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Organizational Design
Organizational Design - the process of constructing and adjusting an organizations structure to achieve its organizations structure goals. the linking of departments and jobs within an organization
H. Mintzberg, The Structuring of Organizations, Prentice Hall, 1979, 301. Reprinted by permission of Prentice-Hall, Inc, Upper Saddle River, NJ.
Four Dimensions Managers goal orientation Time orientation Interpersonal orientation Formality of structure
Horizontal Differentiation
The degree of differentiation between organizational subunits Based on employees specialized knowledge, education, or training
Vertical Differentiation
The difference in authority and responsibility in the organizational hierarchy Greater in tall, narrow organizations than in flat, wide organizations
Spatial Differentiation
Geographic dispersion of an organizations offices, plants, and personnel Complicates organizational design, but may simplify goal achievement or protection
Designed to achieve unity among individuals and groups Supports a state of dynamic equilibrium - elements of organization are integrated, balanced
Vertical Integration
Hierarchical referral Rules and procedures Plans and schedules Positions added to the organization structure Management information systems
Horizontal Integration
Liaison roles Task forces Integrator positions Teams
Formalization - the degree to which the organization has official rules, regulations, and procedures
Centralization - the degree to which decisions are made at the top of the organization
Specialization the degree to which jobs are narrowly defined and depend on unique expertise
Complexity - the degree to which many different types of activities occur in the organization
Standardization - the degree to which work activities are accomplished in a routine fashion
Simple Structure - a centralized form of organization that emphasizes the upper echelon & direct supervision Structural Configurations of Organizations
Machine Bureaucracy a moderately decentralized form of organization that emphasizes the technical staff & standardization of work processes
Adhocracy - a selectively decentralized form of organization that emphasizes the support staff & mutual adjustment among people
Divisional Form - a moderately decentralized form of organization that emphasizes the middle level & standardization of outputs
Professional Bureaucracy a decentralized form of organization that emphasizes the operating level & standardization of skills
Five Structural Configurations of Organization Prime Structural Type of Key Part of Coordinating Configuration Organization Decentralization Mechanism Simple Structure Machine Bureaucracy Direct Supervision Standardization of Work Processes Upper Echelon Technical Staff Operating Level Middle Level Support Staff
Centralization
Limited Horizontal Decentralization Vertical & Horizontal Decentralization Limited Vertical Decentralization Selective Decentralization
Professional Standardization Bureaucracy of Skills Divisionalized Standardization Form of Outputs Adhocracy Mutual Adjustment
Strategic Apex
Size
Technology
Contextual Variables a set of characteristics that influences the organizations design processes
Environment
Size
Small Organizations
Less High Low Low Low Flat
Large Organizations
More Low High High High Tall
Technology
Technological Interdependence the degree of interrelatedness of the organizations various technological elements
Task Variability
Few Exceptions Many Exceptions
Craft Ill-defined & Unanalyzable 1. Moderate 2. Moderate 3. Moderate 4. Low-moderate 5. High 6. Low Well-defined & Routine 1. High Analyzable 2. High 3. Moderate 4. High 4 Standardization 5 Complexity 5. Low 6 Hierarchy of Authority 6. High
Nonroutine 1. Low 2. Low 3. Low 4. Low 5. High 6. Low Engineering 1. Moderate 2. Moderate 3. High 4. Moderate 5. Moderate 6. Moderate
Built from C. Perrow, A Framework for the Comparative Analysis of Organization, American Sociological Review, April 1967, 194-208
Environment - anything outside the boundaries of an organization Task Environment - the elements of an organizations environment that are related to its goal attainment Environmental Uncertainty - the amount and rate of change in the organizations environment
Environment
Organic Structure - an organizational design that emphasizes teamwork, open communication, and decentralized decision making
Strategic Dimension
Predicted Structural Characteristics Innovationto understand Low formalization and manage new processes Decentralization and technologies Flat hierarchy Market differentiationto Moderate to high complexity specialize in customer Moderate to high preferences formalization Moderate centralization Cost controlto produce High formalization standardized products High centralization efficiently High standardization Low complexity
Context of the organization Correct size Current technology Perceived environment Current strategy & goals
Influences how manager perceive structural needs Structural dimensions Level of formalization Level of centralization Level of specialization Level of standardization Level of complexity Hierarchy of authority
Which characterize the organizational processes Differentiation & Integration Which influence how well the structure meets its Purposes Designate formal lines of authority Designate formal informationprocessing patterns Which influence how well the structure fits the Context of the organization
Create Demand
Produce Product
Provide Support
From R. Teerlink and L. Ozley, More than a Motorcycle: The Leadership Journey at Harley-Davidson. Boston, MA, 2000. P. 139. Copyright 2000 by the Harvard Business School Publishing Corporation; all rights reserved.
Paranoid
Depressive