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Organizational Structure and Culture

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Coca-Cola decentralized its organizational structure by ... Taller structure. Communication problems. Expensive. Broad span of control. Flatter structure ... – PowerPoint PPT presentation

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Title: Organizational Structure and Culture


1
Chapter 13
  • Organizational Structure and Culture

2
Chapter Outline
  • Fundamental Elements of Structure
  • Factors Affecting Structure
  • The Role of Strategy
  • The Role of the Environment
  • Elements of Organizational Culture

3
Fundamental Elements of Structure
  • Organizational Structure formal system
  • of work roles authority relationships
  • Organizational chart is visual representation
  • Used as a tool for change
  • Support or inhibit communication/relationships

4
Fundamental Elements of Structure
  • Coca-Cola decentralized its organizational
    structure by cutting half of its Atlanta
    headquarters staff and moving regional
    chieftains closer to their local markets.

5
Fundamental Elements of Structure
  • Structural Characteristics
  • Basic shape appearance of organizations
    hierarchy
  • Structuring Characteristics
  • Policies approaches used to directly affect
    behavior

6
Fundamental Elements of Structure
  • Structural Characteristics
  • Span of Control
  • Height
  • Departmentation
  • Structuring Characteristics
  • Centralization
  • Standardization
  • Formalization
  • Specialization

7
Fundamental Elements of Structure Structural
Characteristics
  • Height
  • Number of hierarchical levels in an organization,
    from CEO to lowest level
  • Span of Control
  • Number of employees a manager directly oversees

8
Fundamental Elements of Structure Structural
Characteristics
  • Narrow span of control
  • Taller structure
  • Communication problems
  • Expensive
  • Broad span of control
  • Flatter structure
  • Possible with similar tasks or routine jobs and
    self-directed teams

9
Narrow Span
Broad Span
10
Fundamental Elements of Structure Structural
Characteristics
  • Forms of Departmentation
  • Simple Structure
  • Functional Structure
  • Divisional Structure
  • Matrix Structure
  • Network Structure

11
Fundamental Elements of Structure Structural
Characteristics
  • Simple Structure
  • The Alaska Chip Company
  • Few employees
  • Minimal hierarchy
  • Centralized decisions made by founder

12
Fundamental Elements of Structure Structural
Characteristics
  • Simple Structure
  • Employ only a few people
  • Offer only one distinct product or service
  • Minimal hierarchy
  • Insufficient economies of scale
  • Broadly defined roles
  • Flexible
  • Depend on owners direct supervision

13
Fundamental Elements of Structure Structural
Characteristics
  • Functional Structure
  • Organizes employees around specific
  • knowledge or other resources

CEO
Finance
Production
Marketing
14
Fundamental Elements of Structure Structural
Characteristics
  • Functional Structure
  • Advantages
  • Foster professional identity, clarify career path
  • Permit greater specialization
  • Economies of scale
  • Disadvantages
  • Narrow perspective
  • Poor coordination across units
  • Dysfunctional conflict

15
Fundamental Elements of Structure Structural
Characteristics
  • Geographic Divisional Structure
  • Organizes employees around geographic areas

CEO
European Operations
U.S. Operations
Latin American Operations
16
Fundamental Elements of Structure Structural
Characteristics
  • Product/Service Divisional Structure
  • Organizes employees around output areas

CEO
Chevrolet
Pontiac
Cadillac
17
Fundamental Elements of Structure Structural
Characteristics
  • Client Divisional Structure
  • Organizes employees around client areas

CEO
Consumer Products
Knowledge Workers
Software Developers
18
Fundamental Elements of Structure Structural
Characteristics
  • Divisional Structure
  • Advantages
  • Accommodates growth easily
  • Each unit is self-contained
  • Better coordination in diverse markets
  • Disadvantages
  • Loss of economies of scale
  • Lack of knowledge sharing
  • Reduces cooperation across groups

19
Fundamental Elements of Structure Structural
Characteristics
Matrix Structure
President
Project 1 Manager
Project 2 Manager
Project 3 Manager
20
Fundamental Elements of Structure Structural
Characteristics
  • Matrix Structure
  • Overlays a divisional structure with a functional
    structure dual-boss reporting system
  • Advantages
  • Flexible use of resources
  • Disadvantages
  • Require high level of coordination
  • Dual-boss reporting may dilute accountability
  • Conflict, stress, organizational politics

21
Fundamental Elements of Structure Structural
Characteristics
Network Structure
Product Development Firm (France)
Marketing Firm (U.K.)
Core Firm
Production Firm (China)
Customer Service Firm (Canada)
Accounting Firm (U.S.A.)
22
Fundamental Elements of Structure Structural
Characteristics
  • Network Structure alliance of several
    organizations
  • Core competency held by hub or core firm
  • Outsourcing is used for all noncritical tasks
  • Advantages
  • Flexibility
  • Disadvantages
  • Expose core firm to market forces

23
Fundamental Elements of Structure
  • Structural Characteristics
  • Span of Control
  • Height
  • Departmentation
  • Structuring Characteristics
  • Centralization
  • Standardization
  • Formalization
  • Specialization

24
Fundamental Elements of Structure Structuring
Characteristics
  • Centralization
  • Amount of decision power at the top
  • Centralized is not consistent with
    high-involvement management
  • Generally perform less well
  • Standardization
  • Rules and standard operating procedures
  • Negatively affects motivation satisfaction
  • Efficiency safety

25
Fundamental Elements of Structure Structuring
Characteristics
  • Formalization
  • Degree to which rules procedures are documented
  • Specialization
  • Degree to which employees have narrow jobs with
    little variety
  • Increase efficiency
  • May negatively affect motivation, satisfaction,
    performance

26
The Modern Organization
27
Factors Affecting Structure The Role of Strategy
  • Corporate Strategy
  • Growth through internal development
  • Larger marketing and R D
  • Authority for decisions decentralized
  • Growth through external acquisition
  • Well-developed financial and legal functions
  • Diversification
  • Adopt the divisional structure

28
Factors Affecting Structure The Role of Strategy
  • Business Strategy
  • Cost Leadership
  • Efficiency and control
  • More mechanistic structure
  • Differentiation
  • Flexibility and initiative
  • More organic structure

Structure Follows Strategy
29
Factors Affecting Structure The Role of the
Environment
30
Factors Affecting Structure The Role of the
Environment
31
Elements of Organizational Culture
  • Physical Structures
  • Rituals Ceremonies
  • Stories
  • Language
  • Beliefs
  • Values
  • Assumptions

Artifacts of Organizational Culture
Organizational Culture
32
Elements of Organizational Culture
  • Assumptions
  • Deepest part of culture, unconscious shared
    mental models that guide behaviors
  • Beliefs
  • Perceptions of reality
  • Values
  • Stable, long-lasting beliefs
  • Espoused
  • Enacted

33
(No Transcript)
34
Elements of Organizational Culture
  • Brown Brown, Inc. --
  • an aggressive culture
  • Annual sales meeting, managers of poorly
    performing divisions are led to the podium by
    medieval executioners while a funeral dirge plays
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