OrganizingProcess a course of action, a route, a progressionStructure an arrangement, a configuration, a construction

OrganizingThe process of deploying resources to achieve strategic goals

The process of organizing takes place within a structure reflected by the way in which the organizationDivides its labor into departments and jobsEstablishes formal lines of authorityEstablishes mechanisms for coordinating diverse tasks

Organizing process leads to creation of an Organizational StructureFormal tasks assignedFormal reporting relationshipsSystems design for coordination across departments

Features of Organizational Structure

Work SpecializationAlso called division of LaborSpecialists get good at a specific taskEfficiency increasesEmployees are selected based on specific skillsTraining is geared toward increased efficiency.Based on a mechanistic organization

Chain of CommandAn unbroken line of authorityUnity of Command-Everyone has only one supervisorScalar Principle-Everyone has at least one boss. Everyone is included

AuthorityThe formal rights of a manager to manageVested in the organizational position, not the person.Provides the manager with positional powerAuthority is accepted by the subordinatesAuthority flow from the top, down.

ResponsibilityThe duty to perform the task the employee has been assigned.

Responsibility and Authority are delegated together and make the employee accountable to superiors

Line and Staff OrganizationsLine departments perform the organizations primary tasks.Production, marketing, sales, R&DStaff Departments provide specialized skills in support of line departments.Engineering, Human Resources, Legal, Advise and council in areas of expertise

Span of Management (Control)The number of employees reporting to a supervisor.Size varies with the type of organization, skill of the subordinates, Geographic dispersionManagerial skill and preference

Centralization Decision making is done high in the organizationTendency toward decentralizationGreater use of employee skillsLess mechanisticRelieve burden on manager to do everythingDecisions made closer to the actionDecisions are make quicker

Factors influencing DecentralizationAmount of change and uncertainty in the environmentCorporate strategy and cultureSize and dispersion of the organizationThe risk of failure The greater the risk, the higher up the decisions are made.

Departmentalization or Structure

Functional ApproachGrouping of positions based on skills of functions.

Advantages and Disadvantages of Functional Organization StructuresAdvantagesEfficient use of resourcesIn depth skillsSpecialized career developmentCoordination within functionsExcellent technical problems solvingDisadvantagesPoor communications across functionsSlow response to external changesRequires high level coordinationLimited general management training

Divisional ApproachBased on outputs e.g. products, sbus etc.

Advantages and Disadvantages of Divisional StructureAdvantagesCustomer orientedFaster response to varied environmental changesCoordination between functions within structureEasy to fix blameEmphasis on overall product and division goalsDisadvantagesDuplicate resourcesLess specialization within divisionsLess top management controlCompetition for corporate resources

Matrix OrganizationTwo sets of bosses-functional and divisional.Violates the chain of command, e.g. two bosses, not clear line of authority.Attempts to lower the risks of functional and divisional structuresRequires employee to manage two sets of bosses.

Team StructureDelegate authorityPush decision making to the lowest levelGain commitment from workers

Team ApproachAdvantagesSame as functional departmentsReduces barriers among functionsLower response timeBetter morale and enthusiasmLess overheadDisadvantagesLots of meetingsDual loyalties

Network or Value Chain ManagementDo what you do well, sub-contract everything else to those who do better than you.Look for the best industry practicesManagement the value chain rather than the organization AdvantagesIncreased competitivenessFlexibilityReduced costsDisadvantagesRequires a different kind of managementNeed to sell the conceptLess control

Change Management-A Process

Models of Planned Organizational ChangeChange can be managedOrganizational change is the adoption of a new idea or behavior by an organizationChange comes from recognition that environmental changes will create mismatches

Forces for changeMismatches occur between the company and its external environmentCustomersCompetitorsTechnologyEconomicsInternationalGovernmentAs well as its internal environmentManagementEmployeesUnionsInefficiencies

Managers must be aware of the mismatches as they develop and initiate change

Initiating ChangeChange can be made by finding established ways to eliminate the mismatchDownsizing to eliminate mismatch of department size and reduced demand.Create new ways Two people share one job

Creativity to Initiate ChangeDefine it pleaseFrom the top of the barn, a horse looks like a violin -Mark TwainThe ability to view ordinary situations in unique waysFunction of Organizational Climate and Individual characteristicsClimateOpen communicationsGood mix of experts and non expertsFreedom to choose problemsResources available without a specific reasonIndividual CharacteristicsOriginalityCurosityOpen MindednessFocused approachPersistancePlayful attitudeReceptiveness to new ideas

Creativity in OrganizationsCreativity can be built into an organization by creating an appropriate structure New Venture teams (intrapreneurship)Idea ChampionsNew Venture Funds

Change Management Two Paths of ChangeEffectivenessEfficiency

EfficiencyClassical, hierarchical, mechanistic structureEnvironment slow to changeTQM Management changes the culture (top down)Teams uses Shewhart Cycle, quality circles to continuously improve efficiency

EffectivenessReengineered or OD oriented, team based structureEnvironment quick to changeStructural coupling to the environment in order to keep up with the changeEmployees coupled to and focusing on the customers needsIndividual controls all the processes needed to support each customer

Making it happenImplementing Change.Implementing change involves perturbing the system.Resistance to change is naturalFeedback loops keep change from happeningChange involves hard work by everyoneEmployees sense they will lose somethingResistance cant be ignored

A feedback loop

Force Field Analysis to Overcome ResistanceWhen a change is introduced, some forces drive it while some inhibit itRemove the forces that inhibit the changeThe forces that drive it will make it happenYou can alsoCommunicate and EducateEncourage participation by allNegotiateCoerce

Types of Planned ChangeStrategyTechnologyNew ProductsStructureCulture Changes are interrelated. A change in one affects the others.

Part OneSelect an organization with which you are most familiar with, preferably one with which you are most familiar with at this time. It could be a department within a larger organization

Describe the organization as a spider plant. Let your imagination run wild.

How does the image fit? Does it grasp the nature of the organization? Any new insights

Now use the spider plant to think about how your organization could be.In other words, use the image interpreted -in whatever way you wish- as the basis for a new organizational design. If you had the opportunity to design your organization as a spider plant, how would it be?

What are the differences between the new one and the one you described in part one?