of command

In smaller companies, the team structure can define the entire organization. More often, especially in larger organizations, the team structure complements what is typically a bureaucracy. Such an arrangement allows the organization to achieve the efficiency of standardization while gaining flexibility.

Boundaryless Organization

?“boundary” include intra-organizational in inter-organizational.

Many different names for the innovation of “the new type of

organizations” (inter and intra organizational relationships):

Barrier free organization, Network organization, Virtual

cooperation, Learning organization

?Typical method to break down the internal boundaries:

minimize the chain of command, limit spans of control, replace

departments with empowered teams, cross-hierarchical teams,

participative decision making, 360 degree performance

appraisals dismantle vertical boundaries, cross-functional teams, project-driven activities, lateral transfers, job rotation minimize

horizontal boundaries

Driving Forces of Boundaryless

?Changing environment make it necessary: globalization and

changing business environment

?Modern IT Technology make it possible: computer and network Learning Organization

?Learning organization is an organization that has developed

the capacity to continuously adapt and change because all

members take an active role in identifying and resolving work

related issues.

Organization Iceberg

Like an iceberg, a lot of the behavior within an organization is not visible to the naked eye. When we look at organizations, for instance, we see their formal aspects: strategies, objectives, policies and procedures, structure, technology, formal authority, and chains of command. But, just under the surface lie informal elements that managers must understand. In terms of the 3 elements of the organization ---- purpose, structure and people, 2 could be above the surface and visible but the other one in most cases are under the water, difficult to see by a naked eye.

Organizational Behavior

?organizational behavior (OB) is concerned specifically with

the actions/behavior of people at work. ---- individual and in

group.(the general study of human behavior is Psychology)

?The goals of OB are to explain and predict behavior

?Why do this rather than that?

?How will be the reaction to certain managerial actions

By doing so to help solve many management concern like

productivity, absenteeism, turnover, job satisfactions.

Individual Behavior

?Attitude: How people feel about things, often expressed in the

evaluative statement …“Attitude is every thing”

People generally seek consistency among their attitudes and between their attitudes and their behavior ---- to show they are rational and consistent

?Personality: the difference between people

Quiet vs. loud

passive vs. aggressive

extroverted vs. introverted

ambitious, loyal, sociable, tense …

Example of present application of EI/EQ in management: a

survey of HR managers 40% says very important

?Perception: the process of organizing and interpreting sensory

impressions in order to give meaning to the environment ---

how people look at (understand/explain) the world

?Learning: how people change their behavior (not just reading

books/memorize knowledge)

?Operant conditioning theory: behavior is the function its consequences

?Social learning theor y: new behavior comes from

following the model

?How to shape or change the behavior: rewards/punishments, Emotional Intelligence

Emotional intelligence (EI) is an assortment of skills, capabilities, and competencies that influence a person’s ability to cope with environmental demands and pressures. Studies suggest that EI may play an important role in job performance.

?Self-awareness ---- being aware of what you are feeling.

?Self-management ---- the ability to manage your own emotions and impulses.

?Self-motivation ---- the ability to persist in the face of setbacks and failures.

?Empathy ---- the ability to sense how others are feeling.

?Social skills ---- the ability to handle the emotions of others. Define Group

?A group is two or more interacting and interdependent

individuals who come together to achieve particular objectives.

Individuals act differently in groups than they do when they are alone. To understand organizational behavior, therefore, we

must understand groups.

?Formal groups are established by the organization. These groups have designated assignments and established tasks. Behaviors

are stipulated by and directed toward organizational goals.

?Informal groups are of a social nature. These groups are natural formations that appear in the work environment in response to

the need for social contact. Informal groups tend to form around friendships and common interests.

Two key concepts on group

?Role refers a set of expected behavior patterns that are attributed to occupying a given position in a social unit. Research on roles in groups has concluded the following:

?People play multiple roles.

?People learn roles from the stimuli around them.

?People shift roles rapidly according to situational demands.

?People experience conflict when one role contradicts another.

?Norms refers to acceptable standards of group behavior that are shared by the group’s members.

?When accepted by the group, norms influence the group’s behavior with a minimum of external controls.

?Groups will exert pressure upon members to bring their behavior into conformity with the standards of the group.

?Study revealed the following: people desire to be one of the group and to avoid being different, so they feel pressure to

conform

Why People Join Groups

?Security reflects a strength in numbers.

?Status indicates a prestige that comes from belonging to a

particular group.

?Self-esteem conveys people’s feelings of self worth.

?Affiliation with groups can fulfill one’s social needs th rough

social interaction.

?Groups represent the power to achieve actions that are not

possible for individuals and they offer protection from the

unreasonable demands of others.

?People may join a group for goal achievement when it takes

more than one pers on’s talents, skills, and abilities to do the job. Define Organizational Culture

?The term organization culture refers to a system of meaning that members share.

?Organizational culture distinguishes the organization from

others, i.e. . it is the personality of the organization.

?Organizational culture strongly influences how employees will

behave while they are at work.

?Strong culture can substitute for rules and regulations, it

produce predictability, orderlines s and consistency of

members behavior

?Where does the organizational culture comes from?

?Vision/mission of founders

?First employees

?…..

Assessing Organization Culture

?Recall: Hofstede’s 4 dimensions of national culture:

Individualism, power distance, uncertainty avoidance, quality

vs. quantity of life

?The culture of an organization can be analyzed based on how it

rates on ten characteristics, which are relatively stable and

predict many organizational behavior over time.

?Member identify is the degree to which employees identify with the organization as a whole rather than with their type

of job or professional expertise.

?Group emphasis is the degree to which work activities are organized around groups rather than individuals.

?People focus is the degree to which the decisions of management take into consideration the effect of outcomes on people.

?Unit integration is the degree to which organizational units work in a cooperative or independent manner.

?Control is the degree to which regulations, rules, and direct supervision are used.

?Risk tolerance is the degree to which employees are encouraged to be aggressive and innovative.

?Reward criteria is the degree to which rewards are allocated on employee performance rather than seniority or favoritism. ?Conflict tolerance is the degree to which employees are encouraged to air conflicts and criticisms openly.

?Means-end orientation is the degree to which management focuses on results rather than the techniques used to achieve them.

?Open-systems focus is the degree to which the organization monitors and responds to changes in the external environment.