OB11 chapter 15 foundations of organization structure

eleventh edition

organizational

behavior

stephen p. robbins


Chapter 15

Foundations of
Organization Structure
ORGANIZATIONAL BEHAVIOR
S T E P H E N P. R O B B I N S
E L E V E N T H
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E D I T I O N

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PowerPoint Presentation
by Charlie Cook


OBJECTIVES
LEARNING

After studying this chapter,

you should be able to:
1. Identify the six key elements that define an
organization’s structure.
2. Explain the characteristics of a bureaucracy.
3. Describe a matrix organization.
4. Explain the characteristics of a virtual
organization.
5. Summarize why managers want to create
boundaryless organizations.
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15–
3


O B J E C T I V E S (cont’d)
LEARNING

After studying this chapter,
you should be able to:
6. Contrast mechanistic and organic structural
models.
7. List the factors that favor different
organizational structures.
8. Explain the behavioral implications of different
organizational designs.

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15–4


What
What Is
Is Organizational
Organizational Structure?
Structure?
Organizational Structure
How job tasks are formally
divided, grouped, and
coordinated.

Key
KeyElements:
Elements:
• • Work
Workspecialization
specialization
• • Departmentalization
Departmentalization
• • Chain
Chainof
ofcommand
command
• • Span
Spanof
ofcontrol
control

• • Centralization
Centralizationand
and
decentralization
decentralization

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• • Formalization
Formalization

15–5


Key
KeyDesign
DesignQuestions
Questionsand
andAnswers
Answers for
forDesigning
Designingthe
the
Proper
ProperOrganization
OrganizationStructure
Structure
The Key Question

The Answer Is Provided By

1. To what degree are articles
subdivided into separate jobs?

Work specialization

2. On what basis will jobs be grouped
together?

Departmentalization

3. To whom do individuals and groups
report?

Chain of command

4. How many individuals can a manager
efficiently and effectively direct?

Span of control

5. Where does decision-making
authority lie?

Centralization
and decentralization

6. To what degree will there be rules
and regulations to direct employees

managers?
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Formalization

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15–
6

E X H I B I T 15–1
E X H I B I T 15–1


What
What Is
Is Organizational
Organizational Structure?
Structure? (cont’d)
(cont’d)
Work Specialization
The degree to which tasks in the organization are
subdivided into separate jobs.
Division
Divisionof
oflabor:
labor:
• • Makes

Makesefficient
efficientuse
useof
ofemployee
employeeskills
skills
• • Increases
Increasesemployee
employeeskills
skillsthrough
throughrepetition
repetition
• • Less
Lessbetween-job
between-jobdowntime
downtimeincreases
increasesproductivity
productivity
• • Specialized
Specializedtraining
trainingisismore
moreefficient.
efficient.
• • Allows
Allowsuse
useof
ofspecialized
specializedequipment.
equipment.

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15–7


Economies
Economies and
and Diseconomies
Diseconomies of
of Work
Work
Specialization
Specialization

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E X H I B I T 15–2
E X H I B I T 15–2

15–8


What
What Is
Is Organizational
Organizational Structure?
Structure? (cont’d)
(cont’d)

Departmentalization
The basis by which jobs are grouped together.
Grouping
GroupingActivities
ActivitiesBy:
By:
•• Function
Function
•• Product
Product
•• Geography
Geography
•• Process
Process
•• Customer
Customer
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15–9


What
What Is
Is Organizational
Organizational Structure?
Structure? (cont’d)
(cont’d)
Authority
The rights inherent in a managerial position to give

orders and to expect the orders to be obeyed.
Chain of Command
The unbroken line of authority that extends from
the top of the organization to the lowest echelon
and clarifies who reports to whom.
Unity of Command
A subordinate should have only one superior to
he or she
directly responsible.
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15–
10


What
What Is
Is Organizational
Organizational Structure?
Structure? (cont’d)
(cont’d)
Span of Control
The number of subordinates a manager can efficiently
and effectively direct.
Concept:
Concept:
Wider

Widerspans
spansof
ofmanagement
managementincrease
increaseorganizational
organizational
efficiency.
efficiency.
Narrow
NarrowSpan
SpanDrawbacks:
Drawbacks:
• •Expense
Expenseof
ofadditional
additionallayers
layersof
ofmanagement.
management.

• •Increased
Increasedcomplexity
complexityof
ofvertical
verticalcommunication.
communication.
• •Encouragement
Encouragementof
ofoverly
overlytight

tightsupervision
supervisionand
and
discouragement of
ofemployee
employeeautonomy.
autonomy.
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15–
11


Contrasting
Contrasting Spans
Spans of
of Control
Control

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15–
12

E X H I B I T 15–3

E X H I B I T 15–3


What
What Is
Is Organizational
Organizational Structure?
Structure? (cont’d)
(cont’d)
Centralization
The degree to which decision making is
concentrated at a single point in the organization.
Decentralization
The degree to which decision making is
spread throughout the organization.
Formalization
The degree to which jobs within
the organization are standardized.
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15–
13


© 2005 Prentice Hall Inc.
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Source: S. Adams, Dogbert’s Big Book of Business, DILBERT
reprinted by permission of United Features Syndicate, Inc.

