Organization Structure and Effectiveness

An organization is a cooperative social system of two or more people with a common purpose.

Common Characteristics of Organizations

Coordination of effort: Multiplying individual contributions to achieve results greater than those possible by individuals working alone

Common goal or purpose: Having a focus to strive for something of mutual interest

Division of labor: Dividing tasks into specialized jobs that use human resources efficiently

Hierarchy of authority: Using a chain of command to control and direct the actions of others

Organization Charts

Organization Chart (Table): A visual display of an organization’s positions and lines of authority that is useful as a blueprint for deploying human resources

Vertical and Horizontal Dimensions: Vertical hierarchy establishes the chain of command. Horizontal specialization denotes the division of labor.

Line and Staff Positions: Line managers make decisions and staff personnel provide advice and support. Personal staff are assigned to a specific manager in supporting roles.

A Simplified Sample Organization Chart

Organizations as Open Systems

Characteristics of Open Systems

Interaction with the external environment through permeable boundaries. An open-system model encourages managers to think about the organization’s life-support system

Interacting organizational subsystems:

Technical (production function) subsystems define the organization’s transformation process. Boundary-spanning subsystems provide the organization’s interface with the external environment. Managerial subsystems bridge (control and direct) the technical and boundary-spanning subsystems.

Open-System Model of a Business

 

Organizational Learning

Learning Organization: One that can create, acquire, and transfer knowledge, and can then adapt its behavior accordingly

Necessary Skills for a Learning Organization

Solving problems

Experimenting

Learning from organizational experience and history

Learning from others

Transferring and implementing

Garvin’s Model of the Learning Organization

Organizational Effectiveness

Effectiveness: A measure of whether or not organizational objectives are accomplished

Efficiency: A measure of the relationship between inputs and outputs for the organization

No Silver Bullet: No single approach to the evaluation of effectiveness  is appropriate in all circumstances or for all organizational types.

A Time Dimension: Organizational Effectiveness: Meeting organizational objectives and prevailing societal expectations in the near future, adapting to environmental demands, maturing and learning in the immediate future

The Time Dimension of Organizational Effectiveness

 

Contingency Design

The process of determining the degree of environmental uncertainty and adapting the organization and its subunits to the situation

—         How much environmental uncertainty is there?

—         What combination of structural characteristics is most appropriate?

Determining Degree of Environmental Uncertainty  

The Burns and Stalker Model

Mechanistic Organizations: Are rigid in design, rely on formal communications, and have strong bureaucratic qualities best suited to operating in relatively stable and certain environments

Organic Organizations: Have flexible structures, have participative communication patterns, and are successful in adapting to change in unstable and uncertain environments

Mechanistic versus Organic Organizations  

Basic Departmentalization Formats

Departmentalization: Grouping of related jobs or processes into major organizational units. Overcomes some of the effect of fragmentation caused by differentiation (job specialization). Permits coordination (integration) to be handled in the least costly manner. Sometimes refers to divisions, groups, or units in large organizations.

Functional Departments: Categorize jobs according to the activity performed

Product-Service Departments: Group jobs around a specific product or service

Geographic Location Departments: Based on the physical dispersion of assets, resources, and customers

Customer Classification Departments: Centered on various customer categories. Work Flow Process Departments in Reengineered Organizations.

Emphasis on smooth and  speedy work flow between two points:

—  Identifying customer needs

—  Satisfying the customer

Alternative Departmentalization Formats

Span of Control

Span of Control (Management): The number of people who report to a manager. Narrow spans of control foster tall organizations with many organizational/managerial layers. Flat organizations have wider spans of control.

Is There an Ideal Span of Control?

The right span of control efficiently balances too little and too much supervision. Situational factors dictate the width of spans of control.

Narrow and Wide Spans of Control

Situational Determinants of Span of Control

Centralization, Decentralization and Delegation

Centralization: The retention of decision-making authority by top management.

Decentralization: The sharing of decision-making authority by management with lower-level employees.

The Need for Balance: The challenge to balance the need for responsiveness to changing conditions (decentralization) with the need to create low-cost shared resources (centralization)

Factors in Relative Centralization/Decentralization

Effective Delegation

Delegation: Assigning various degrees of decision-making authority to lower-level employees

Advantages of Delegation

—  Frees up managerial time for other important tasks

—  Serves as a training and development tool for lower-level managers

—  Increases subordinates’ commitment by giving them challenging assignments

The Delegation Continuum

Barriers to Delegation

—  Belief that only you can do the job right

—  Lack of confidence and trust in lower-level employees

—  Low self-confidence

—  Fear of being called lazy

—  Vague job definition

—  Fear of competition from those below

—  Reluctance to take risks that depend on others

—  Lack of early warning controls

Poor example of bosses who do not delegate.

The Changing Shape of Organizations

Characteristics of New Organizations

—  Fewer organizational layers

—  More teams

—  Smallness within bigness

New Organizational Configurations

Hourglass organization: Three-layer structure with constricted middle (management) layer.

Cluster organization: Collaborative structure in which teams are the primary unit.

Virtual organizations: Internet-linked networks of value-adding subcontractors.

Reshaping  the Traditional Pyramid Organization

Organizational Cultures

Organizational Culture:

The collection of shared beliefs, values, rituals, stories, myths, and specialized language that creates a common identity and sense of community. The “social glue” that binds an organization’s members together.

Characteristics of Organizational Cultures

Collective: Organizations are social entities.

Emotionally charged: The organization’s culture serves as a security blanket to its members.

Historically based: Trust and loyalty result from long-term organizational associations.

Inherently symbolic: Actions often speak louder than words.

Dynamic: Culture promotes stability and control.

Inherently fuzzy: Ambiguity, contradictions, and multiple meanings are part of culture.

Forms and Consequences of Organizational Cultures

Organizational values are shared beliefs about what the organization stands for. The degree of sharing and the degree of intensity determine whether an organization’s culture is strong or weak.

Forms and Consequences of Organizational Culture

The Organizational Socialization Process

Organizational socialization: The process of transforming outsiders into accepted insiders

Orientations: Orientation programs familiarize new employees with the organization’s history, culture, competitive realities, and compensation and benefits.

Storytelling: Recitations of heroic or inspiring deeds provide “social road maps” for new employees.

Strengthening Organizational Cultures.

Symptoms of a weak organizational culture

—  Inward focus

—  Morale problems

—  Fragmentation/inconsistency

—  Ingrown subcultures

—  Warfare among subcultures

—  Subculture elitism