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The Need for Coordination:            The primary reason for coordination is that departments and work groups are interdependent.

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The Need for Coordination:            The primary reason for coordination is that departments and work groups are interdependent.

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is the process by which managers assign a portion of their total workload to others

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is power that has been legitimized by the organization.

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Organisational life cycle: progression through organizations evolve (birth, youth, midlife, maturity)

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Research findings : small term focus on their core technologies, large firm characterized by level of job, standard operating procedures, rule and regulation, degree of decentralization

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Organisational size: full-time or full-time equivalent employees

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Healthy competition for resources between departments can improve efficiency, but cooperation also needs to be fostered.

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Organisational Size and Life Cycle

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Integration: the various subunits must work together in a coordinated fashion

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Businesses in related areas operating within a larger organizational framework
- This design results from a strategy of related diversification.
- Advantages:
+ The opportunities for coordination and shared resources represent
+ The M-form design basic objective is to optimize internal competition and cooperation.

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Differentiation: the organisation is broken down into subunits

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Organic organisation: often found in unstable and unpredictable environments.

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Mechanistic organisation: most frequently in stable environments.

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Paul R. Lawrence and Jay W. Lorsch

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By Tom Burns and G. M. Stalker

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Environment

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Results in the neglect of human and social processes

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Making exceptions to or changing rules is difficult

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Results in inflexibility

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Disadvantage

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Makes procedures and practices very clear

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Helps minimise favouritism

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continuous-process technology

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large-batch or mass-production technology

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Improves efficiency

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unit or small-batch technology

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Techonology : transform inputs to outputs

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Advantage

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Situational Influences on Organisation Design

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Situational Influences on Organisation Design

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Employment and advancement based on technical expertise

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Impersonal management with appropriate social distance

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Hierarchy of positions

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Consistent set of rules

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Distinct division of labour

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Five basic characteristics

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Bureaucracy: model of organisation design based on a legitimate and formal system of authority

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The Bureaucratic Model of Organisation Design

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The Bureaucratic Model of Organisation Design

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Research suggests that many organizations following this approach achieve only average-to-weak financial performance, and many firms have abandoned it for other approaches.

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approach loosely based on the product form of departmentalization

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Some activities are extremely decentralized down to the divisional level; others are centralized at the corporate level

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Administration costs With a larger number of administrative staff, salary costs increase
Duplication of functions can increase operating costs or even competition between departments

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sequential interdependence
When the output of one unit becomes the input for another in a sequential fashion

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On the other hand, it promotes a functional, rather than an organizational, focus and tends to promote centralization.

Functionally based designs are most commonly used in small organizations.

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Opportunity for coordination and shared resources (one of the biggest advantages)

The basic objective is to optimize internal competition and cooperation.

Healthy competition for resources between departments can improve efficiency, but cooperation also needs to be fostered.

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allows the organization to staff all important positions with functional experts, and it facilitates coordination and integration.

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Based on the functional approach to departmentalization

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M-form (for multidivisional) approach, is based on multiple businesses in related areas operating within a larger organizational framework. This design results from a strategy of related diversification.

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- difficult to compare and integrate activities
- achieve moderate to weak financial performance

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- improve operational efficiency
- resource allocation between companies
- decisions about buying and selling businesses.

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H-form organization, parent company.
an organization made up of a set of unrelated businesses

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Units operate with little interaction—the output of the units is pooled at the organizational level.

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functional experts, and it facilitates coordination and integration.

promotes a functional, focus and centralization.

Most common in small organizations.

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- external environment
- history
- nature of the decisions

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decision-making power is concentrated at the top management

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Employees have the right to make decisions

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exists when activities flow both ways between units.

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