module 8 #organizational structures
DESCRIPTION
This is the eighth of ten modules in which I am organizing my delivery of the course on organizational behavior at ICBM-SBE, 2014. Wherever I felt I used copyrighted content, I tried to make sure I gave appropriate credit to the author/source. In case you see that I missed something, please do let me know. I would be happy to improve.TRANSCRIPT
Organizational Behavior
Module 8: Organizational Structures
Vinay Kumar, Ph.D
Vidisha Garg, MBA
ICBM-SBE, 2014
Why structure?
Vinay Kumar; Vidisha Garg 2
First, there is ‘me’ Then, there is ‘what I hear’ Later, there is ‘what someone clarifies’ My question: Where was I ‘best’ informed?
Organizational structure
• Defines how
– Job tasks are formally
• divided
• grouped
• coordinated
• Organizations use structures to manage areas such as
– Work specialization
– Departmentalization
– Chain of command
– Span of control
– Centralization / Decentralization
– Formalization
Vinay Kumar; Vidisha Garg 3
Key questions and areas to look for answers
Vinay Kumar; Vidisha Garg 4
Source: Robbins, S. P., & Judge, T. A. (2013). Organizational Behavior,15th Edition. Pearson: New Jersey.
Division
Grouping
Coordination
Work specialization
• Q1: Why does productivity seem to
improve with lack of specialization?
Vinay Kumar; Vidisha Garg 5
Source: Robbins, S. P., & Judge, T. A. (2013). Organizational Behavior,15th Edition. Pearson: New Jersey.
• Q2: Why does productivity seem to
decline with increasing specialization?
Departmentalization
• Bases (indicative list, not exhaustive)
– Product
– Geography
– Nature of tasks
– Similarity in tasks
– Nature of stakeholders
– Frequency of interaction
Vinay Kumar; Vidisha Garg 6
Puzzle: Imagine that a graduate in finance finds place in the accounting department. And he is placed in the function of managing payrolls. How do you think this aspiring graduate can plan his career further?
Elements of coordination
• Chain of command
– Unity: One boss for any employee
– Authority: Inherent capacity of a position to give orders and get compliance
• Span of control (number of subordinates for a given superior)
– Determines the number of levels in the organization (Depth of hierarchy)
• Centralization/Decentralization
– Degree to which resources are concentrated or spread
– Resources could include: information, decision-making authority, operations etc
• Formalization
– Degree to which jobs and work flows are standardized
Vinay Kumar; Vidisha Garg 7
Mintzberg’s coordination mechanisms
• Mutual adjustment
• Direct supervision
• Standardization of
– skills and knowledge
– work processes
– output
– norms
Vinay Kumar; Vidisha Garg 8
Source: http://goodschool.cphwest.dk/Chapter%201%20to%205/Chapter%202_clip_image004.gif
Common organizational designs
• Simple
• Bureaucratic
• Matrix
• Virtual
• Boundary-less
Vinay Kumar; Vidisha Garg 9
Characteristics (indicative, not necessarily valid)
• Work Specialization : Low
• Departmentalization : Not Specific
• Chain of command : Strong
• Depth of hierarchy : Flat
• Centralization : High
• Formalization : Low
• Example : Local retail store
Common organizational designs
• Simple
• Bureaucratic
• Matrix
• Virtual
• Boundary-less
Vinay Kumar; Vidisha Garg 10
Characteristics (indicative, not necessarily valid)
• Work Specialization : High
• Departmentalization : Very Specific
• Chain of command : Strong
• Depth of hierarchy : Deep
• Centralization : Low
• Formalization : High
• Example : Govt. Tax Office
Go to this link: http://www.incometaxindia.gov.in/ccit/rtipage.asp And read: Information under section 4(1)(b) of the RTI Act
Common organizational designs
• Simple
• Bureaucratic
• Matrix
• Virtual
• Boundary-less
Vinay Kumar; Vidisha Garg 11
Characteristics (indicative, not necessarily valid)
• Work Specialization : Moderate
• Departmentalization : Crossed
• Chain of command : Split/Shared
• Depth of Hierarchy : Moderate
• Centralization : Moderate
• Formalization : Moderate
• Example : Your college
Common organizational designs
• Simple
• Bureaucratic
• Matrix
• Virtual
• Boundary-less
Vinay Kumar; Vidisha Garg 12
Characteristics (indicative, not necessarily valid)
• Work Specialization : High
• Departmentalization : NA
• Chain of command : NA
• Depth of hierarchy : NA
• Centralization : Low
• Formalization : Low
• Visit : sourceforge.net
Caution: Virtual organizations can sometimes be overrated. Whether they are effective or not really depends on at least two things: (i) role clarity among individuals, and (ii) the need for coordination.
Common organizational designs
• Simple
• Bureaucratic
• Matrix
• Virtual
• Boundary-less
Vinay Kumar; Vidisha Garg 13
Characteristics (indicative, not necessarily valid)
• Work Specialization : Rounded
• Departmentalization : NA
• Chain of command : NA
• Depth of hierarchy : NA
• Centralization : Low
• Formalization : Low
• Example : McKinsey
Caution: The premise of boundary-less organizations is that empowered employees behave responsibly. And that requires, if not organizational structures, reciprocation from employees to serve their firm.
What affects organizational design choice?
• Some common factors include
– Size
– Technology
– Environment
• Critical factor that drives the choice, however is ‘strategy’
Vinay Kumar; Vidisha Garg 14
Source: Robbins, S. P., & Judge, T. A. (2013). Organizational Behavior,15th Edition. Pearson: New Jersey.
Mechanistic vs. Organic Models
Vinay Kumar; Vidisha Garg 15
Source: Robbins, S. P., & Judge, T. A. (2013). Organizational Behavior,15th Edition. Pearson: New Jersey.
The Trade-off
Consistency/Constraint Vs.
Creativity/Freedom
How would you decide?
Simplified model of the structure dynamic
Vinay Kumar; Vidisha Garg 16
Source: Robbins, S. P., & Judge, T. A. (2013). Organizational Behavior,15th Edition. Pearson: New Jersey.
For discussion
• What according to you is the best way of coordinating: mutual adjustments
or standardization? What are your reasons for the selection you make?
• Do you think structure can communicate with people? How does it
accomplish such communication?
• To what extent do you think individual performance is a function of
organizational structure?
• Would organizations with similar businesses and similar goals in two
countries be structured alike? Why or why not?
• What do you understand by ‘restructuring’ an organization? And how do you
think that is done?
Vinay Kumar; Vidisha Garg 17
End of module 8.
Please post your feedback for this session to [email protected] / [email protected]
Do not forget to mention the ‘session date/section’ details
Upcoming
Module 9: Power and Politics