Organization
System of consciously coordinated activities or forces of two or more persons
Common denominators of all organizations
-coordination of effort
-aligned goals
-division of labor
-hierarchy of authority
Organization Charts
Reveal basic dimensions of organizational structure
-hierarchy of authority
-division of labor
-spans of control
-line and staff positions
Hierarchy of Authority
Formal hierarchy of authority delineats official communication network and speaks volumes about compensation
-difference in pay between successive layers tends to increase over time
Division of labor
at each lower level in organization, jobs become more specialized
Spans of control
Span of control refers to the number of people reporting directly to a given manager. Narrow span of control tends to create "taller" organizations
Wide span of control leads to "flat" organization. Span of 7-10 people considered best
Four factors when determining spans of control
Organizational skill, skill level, organizational culture, managerial responsibilities
Organizational size
larger organizations have narrower spans of control and more organizational layers. Smaller ones have wider span of control. Costs higher in organizations with narrow spans due to more managers' expenses. Communication slower in narrow span because it tra
Skill Level
Complex tasks require more managerial input, suggesting narrow span of control. Routine tasks don't require supervision, leading to wider span of control
Organizational Culture
Hierarchal culture leads to more likely narrow span of control (internal integration and stability and control)
Wider spans of control more likely in companies that desire flexibility and discretion (clan or adhocracy culture)
Wider spans complement cultu
Managerial responsibilities
Most senior executives have narrower spans of control than middle managers because they have broader, complex responsibilities
Organizational Systems
reveal basic dimensions of organizational structure
Closed system
self-sufficient entity - closed to the surrounding environment
Open system
Depends on constant interaction with the environment for survival
Organization of open system
People, information, capital, and goods and services move back and forth across outer boundary of organization.
five organizational subsystems dependent on the others - goals and values, technical, psychosocial, structural, and managerial
Learning organization
Proactively creates, acquires and transfers knowledge.
Changes behavior on the basis of new knowledge and insights
Five Subprocesses of Organizational Learning
Information Acquisition, information distribution, information interpretation, knowledge integration, organizational memory
Improving Organizational Learning
Improve five steps, realize leader behavior and organizational culture drives organizational learning
Organizational Design
Structures of accountability and responsibility used to develop and implement strategies, and HR practices and information and business processes that activate those structures
Categories of Organizational Design
Horizontal, open, traditional
Functional Organizational Structure
groups people according to the business functions they perform, for example, manufacturing, marketing and finance
Divisional Organizational Structure
Employees are segregated into organization groups based on similar products or services, customers or clients, or geographic regions
Matrix Organizational Structure
Combines vertical structure with equally strong horizontal overlay
Generally combines functional and divisional chains of command to form a grid with two command structures
Horizontal Organizational Structure
Teams or workgroups, either temporary or permanent, are created to improve collaboration and work on common projects
Hollow Organizational Structure
-open organization example
-aka network structure
-designed around central core of key functions and outsources other functions to other companies or individuals who can do them cheaper or faster
Modular Organizational Structure
-example of open organization
-uses outsourcing
-assembles product parts, components or modules provided by external contractors
Virtual Organizational Structure
-example of open organization
-members are geographically apart, usually working with email and other forms of information technology
-generally appears to customers as a single, unified organization with a real physical location
Types of Virtual Structures
Internal Virtual Structure and Networked Virtual Structure
Contingency Approach
Organizations tend to be more effective when structured to fit the demands of the situation
Mechanistic organization
rigid bureaucracies with strict rules, narrowly defined tasks, and top-down communication
Organic organization
Flexible networks of multitalented individuals who perform a variety of tasks
Centralized Approach
Decision making occurs when key decisions made by top management
used in mechanistic organizations
Decentralized Approach
Decision making occurs when important decisions made by middle and lower-level managers
Used in organic organizations
Practical Research Insights
No one type (mechanistic of organic) is superior to the other - depends on environment
Mechanistic for stable environment
Organic for unstable and uncertain environment
Key issues when making organizational design decisions
Strategy and goals, technology, size, human resources
Generic Effectiveness Criteria
Goal accomplishment
Internal processes
Strategic constituency satisfaction
Resource acquisition
Goal Accomplishment Approach
appropriate when goals are clear, consensual, time-bound and measurable
Internal Process Approach
Appropriate when organizational performance is strongly influenced by specific processes
Strategic constituencies approach
appropriate when powerful stakeholders can significantly benefit or harm the organization
Resource Acquisitions Approach
Appropriate when inputs have traceable effect on results or output
Innovation
Creation of something new that makes money
finds pathway to consumer
more likely to occur when organizations have proper supporting forces
Product vs. Process Innovation
Product: change in the appearance or performance of a product or service or the creation of a new one
Process: change in the way a product or service is conceived, manufactured or distributed
Core vs. Transformational Innovation
Core: targeted at existing customers and rely on optimizing existing products/services for existing customers
Transformational: targeted at creating new markets and customers and rely on developing breakthroughs and inventing things that don't currently e
Seeds of Innovation
-hard work in specific direction
-hard work with direction change
-curiosity and experimentation
-wealth and money
-necessity
-combination of seeds
Learning from failure
occurs when activity fails to deliver expected results
mistakes generally feared and penalized, which creates risk averse environment, reducing innovation
Organizations learn from success AND failure, but learning is stronger and longer last when based on
Supporting Forces for Innovation
Necessary Human Capital?
Right Organizational Culture and Climate?
Devote enough resources to innovation?
Have required structure and processes?
Which of the following is not one of the common denominators of organizations?
Profit Motive
The number of people reporting directly to a given manager is known as:
Span of Control
In a learning organization, the ___ subprocess leads to shared understanding among individuals and groups
Knowledge Integration