8_Organizational Structure

8_Organizational Structure - Macro Week Macro Week Macro OB...

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Unformatted text preview: Macro Week Macro Week Macro OB Org Structure Large Scale Change (Frost) Culture Organizational Structure & Organizational Structure & Design Organizational Structure ­ the way individuals and groups are arranged with respect to the tasks they perform. Organizational Design ­ the process of coordinating these structural elements in the most effective manner. What Determines Organizational Structure? To what degree are tasks subdivided into separate jobs? On what basis will jobs be grouped together? To whom do individuals and groups report? How many individuals can a manager efficiently and effectively direct? Where does decision­making authority lie? To what degree will there be rules and regulations to direct employees and managers? MECHANISTIC VERSUS ORGANIC DESIGNS: A SUMMARY Structure Dimension Mechanistic Organic Stability Change unlikely Change likely Specialization Many specialists Many generalists Formal rules Rigid rules Considerable flexibility Centralized in few top people Decentralized, diffused throughout the organization Authority 10 Two Sample Organizational Charts Bureaucracy Chief Executive Relatively narrow span of control Simple Structure Chief Executive Relatively wide span of control 5 Organizational Design: Classical Organizational Design: Classical Approach Formal Hierarchy Clear Rules Specialization of Labor Highly Routine Tasks Impersonal Atmosphere * I.e. Frederick Taylor, Max Weber, Ford Assembly Line Functional Organizational Structure Organizes employees around specific knowledge or other resources (marketing, production) CEO CEO Finance Production Marketing Divisional Structure Organizes employees around outputs, clients, or geographic areas CEO Consumer Products Lighting Products Medical Systems Matrix Structure (Project­based) Employees ( )are temporarily assigned to a specific project team and have a permanent functional unit CEO Engineering Project A Manager Project B Manager Project C Project Manager Marketing Design The Virtual (Network) The Virtual (Network) Organization Advertising Agency Independent R & D Consulting Firm Executive Group Factories in South Korea Commissioned Sales Representatives Emergence of Structure Emergence of Structure Example Forces for Change Forces for Change International trade industry shifts (e.g. BP, “Beyond Petroleum) economic conditions government regulation population trends technology production fluctuations increased knowledge crisis felt need Forcefield Analysis Forces Resisting Change Differing perceptions of the importance of new products products Bureaucratic inertia of the large computer manufacturer Social disruption caused by breaking up old work groups Competition from Asian firms Desired Position Employee fears about adapting to new production technologies Introduction of greater factory automation Forces Supporting Change Present Position Sense of crisis in company and industry Frost Case Frost Case 1. 2. 3. What were the forces driving Chad Frost to adopt new technology? What were forces opposing the adoption of new technology? What were strengths and weaknesses in Frost’s preparation for adopting new technology? What are the key problem areas that must be addressed in any implementation strategy? Beer’s Framework: Are you ready Beer for change? 1. 2. 3. 4. Sufficient level of dissatisfaction with status quo? Fully articulated model of what organization will become? Fully defined process from moving from present state to desired future? Cost of change? 1, 2, & 3 > 4? Minimizing Resistance to Change Communication Communication Highest priority and first strategy for change Improves urgency to change Reduces uncertainty (fear of unknown) Problems ­­ time consuming and costly Minimizing Resistance to Change Communication Communication Training Provides new knowledge and skills Includes coaching and action learning Helps break old routines and adopt new roles Problems ­­ potentially time consuming and costly Minimizing Resistance to Change Communication Communication Increases ownership of change Helps saving face and reducing fear of unknown Includes task forces Problems ­­ time­ consuming, potential conflict Training Employee Employee Involvement Involvement Minimizing Resistance to Change Communication Communication When communication, training, and involvement do not resolve stress Potential benefits Training Employee Employee Involvement Involvement More motivation to change Stress Stress Management Management Less fear of unknown Fewer direct costs Problems ­­ time­ consuming, expensive, doesn’t help everyone Minimizing Resistance to Change Communication Communication Training Employee Employee Involvement Involvement When people clearly lose something and won’t otherwise support change Stress Stress Management Management Influence by exchange­­ reduces direct costs Negotiation Problems • Expensive • Increases compliance, not commitment Minimizing Resistance to Change Communication Communication Training Employee Employee Involvement Involvement When all else fails Assertive influence Stress Stress Management Management Firing people ­­ radical form of “unlearning” Negotiation Problems Coercion • Reduces trust • May create more subtle resistance Leading Change Leading Change Establish a sense of urgency Form a powerful guiding coalition Create a vision Communicate the vision Empower acting on the vision Plan and create short­term wins Consolidate and leverage change Institutionalize new approaches Kotter, 1996 Strategic Vision & Change Strategic Vision & Change Need a vision of the desired future state Minimizes employee fear of the unknown Clarifies role perceptions Change Agents Change Agents Change agents apply transformational leadership Help develop a vision Communicate the vision Act consistently with the vision Build commitment to the vision Also requires transactional leadership Aligning employee behavior through rewards, resources, feedback ,etc. Organizational Culture Defined Organizational Culture Defined Courtesy of VanCity The basic pattern of shared assumptions, values, and beliefs considered to be the correct way of thinking about and acting on problems and opportunities facing the organization. Elements of Organizational Culture Artifacts of Organizational Culture Physical Structures Language Rituals and Ceremonies Stories and Legends Beliefs Values Assumptions Organizational Culture Artifacts: Stories and Legends Artifacts: Stories and Legends Social prescriptions of desired (undesired) behavior Provides a realistic human side to expectations Most effective stories and legends: Describe real people Assumed to be true Known throughout the organization Are prescriptive Artifacts: Rituals and Ceremonies Artifacts: Rituals and Ceremonies Rituals programmed routines (eg., how visitors are greeted) Ceremonies planned activities for an audience (eg., award ceremonies) Artifacts: Organizational Artifacts: Organizational Language Words used to address people, describe customers, etc. Leaders use phrases and special vocabulary as cultural symbols eg. Container Store’s “Being Gumby” Language also found in subcultures eg. Whirlpool’s “PowerPoint culture” Artifacts: Physical Structures/Symbols Artifacts: Physical Structures/Symbols Building structure ­­ may shape and reflect culture Oakley’s “Interplanetary Headquarters” in Foothill Ranch, California Office design conveys cultural meaning Furniture, office size, wall hangings Strengthening Organizational Culture Founders and leaders Selection and socialization Strengthening Strengthening Organizational Culture Managing the cultural Network (e.g. NY Life) Culturally consistent rewards Stable workforce ...
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