Mechanistic versus Organic Structures 2 Differentiation Design Challenge 1
People in this organization take on new tasks as the need arises and its very unclear who is responsible for what and who is supposed to report to whom. This makes it difficult to know whom to call on when the need arises and difficult to coordinate peoples activities so they work together as a team. 3
Differentiation: assigning people and resources to tasks
simple organization -> low differentiation
complex organization -> high differentiation Differentiation 4 The basic building blocks of differentiation are organizational roles.
An organizational role is a set of task-related behaviors required of a person by his or her position in an organization.
For example: Maintenance Technician Design Engineer Differentiation 5 As the division of labor increases, managers specialize in some roles and hire people to specialize in others.
Specialization allows people to develop their individual abilities and knowledge within their specific role.
The identification of roles leads to authority and control issues. Differentiation 6
Authority is the power to hold people accountable for their actions and to make decisions concerning the use of resources.
Control is the ability to coordinate and motivate people to work in an organizations interests.
Differentiation 7
In most organizations, people with similar roles are grouped into a subunit.
The main subunits that develop in organizations are: functions (or departments) divisions
Differentiation 8 A function is a subunit composed of a group of people who possess similar skills and knowledge to perform their jobs.
marketing dept. maintenance dept.
A division is a subunit that consists of a collection of functions that are related to a particular good or service.
The number of functions and divisions in an organization is a measure of its complexity.
Differentiation increases control and allows an organization to accomplish tasks effectively. Differentiation 10 As organizations grow in size, they differentiate into five different kinds of functions:
1) Support functions facilitate relations with the environment and stakeholders
purchasing sales marketing legal affairs public relations Differentiation 11 As organizations grow in size, they differentiate into five different kinds of functions:
2) Production functions manage the efficiency of the conversion processes
production operations production control quality control Differentiation 12 As organizations grow in size, they differentiate into five different kinds of functions:
3) Maintenance functions enable an organization to keep its departments in operation
personnel engineering janitorial services Differentiation 13 As organizations grow in size, they differentiate into five different kinds of functions:
4) Adaptive functions allow adjustment to changes in the environment
research and development market research long-range planning
Differentiation 14 As organizations grow in size, they differentiate into five different kinds of functions:
5) Managerial functions facilitate the control and coordination of activities within and among departments.
top management middle managers lower-level managers
Differentiation 15 An organization chart is a drawing that shows the end result of organizational differentiation.
The organization chart is a snapshot of the way things are divided up along two dimensions:
vertical horizontal Differentiation 16 Vertical differentiation refers to the way an organization designs its hierarchy of authority (i.e., reporting relationships).
Horizontal differentiation refers to the way an organization groups tasks into roles and roles into subunits (i.e., functions and divisions). Differentiation 17 Design Challenge 2
We cant get people to communicate and coordinate in this organization. Specifying tasks and roles is supposed to help coordinate the work process, but here it builds barriers between people and functions. Integration 18 Integrating Mechanisms
1) Hierarchy of Authority: who reports to whom
2) Direct Contact: subunit representatives meet face to face
3) Liaison Role: a specific person coordinates with other subunits Integration 19 4) Task Force: temporary committee to coordinate cross-functional activities
5) Team: permanent committee
6) Integrating Role: A new role is established to coordinate the activities of two or more functions or divisions
7) Integrating Department: A new department is created to coordinate the activities of functions or divisions Integration 20
Balance differentiation and integration. 21 Decision Making Centralized High managerial control Low employee empowerment
Decentralized Low managerial control High employee empowerment Crucial in fast-changing environments 22 Types of Structures Two general categories of structure types:
organic and mechanistic 23 Mechanistic Structures Designed to induce people to behave in predictable ways.
Decision making is centralized Subordinates are closely supervised Information flows downward in the hierarchy Tasks are clearly defined Integrating mechanisms are simple Work is very standardized
24 Organic Structures Promote flexibility, so people initiate change and can adapt quickly
Decision making is decentralized Roles are loosely defined Integrating mechanisms are complex Tasks rely on mutual adjustment Information flows freely 25 Design Goal Anticipate environmental, social, and procedural constraints and opportunities