OB 06

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Information about OB 06

Published on May 5, 2008

Author: shengvn

Source: authorstream.com

Organizational Structure, Design and Culture: Organizational Structure, Design and Culture I - Organizational Structure & Design: I - Organizational Structure & Design W.L. Gore & Associates’ Structure: W.L. Gore & Associates’ Structure W. L. Gore & Associates Inc. has a team-based organizational structure that eliminates the traditional hierarchy and decentralizes authority. The maker of GoreTex fabric, electronics, industrial, and medical products was deliberately structured around teams responsible for their own projects and work processes. ©W.L. Gore & Associates Division of Labor: Division of Labor Subdivision of work into separate jobs assigned to different people Potentially increases work efficiency Necessary as company grows and work becomes more complex ©W.L. Gore & Associates Forms of Work Coordination: Forms of Work Coordination Informal communication Sharing information High media-richness Important in teams Formal hierarchy Direct supervision Common in larger firms Problems -- costly, slow, less popular with young staff Standardization Formal instructions Clear goals/outputs Training/skills Coordinating Work at ORBIS: Coordinating Work at ORBIS During operations on board the ORBIS Flying Eye Hospital, these medical professionals coordinate to some extent through informal communication. However, much of the operation occurs without discussion because team members also coordinate through standardization of skills. ©AP Photo/Ken Bilbert Elements of Organizational Structure: Organizational Structure Elements Span of Control Centralization Department- alization Formalization Elements of Organizational Structure Span of Control: Span of Control Number of people directly reporting to the next level Assumes coordination through direct supervision Wider span of control possible: with other coordinating methods employees perform similar tasks employee skills are standardized tasks are routine Moving to flatter structures Centralization and Decentralization: Formal decision making authority is held by a few people, usually at the top Centralization Decision making authority is dispersed throughout the organization Decentralization Centralization and Decentralization Formalization: Formalization Causes As firms get older, larger, and more regulated Problems Reduces organizational flexibility Work rules can undermine productivity Employee alienation, powerlessness Rules become focus of attention Mechanistic vs. Organic Structures: Mechanistic vs. Organic Structures Mechanistic Narrow span of control High formalization High centralization Organic Wide span of control Little formalization Decentralized decisions Effects of Departmentalization: Effects of Departmentalization Establishes work teams and supervision structure Creates common resources, measures of performance, etc Coordination through informal communication Alaska Chip Co’s Simple Structure: Alaska Chip Co’s Simple Structure The Alaska Chip Company is typical of small firms with a simple organizational structure. It has few employees, minimal hierarchy, and centralized decisions made by co-founder Ralph Carney (shown here) and his wife. ©T.Bradner/Alaska Journal of Commerce Features of Simple Structures: Features of Simple Structures Minimal hierarchy -- staff reports directly to owner Roles are fairly loosely defined for flexibility Informal communication for coordination Centralized structure -- owner makes most decisions ©T.Bradner/Alaska Journal of Commerce Functional Organizational Structure: Organizes employees around specific knowledge or other resources (marketing, production) CEO Finance Production Marketing Functional Organizational Structure Evaluating Functional Structures: Evaluating Functional Structures Benefits Supports professional identity and career paths Permits greater specialization Easier supervision --similar issues Creates an economy of scale --common pool of talent Limitations More emphasis on subunit than organizational goals Higher dysfunctional conflict Poorer coordination -- requires more controls Divisional Structure: Organizes employees around outputs, clients, or geographic areas Divisional Structure CEO Consumer Products Lighting Products Medical Systems Evaluating Divisional Structures: Evaluating Divisional Structures Benefits Building block structure -- accommodates growth Better coordination in diverse markets Limitations Duplication, inefficient use of resources Specializations are dispersed, creating silos of knowledge Matrix Structure (Project-based): Project C Manager Project B Manager Project A Manager Engineering Marketing Design Matrix Structure (Project-based) CEO Employees ( )are temporarily assigned to a specific project team and have a permanent functional unit Evaluating Matrix Structures: Evaluating Matrix Structures Benefits Uses resources and expertise effectively Improves communication,flexibility, innovation Focuses specialists on clients and products Allows interaction within specialty across groups Limitations More coordination required within group Two bosses dilutes accountability More conflict, organizational politics, and stress Flight Center’s Team-Based Structure: Flight Center’s Team-Based Structure Flight Center has a “tribal” team-based structure that organizes people around families, villages and tribes. This tribal structure seems to work well in an industry that has to pay attention to local markets and change quickly in a dynamic industry. AAP Image/Dave Hunt Team-Based Structure Features: Team-Based Structure Features Self-directed work teams Teams organized around work processes Very flat span of control Very little formalization Usually found within divisionalized structure AAP Image/Dave Hunt Network Organizational Structure: Core Firm (U.S.A.) Product Design Firm (France) Call Center Firm (India) Advertising Firm (U.K.) Manufacturing (Malaysia) Accounting Firm (U.S.A.) Network Organizational Structure Types of Organizational Technology: High Analyzability Low Analyzability High Variety Low Variety Scientific Research Assembly Line Skilled