MANAGEMENT

RICHARD L. DAFT

Designing Adaptive
Organizations
CHAPTER 9

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Learning Outcomes

Discuss the fundamental characteristics of organizing, including such

concepts as work specialization, chain of command, span of
management, and centralization versus decentralization.

Describe functional and divisional approaches to structure.

Explain the matrix approach to structure and its application to both

domestic and international organizations.

Describe the contemporary team and virtual network structures and why
they are being adopted by organizations.

Explain why organizations need coordination across departments and

hierarchical levels, and describe mechanisms for achieving coordination.

Identify how structure can be used to achieve an organizations strategic

goals.

chapter9

What are Your

Leadership Beliefs?

Personal beliefs about the role of leadership

impact a new manager
A managers work is influenced by how the
organization is organized
Organizational systems should be compatible
with leadership beliefs
Good managers understand and learn to work
within a variety of structural configurations
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Organizing

Organizing follows from strategy

Strategy dictates what you do
Organization dictates how you do it

Organizing is the deployment of

organizational resources to achieve
strategic goals
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Organizing The
Vertical Structure

1) The set of formal tasks assigned to

individuals and departments
2) Formal reporting relationships, including
lines of authority, decision responsibility,
number of levels and span of control
3) The design of systems to ensure
effective coordination of employees
across departments
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Organizing Concepts

Work
Work Specialization
Specialization the
the division
division tasks
tasks
into
into individual
individual jobs
jobs called
called division
division of
of labor
labor
Chain
Chain of
of Command
Command aa line
line of
of authority
authority
that
that links
links individuals
individuals and
and direct
direct reports
reports

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Authority, Responsibility,
and Delegation

The chain of command illustrates authority

Authority is the formal and legitimate right to
make decisions and issues orders
Authority is vested in organizational positions, not
people
Authority is accepted by subordinates
Authority flows down the vertical hierarchy

Responsibility is the duty to perform the task or

activity assigned
Delegation is the process managers use to
transfer authority and responsibility to others

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Line and Staff Authority

Line departments perform the tasks that

reflect the organizations primary goals
They work directly with customers/products

Staff departments are those departments

that provide specialized skills in support of
line departments
Legal, Human Resources, Marketing
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Organizing Chart for a

Water Bottling Plant

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Span of Management

The number of employees reporting to a

supervisor is span of management
Factors associated with less supervisor
involvement and larger span of control
Work is stable and routine
Subordinates perform similar work
Subordinates in single location
Highly trained and need little direction
Rules and procedures are defined
Support systems and personnel are available to manager
Little supervision is required
Managers personal preference favor a large span

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Reorganization to Increase
Span of Management

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Centralization means that

decision authority
is located near the
top of the organization

Centralization and
Decentralization
Decentralization means
decision authority is
pushed downward to lower
organizational levels

Change and uncertainty are usually associated with decentralization

The amount of centralization or decentralization should fit the firms strategy

During crisis or risk of company failure, authority may be centralized

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Departmentalization

Basis for grouping positions into departments

Choices regarding chain of command
Five traditional approaches:
Functional
Divisional
Matrix

Innovative approaches:
Teams
Virtual Networks
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Approaches to
Structural Design

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Approaches to
Structural Design

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Vertical Functional
Approach

Grouping into departments based on skills,

expertise, work activities and resource use
Departmentalized by organizational
resources
Accounting
Human resources
Engineering
Manufacturing
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Divisional Approach

Departments are grouped based on outputs

Product structure, program structure, self-contained
unit structure

Many large corporations have multiple

divisions for different business lines
Organizations may assign division responsibility
by geographic region or customer group
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Functional Versus
Divisional Approach

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Geographic-Based Global
Organization Structure

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Matrix Approach

Combines aspects of both functional and

divisional structures simultaneously
Improves coordination and information
sharing
A key challenge is the dual lines of
authority
Employees report to two supervisors

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Dual-Authority Structure in
a Matrix Organization

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Global Matrix Structure

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Team Approach

Teamwork is a growing trend

Teams allow organizations to delegate
authority
Become flexible and competitive in global
environment
Organizations may use cross-functional
and/or permanent team strategies
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The Virtual Network

Approach

Extending the boundaries of collaboration

beyond the organization
Subcontracting functions to other companies
Coordinate activities

Interconnected groups of companies

partnerships and collaborations
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Network Approach to
Departmentalization

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Structural Advantages and

Disadvantages

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The Need for Coordination

Organizations grow and evolve

Organizations need systems to process
information and enable communication
Coordination is the quality of
collaboration across departments
Coordination is required, regardless of
the structure
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Evolution of Organization
Structures

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Task Forces, Teams, and

Project Management

Project Managers are

responsible for
coordinating
the activities of
several departments on
a full-time basis for
the completion
of a specific project

Task Force
A temporary team or
committee formed to
solve a specific
short-term
problem

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Examples of Project
Manager Relationships

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Reengineering

Reengineering or business process

reengineering
Radical redesign of business processes to
achieve dramatic improvements
Cost
Quality
Service
Speed
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Reengineering at Michigan
Casting Center

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Structure Follows Strategy

The right structure is designed to fit the

organizations strategy

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