Reframing Organizations, 3rd ed.

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Reframing Organizations, 3rd ed.
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Chapter 4

• Structure and Restructuring

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Structure and Restructuring

• Chapter 4 Overview
• Structural dilemmas
• Structural configurations
• Generic issues in restructuring
• Why restructure?
• Making restructuring work
• Three case examples

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I. Structural Dilemmas

• Differentiation vs. integration
• (allocation of work coordination)
• Gaps vs. overlaps
• (whose responsibility/job?)
• Underuse vs. overload
• (Navy brick theory)
• Lack of clarity vs. lack of creativity
• (unclear job responsibilities)

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I. Structural Dilemmas cont

• Excessive autonomy vs. excessive interdependence
  
• (group work)
• Too loose vs. too tight
• (govt bureaucracy)
• Goalless vs. goalbound
• (organizational goals)
• Irresponsible vs. unresponsive
• (rules)

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II. Structural Configuration

• Mintzbergs five-sector logo
• Operating core
• People who perform basic work (line workers)
• Administrative Component
• Managers/supervisors (line supervisor)
• Strategic Apex
• Focus on outside environment (executives)
• Techno structure
• Specialist/analysts (engineers)
• Support staff
• Perform tasks that facilitate work (secretaries)

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II. Structural Configuration cont

• Simple structure
• Two Levels
• Strategic apex
• Operating level
• Start-up companies
• Virtues
• Structure is very flexible adaptable
• One person directs the entire operation
• Vices
• Lack of strategic planning (boss too close to
  operations)
• Authority can block change

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II. Structural Configuration cont

• Machine bureaucracy
• Important decisions are made at the strategic
  apex
• Day-to-day operations are controlled by managers
  SOPs
• Example McDonalds
• Challenges
• How to motivate employees and satisfy workers in
  the operating core
• Constant tension between headquarter and local
  managers
• Overcome challenges by
• Permitting experimentation (Egg McMuffin
  breakfast sandwich)

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II. Structural Configuration cont

• Professional Bureaucracy
• Characteristics
• Operating core is larger than other structural
  parts
• Few managerial levels exist between the strategic
  apex and professors (flat organizational
  structure)
• Examples Universities (EIU or U of Illinois)
• Challenges
• Quality control and coordination
• Dealing with incompetence and irresponsibility
• Respond slow to change

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II. Structural Configuration cont

• Divisionalized Form
• Work accomplished through quasi-autonomous units
  (multispecialty hospital) serving defined markets
• Division heads (presidents) are accountable to
  the corporate office
• As long as the division performs, they have free
  reign
• Benefits
• Offer economies of scale
• Ample resources
• Responsive
• Challenges
• Headquarters may lose touch with operations

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II. Structural Configuration cont

• Adhocracy
• Loose, flexible, and organic structure
• Characteristics
• Dont believe in hierarchy, rule books, dress
  codes, etc
• Ambiguous authority structure
• Unclear objectives
• Contradictory assignments

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Helgesens Web of Inclusion

• Helgesens Web of Inclusion
• Organizational structure form more circular than
  a defined hierarchical pyramid(spider web)
• Emphasis on lateral relationships rather than
  hierarchy
• Leadership at the center rather than at the top
• Web builds from the center out through a network
  of interconnections

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III. Generic Issues in Restructuring

• Restructuring must take into account structural
  configurations
• Restructuring triggers a multidirectional
  tug-of-war
• Each component exerts distinct pressures.
• Strategic apex pushes for more alignment,
  centralization.
• Middle managers try to protect autonomy and room
  to run their own units.
• Technostructure pushes for standardization,
  believes in measurement and monitoring.
• Support staff prefers less hierarchy, more
  collaboration.

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IV. Why Restructure?

• The environment shifts (regulation/compliance)
• Example Health Insurance Portability and
  Accountability Act (HIPPA)
• Technology changes
• Example Boeings shift from piston to jet
  engines
• Example Automotive mfg shift to hybrid cars
• Organizations grow
• Leadership changes
• Often the first initiative when new leadership
  arrives

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V. Three Case Examples

• Citibanks back room
• Backroom was originally structured as a machine
  bureaucracy (ex. McDonalds)
• Issues
• Productivity, errors, expenses rising 20/per
  year
• The Idea was to transform backroom into
  high-volume production facility through
  divisional form bureaucracy
• Phases
• Phase 1 Implemented new computer system for
  control and forecasting
• Phase 2 Studied how the back rooms processes
  worked
• Phase 3 Broke pipeline into smaller lines
  (different product) with managers for each line
• Challenges
• Technical core strongly resisted the
  restructuring (almost led to rebellion)

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V. Three Case Examples cont

• Kodaks black-and-white division
• Issues
• Competition, costs, customer satisfaction, low
  employee morale
• Plan
• Organize into three flow with the black white
  division
• Graphics
• Health Sciences
• Financial services, HR, engineering would
  support the flows
• Managers/supervisors became coaches
• Cross functional teams were formed to solve
  problems
• Result
• Two years after restructuring the division
  performance standards were surpassed

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V. Three Case Examples cont

• Beth Israel Hospital
• Issues
• Responsibilities of nurses were highly
  specialized (no one really knew what was going on
  with the patient)
• Idea
• Transform structure from a pyramid into an
  inclusionary web (called primary nursing)
• Each nurse assumes responsibility for the care of
  a specific patient
• Nurse manager sets goals, deals with budget and
  administrative matters, and ensures nurses have
  resources
• Results
• Nurse became a professional partner

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V. Three Case Examples cont

• Why were these restructuring efforts successful?
• Developed a new conception of the organizational
  goals and strategies
• Carefully studied the existing structure and
  processes (had the complete picture)
• Designed new structure in light of goals,
  technology, and environment
• Experimented while retaining things that worked

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Conclusion

• An organizations structure represents its
  efforts to align its internal processes with its
  external environment while balancing structural
  dilemmas.
• Mintzberg structural configurations align with
  different tasks and environments.
• Changes in the environment pressure the
  organization to realign it structure.