Chapter 10 Managing Organizational Structure and Culture

Chapter 10

Managing Organizational Structure and Culture

MGMT 321 – Chapter 10 2

Organizational Structure

Organizational Architecture– The organizational structure, control

systems, culture, and human resource management systems that together determine how efficiently and effectively organizational resources are used

MGMT 321 – Chapter 10 3

Organizational Structure

Organizing– Establishing working relationships among

employees to achieve goals.

Organizational Structure– Formal system of task and reporting relationships

showing how workers use resources.

Organizational Design– Creating a specific type of organizational structure

and culture so that a company can operate in the most efficient and effective way

MGMT 321 – Chapter 10 4

Factors Affecting Organizational Structure

MGMT 321 – Chapter 10 5

The Organizational Environment

Organization structure depends on: How to group tasks into individual jobs How to group jobs into functions and

divisions How to allocate authority and

coordinate functions and divisions

MGMT 321 – Chapter 10 6

Job Design

Job Design– Deciding how to divide tasks into specific jobs

Job Enlargement– Increasing the number of different tasks in a

given job by changing the division of labor

Job Enrichment– Increasing the degree of a worker’s

responsibility

MGMT 321 – Chapter 10 7

The Job Characteristics Model

MGMT 321 – Chapter 10 8

Job Characteristics Model

Job Characteristic

Skill variety Employee uses a wide range of skills.

Task identity Worker is involved in all tasks of the job from beginning to end of the production process

Task significance Worker feels the task is meaningful to organization.

Autonomy Employee has freedom to schedule tasks and carry them out.

Feedback Worker gets direct information about how well the job is done.

MGMT 321 – Chapter 10 9

Grouping Jobs into Functions

Function– Group of people who possess similar skills

to perform their jobs Functional Structure

– An organizational structure composed of all the departments that an organization requires to produce its goods or services

MGMT 321 – Chapter 10 10

Divisional Structures

Divisional Structure– Managers create a series of business units

to produce a specific kind of product for a specific kind of customer

Types of Divisional Structures– Product– Market– Geographic

MGMT 321 – Chapter 10 11

Types of Divisional Structures

MGMT 321 – Chapter 10 12

Matrix Structure

MGMT 321 – Chapter 10 13

Product Team Structure

MGMT 321 – Chapter 10 14

Federated’s Hybrid Structure

MGMT 321 – Chapter 10 15

Allocating Authority

Hierarchy of Authority– An organization’s chain of command– Span of control

Line Manager Staff Manager

MGMT 321 – Chapter 10 16

Tall Organizations

MGMT 321 – Chapter 10 17

Flat Organizations

MGMT 321 – Chapter 10 18

Decentralization of Authority

Decentralizing authority Disadvantages

– Teams may begin to pursue their own goals at the expense of organizational goals

– Can result in a lack of communication among divisions

MGMT 321 – Chapter 10 19

Integrating Mechanisms

MGMT 321 – Chapter 10 20

Organizational Culture

MGMT 321 – Chapter 10 21

Adaptive and Inert Cultures

Adaptive cultures – Values and norms help an organization

grow and change as needed to be effective Inert cultures

– Values and norms that fail to motivate or inspire employees

– Lead to stagnation and often failure over time