Lesson 14 Organization and Work Design
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1 Lesson 14 Organization and Work Design Università Tor Vergata 1
2 Part A Agenda Organizations as systems Contingency theory Organizational design 2
3 Organizations as systems The organization is a system (Systems theory) A functioning body Interlinking parts One overall goal & many contributing goals A task to perform Need to adapt to survive An open system 3
4 Limits of the systems approach Social behaviour is open-ended, uncertain (deterministic approach) Multiple goals exist Reification (goals are about individuals) 5
5 Contingency Theory Structure is a contingent variable that needs changing according to what the context indicates Contextual Organization Factors structure Performance 7
6 Contingency Theory The Aston studies identified contextual & structural variables. Examples are: Structural variables: Specialization of tasks Standardization of roles and procedures Formalization of communications (Centralization of authority) Contextual variables: Size Technology Environment 8
7 Contingency Theory Technology production methods work organization Woodward: a given technology demands a particular structure Perrow: managerial responsibilities are affected by the organization s task structure i.e. technology Few exceptions Many exceptions Not well understood problems Craft Uncertainty Well understood problems Routine Risk 9
8 Contingency Theory Environment: how to tackle uncertainty Burns & Stalker: mechanistic vs. organic structures Lawrence & Lorsch: Differentiation (differences in cognitive and emotional orientation among managers in different functional departments) Integration (the quality of collaboration amongst departments required to achieve unity by the demands of the environment) 10
9 Organizational design Organizational design: Setting the structures in which decisions are made and executed Rationalized vs. flexible structures Efficiency vs. flexibility A choice or a combination? 12
10 Part B Agenda A. Basic charts: 1. Elementary 2. Functional 3. Divisional B. Modified charts 4. Products 5. Projects 6. Matrix 19
11 The general theoretical frame Environment Organizational system Results Market structure Industry Strategy Tecnology Organizat. structure Operative systems Individuals Social and cultural v. 20
12 Organization design activity Principles: Outputs: Dynamic consistency ( one best fit instead of one best way ) Good balance between the organizational efficiency and people satisfaction (!) The organizational structure Macro (organization chart) Micro (organization unit) Operative systems Strategic planning systems Managerial control systems Human resource management systems Information systems 21
13 Organization charts: typologies Contingency factors Organization chart (?) fit misfit high Performance low A. Basic charts: Elementary Functional Divisional B. Modified charts by Product by Project by Matrix 22
14 The elementary chart Managing Director Economical and managerial direction unit Secretariat staff Operative units unit1 unit2 unit3 unit4 23
15 The functional chart Managing Director Economical and managerial direction unit E.D.P. Staff Prod. Marketing R & D Finance Functional units Plant 1 Plant 2 Operative units 24
16 The divisional chart Director General Economical and managerial direction unit E.D.P. Staff units BU 1 BU 2 BU 3 BU 4 Business units Production Marketing Operative units 25
17 How to choose? 1. No homogeneity 2. Scale economies No homogeneity? NO YES Divisional chart Scale economies? NO Divisional chart 3. Managerial professionalization YES 4. Interdependence degree Functional chart 26
18 The modified charts. New organizational units are inserted TEMPORARY PERMANENT Without authority BY PRODUCT With authority BY PROJECT BY MATRIX 28
19 Modified by product: Type 1 Managing Director. Finance and Control HR Product managers Marketing Production Product manager 1 Product manager 2 Product manager 3 29
20 Modified by product: Type 2 Managing Director Finance and Control HR Marketing Production Promotion Sales Product manager 1 Product manager 2 Product manager 3 30
21 Modified by project units D. G. Production R&S Sales Pj manager 1 Pj manager 2 Pj manager 3 31
22 The matrix chart Top management Responsabili di tecniche Responsabili di prodotto/progetto 2 boss manager 32
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