ORGANISATIONAL BEHAVIOUR

Transcription

1 ORGANISATIONAL BEHAVIOUR CHAPTER 15

2 What is Organisation Structure How jobs are formally divided, grouped and coordinated Six key elements 1. Work Specialisation 2. Departmentalisation 3. Chain of Command 4. Span of Control 5. Centralisation and Decentralisation 6. Formalisation

3 Work Specialisation Degree to which activities in the organisation are sub-divided into separate jobs Each step performed by separate individuals

4 Economies and Diseconomies of Work Specialisation

5 Departmentalisation Basis by which jobs are group together Different ways to departmentalise 1. Functions 2. Type of product or service 3. Geography 4. Process 5. Customer

6 Chain of Command The unbroken line of authority that extends from the top of the organisation to the lowest echelon and clarifies who reports to whom Authority refers to the rights inherent in a managerial position to give orders and expect them to be obeyed Unity of command refers to the idea that subordinates should have only one superior to who he or she is directly responsible.

7 Span of Control The number of subordinates a manager can efficiently and effectively direct Determines the number of levels and managers an organisation has Narrow or Small Span of Control Advantage - Control Disadvantages Expensive Slows down decision making Overly tight supervision and discourages employee independence

8 Span of Control Wider Span of Control (SOC) Advantage Inexpensive speed in decisions flexibility Closer to customers employee empowerment Companies spend heavily on training for wider SOC

9 Centralisation and Decentralisation Centralisation refers to the degree to which decision making is concentrated at a single point in the organisation Centralised Organisation top managers make all the decisions and lower-level managers merely carry out their directives Decentralised Organisation decision making is pushed down to managers closer to the action 1) Act quickly, 2) solve more problems, 3) have more people provide inputs to decisions, 4) make employees to feel less alienated

10 Formalisation Degree to which jobs within the organisation are standardised High formalisation Employees have minimal amount of discretion Consistent and Uniform Lot of rules and procedures Low Formalisation Behaviours are un-programmed Freedom to exercise discretion

11 COMMON ORGANISATIONAL DESIGN

12 The Simple Structure Structure characterised by low degree of departmentalisation, wide spans of control, authority centralised in a single person, and little formalisation Flat organisation Small businesses in which manager and owner are one and the same In times crisis, large companies resort to Simple Structure Strengths: Fast, flexible, inexpensive, clear accountability Weakness: 1) inadequate as organisations grow, 2) risky-dependant on one

13 The Bureaucracy Structure with highly routine operating tasks achieved through specialisation, very formalised rules and regulations, tasks are grouped into functional departments, centralised authority, narrow spans of control, and decision making that follows the chain of command Advantages: Efficient, economies of scale, can get by with less skilled employees Weaknesses: creates conflicts (page 524), difficult for unprogrammed decisions

14 The Matrix Structure Structure that creates dual lines of authority and combines functional and product departmentalisation Advantages of Functional Departmentalisation: Putting like specialists together Pooling and sharing specialised resources across products Disadvantages of Functional Departmentalisation: Difficult to coordinate the tasks of diverse functional specialists on time and within budget Product Departmentalisation has the exact opposite strengths and weaknesses.

15 The Matrix Structure Strengths of Matrix: Facilitates coordination in complex and interdependent activities Economies of scale Best resources working Weaknesses of Matrix: Creates confusion Tendency to foster power struggles Stressful Can create conflicts

16 Fewer levels of hierarchy and more emphasis on opening the boundaries of the organisation NEW DESIGN OPTIONS

17 The Virtual Organisation AKA Network or Modular Organisation Small/Core organisation that outsources its major business functions Highly centralised, little/no departmentalisation No bureaucratic overhead as there is no lasting org. to maintain Lessens long-term risks and costs

18 Virtual Organisation Independent R&D consulting firm Advertising Agency Executive Group Factories in China Commissioned Sales Rep

19 Virtual Organisation Advantages Flexibility, which allows them innovative ideas and little money to compete with larger organisations Save more money by eliminating permanent offices and hierarchical roles Drawbacks Unclear roles and goals (leading to political behaviour) No cultural alignment or shared goals due to lack of interaction Sharing of information and knowledge is difficult At times, less adaptable and innovative than org. with established comm.

20 The Boundary-less Organisation An organisation that seeks to eliminate the chain of command, have limitless span of control, and replace departments with empowered teams Flattens the hierarchy and minimizes the rank Cross-hierarchical team, participative DM +, and performance review No functional departments (creates horiz. Boundaries) Replace with cross-functional teams Rotate employees across function Breaks down geographical/cultural barriers + DM Decision Making

21 The Leaner Organisation: Downsizing Lean, focused and flexible Downsizing Systematic effort to make an organisation leaner by closing locations, reducing staff or selling off business units that don t add value Reduces bureaucracy and speeds up DM Negative impact of downsizing despite cost savings Less commitment Stress, absences, more turnover Lower concentration and creativity

22 Effective Strategies for Downsizing Investment Invest in high-involvement work practices Communication Communicate before downsizing Participation Voluntary early-retirement/severance packages Assistance Severance, extended healthcare, job search assistance

23 WHY DO STRUCTURES DIFFER?

24 Mechanistic Vs. Organic Models

25 Why do structures differ? Organisational Strategy Organisational Size Technology Environment

26 Organisational Strategy Three dimensions Innovation Emphasizes the introduction of major new products and services Mechanistic model Cost minimisation Emphasizes tight cost controls, avoidance of unnecessary innovation or marketing expenses and price cutting. Imitation Seeks to move into new products/markets only after viability has already been proven

27 Strategy-Structure Relationship

28 Why do structures differ? Organisational Strategy Organisational Size Technology Degree of routineness Environment Capacity degree to which env. can support growth Volatility degree of instability in the env. Complexity degree of heterogeneity

29 Three Dimensional Model

30 ORGANISATIONAL DESIGNS AND EMPLOYEE BEHAVIOUR

31 Organisational designs and employee behaviour Work Specialisation Span of Control Centralisation Conclusion: must take individual differences into account National culture influences the preference for structure High power-distance Low power-distance

32 END OF CHAPTER