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Unformatted text preview: Class 31: Organizational Design MGTS 3401 Cummings ► No FTF Office Hours this Afternoon Announcements – This Week I will hold Virtual Office Hours this evening ► 5:30 – 7:00 pm, MGTS 3401 Class Chat Room ► Tomorrow afternoon:
► Progress Report Feedback will be posted on WebCT; “Detailed Instructions for Final Paper” will be posted Many Spaces on my door for tomorrow, and Wednesday morning
if you don’t see it, EMAIL me ► Wednesday is a Group Work Day we do not meet as full class ► Happy Thanksgiving!
MGTS 3401 Cummings Announcements – Next Week
► For Monday, 30 November Read Chapter 19 about Organizational Change and Stress Prepare FNT Questions ► Next Friday, 4 December: Short Exam 3 “Preparing for Exam 3” will be on WebCT Wednesday this week ► Lots of open space on my door Next week MGTS 3401 Cummings Economy Allies Allies Suppliers Competitors Culture and Norms
MGTS 3401 Cummings Legal/ Political Systems Regulatory Groups Organization Customers Technology Strategy and Organizational Design
Environment Culture Technology Management’s Strategic Choices Organizational Design Goals Size People MGTS 3401 Cummings Management Functions
Planning Organizing Management Functions
Controlling Leading MGTS 3401 Cummings Organizing The activity of designing, structuring, arranging, and rearranging the components of an organization’s internal environment to accomplish the organization’s goals. MGTS 3401 Cummings What Is Organizational Design?
How tasks and people are formally Divided Grouped Coordinated and Integrated MGTS 3401 Cummings Organizational Design: Six Questions Top Managers Should Ask
► ► ► ► ► ► Where should the decisionmaking authority lie? To what degree do tasks need to be subdivided into different jobs? On what basis will jobs be grouped together? To whom do individuals and groups need to report? How many people can a manager efficiently and effectively direct? To what degree does there need to be rules and regulations to direct people?
MGTS 3401 Cummings Question
► ► ► ► ► Org Design Variable Centralization (and Decentralization) Work specialization Departmentalization Chain of Command ► Where should the decision making authority lie? ► To what degree do tasks need to be subdivided into different jobs? ► On what basis will jobs be grouped together? ► To whom do individuals and ► groups need to report? How many people can a manager efficiently and effectively direct? To what degree does there need to be rules and regulations to MGTS 3401 Cummings direct people? Benefits of Decentralization
►More flexibility and greater speed in reacting to changes in the environment. ►Better able to deal with complex combinations of business activities ►Increased ability to cope with growth and change. ►Relieves managers of information and decision overload. ►Motivates employees. ►Increases a sense of ownership and for work and for the organization. MGTS 3401 Cummings Job Characteristics Model
Core Job Characteristics
Skill Variety Task Identity Task Significance Experienced Psychological States
Meaningfulness of Work Personal and Work Outcomes High Internal Work Motivation High-Quality Work Performance Low Absenteeism and Turnover Task Autonomy Responsibility for Work Outcome Job Feedback Knowledge of Results High Job Content Satisfaction Individual Differences
Employee GrowthNeed Strength Source: J. R. Hackman and G. R. Oldham. 1976. Motivation through the design of work: Test of a theory, Organizational Behavior and Human Performance 16:250–279. MGTS 3401 Cummings For Today ForToday What are the different ways that a manager might organize his or her company into departments? What are the advantages and disadvantages of each? MGTS 3401 Cummings Eight Common Organizational Structures (ways of organizing departments)
► Simple ► Functional ► Hybrid ► Matrix ► Virtual ► Divisional (multiple types within this) ► Modular ► Team/Boundaryless
MGTS 3401 Cummings Departmentalization Traditional Approaches
I. Functional II. Divisional Products/Services Territorial/geographical Customer/client Production processes Project
MGTS 3401 Cummings A Functional Structure
President Finance Marketing Operations Human Resources Research and Development Marketing Research Advertising Sales The grouping of The activities (at the top of the organization) by organizational function. function. MGTS 3401 Cummings Organizational and Managerial Functions
Execute the Organizational Functions Through the Managerial Functions: Operations Planning Finance Directing Organizing Controlling Human Resources Marketing Accounting
MGTS 3401 Cummings A Territorial Divisional Structure
President Western Division Eastern Division West Midwest Northeast Southeast Saskatchewan British Columbia California Washington Minnesota Oregon Manitoba Alberta MGTS 3401 Cummings Illinois Functional Structure
Advantages Disadvantages Versatile and applicable Creates a closed regardless of environment focused on organizational size itself Focused orientation Lack of external fosters: communication, ►specialization understanding, and coordination with other ►economies of scale organizational units ►efficiency Bottlenecks at upper ►quality levels
MGTS 3401 Cummings Divisional Structure
Advantages Improved information flows Fewer bottlenecks High level of coordination Improved flexibility, adaptability to customer Add or Subtract whole units easily Disadvantages Loss of functional economies of scale Difficulty in sharing resources Duplication of activities Lack of standardization Communication and coordination problems in widely separated territories MGTS 3401 Cummings Hybrid Approach to Departmentalization Human Resources Midwest Market Research Sales Advertising Sales Advertising Sales Advertising Woodcutting Sanding Gluing Painting Shipping Woodcutting MGTS 3401 Cummings Marketing Operations Bedroom Living room CEO East West Sanding Gluing Painting Shipping Financial Accounting Budgeting Financial Analysis Special Projects A Matrix Structure
Lines are Chain of Command
President Vice President Products Vice President Finance Vice President Marketing Vice President Operations Vice President Human Resources Product A Manager Manager A Product Line:
Product B Manager Authority, Responsibility, Coordination Systems Functional Line:
Authority, Responsibility, Coordination Systems MGTS 3401 Cummings Example of Matrix Structure
Universe Products, Ltd. Oceans Division Grounds Division Aerospace Division Functional Command Systems Mechanical Division Chemical Division Electrical Division Space Project Manager Engineering and Research Group Materials and Procurement Group Mars Project Project Command Systems Engineering and Research Group Materials and Procurement Group Venus Project Project Command Systems MGTS 3401 Cummings Engineering and Research Group Materials and Procurement Group Chain of Command
The unbroken line of authority that extends from the top of the organization to the lowest echelon and clarifies who reports to whom. Authority The rights inherent in a managerial position to give orders and to expect the orders to be obeyed. MGTS 3401 Cummings Next Two Classes
For Wednesday (25 Nov): In class work day. Use Agendas to maximize your effectiveness, and your efficiency. (e.g., do you have a set of specific tasks and goals you’ll accomplish during this inclass group work time?) Lots of time on my door before then (Tuesday and Wednesday am) – let met support you! Travel Safely For Monday after Thanksgiving (30 November) Read and Prepare FNT questions: Chapter 19 – Organizational Change
MGTS 3401 Cummings ...
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- Spring '08