Trades Engineering Projects Types of Organizational Technology External Environment & Structure: External Environment & Structure Dynamic • High rate of change • Use team-based, network, or other organic structure Stable • Steady conditions, predictable change • Use mechanistic structure Complex • Many elements (such as stakeholders) • Decentralize Simple • Few environmental elements • Less need to decentralize External Environment & Structure (con’t): Diverse • Variety of products, clients, regions • Divisional form aligned with the diversity Hostile • Competition and resource scarcity • Use organic structure for responsiveness Integrated • Single product, client, place • Use functional structure, or geographic division if global Munificent • Plenty of resources and product demand • Less need for organic structure External Environment & Structure (con’t) Organizational Strategy: Organizational Strategy Structure follows strategy Differentiation strategy Providing unique products or attracting clients who want customization Cost leadership strategy Maximize productivity in order to offer competitive pricing Organizational Structure and Design: Organizational Structure and Design Organizational Culture: Organizational Culture Van City’s Corporate Culture : Van City’s Corporate Culture Vancouver City Savings Credit Union has re-affirmed its corporate culture to improve customer service and employee relations. Courtesy of VanCity Organizational Culture Defined: Organizational Culture Defined 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. Courtesy of VanCity Elements of Organizational Culture: Physical Structures Language Rituals and Ceremonies Stories and Legends Beliefs Values Assumptions Artifacts of Organizational Culture Organizational Culture Elements of Organizational Culture Rand Merchant Bank’s Culture: Rand Merchant Bank’s Culture When employees at Rand Merchant Bank received a booklet entitled The Complete Book of Rules, they discovered that the pages inside were blank. The book was a reminder that the South African financial institution’s culture encourages employees to make their own decisions. Courtesy of Rand Merchant Bank Meaning of Cultural Content : Meaning of Cultural Content Cultural content refers to the relative ordering of beliefs, values, and assumptions. Example: Rand Merchant Bank’s empowerment culture An organization emphasizes only a handful of values out of dozens or hundreds of values that exist. Courtesy of Rand Merchant Bank Organizational Subcultures : Organizational Subcultures Located throughout the organization Can enhance or oppose (countercultures) firm’s dominant culture Two functions of countercultures: provide surveillance and critique, ethics source of emerging values 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 Language: 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 Benefits of Strong Corporate Cultures: Benefits of Strong Corporate Cultures Strong Organizational Culture Social Control Improves Sense-Making Social Glue Problems with Strong Cultures: Problems with Strong Cultures Culture content might be misaligned with the organization’s environment. Strong cultures may focus on mental models that could be limiting Strong cultures suppress dissenting values from subcultures. Adaptive Organizational Cultures: Adaptive Organizational Cultures External focus -- firm’s success depends on continuous change Focus on processes more than goals Strong sense of ownership Proactive --seek out opportunities Merging “HP Way” with Compaq Culture: Merging “HP Way” with Compaq Culture Hewlett-Packard CEO Carly Fiorina (left) wanted to inject Compaq Computer’s responsiveness into H-P’s culture by merging the two firms. Meanwhile, Compaq suffered from clashing cultures a few years earlier when acquiring Digital Equipment Corp., so Compaq executives were careful to ensure the merger with H-P was culturally feasible. © Reuters/New media, Inc./ CORBIS Bicultural Audit: Bicultural Audit Part of “due diligence” in merger Minimizes risk of cultural collision by diagnosing companies before merger Three steps in bicultural audit: 1. Examine artifacts 2. Analyze data for cultural conflict/compatibility 3. Identify strategies and action plans to bridge cultures © Reuters/New media, Inc./ CORBIS Merging Organizational Cultures: Merging Organizational Cultures Assimilation Deculturation Acquired company embraces acquiring firm’s cultural values Acquiring firm imposes its culture on unwilling acquired firm Integration Cultures combined into a new composite culture Separation Merging companies remain separate with their own culture Strengthening Organizational Culture: Strengthening Organizational Culture Founders and leaders Culturally consistent rewards Stable workforce Selection and socialization Managing the cultural network Strengthening Organizational Culture Organizational Socialization Defined: Organizational Socialization Defined The process by which individuals learn the values, expected behaviors, and social knowledge necessary to assume their roles in the organization Socialization: Learning & Adjustment: Socialization: Learning & Adjustment Learning Process Newcomers form a cognitive map of the organization’s physical, social, and strategic/cultural dynamics Adjustment Process Newcomers need to adapt to their new work environment New work roles New team norms New corporate cultural values Stages of Socialization: Insider Changing roles and behavior Resolving conflicts Stages of Socialization Newcomer Testing expectations Outsider Gathering information Forming psychological contract Pre-Employment Stage Encounter Stage Role Management Pre-employment Socialization Conflicts: Individual Attracts Organization Individual Selects Organization Organization Attracts Individual Organization Selects Individual Conflict A Conflict B Conflict C Conflict D Pre-employment Socialization Conflicts Benefits of Realistic Job Previews: Benefits of Realistic Job Previews Less turnover, higher job performance Less reality shock Vaccination effect Applicants self-select themselves Builds loyalty Organizational Culture: Organizational Culture

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