The Structural View of Things

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The Structural View of Things
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Organization Structure
How work is formally divided, grouped and
then-hopefully-coordinated
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The Metaphor The Organization as an Efficient
Machine
Reliability
Efficiency
Effectiveness
Clarity
Speed
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• The Fundamental
  Assumptions
• 1. Organizations exist to achieve established
  goals and objectives.
• 2. Organizations work best when rationality
  prevails over personal preferences and external
  pressures.
• 3. Structures must be designed to fit an
  organizations circumstances (including its
  goals, technology and environment).
• 4. Organizations increase efficiency and enhance
  performance through specialization and division
  of labor.
• 5. Appropriate forms of coordination and control
  are essential to ensuring that individuals and
  units work together in the service of
  organizational goals.
• 6. Problems and performance gaps arise from
  structural deficiencies and can be remedied
  through restructuring.

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The Structural View

• Metaphor complex machine
• Leader analyst, architect
• Strategy do your homework, analyze, design,
  weigh, measure, be rational, manage
• Focus data, logic, structure, plans,
  policies,(the stuff that makes up most of the
  MBA degree )

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Key elements in org.structure

• Work specialization how much should one person
  know?
• Departmentalization how to put people together
  with similar tasks
• Chain of command line of authority
• Span of control how many to manage
• Centralization and decentralization tall or flat
• Formalization how many rules, formal policies

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The Organization Chart

• Organization Chart is a box-and-lines
  illustration showing the formal lines of
  authority and the organizations official
  positions or division of labor

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There are many ways, different options, and
various rationale for dividing up the workall
with different consequences
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Simple Structure
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• TOWER BUILDING AN EXERCISE IN LEADING,CENTRALIZIN
  G- DECENTRALIZING AUTHORITY, AND SPAN OF CONTROL

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Chain of command to establish authority

• To whom individuals and groups report?
• Chain of command is an unbroken line of authority
  than extends from the top to the lowest level of
  organization
• Dont confuse authority with influence
• There are many other patterns of influence
  Such asgtgtgt you tell me.

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Span of Control

• How many individuals can a manager direct?
• The following factors are often considered
• Required Contact
• Degree of Specialization
• Ability to Communicate

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Spans of Control Narrow versus Wide
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Centralized Vs. Decentralized Organizations

• Centralized Authority important decisions are
  made by higher-level managers

• Decentralized Authority important decisions are
  made by middle-level and supervisory-level
  managers

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• TOWER BUILDING AN EXERCISE IN LEADING,
  STRUCTURE, AND SPAN OF CONTROL
• Task Build a tower of sugar cubes as high as you
  think you can with your non-dominant hand, in
  five minutes, e.g. if you are right handed use
  your left hand or vice-versa. Your group score is
  based upon the number of cubes standing at the
  end of each round for the two builders. Then add
  up the three rounds. No practicing  before the
  exercise begins.
• Form groups of three for three rounds of tower
  building.
• Change leaders for each round.
• The other two, who are the builders, blindfold
  themselves.
• If you are done or your tower falls before the
  end of five minutes, remain silent until the end
  of the five minutes.
• Begin building your tower as instructed by your
  group leader when the instructor says to begin.
• If the tower falls, the score is zero. Score the
  number of cubes that remain standing at the end
  of each five minutes. Each group keeps track of
  total score per round,  then sums all three
  rounds.
• Between rounds two and three there are three
  minutes to talk tactics and/or time to practice.
  Time for training and integration.
•  

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• 1. How did the tactics of the leader change from
  round to round? What helped? What hindered?
• 2. Was more help given than asked for? Did this
  change?
• 3. Were the structures flat or tall?  Rank each
  of the three structures 1 to  10
• 1Tall almost all action directed by the leader.
    
• 10 Flat builders work with little direction
• 4. Return to your  regular groups Discuss What
  do you think would be the maximum span of control
  with what kind of structure, flat or tall, to
  maximize the score? Max number of workers is
  five. Try a round with the structure you think
  works best. We'll see which group wins.
•  

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• Then There is Functional Structure?
  So What Is it?

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Functional Organization One of the Most Common
Ways to Structure
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Other options for dividing the work (continued)
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Organization Chart for a Hospital A Basic
Example of a Function Structure Designed to
Assure Tension and Conflict
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How Might You Lessen the Conflict

• In Groups Discuss What
  Might You Do? For example, is there a structural
  change that might help?

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Baldrige performance excellence criteria are a
framework that any organization can use to
improve overall performance. Seven areas of
examination

• Baldrige National Quality Program
• LeadershipExamines how senior executives guide
  the organization and how the organization
  addresses its responsibilities to the public and
  practices good citizenship.
• Strategic planningExamines how the organization
  sets strategic directions and how it determines
  key action plans.
• Customer and market focusExamines how the
  organization determines requirements and
  expectations of customers and markets builds
  relationships with customers and acquires,
  satisfies, and retains customers.
• Measurement, analysis, and knowledge
  managementExamines the management, effective
  use, analysis, and improvement of data and
  information to support key organization processes
  and the organizations performance management
  system.
• Human resource focusExamines how the
  organization enables its workforce to develop its
  full potential and how the workforce is aligned
  with the organizations objectives.
• Process managementExamines aspects of how key
  production/delivery and support processes are
  designed, managed, and improved.
• Business resultsExamines the organizations
  performance and improvement in its key business
  areas customer satisfaction, financial and
  marketplace performance, human resources,
  supplier and partner performance, operational
  performance, and governance and social
  responsibility. The category also examines how
  the organization performs relative to competitors.