15–
14

E X H I B I T 15–4
E X H I B I T 15–4


Common
Common Organization
Organization Designs
Designs
Simple Structure
A structure characterized by a low degree of
departmentalization, wide spans of control, authority
centralized in a single person, and little
formalization.
AASimple
SimpleStructure:
Structure:
Jack
JackGold’s
Gold’sMen’s
Men’sStore
Store

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15–
15

E X H I B I T 15–5
E X H I B I T 15–5


Common
Common Organization
Organization Designs
Designs (cont’d)
(cont’d)
Bureaucracy
A structure of highly operating
routine tasks achieved through
specialization, very formalized
rules and regulations, tasks that
are grouped into functional
departments, centralized
authority, narrow spans of
control, and decision making
that follows the chain of
command.
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15–
16


The
The Bureaucracy

Bureaucracy
 Strengths
– Functional
economies of scale
– Minimum duplication
of personnel and
equipment
– Enhanced
communication
– Centralized decision
making
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 Weaknesses
– Subunit conflicts with
organizational goals
– Obsessive concern
with rules and
regulations
– Lack of employee
discretion to deal
with problems

15–
17


Common
Common Organization

Organization Designs
Designs (cont’d)
(cont’d)
Matrix Structure
A structure that creates dual lines of authority and
combines functional and product departmentalization.
Key
KeyElements:
Elements:
++Gains
Gainsthe
theadvantages
advantagesof
offunctional
functionaland
andproduct
product

departmentalization
departmentalizationwhile
whileavoiding
avoidingtheir
theirweaknesses.
weaknesses.
++Facilitates
Facilitatescoordination
coordinationof
ofcomplex
complexand
and

interdependent
interdependentactivities.
activities.

––Breaks
Breaksdown
downunity-of-command
unity-of-commandconcept.
concept.
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15–
18


Matrix
MatrixStructure
Structure(College
(Collegeof
ofBusiness
BusinessAdministration)
Administration)

(Director)

(Dean)

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Employee

15–
19

E X H I B I T 15–6
E X H I B I T 15–6


New
New Design
Design Options
Options
Team Structure
The use of teams as the central device to coordinate
work activities.
Characteristics:
Characteristics:

• •Breaks
Breaksdown
downdepartmental
departmentalbarriers.
barriers.
• •Decentralizes
Decentralizesdecision
decisionmaking
makingto
tothe

theteam
teamlevel.
level.
• •Requires
Requiresemployees
employeesto
tobe
begeneralists
generalistsas
aswell
wellas
as
specialists.
specialists.
• •Creates
Createsaa“flexible
“flexiblebureaucracy.”
bureaucracy.”

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15–
20


New
New Design
Design Options
Options (cont’d)

(cont’d)
Virtual Organization
A small, core organization that outsources its major
business functions.
Highly centralized with little or no
departmentalization.
Concepts:
Concepts:
Advantage:
Advantage:Provides
Providesmaximum
maximumflexibility
flexibilitywhile
while
concentrating
concentratingon
onwhat
whatthe
theorganization
organizationdoes
doesbest.
best.
Disadvantage:
Disadvantage:Reduced
Reducedcontrol
controlover
overkey
keyparts
partsof
of

the
thebusiness.
business.

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15–
21


AA Virtual
Virtual Organization
Organization

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15–
22

E X H I B I T 15–7
E X H I B I T 15–7


New
New Design
Design Options
Options (cont’d)
(cont’d)

Boundaryless Organization
An organization that seeks to eliminate the chain of
command, have limitless spans of control, and
replace departments with empowered teams.
T-form
T-formConcepts:
Concepts:
Eliminate
Eliminatevertical
vertical(hierarchical)
(hierarchical)and
andhorizontal
horizontal
(departmental)
(departmental)internal
internalboundaries.
boundaries.
Breakdown
Breakdownexternal
externalbarriers
barriersto
tocustomers
customersand
and
suppliers.
suppliers.

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15–
23


Why
Why Do
Do Structures
Structures Differ?
Differ?
Mechanistic Model
A structure characterized by extensive
departmentalization, high formalization,
a limited information network, and
centralization.

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15–
24


Why
Why Do
Do Structures
Structures Differ?
Differ?
Organic Model
A structure that is flat, uses cross-hierarchical and
cross-functional teams, has low formalization,

possesses a comprehensive information network, and
relies on participative decision making.

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15–
25