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Size of Operations
The size and scale of operations is a major determinant of the
organizational structure.
A restaurant business can afford to centralize its authority and decision
making, but a large computers manufacturing firm cannot.
As the business expands, it becomes mandatory to decentralize
authority and departmentalize all important strategic functions.
A large organization has different departments for different functions like
marketing, production, finance and human resources (HR). Each
department takes care of its function, and later all chores are collated to
form organizational tasks.
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Skills of Employees
The skills and educational qualifications of the employees also
influence the choice of the type of the structure.
A law firm would be constituted of attorneys. These individuals would
have vast professional and educational expertise and experience.
It would get very difficult to maintain authority over them at all times.
They must be given a free hand to make their own decisions. Otherwise,
there are chances of ego clashes between the employees and the
management. It is very easy to maintain authority over low-rung
laborers.
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Technologies Used
The types of technologies used by the organization
also determine the type of organizational structure.
A company that has automated its operations can
choose to decentralize its authority. The systems
would monitor progress of the employee throughout.
Hence, the task of the employee's immediate
superior would be to provide guidance as and when
required.
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The Components of
Organizational Structures
Work Functions
Also referred to as the "division of labor," work functions are
separated and defined in an organizational structure. Work tasks
and responsibilities are divided into different job titles. For example,
in an advertising agency, an account executive might handle
business development and account maintenance, or a media
specialist might concentrate on locating the best venues to place the
client's advertising in, such as print magazines. Job functions and
titles range from highly specialized to general.
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Job Groups
In organizational structures, similar job functions are grouped
together to form separate departments. Officially referred to as
"departmentalization," organizations group jobs according to
function, geographic location, product or market. Functional
departmentalization groups jobs according to a common task, such
as human resources, marketing or accounting. Product
departmentalization groups jobs according to the product that their
activities relate to; this type of departmentalization spans several
disciplines. Market departmentalization groups job functions
according to the client they serve, for example, a third-party contact
center that groups workers according to account.
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Span of Control
Another aspect of organizational structures is deciding the number of
employees that will report to a single manager, or the span of control.
A subaspect of span of control is deciding the number of management
layers that will exist. For example, a sales organization might employ
hundreds of front-line representatives who report to a front-line sales
manager in groups of 10. Each front-line sales manager might report
to a division sales manager who, in turn, might report to a regional
sales vice president.
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Decision-making Authority
In traditional hierarchical structures, the chain of command starts with
the company's top executives and flows downward. This culminates in
front-line staff implementing the strategic decisions that top
management has handed down. Employees might have little
involvement in the policies and procedures they must comply with. An
informal structure involves giving decision-making authority to all levels
of employees. In this type of structure, front-line employees can
participate in the development of the company's policies and make
decisions concerning their daily work routines.
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Hierarchy
One of the primary components of any organizational structure is
the hierarchy, or how many layers the organization has. A layer
typically signifies a level of management that an order or idea must
pass through. The executive board is the top layer of the business,
and the bottom layer is made of the entry level works. Sometimes
many levels of managers are found in between the two, especially in
mechanical structures. Sometimes there is only one or two levels of
management, which occurs more often in organic structures.
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Formalization
Formalization refers to how orders, decisions and company
standards are transmitted to all employees throughout the company.
This is tightly tied to leadership and hierarchy. Some businesses
prefer a very bureaucratic system of administering orders by strict
methods and publishing them through dependable channels that are
unquestionable. Conversely, other businesses prefer to collaborate
when making decisions, inviting employee dissent and encouraging
alternative ideas or a reversal of plans even after they are created.
Channels of communication are not as rigid in these types of
organizational structures.
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Divisions
How a company sets up its divisions is also a very important
component of an organization's structure. Small businesses can
often get away with only one division that handles all operations.
Some larger companies, meanwhile, divide the company based on
departments, with accounting, IT, HR and other departments
created as needed. Other organizations create divisions that
produce different products -- for example, one division for vacuum
cleaners and another for washing machines.
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Temporary Constructs
Temporary constructs are those elements of a business
organization that are frequently used to solve problems but do
not last as individual entities themselves. Many businesses
create temporary teams in order to complete specific projects.
Some businesses do not like to use teams but will assign a
special project to a dedicated troubleshooter. How a company
accepts or rejects these more fluid elements becomes an
important part of the organization.
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Organization Culture
The values and behaviors that contribute to the unique
social and psychological environment of an organization.
Organizational culture includes an organization's
expectations, experiences, philosophy, and values that
hold it together, and is expressed in its self-image, inner
workings, interactions with the outside world, and future
expectations.
It is based on shared attitudes, beliefs, customs, and
written and unwritten rules that have been developed
over time and are considered valid.
Copyright 2006 by Thomson Delmar Learning. ALL RIGHTS RESERVED.
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Organization Culture
Also called corporate culture, it's shown in
(1) the ways the organization conducts its business, treats its
employees, customers, and the wider community,
(2) the extent to which freedom is allowed in decision making,
developing new ideas, and personal expression,
(3) how power and information flow through its hierarchy, and
(4) how committed employees are towards collective objectives.
