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1、CHAPTER6ORGANIZATIONAL STRUCTURE AND DESIGNLEARNING OUTCOMES After reading this chapter students should be able to:1. Describe 6 key elements in organizational design. 2. Identify the contingency factors that favor the mechanistic model or the organic model.3. Compare and contrast traditional and co

2、ntemporary organizational designs. 4. Discuss the design challenges faced by todays organizations. Management Myth MYTH: Bureaucracies are inefficient.TRUTH: Bureaucratic organizations are still alive and well and continue to dominate most medium-sized and large organization. SUMMARYThis chapter dis

3、cusses the key concepts and their components and how managers create a structured environment where employees can work efficiently and effectively. Once the organizations goals, plans, and strategies are in place, managers must develop a structure that will best facilitate the attainment of those go

4、als.I. WHAT ARE THE SIX KEY ELEMENTS IN ORGANIZATIONAL DESIGN?Learning Catalytics Question: Instructor Directions and Follow-UpQuestion TypeQuestionAnswer/ResponseFor the InstructorWord CloudWhat are the six key elements in organizational design?Options: work specialization, departmentalization, aut

5、hority, responsibility and power, span of control, centralization and decentralization, and formalizationUse this at the start of class to aid students' recall of the six key elements of organizational design.A. Introduction1. Organization design decisions are typically made by senior managers.

6、2. Organization design applies to any type of organization.3. Formulated by management writers such as Henri Fayol and Max Weber in the early 1900s. 4. These principles still provide valuable insights into designing effective and efficient organizations. B. What Is Work Specialization? 1. Work speci

7、alization is dividing work activities into separate jobs tasks. a) Individuals specialize in doing part of an activity.b) Work specialization makes efficient use of the diversity of skills that workers hold. 2. Some tasks require highly developed skills; others lower skill levels. 3. Excessive work

8、specialization or human diseconomies, can lead to boredom, fatigue, stress, low productivity, poor quality, increased absenteeism, and high turnover. (See Exhibit 6-1.) 4. Today's view is that specialization is an important organizing mechanism for employee efficiency, but it is important to rec

9、ognize the economies work specialization can provide as well as its limitations.C. What Is Departmentalization?1. Departmentalization is when common work activities are grouped back together so work gets done in a coordinated and integrated way. 2. There are five common forms of departmentalization

10、(see Exhibit 6-2).a) Functional Groups - employees based on work performed (e.g., engineering, accounting, information systems, human resources)b) Product Groups - employees based on major product areas in the corporation (e.g., womens footwear, mens footwear, and apparel and accessories)c) Customer

11、 Groups - employees based on customers problems and needs (e.g., wholesale, retail, government)d) Geographic Groups - employees based on location served (e.g., North, South, Midwest, East)e) Process Groups - employees based on the basis of work or customer flow (e.g., testing, payment)3. With today&

12、#39;s focus on the customer, many companies are using cross-functional teams, which are teams made up of individuals from various departments and that cross traditional departmental lines.D. What are Authority and Responsibility? 1. The chain of command is the continuous line of authority that exten

13、ds from upper organizational levels to the lowest and clarifies who reports to whom. 2. An employee who has to report to two or more bosses might have to cope with conflicting demands or priorities. 3. Authority refers to the rights inherent in a managerial position, to give orders and expect the or

14、ders to be obeyed.4. Each management position has specific inherent rights that incumbents acquire from the positions rank or title. a) Authority is related to ones position and ignores personal characteristics.5. When managers delegate authority, they must allocate commensurate responsibility. a) W

15、hen employees are given rights, they assume a corresponding obligation to perform and should be held accountable for that performance.b) Allocating authority without responsibility creates opportunities for abuse.c) No one should be held responsible for something over which he or she has no authorit

16、y.6. What are the different types of authority relationships? a) The early management writers distinguished between two forms of authority.(1) Line authority entitles a manager to direct the work of an employee. (a) It is the employer-employee authority relationship that extends from top to bottom.(

17、b) See Exhibit 6-3. (c) A line manager has the right to direct the work of employees and make certain decisions without consulting anyone. (d) Sometimes the term “l(fā)ine” is used to differentiate line managers from staff managers.(e) Line emphasizes managers whose organizational function contributes d

18、irectly to the achievement of organizational objectives (e.g., production and sales). (2) Staff managers have staff authority (e.g., human resources and payroll). (a) A managers function is classified as line or staff based on the organizations objectives.(b) As organizations get larger and more com

19、plex, line managers find that they do not have the time, expertise, or resources to get their jobs done effectively. (c) They create staff authority functions to support, assist, advice, and generally reduce some of their informational burdens. (d) Exhibit 6-4 illustrates line and staff authority. 7

