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Managing Organizational Structure and Culture

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Managing Organizational Structure and Culture

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DESIGNING ORGANIZATIONAL STRUCTURE

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GROUPING TASKS INTO JOBS

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ORGANIZATIONAL STRUCTURE

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ORGANIZATIONAL CULTURE

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Allocating Authority

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is the process of

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In general

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Establishing formal relationships among employees to coordinate efforts towards achieving the organization's goals efficiently.

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it involves

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Making specific choices to create a particular structure and culture within the company, aiming to foster desired attitudes and behaviors while ensuring effective coordination.

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four key factors of organizational structure and culture

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The organizational environment

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decides

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Whether managers should choose flexible structures and corporate cultures in uncertain and constantly changing contexts, or more formal structures in stable and predictable contexts.

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managers choose organizational structures and cultures based on their:

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Strategy

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Different strategies, such as differentiation or low cost, require specific structures.

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for example:

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A flexible structure is appropriate as a differentiation strategy based on innovation, while a formal structure is better for price-focused strategies. Expansion and internationalization also require flexible structures.

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Technology

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Combination of skills, knowledge, machines and computers used in the production of goods and services. Complex technologies require flexible structures and cultures to cope with unexpected events, while routine technologies adapt to formal structures because of their predictability.

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refers to the

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The characteristics of an organization's:

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Human resources greatly influence

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The choice of structure and culture. Highly skilled employees tend to prefer autonomy and dislike close supervision. Consequently, organizations with skilled workforces often adopt flexible and decentralized professional structures and cultures that promote employee autonomy and self-control.

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These factors tend to bring with them a higher level of uncertainty, so a flexible and adaptable structure is usually chosen instead of a rigid one.

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The first step in organizational design is Job design

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The process by which managers decide how to divide into specific jobs the tasks that have to be performed to provide customers with goods and services.

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Managers need to analyze

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The range of tasks to be performed and then create jobs that best allow the organization to give customers the goods and services they want.

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Job Simplification

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of reducing the number of tasks that each worker performs

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the process of

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but

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Oversimplifying jobs can reduce efficiency if workers feel bored, unmotivated and happy, which can lead to poor performance.

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Job enlargement involves

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Expanding the variety of tasks within a job by adjusting the division of labor. For example, at Subway, food servers both make and serve food, enlarging their job scope compared to McDonald's servers

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This approach aims to

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reduce boredom, fatigue, and potentially increase motivation, leading to higher performance and improved quality of goods and services provided.

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Job enrichment

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involves

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Increasing the level of responsibility a worker has in their role by empowering them to experiment, develop new skills, make decisions, and monitor their own performance.

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this approach aims to

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Managers who implement job enrichment and job enlargement strategies tend to encourage a flexible organizational structure, promoting innovation among employees.

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The Job Characteristics Model, developed by Hackman and Oldham identifies five key job characteristics :

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Task identity: The extent to which a job involves completing a whole, identifiable piece of work.

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Skill variety: The range of different skills, abilities, or knowledge required by the job.

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Autonomy: The level of freedom and discretion given to employees to schedule tasks and make decisions.

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Task significance: The perceived impact of the job on others, either within or outside the organization.

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Feedback: The clarity and immediacy of information employees receive about their job performance.

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These characteristics affect employees' motivation by influencing their sense of meaningfulness, responsibility for outcomes, and understanding of how their work affects others

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Designing organizational structure involves grouping jobs to match the organization's needs.

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But when technology or customer needs change rapidly, even more flexibility is needed. That's why managers opt for structures such as matrix or product teams.

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Cross-functional team A group of managers brought together from different departments to perform organizational tasks.

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Managers decide how to group jobs into departments, aiming for efficiency. As the organization grows, more complex structures may be necessary. Choosing the right structure is crucial for success, and making informed decisions, leading to high performance.

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Functional structure

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Switching to a divisional structure by product, market or geography allows for quick responses.

