MANAGING ORGANIZATIONAL STRUCTUREAND CULTURE
OVERVIEW OF THE CHAPTER
To create high performing organizations, managers must design an organizational architecture
that maximizes the efficient use of resources in order to efficiently produce the goods and
services customers want. This chapter opens by examining the four critical factors that help
managers to determine the most appropriate structure for their organization. Next, it discusses
three components of organizational design: job design, grouping jobs into functions and
divisions, and the coordination of functions and divisions. The chapter closes with a
discussion of organizational culture, where it comes from, and difference between strong,
adaptive cultures and weak, inert ones.
Identify the factors that influence managerment’s choice of an organizational
Explain how managers group tasks into jobs that are motivating and satisfying for
Describe the types of organizational structures managers can design, and explain why
they choose one structure over another.
Explain why managers must coordinate jobs, functions, and divisions using the
hierarchy of authority and integrating mechanisms.
List the four sources of organizational culture and differentiate between a strong,
adaptive culture and a weak, inert culture.
A MANAGER’S CHALLENGE: A CENTRALIZED, MILITARY-STYLE STRUCTURE
AND CULTURE TRANSFORMS HOME DEPOT
Home Depot made major changes in its organizational structure and culture when it recently
hired Bob Nardelli as CEO.
When the company was founded, its owners wanted their
managers to act in an entrepreneurial way so they established norms and values that
encouraged freedom in decision making. Their decentralized approach worked well until
faced with new competitors, especially Lowes. Because Lowes believed Home Depot’s
weakness was poor customer service and poor store layout, they developed an organizational
design that allowed their stores to capitalize upon their competitor’s weaknesses. That’s when
Home Depot hired Nardelli, who recentralized authority and created a military-like culture.
Within eighteen months, Nardelli turned Home Depot around. Its costs fell, sales increased,
and customer responsiveness improved.
DESIGNING ORGANIZATIONAL STRUCTURE
Jones, Contemporary Management, Fifth Edition