Exploring management 6th by schermerhornch08

Exploring
Management
John R. Schermerhorn, Jr. and Daniel G. Bachrach
Sixth Edition

Chapter 8
Organization Structure and Design


Organizing brings people
and resources together to
accomplish lofty goals.

Copyright ©2018 John Wiley & Sons, Inc.

2


Your Chapter 8 Takeaways
• Understand organizing as a managerial responsibility
(8.1)
• Identify common types of organization structures
(8.2)
• Recognize current trends in organizational design
(8.3)

Copyright © 2018 John Wiley & Sons, Inc.

3

ORGANIZING AS A MANAGERIAL RESPONSIBILITY 8.1

Takeaway 8.1 – answers to come
• Organizing is one of the management functions.
• Organization charts describe the formal
structures of organizations.
• Organizations also have informal structures.
• Informal structures have good points and bad
points.
Copyright ©2018 John Wiley & Sons, Inc.

4


ORGANIZING AS A MANAGERIAL RESPONSIBILITY 8.1

Management Functions
Organizing is the
process of arranging
people and resources
so they can work
together to
accomplish goals.

FIGURE 8.1 What Is the Importance of Organizin
in the Management Process?
Copyright © 2018 John Wiley & Sons, Inc.

5

ORGANIZING AS A MANAGERIAL RESPONSIBILITY 8.1

Organizational Charts
Structure
• a formal arrangement of
people, tasks, positions,
and reporting
relationships
Organization Charts
• a diagram of positions—
job titles, and reporting
relationships—the
hierarchy of authority,
within a team or
organization
Copyright © 2018 John Wiley & Sons, Inc.

6


ORGANIZING AS A MANAGERIAL RESPONSIBILITY 8.1

Formal Structure
Division of Labor
• People and groups performing different jobs
Formal Structure
• The official structure of the organization
Informal Structure
• The unofficial relationships that develop among an

organization’s members

Copyright © 2018 John Wiley & Sons, Inc.

7


ORGANIZING AS A MANAGERIAL RESPONSIBILITY 8.1

Informal Structure
Informal Structure
• Unofficial but
important working
relationships between
members.

Copyright © 2018 John Wiley & Sons, Inc.

8


ORGANIZING AS A MANAGERIAL RESPONSIBILITY 8.1

Informal Structure
Informal Structures have good points and downsides
• Social network analysis identifies communication
relationships
• Good points include problem solving, support,
friendship and fill gaps in the formal structure
• Bad points include rumors, inaccurate information

and resistance to change

Copyright © 2018 John Wiley & Sons, Inc.

9


ORGANIZING AS A MANAGERIAL RESPONSIBILITY 8.1

Study Guide for Takeaway 8.1

Rapid Review:
• Organizing is the process of arranging people and resources to work
toward a common goal.
• Structure is the system of tasks, reporting relationships, and
communication that links people and positions within an organization.
• Organization charts describe the formal structure and how an
organization should ideally work.
• The informal structure of an organization consists of the unofficial
relationships that develop among its members.
• Informal structures create helpful relationships for social support and
task assistance, but they can be susceptible to rumors.
Copyright © 2018 John Wiley & Sons, Inc.

10


ORGANIZING AS A MANAGERIAL RESPONSIBILITY 8.1

Study Guide for Takeaway 8.1

Questions for Discussion:
1. Why is organizing such an important management
function?
2. If organization charts are imperfect, why bother with
them?
3. Could an organization consistently perform well
without the help of its informal structure?

Copyright © 2018 John Wiley & Sons, Inc.

11


ORGANIZING AS A MANAGERIAL RESPONSIBILITY 8.1

Be Sure You Can…for Takeaway 8.1

• explain what you can learn from an organization
chart.
• differentiate formal and informal structures.
• discuss potential good and bad points about informal
structures.

Copyright © 2018 John Wiley & Sons, Inc.

12


COMMON ORGANIZATION STRUCTURES 8.2

Takeaway 8.2 – answers to come
•Functional structures group together people using similar
skills.
•Divisional structures group together people by products,
customers or locations.
•Matrix structures combine the functional and divisional
structures.
•Team structures make extensive use of permanent and
temporary teams.
•Network structures make extensive use of strategic alliances
and outsourcing.
Copyright © 2018 John Wiley & Sons, Inc.

