OB lecture 7 issues in organizational structure

Lecture 7
Unit 3 Organizations and Behaviour

Other Issues in Organization Structure


Scope for Today
1.Issues in Organization Theory

2.Assignment 1 – Case Study


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Teaching Material
  



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Types of Organization
Structure
1.
2.
3.
4.
5.

6.
7.

Simply Structure (no structure !)
Functional Structure
Team Structure
Matrix Structure
Division Structure (Federal Decentralization)
Stimulated Decentralization
Network or Systems Structure (non –
organization)


A large organization contains several
types
of structure at different levels


7. Issues in Organization
structure
1 Formal and Informal
2 Centralized and Decentralized
3 Tall and flat
4 Span of control
5. Formalization/Standardization


Formal vs. Informal
Page 58 – 59 of Text book

Formal Structure
CEO

Information
Technology
Authority

Purchasing

Reporting

Incoming
Inspection

Human
Resource
s

Communication

Assembly
Assembly
1
Assembly
2

Division of labour

Assembly

3

Quality
Control

Sales


Formal Structure describes how work is
organized (division of labour),
authority
(Unity of Command), and how
information
is passed down (Scalar Chain of
Command)


Informal Structure
There is an informal structure that exists
alone side the formal structure – social
network, cliques, and temporary networks.
- Unwritten Rules (How we do things here)
- Informal channel of communication
(Grapevine)


Informal Structure can be faster and
more
effective.
It is part of the ‘organizational

culture’that
management should pay attention.


Old Dorm for Lecturers in
Beijing

Cleaner

Vincent

Ben

David

Angie

Isabelle

TV

Dinning


Rebuilt

Isabelle

Ben

Which is better for informal structure ?

Kitchen

Angie

Kitchen

Kitchen

David

Vincent


Tall and Flat
Structure


Tall and Short

Tall

Flat


Tall and Flat
Who is handsome?
Advantages and Disadvantages
(page 64)

Malorganization = Sick
Organization
Mal –”sick” in French

The most common and serious symptom
of malorganzation is multiplication of
management level
A basic rule is to build the least possible
number of level


More Layers
Introduces ‘noise’
More layesr make the attainment of
common direction and mutual
understanding.
additional distorts objectives and misdirects
attention
- Peter Drucker


Management Development
If an organization has 12 layers, and an
executive will never reach CEO whie he or
she is still young and vigorous.
12x 5 = 60 years !
Assuming a candidate stays 5 years at one
level

So much noise that
communication is
impossible
Example of Chinese Emperor
Yongzhen
and his invention.
He sent and received letters from his
Generals directly in sealed envelope.


Why So Many Layers ?
Parkinson’s law of Rising Pyramid
“Work expands so as to fill the time available
for its completion”.
If there are A, B and C in a department. If A
too much work, Instead of distribute among
B, and C, A will hire D and F to build
up his/her position.


Delayering
Reduce the number of layers.
Very little value added there is by the
intermediate level.
It is much feasible now with advances in
information technology

What is the minimum
number of layers
3? 5? 6?


Centralization vs
Decentralization
The degree of concentration of
authority


Decentralize if it works