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Artifacts symbols
of
s
culture in the physical
and social work environment
Values
Espoused: what members of
an organization say they value
Enacted: reflected in the way
individuals actually behave
Levels
Levelsof
of
Organizational
Organizational
Culture
Culture
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Types of Artifacts
Ceremonies and Rites
Stories
Rituals
Symbols
Copyright 2006 by Thomson Delmar Learning. ALL RIGHTS RESERVED.
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Understanding Organizational
Culture
Antecedents
Founders values
Industry &
business
environment
National culture
Senior leaders
vision and
behavior
Organizational
Culture
Observable
artifacts
Espoused values
Basic
assumptions
Organizationa
l Outcomes
Effectiveness
Innovation &
stress
Organizationa
l Structure &
Practices
Group &
Social
Processes
Socialization
Reward
systems
Mentoring
Decision
making
Organizational
design
Collective
Attitudes &
Behavior
Group
dynamics
Communication
Influence &
empowerment
Leadership
Work attitudes
Job
satisfaction
Motivation
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Work Hard/Play Hard Culture: This type of organization does not involve
much risk, as the organizations, already, consist of a firm base coupled with a
strong client relationship. This kind of culture is predominantly opted by the
large-scaled organizations that have gained their customers' trust and support. The
organization is qualified with multiple-team meetings.
Bet Your Company Culture: In this kind of culture, the company makes big, and
important decisions over high stake endeavors. It takes time to see the
consequence of these decisions. Companies that postulate experimental projects,
and researches as their core business proposition, adopt this kind of culture; for
instance, a company designing experimental military weapons may implement the
said type of culture.
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Organizational Culture
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Constructive Culture
Normative
Beliefs
Organizational
Characteristics
Achievement
Selfactualizing
Value self-development
and creativity
Humanisticencouraging
Affiliative
Participative, employee
centered, and
supportive
High priority on constructive
interpersonal relationships, and focus
on work group satisfaction
Copyright 2006 by Thomson Delmar Learning. ALL RIGHTS RESERVED.
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Organizational
Characteristics
Approval
Conventional
Conservative,
bureaucratic, and
people follow the rules
Nonparticipative, centralized decision
making, and employees do what they
are told
Negative reward system and Defensive
avoid accountability
Dependent
Avoidance
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Aggressive-Defensive
Culture
Organizational
Characteristics
Normative
Beliefs
Oppositional
Confrontation and
negativism rewarded
Power
Nonparticipative, take
charge of Defensive
subordinates, and
responsive to superiors
Winning is values and a
win-lose approach is
used
Perfectionistic, persistent, and hard
working
Competitive
Perfectionistic
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Organizational Culture
Research Suggests:
1) Organizational culture correlated with
employee attitudes and behavior
2) Congruence between an individuals values
and the organizations values associated
with organizational commitment, job
satisfaction, intentions to quit, and
turnover
3) Organizational culture did not predict a
companys financial performance
4) Mergers frequently failed due to
incompatible cultures
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Strong Culture
an organizational culture with a
consensus on the values that drive
the company and with an intensity that
is recognizable even to outsiders
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BECAUSE
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Fit Perspective
A culture is good only if it fits the
industry or the firms strategy
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Fit Perspective
Three particular industry
characteristics affect culture:
1.Competitive environment
2.Customer requirements
3.Societal expectations
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Adaptive Culture
An organizational culture that encourages
confidence and risk taking among employees,
has leadership that produces change, and
focuses on the changing needs of customers
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Organizational Socialization
Phase 1: Anticipatory
Phase 2: Encounter
Phase 3: Change and acquisition
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Organizational Socialization
Perceptual and
Social Processes
Phases
1) Anticipatory
socialization
learning that
occurs prior to
joining the
organization
Anticipating realities
about the organization
and the new job
Anticipating
organizations needs for
ones skills and abilities
Anticipating
organizations sensitivity
to ones needs and
values
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Organizational Socialization
Perceptual and
Social Processes
Phases
2) Encounter values,
skills, and
attitudes start to
shift as new
recruit discovers
what the
organization is
truly like
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Organizational Socialization
Perceptual and
Social Processes
Phases
3) Change and
acquisition recruit
masters skills and
roles and adjusts
to work groups
values and norms
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Outcomes of Socialization
Newcomers who are successfully
socialized should exhibit:
Good performance
High job satisfaction
Intention to stay with organization
Low levels of distress symptoms
High level of organizational commitment
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Formal/public statements
Physical Layout
Slogans, co. lingo
Mentoring, modeling
Explicit rewards, promotion criteria
Stories, legends, myths
Processes and outcomes, measurement
Workflow and systems
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Mentoring
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Functions of Mentoring
Career Functions
Sponsorship
Exposure-and-Visibility
Coaching
Protection
Challenging Assignments
Psychological Functions
Role Modeling
Acceptance-andConfirmation
Counseling
Friendship
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Questions on Culture
Can the organizational culture change?
How?
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