20、. What is Unity of Command?a) The chain of command is the continuous line of authority that extends from upper organizational levels to the lowest and clarifies who reports to whom. b) An employee who has to report to two or more bosses might have to cope with conflicting demands or priorities. c) T

21、herefore, the early management writers argued that an employee should have only one superior (Unity of command). d) If the chain of command had to be violated, early management writers always explicitly designated that there be a clear separation of activities and a supervisor responsible for each.e

22、) The unity of command concept was logical when organizations were comparatively simple.f) There are instances today when strict adherence to the unity of command creates a degree of inflexibility that hinders an organizations performance.8. How does the contemporary view of authority and responsibi

23、lity differ from the historical view?a) The early management writers assumed that the rights inherent in ones formal position in an organization were the sole source of influence. b) This might have been true 30 or 60 years ago. c) It is now recognized that you do not have to be a manager to have po

24、wer, and that power is not perfectly correlated with ones level in the organization.d) Authority is but one element in the larger concept of power.9. How do authority and power differ?a) Authority and power are frequently confused. b) Authority is a right, the legitimacy of which is based on the aut

25、hority figures position in the organization.(1) Authority goes with the job. c) Power refers to an individuals capacity to influence decisions. (1) Authority is part of the larger concept of power. (2) Exhibit 6-5 visually depicts the difference. d) Power is a three-dimensional concept.(1) It includ

26、es not only the functional and hierarchical dimensions but also centrality. (2) While authority is defined by ones vertical position in the hierarchy, power is made up of both ones vertical position and ones distance from the organizations power core, or center.e) Think of the cone in Exhibit 6-5 as

27、 an organization. (1) The closer you are to the power core, the more influence you have on decisions. (2) The existence of a power core is the only difference between A and B in Exhibit 6-5.f) The cone analogy explicitly acknowledges two facts: (1) The higher one moves in an organization (an increas

28、e in authority), the closer one moves to the power core.(2) It is not necessary to have authority in order to wield power because one can move horizontally inward toward the power core without moving up. (a) Example, administrative assistants, “powerful” as gatekeepers with little authority.(3) Low-

29、ranking employees with contacts in high places might be close to the power core. (4) So, too, are employees with scarce and important skills.(a) The lowly production engineer with twenty years of experience might be the only one in the firm who knows the inner workings of all the old production mach

30、inery. g) Power can come from different areas.(1) John French and Bertram Raven have identified five sources, or bases, of power.(a) See Exhibit 6-6. (b) Coercive power -based on fear; Reward power - based on the ability to distribute something that others value; Legitimate power - based on ones pos

31、ition in the formal hierarchy; Expert power - based on ones expertise, special skill, or knowledge; Referent power -based on identification with a person who has desirable resources.E. What is Span of Control? 1. How many employees can a manager efficiently and effectively direct?2. This question re

32、ceived a great deal of attention from early management writers. 3. There was no consensus on a specific number but early writers favored small spans of less than six to maintain close control.4. Level in the organization is a contingency variable. a) Top managers need a smaller span than do middle m

33、anagers, and middle managers require a smaller span than do supervisors. 5. There is some change in theories about effective spans of control.6. Many organizations are increasing their spans of control. 7. The span of control is increasingly being determined by contingency variables.a) The more trai

34、ning and experience employees have, the less direct supervision needed. 8. Other contingency variables should also be considered; similarity of employee tasks, the task complexity, the physical proximity of employees, the degree of standardization, the sophistication of the organizations management

35、information system, the strength of the organizations value system, the preferred managing style of the manager, etc.A Question of EthicsA small percentage of companies are revealing to employees details about everything from financials to staff performance reviews. Advocates of this approach say it

36、 is a good way to build trust and allow employees to see how they are making contributions to the company. Critics say open management can be expensive and time consuming. As work becomes more collaborative the sharing of details may become inevitable.Questions for students to consider:· What e

37、thical issues they see in the case?· What are the implications for (a) managers and (b) employees?F. How Do Centralization and Decentralization Differ? 1. Centralization is a function of how much decision-making authority is pushed down to lower levels in the organization. 2. Centralization-dec

38、entralization is a degree phenomenon. 3. By that, we mean that no organization is completely centralized or completely decentralized. 4. Early management writers felt that centralization in an organization depended on the situation.a) Their objective was the optimum and efficient use of employees. b

39、) Traditional organizations were structured in a pyramid, with power and authority concentrated near the top of the organization. c) Given this structure, historically, centralized decisions were the most prominent. 5. Organizations today are more complex and are responding to dynamic changes.a) Man

