This preview shows page 1. Sign up to view the full content.
Unformatted text preview: AEM1200, Introduction to Business Management. AEM1200,
Friday 10/22 Organizational Theory and Structure Types of organizational structure Principles of hierarchy and bureaucracy Alternatives to hierarchy and bureaucracy Fundaments of Bureaucracy: Fayol and Weber Fundaments
Unity of command Hierarchy of authority Division of labor Subordination of individual Subordination interests to the general interest interests Authority Degree of centralization Close communication Close channels channels Order Equity Esprit de corps Job descriptions Written rules, decision Written guidelines, and policies guidelines, Consistent procedures, Consistent regulations, and policies regulations, Staffing and promotion based Staffing on qualification on The Bureaucratic Organization
Equal treatment for all employees; Reliance on expertise, skills, and experience relevant to the position; The organization owns the product and the means of production; Specific standards of work and output; Extensive record keeping (control); Establishment and enforcement of rules and regulations; Rules bind all members of the organization. Levels of Management Fundamentals of Bureaucracy Chain of Command Rules & Regulations Set Up by Function B oss V ic e P r e s id e n t S u p e r v is o r Communication = Minimal E m p lo y e e Functional Structure Divisional Structure Departmentalization Skill Development Economies of Scale Good Coordination Lack of Communication Employees Identify with Department Slow Response to External Demands Narrow Specialists Types of Departmentalization
Functional – Functional Structure Product Sony, United Technologies Swisscom AG Coca Cola Procter and Gamble Customer Geographic Matrix Span of Control Span
Optimum number of subordinates a manager Optimum supervises or should supervise; supervises Usually between 7 and 15; Can be increased when Jobs are routine and/or low skilled Information technology Greater managerial experience Jobs are unique and/or highly skilled Jobs require extended periods of face-to-face Jobs communication communication Little managerial experience Must be reduced when Coordinating and separating roles Coordinating
Gatekeeper Someone who controls access to something Organizational members who link their organization Organizational with the external environment. Boundary spanning primarily concerns the exchange of information [Daft, 1989]. A boundary spanner is further defined as one who attempts to influence external environmental elements and processes. Thus, the fundamental task of a boundary-spanning strategist (BSS) is to make decisions concerning information gathered. Boundary spanners Centralization vs. Decentralization Increased Uniformity Less Duplication Maximum Control Lots of Policies & Procedures Many Layers/Slower Informed Decisions Worker Responsibility Few Layers/Faster Loss of Control Possible Duplication How to Improve How Organizational Structure
Break business into smaller units Build teamwork Impose autonomy Create meaningful incentives Outsource non-operating activities Share business capabilities across units Job Oriented Motivational Techniques Job Simplification Job Enlargement Job Rotation Job Enrichment/Redesign
• • • • Skill Variety Task Identity/Significance Autonomy Feedback Job Enrichment
Job variety The extent to which a job demands different skills; The degree to which a job requires doing a task with a visible outcome from beginning to end; The degree to which the job has a substantial impact on the lives or work of others in the company; The degree of freedom, independence, and discretion in scheduling work and determining procedures; The amount of direct and clear information that is received about job performance. Task identity Task significance Autonomy Feedback Current trends
Organic organizations Characterized by broadly defined jobs and responsibility, loosely defined, frequently changing roles, decentralized authority and horizontal communication based on task knowledge… Permanently passing decision-making authority and responsibility from managers to workers by giving them the information and resources they need to make and carry out good decisions; An organization that is composed of a network in which many companies share skills, costs, capabilities, markets, and customers to collectively provide specific products or services. Empowerment Virtual organizations Mechanistic vs. Organic Organizations Mechanistic
Mechanistic organizations have: Organic organizations have: Specialized jobs and Broadly defined jobs and Specialized Broadly responsibilities; responsibilities; responsibilities; responsibilities; Precisely defined, unchanging Loosely defined, Precisely Loosely roles; frequently changing roles; roles; frequently A rigid chain of command Decentralized authority; Centralized authority Horizontal Horizontal Vertical communication communication; communication; Based on sequential and Based Based on reciprocal Based pooled interdependence pooled interdependence interdependence Organization centered Task centered Takeaways Takeaways
Formal organizational structures (organizational Formal charts) help in establishing responsibility and control lines. However, they are very inflexible. very Some ways to improve flexibility include flattening the structure, outsourcing non-critical activities, and sharing capabilities across units. and Stay centralized, bureaucratized and hierarchical when standardization is important, and decentralize where standardization is unimportant. Organizations are composed of people. To Organizations people To improve organizations beyond their structure, one must motivate and empower people. motivate empower ...
View Full Document
This note was uploaded on 10/24/2010 for the course AEM 1200 at Cornell University (Engineering School).