13


COMMON ORGANIZATIONAL STRUCTURES 8.2

Functional Structures
Functional Structures group people with similar skills
• Departmentalization
• Grouping people and jobs into a work unit
• Functional Structure
• Work units have similar skills and tasks such as
finance, marketing, production and human
resources.
• Work best in smaller or stable organizations

Copyright © 2018 John Wiley & Sons, Inc.

14


COMMON ORGANIZATIONAL STRUCTURES 8.2

Functional Structures
Potential Advantages of Functional Structures
•Economies of scale make efficient use of human resources.
•Functional experts are good at solving technical problems.
•Training within functions promotes skill development.
•Career paths are available within each function.

Copyright © 2018 John Wiley & Sons, Inc.

15


COMMON ORGANIZATIONAL STRUCTURES 8.2

Functional Structures

Figure 8.2 Common Functional Structure
Copyright © 2018 John Wiley & Sons, Inc.

16


COMMON ORGANIZATIONAL STRUCTURES 8.2

Functional Structures
• Functional Chimneys or Functional Silos
• Communication and performance decrease across
functions

Copyright © 2018 John Wiley & Sons, Inc.

17


COMMON ORGANIZATIONAL STRUCTURES 8.2

Divisional Structures
Divisional structures group together people who work on
a similar product, work in the same geographical region,
or serve the same customers

FIGURE 8.3
What Are Some Ways
Organizations Use Divisional
Structures?
Copyright © 2018 John Wiley & Sons, Inc.

18


COMMON ORGANIZATIONAL STRUCTURES 8.2

Divisional Structures
Potential Advantages of Divisional Structures

•Expertise focused on special products, customers, regions
•Better coordination across functions within divisions
•Better accountability for product or service delivery
•Easier to grow or shrink in size as conditions change

Copyright © 2018 John Wiley & Sons, Inc.

19


Divisional Structures
• Product structures group together people and jobs
devoted to a single product or service.
• Geographic structures group together people and jobs
in the same geographic regions.
• Customer structures group together people and jobs
that serve the same customers or clients.

Copyright ©2018 John Wiley & Sons, Inc.

20


COMMON ORGANIZATIONAL STRUCTURES 8.2

Matrix Structures

Matrix Structures combine functional and
divisional structures
•uses permanent cross functional teams to try to gain the

advantages of both the functional and divisional
approaches

Figure 8.4
How Does a Matrix Structure Combine
Functional and Divisional Structures?
Copyright ©2018 John Wiley & Sons, Inc.

21


COMMON ORGANIZATIONAL STRUCTURES 8.2

Matrix Structures
Potential advantages of Matrix structures
• Performance accountability rests with program,
product, or project managers.
• Better communication exists across functions.
• Teams solve problems at their levels.
• Top managers spend more time on strategy.

Copyright © 2018 John Wiley & Sons, Inc.

22


COMMON ORGANIZATIONAL STRUCTURES 8.2

Team Structures

Team Structures
•Make use of permanent and temporary cross functional teams
•Improved problem solving and project management

Figure 8.5 How Do Team Structures Capture the Benefits of CrossFunctional Teams?
Copyright © 2018 John Wiley & Sons, Inc.

23


COMMON ORGANIZATIONAL STRUCTURES 8.2

Team Structures
Potential advantages of team structures
• Team assignments improve communication,
cooperation, and decision making.
• Team members get to know each other as persons,
not just job titles.
• Team memberships boost morale, and increase
enthusiasm and task involvement.

Copyright © 2018 John Wiley & Sons, Inc.

24


COMMON ORGANIZATIONAL STRUCTURES 8.2

Network Structures

•Consist of a central core with networks of relationships
with contractors
•Contractors and network partners supply essential
services

Figure 8.6 How Do Network
Structures Take Advantage of
Strategic Alliances and
Outsourcing?
Copyright © 2018 John Wiley & Sons, Inc.

25