40、y managers believe that decisions need to be made by those closest to the problem.6. Today, managers often choose the amount of centralization or decentralization that will allow them to best implement their decisions and achieve organizational goals. 7. One of the central themes of empowering emplo

41、yees was to delegate to them the authority to make decisions on those things that affect their work.a) Thats the issue of decentralization at work. b) It doesnt imply that senior management no longer makes decisions.G. What is Formalization?1. Formalization refers to how standardized an organization

42、s jobs are and the extent to which employee behavior is guided by rules and procedures.2. Early management writers expected organizations to be fairly formalized, as formalization went hand-in-hand with bureaucratic-style organizations.3. Today, organizations rely less on strict rules and standardiz

43、ation to guide and regulate employee behavior.II. WHAT CONTINGENCY VARIABLES AFFECT STRUCTURAL CHOICE?Learning Catalytics Question: Instructor Directions and Follow-UpQuestion TypeQuestionAnswer/ResponseFor the InstructorRegionFamilies are organizations that function best when roles and responsibili

44、ties are clearly defined. Was your family more mechanistic or organic?There is no correct answer.Use the structure of the college/university to explain how organizations function.A. Introduction1. The most appropriate structure to use will depend on contingency factors. 2. The more popular contingen

45、cy variables are strategy, size, technology, and environment.B. How Is a Mechanistic Organization Different from an Organic Organization? 1. Exhibit 6-7 describes two organizational forms. 2. The mechanistic organization (or bureaucracy) was the natural result of combining the six elements of struct

46、ure. a) The chain-of-command principle ensured the existence of a formal hierarchy of authority.b) Keeping the span of control small created tall, impersonal structures. (1) Top management increasingly imposed rules and regulations. c) The high degree of work specialization created simple, routine,

47、and standardized jobs. d) Departmentalization increased impersonality and the need for multiple layers of management.3. The organic form is a highly adaptive form that is a direct contrast to the mechanistic one. a) The organic organizations loose structure allows it to change rapidly as needs requi

48、re. (1) Employees tend to be professionals who are technically proficient and trained to handle diverse problems. (2) They need very few formal rules and little direct supervision.b) The organic organization is low in centralization.4. When each of these two models is appropriate depends on several

49、contingency variables.C. How Does Strategy Affect Structure?1. An organizations structure should facilitate goal achievement. a) Strategy and structure should be closely linked. b) Certain structural designs work best with different organizational strategies. 2. Accordingly, organizational structure

50、 should follow strategy. If management makes a significant change in strategy, it needs to modify its structure as well.D. How Does Size Affect Structure?1. There is historical evidence that an organizations size significantly affects its structure.2. Large organizationsemploying 2,000 or more emplo

51、yeestend to have more work specialization, horizontal and vertical differentiation, and rules and regulations than do small organizations. 3. The relationship is not linear; the impact of size becomes less important as an organization expands. a) Example, once an organization has around 2,000 employ

52、ees, it is already fairly mechanistican additional 500 employees will not have much effect.b) Adding 500 employees to an organization that has only 300 members is likely to result in a shift toward a more mechanistic structure.E. How Does Technology Affect Structure? 1. Every organization uses some

53、form of technology to convert its inputs into outputs. 2. To attain its objectives, the organization uses equipment, materials, knowledge, and experienced individuals and puts them together into certain types and patterns of activities. a) For example, your tablet or smartphone has a standardized as

54、sembly line.b) For example, your resume is custom design and print.c) For example, your bottle of Ibuprofen was manufactured using a continuous flow production line by the pharmaceutical company.From the Past to the PresentJoan Woodward (British scholar) found that distinct relationships exist betwe

55、en size of production runs and the structure of the firm. The effectiveness of organizations was related to “fit” between technology and structure. Most studies focused on the processes or methods that transform inputs into outputs and how they differ by their degree of routine.Three categories, rep

56、resenting three distinct technologies, had increasing levels of complexity and sophistication. Unit production described the production of items in units or small batches. Mass production described large batch manufacturing. The most technically complex group, process production, included continuous

57、-process production. The more routine the technology, the more standardized and mechanistic the structure can be. Organizations with more non-routine technology are more likely to have organic structures. See Exhibit 6-8.Discuss This:· Why is (a) mechanistic structure more appropriate for an or

58、ganization with routine technology and (b) organic structure more appropriate for an organization with nonroutine technology?· Does Woodwards framework still apply to todays organizations? Why or why not?F. How Does Environment Affect Structure?1. Mechanistic organizations are most effective in stable environments. 2. Organic organizations are best matched with dynamic and uncertain environments.3. The environment-structur

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