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2003 Saint Lukes Hospital of Kansas City
National Baldridge Award Winnerhttp//www.nist.
gov/public_affairs/baldrige2003/St.Lukes_3.3.04.pd
f
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• IN GROUPS

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• Meet with your group
• Among those presently working, someone share
  with others an answer to the question, on what
  basis is work divided up at your organization?
• With what consequences? Where do things break
  down?

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McDonaldization
Deskilled Jobs
Act as Robots
Tightly Controlled
Division of Labor
Ruthless Efficiency
Speed
Mass Production
Success
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Basic Factors to Consider
Knowledge or Skill
Time
Customers or Clients
Grouped By
Process
Place or Geography
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Basic Structural Tensions
Division of Labor and Coordination ofEffort
How to divide up the work differentiation
How to coordinate different roles and units
after responsibilities have been parceled out
integration
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Vertical Coordination
Authority
Rules and Policies
Planning and Control Systems
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Strengths of Vertically Integrated Structure
Efficiencies derive from straightforward
processes Works well with a stable
environment. Precision is a premium measured
against clear standards Maximize responses to
predictable markets
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Weaknesses
Slow to change. Difficulty dealing with
idiosyncratic problems. Stovepipes create
subcultures. Possible dehumanizing effect on
employees. Apathy, carelessness and lack of
pride. Caps on human capacities.
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So.

• How do we do to integrate?

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In General We Flatten
Ad Hoc Teams
Meetings/Committees Task
Forces/Teams Matrix Structures
Networks Coordinating Roles
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But
Lateral Coordination is usually where things
usually bog down
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First Semester
Module I Tools Competitive Analysis
Leadership Residency
Managerial Accounting Economics Financial
Management Quantitative Decision Skills Executive
Leadership
36
First Semester
Second Semester
Module I Tools Competitive Analysis
Wash D.C. Residency
Leadership Residency
Module II Managing People Systems
Managerial Accounting Economics Financial
Management Quantitative Decision Skills Executive
Leadership
Operations Management Human Resources Management
Info. Systems Organizational Group Behavior
37
First Semester
Third Semester
Module III The Enterprise and Its Environment
Strategic Assessment Project
Entrepreneurship Executive Leadership Internationa
l Business Strategic Marketing Strategic
Management
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First Semester Second Semester
Third Semester
Fourth Semester
Module III The Enterprise and Its Environment
International Residency
Strategic Assessment Project
Module IV Strategic Leadership
International Business Leadership of Strategic
Change Strategic Management of Technology Organiza
tional Behavior
Entrepreneurship Executive Leadership Internationa
l Business Strategic Marketing Strategic
Management
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Contingency Design

• Contingency Design the process of fitting the
  organization to the environment

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• Discuss
• What are the major factors to consider in the
  environment?

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The
Organizational Environment
International Forces
Demographic / Cultural Forces
Political Forces
Customers
Distributors
Organization
Suppliers
Unions
Government
Competitors
Work Force Issues
Technological Forces
Economic Forces
Specific Forces
General Forces
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Sources of Environmental Uncertainty complexity,
dynamism, and richness As the environment
becomes more complex, less stable, and poorer,
the level of uncertainty increases.
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• . Contingency theory states that in order to
• manage its environment effectively, an
• organization should design its structure
• to fit with its environment.
• A poor fit between structure and environment
• leads to failure, a close fit leads to success

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The Relationship Between Environmental
Uncertainty and Organizational Structure
Mechanistic organizations
Centralized hierarchy of authority Decentralized hierarchy of authority
Many rules and procedures Few rules and procedures
Specialized tasks Shared tasks
Formalized communication Informal communication
Few teams or task forces Many teams or task forces
Narrow span of control, taller structure Wider span of control, flatter structure
Environmental
UncertaintyStable
In flux (variable)


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Types of Organizational Structures

1. Simple Structure
2. Functional Structure
3. Divisional Structure
4. Conglomerate Structure
5. Hybrid Structure
6. Matrix Structure
7. Team-Based Structure
8. Virtual Network Structures

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Hybrid Structures
A Hypothetical example of what GM might use
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Matrix Structure The Customer as a Member of the
Company
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Advantages of Matrix Organization

• Efficient use or resources
• Flexibility in conditions of change and
  uncertainty
• Technical excellence
• Freeing top management for long-run planning
• Improving motivation and commitment
• Providing opportunities for personal development

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Team-Based Structures
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Network Structure
Design Studio Sweden
Components Assembly Mexico, Asia
Core of personal computer company USA
Engineering Company Japan
Distribution Company Canada
Accounting Finance USA
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Summary of Structural Frame
Looks beyond individuals and operates at
organizational level of analysis. When
structure is overlooked, energy and resources
are often misdirected. Right structure is a
contingency its character depends on goals,
strategies, technology and environment of
organization. Structures can work for, rather
than against both people and the purpose of
organizations.
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• While a poor structure makes a high performance
  impossible, the best structure in the world will
  not ensure good performance
• 
  Peter Drucker

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The Structural Frame

• Structure Iis the fundamental and relatively
  unchanging features of an organization which are
  officially sanctioned by those who control it and
  consist of the way activities and component
  parts are grouped , controlled and coordinated in
  order to achieve specific aims and outcomes
• taken alone, structure rarely tells the full
  story about why folks behave the way they do