Organizational Behavior

Robbins & Judge
Organizational Behavior
13th Edition
Chapter 16: Foundations of Organization Structure Student Study Slideshow

Bob Stretch
Southwestern College 2009 Prentice-Hall Inc. All rights reserved. 16-0
Chapter Learning Objectives

After studying this chapter, you should be able to:
Identify the six elements of an organizations structure. Identify the characteristics of a bureaucracy. Describe a matrix organization. Identify the characteristics of a virtual organization. Show why managers want to create boundaryless organizations. Demonstrate how organizational structures differ, and contrast mechanistic and organic structural models. Analyze the behavioral implications of different organizational designs. Show how globalization affects organizational structure.
2009 Prentice-Hall Inc. All rights reserved. 16-1
What Is Organizational Structure?

Organizational Structure
How job tasks are formally divided, grouped, and coordinated

Key Elements:
1. Work specialization 2. Departmentalization 3. Chain of command 4. Span of control 5. Centralization and decentralization 6. Formalization
1. Work Specialization
The degree to which tasks in the organization are subdivided into separate jobs Division of Labor
Makes efficient use of employee skills Increases employee skills through repetition Less between-job downtime increases productivity Specialized training is more efficient Allows use of specialized equipment
Can create greater economies and efficiencies but not always

Exhibit 16-1
Work Specialization Economies and Diseconomies

Specialization can reach a point of diminishing returns Then job enlargement gives greater efficiencies than does specialization
Exhibit 16-2
2. Departmentalization
The basis by which jobs are grouped together
Grouping Activities by:

Function
Product
Geography
Process
Customer
3. Chain of Command
Authority
The rights inherent in a managerial position to give orders and to expect the orders to be obeyed
Chain of Command
The unbroken line of authority that extends from the top of the organization to the lowest echelon and clarifies who reports to whom
Unity of Command
A subordinate should have only one superior to whom he or she is directly responsible
4. Span of Control
The number of subordinates a manager can efficiently and effectively direct
Wider spans of management increase organizational efficiency Narrow span drawbacks:
Expense of additional layers of management Increased complexity of vertical communication Encouragement of overly tight supervision and discouragement of employee autonomy
Exhibit 16-3
5. Centralization and Decentralization

Centralization
The degree to which decision making is concentrated at a single point in the organization.
Decentralization
The degree to which decision making is spread throughout the organization.
2009 Prentice-Hall Inc. All rights reserved.
16-8
6. Formalization
The degree to which jobs within the organization are standardized.
High formalization
Minimum worker discretion in how to get the job done Many rules and procedures to follow
Low formalization
Job behaviors are nonprogrammed Employees have maximum discretion
16-9
Common Organization Designs: Simple Structure

Simple Structure
A structure characterized by a low degree of departmentalization, wide spans of control, authority centralized in a single person, and little formalization
Exhibit 16-4
16-10
Common Organizational Designs: Bureaucracy

Bureaucracy
A structure of highly operating routine tasks achieved through specialization, very formalized rules and regulations, tasks that are grouped into functional departments, centralized authority, narrow spans of control, and decision making that follows the chain of command
16-11
An Assessment of Bureaucracies
Strengths
Functional economies of scale Minimum duplication of personnel and equipment Enhanced communication Centralized decision making
Weaknesses
Subunit conflicts with organizational goals Obsessive concern with rules and regulations Lack of employee discretion to deal with problems
16-12
Common Organizational Designs: Matrix

Matrix Structure
A structure that creates dual lines of authority and combines functional and product departmentalization
Key Elements
Gains the advantages of functional and product departmentalization while avoiding their weaknesses Facilitates coordination of complex and interdependent activities Breaks down unity-of-command concept
Exhibit 16-5
New Design Options: Virtual Organization

A small, core organization that outsources its major business functions Highly centralized with little or no departmentalization Provides maximum flexibility while concentrating on what the organization does best Reduced control over key parts of the business
Exhibit 16-6
New Design Options: Boundaryless Organization

An organization that seeks to eliminate the chain of command, have limitless spans of control, and replace departments with empowered teams T-form Concepts
Eliminate vertical (hierarchical) and horizontal (departmental) internal boundaries Break down external barriers to customers and suppliers
16-15
Four Reasons Structures Differ

Two extreme forms of organization (Exhibit 16-7) 1. Strategy
Innovation Strategy
A strategy that emphasizes the introduction of major new products and services Organic structure best
Cost-minimization Strategy
A strategy that emphasizes tight cost controls, avoidance of unnecessary innovation or marketing expenses, and price cutting Mechanistic model best
Imitation Strategy
A strategy that seeks to move into new products or new markets only after their viability has already been proven Mixture of the two types of structure
Exhibit 16-8
Why Structures Differ

2. Organizational Size
As organizations grow, they become more mechanistic, more specialized, with more rules and regulations
3. Technology
How an organization transfers its inputs into outputs
The more routine the activities, the more mechanistic the structure with greater formalization Custom activities need an organic structure
4. Environment
Institutions or forces outside the organization that potentially affect the organizations performance Three key dimensions: capacity, volatility, and complexity
Three-Dimensional Environment Model

Capacity
The degree to which an environment can support growth
Volatility
The degree of instability in the environment
Complexity
The degree of heterogeneity and concentration among environmental elements
Exhibit 16-9
Organizational Designs and Employee Behavior

Impossible to generalize due to individual differences in the employees Research Findings
Work specialization contributes to higher employee productivity, but it reduces job satisfaction. The benefits of specialization have decreased rapidly as employees seek more intrinsically rewarding jobs. The effect of span of control on employee performance is contingent upon individual differences and abilities, task structures, and other organizational factors. Participative decision making in decentralized organizations is positively related to job satisfaction.
People seek and stay at organizations that match their needs.

Global Implications
Culture and Organizational Structure
Many countries follow the U.S. model U.S. management may be too individualistic
Culture and Employee Structure Preferences

Cultures with high-power distance may prefer mechanistic structures
Culture and the Boundaryless Organization

May be a solution to regional differences in global firms Breaks down cultural barriers, especially in strategic alliances Telecommuting also blurs organizational boundaries
Summary and Managerial Implications

Structure impacts both the attitudes and behaviors of the people within it Impact of Technology
Makes it easier to change structure to fit employee and organizational needs
Exhibit 16-10
All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of the publisher. Printed in the United States of America.
Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall

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Robbins & Judge

Chapter 16: Foundations of Organization Structure Student Study Slideshow

Chapter Learning Objectives

What Is Organizational Structure?

How job tasks are formally divided, grouped, and coordinated

Can create greater economies and efficiencies but not always

Work Specialization Economies and Diseconomies

Grouping Activities by:

5. Centralization and Decentralization

2009 Prentice-Hall Inc. All rights reserved.

2009 Prentice-Hall Inc. All rights reserved.

Common Organization Designs: Simple Structure

2009 Prentice-Hall Inc. All rights reserved.

Common Organizational Designs: Bureaucracy

2009 Prentice-Hall Inc. All rights reserved.

2009 Prentice-Hall Inc. All rights reserved.

Common Organizational Designs: Matrix

New Design Options: Virtual Organization

New Design Options: Boundaryless Organization

2009 Prentice-Hall Inc. All rights reserved.

Four Reasons Structures Differ

Why Structures Differ

Three-Dimensional Environment Model

Organizational Designs and Employee Behavior

People seek and stay at organizations that match their needs.

Culture and Employee Structure Preferences

Culture and the Boundaryless Organization

Summary and Managerial Implications

Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall

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