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Is a type of organization in which a company's departments are grouped according to the functions they perform, such as sales or research and development. Each department focuses on specific activities necessary to produce goods or services.

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Matrix and Product Team Designs

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organizes a company into separate units

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By Product: Each product line is managed as an independent division, with managers responsible for strategies to compete in their industry.

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Geographic: Divisions are organized according to geographic locations to adapt to the needs of each region.

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Market: The divisions are grouped according to the type of customer they target, allowing them to adapt to the demands of each segment.

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Matrix structure An organizational structure that simultaneously groups people and resources by function and by product.

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Product team structure An organizational structure in which employees are permanently assigned to a cross-functional team and report only to the product team manager or to one of his or her direct subordinates.

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The divisional structure

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Each focused on a specific product, market or region. There are three main types: by product, by market and by geography

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A clear hierarchy of authority must be established to coordinate activities effectively.

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Tall and Flat Organizations:

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COORDINATING FUNCTIONS AND DIVISIONS

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The complex structure of a company creates difficulties in coordinating its functions and divisions, as each develops its own perspective and priorities.

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This can lead to a lack of cooperation between areas, especially when they have divergent objectives. To overcome these challenges, managers design a hierarchy of authority and use integration mechanisms to effectively coordinate functions and divisions.

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Managers must find a balance between centralization and decentralization that fits the needs of the organization and its environment. The key is to maintain agility and alignment with organizational objectives.

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Balance between Centralization and Decentralization:

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Authority and Hierarchy:

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Authority is the power of managers to make decisions and direct resources in an organization. The hierarchy of authority establishes the chain of command, from the CEO to non-managerial employees.

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Organizations can be tall (many hierarchical levels) or flat (few levels). Tall organizations can have communication problems and high costs due to too many managers.

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Centralization and Decentralization of Authority

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Minimum Chain of Command:

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Suggests that managers should have as few hierarchical levels as possible to use resources efficiently.

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Decentralization gives lower-level managers and non-managerial employees the power to make important decisions about the use of resources. It balances flexibility with organizational alignment.

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To increase communication and coordination among functions or between divisions :

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top managers incorporate various integrating mechanisms

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As organizations grow, coordinating activities becomes essential. Integrating mechanisms are tools used to enhance communication and coordination among different functions or divisions within an organization.

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Integrating Roles: Experienced senior managers take on integrating roles solely focused on enhancing coordination and synergy between functions or divisions. These roles are crucial for complex organizations to leverage resources effectively and achieve performance gains.

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Liaison Roles : Managers appoint liaison roles to facilitate coordination between functions or divisions. Liaisons regularly communicate and share information, smoothing interdepartmental interactions.

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Liaison Roles : Managers appoint liaison roles to facilitate coordination between functions or divisions. Liaisons regularly communicate and share information, smoothing interdepartmental interactions.

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Task Forces: Task forces are temporary committees comprising managers from various functions or divisions. They convene to address specific mutual problems, ensuring diverse perspectives and comprehensive solutions.

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Cross-Functional Teams: Permanent integrating mechanisms, such as cross-functional teams, address recurring issues like product development. These teams consist of members from different departments collaborating on specific projects or goals.

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This refers to

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The collective mindset and behavior patterns shared by members of an organization. It's crucial because it shapes how employees interact, make decisions, and work towards common goals.

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Values and Norms:

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Values are fundamental beliefs that guide organizational behavior, influencing priorities and actions. Norms, on the other hand, are unwritten rules or expectations about how members should behave. They are significant because they create a standard for acceptable conduct and promote consistency in organizational behavior.

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Impact of Culture:

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Influences employee engagement, productivity, and performance. Positive cultures enhance organizational effectiveness, while dysfunctional cultures undermine it. Managing culture is crucial for achieving strategic goals.

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Sources of Culture:

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Arise from member characteristics, ethical principles, employment relationships, and organizational structure. Understanding these sources helps manage cultural dynamics.

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Adaptive vs. Inert Cultures: