1. 4. Coordinating Functions and Divisions
1.1. COORDINATING FUNCTIONS
1.1.1. HIERARCHY OF AUTHORITY:
1.1.1.1. An organization’s chain of command, specifying the relative authority of each manager.
1.1.2. AUTHORITY:
1.1.2.1. The power to hold people accountable for their actions and to make decisions concerning the use of organizational resources.
1.1.3. Allocating Authority
1.1.3.1. SPAN OF CONTROL: The number of subordinates who report directly to a manager.
1.1.3.2. STAFF MANAGER: Someone responsible for managing a specialist function, such as finance or marketing.
1.1.3.3. LINE MANAGER: Someone in the direct line or chain of command who has formal authority over people and resources at lower levels.
1.2. TALL AND FLAT ORGANIZATIONS
1.2.1. TALL
1.2.1.1. More levels of hierarchy (12+)
1.2.1.2. Managers have NARROW span of control (5 or 6 people)
1.2.1.3. Staff => little freedom, operational direction from above
1.2.2. FLAT
1.2.2.1. Fewer levels of hierarchy (less than 6)
1.2.2.2. Managers have WIDE span of control (10-12 people)
1.2.2.3. Staff => lots of freedom, operational direction from within
1.3. THE MINIMUM CHAIN OF COMMAND
1.3.1. An organization should choose the minimum number of hierarchical levels consistent with its goals and the environment in which it operates
1.3.2. CENTRALIZATION AND DECENTRALIZATION OF AUTHORITY
1.3.2.1. centralized authority
1.3.2.1.1. important decisions are made by high-level managers
1.3.2.1.2. Less duplication of work
1.3.2.1.3. Procedures are uniform and thus easier to control
1.3.2.1.4. Very small companies tend to be the most centralized, however, Kmart and Mc. Donald are using this kind of authority
1.3.2.2. decentralized authority
1.3.2.2.1. important decisions are made by middle-level and supervisory-level managers
1.3.2.2.2. Managers are encouraged to solve their own problems rather than to buck the decision to a higher level
1.3.2.2.3. Decision are made more quickly, which increases the organization’s flexibility and efficiency
1.3.2.2.4. power has been delegated throughout the organization. General Motors and Sears are using this kind of authority
1.4. Integrating Mechanisms
1.4.1. Direct contact:
1.4.1.1. get managers from different divisions or functions together to solve mutual problems.
1.4.2. Liaison Roles:
1.4.2.1. one manager in each area is responsible for communication with other areas.
1.4.3. Task Forces:
1.4.3.1. temporary committees formed across divisions to solve a specific problem
1.4.4. Cross-functional teams
1.4.4.1. works much like a permanent task force that deals with recurring problems.
1.4.5. Integrating roles and departments
1.4.5.1. Senior managers provide members of cross-functional team with relevant information from other teams and from other divisions.
2. 3. Grouping Jobs into Functions and Divisions: Designing Organizational Structure
2.1. Functional Structure
2.1.1. A functional structure is an organizational structure composed of all the departments that an organization requires to produce its goods or services.
2.1.2. Advantages
2.1.2.1. For member
2.1.2.1.1. Learn together => become more specialized and can perform at a higher level.
2.1.2.1.2. Encourages cooperation within a function.
2.1.2.2. For managers
2.1.2.2.1. Easier for managers to monitor and evaluate their performance
2.1.2.2.2. A functional structure allows workers to evaluate how well co-worker are performing their jobs, and help them develop their skill.
2.1.2.2.3. Create the set of functions they need to scan and monitor the competitive environment and obtain information about the way it is changing
2.1.3. Problems
2.1.3.1. Managers in different functions may find it more difficult to communicate and coordinate with one another
2.1.3.2. Functional managers may become so preoccupied with supervising their own specific departments and forget organization goals
2.2. Divisional Structures: Product, Geographic, and Market
2.2.1. Each division is a collection of functions or departments that work together to produce the product.
2.2.2. Divisional structure : An organizational structure composed of separate business units within which are the functions that work together to produce a specific product for a specific customer
2.2.2.1. the type of good or service
2.2.2.2. the area of the country or world
2.2.2.3. the type of customer
2.3. Product Structure
2.3.1. An organizational structure in which each product line or business is handled by a self-contained division.
2.3.2. Managers must have experience in specific markets or industries
2.3.3. commonly design a product structure to organize their operations
2.3.4. Using a product structure
2.3.4.1. Managers place each distinct product line or business in its own self-contained division and give divisional managers the responsibility for devising an appropriate business-level strategy
2.3.4.2. Advantages
2.3.4.2.1. a product structure allows functional managers to specialize in only one product area
2.3.4.2.2. each division’s managers can become experts in their industry
2.3.4.2.3. frees corporate managers from the need to supervise directly each division’s day-to-day operations
2.3.4.2.4. puts divisional managers close to their customers and lets them respond quickly and appropriately to the changing task environment.
2.4. Geographic Structure
2.4.1. An organizational structure in which each region of a country or area of the world is served by a self-contained division
2.4.2. Since the needs of retail customers differ by region
2.4.3. In adopting a global geographic structure: managers locate different divisions in each of the world regions where the organization operate.
2.4.4. The degree of customers willing to buy => use a global product structure
2.4.4.1. global product structure, each product division, not the country and regional managers, takes responsibility for deciding where to manufacture its products and how to market them in countries worldwide
2.5. Market Structure
2.5.1. An organizational structure in which each kind of customer is served by a self-contained division; also called customer structure
2.5.2. lets managers be responsive to the needs of their customers and allows them to act flexibly in making decisions in response to customers’ changing needs.
2.5.3. need to continually evaluate hierarchy and culture to ensure that operations are working according to plan
2.6. Matrix and Product Team Designs
2.6.1. Matrix Structure
2.6.1.1. managers group people and resources in two ways simultaneously
2.6.1.1.1. by functions: learn from one another and become more skilled and productive.
2.6.1.1.2. product teams: members of different functions work together to develop a specific product.
2.6.1.2. Disadvantages
2.6.1.2.1. The dual reporting relationships
2.6.1.2.2. Conflicts between two bosses
2.6.2. Product Team Structure
2.6.2.1. Solve problem
2.6.2.2. Cross-functional: team A group of managers brought together from different departments to perform organizational tasks.
2.6.2.3. Product team structure: An organizational structure in which employees are permanently assigned to a cross-functional team and report only to the product team manager or to one of his or her direct subordinates
2.6.2.4. The artificial boundaries between departments disappear and focus on a general interest
3. 1. Designing Organizational Structure
3.1. The Organizational Environment
3.1.1. An external environment that changes quickly and is very uncertain requires a more flexible and innovative organizational structure.
3.1.2. A stable external environment can lead to a more stable organization with standard operating procedures (SOP’s)
3.2. Strategy
3.2.1. Once strategy is chosen, right means to implement it must be chosen.A different strategy requires a different organizational structure.
3.2.1.1. Differentiation -> more flexible and innovative.
3.2.1.2. Low-cast -> formal structure.
3.2.2. managers can group their departments or divisions in several ways to allow them to effectively pursue an international strategy.
3.3. Technology
3.3.1. combination of skills, knowledge, machines, and computers
3.3.2. The more complicated technology, the more difficult to control and need for flexibility
3.3.2.1. what determines the complicatedness?
3.3.2.1.1. Task variety:the number of new or unexpected problems orsituations that a person or function encounters in performing tasks or jobs
3.3.2.1.2. Task analyzability:is the degree to which programmed solutions are available to solveproblems
3.4. Human Resources
3.4.1. The higher skilled (strong professional values and norms and desire greater freedom) and more people -> the more flexible organization
4. 2. Grouping Tasks into Jobs: Job Design
4.1. Job Enlargement and Job Enrichment
4.1.1. Job enlargement
4.1.1.1. increasing the number of different tasks in a given job by changing the division of labor
4.1.1.2. Another division of labor to encourage workers toperform at higher level and be more satisfied.
4.1.2. Job enrichment
4.1.2.1. Increasing the degree of responsibility a worker has over his or her job.
4.1.2.1.1. empowering workers to experiment
4.1.2.1.2. encouraging workers to develop new skills
4.1.2.1.3. allowing workers to decide how to do the work and giving them the responsibility for deciding how to respond to unexpected situations
4.1.2.1.4. allowing workers to monitor and measure their own performance
4.2. The Job Characteristics Model
4.2.1. Skill variety
4.2.1.1. the extent to which an employee need a wide variety of skills,knowledge
4.2.2. Task identity
4.2.2.1. the extent to which a worker has to perform all the tasks necessaryto complete the job, or just one of numerous operations
4.2.3. Task significance
4.2.3.1. The degree to which a worker feels his or her job is meaningful because of its effect on people inside the organization
4.2.4. Autonomy
4.2.4.1. The degree to which a job gives an employee the freedom and discretion needed to schedule different tasks and decide how to carry them out
4.2.5. Feedback
4.2.5.1. The extent to which actually doing a job provides a worker with clear and direct information about how well he or she has performed the job
5. 5. Strategic Alliances, B2B Network Structures, and IT
5.1. Strategic alliance:
5.1.1. formal agreement that commits two or more companies to exchange or share their resources in order to produce and market a product
5.1.2. share similar interests and believe they can benefit from cooperating with each other.
5.1.3. Coca-Cola Company and the InterContinental Hotels Group (IHG): IHG will serve select Coke products in its more than 3,200 hotels
5.2. growing sophistication of IT
5.2.1. easier to manage strategic alliances
5.2.2. encourage managers to share information and cooperate with each other across the globe
5.2.3. B2B network structure
5.2.3.1. one or several organizations create with suppliers, manufacturers, and distributors to product and market a product
5.2.3.2. manage its global value chain
5.2.3.3. find new ways to reduce costs while increasing the quality of products
5.2.3.4. without incurring the high costs of operating a complex organizational structure
5.2.3.4.1. gain access to low-cost foreign sources of inputs
5.2.3.5. Nike: most profitable athletic shoe
5.2.3.5.1. Process
5.2.3.5.2. important advantages
5.2.3.6. The use of network structures is increasing rapidly
5.2.3.6.1. specific industry (e.g., auto makers) use the same platform link to each other and establish industry specifications and standards
5.2.3.6.2. Suppliers also use the same software platform
5.3. boundaryless organization .
5.3.1. An organization whose members are linked by computers, mobile and virtual technology, computer-aided design systems, videoconferencing, and cloud computing, and who rarely, if ever, see one another face-to-face
5.3.1.1. are not formal members of an organization
5.3.1.2. they are functional experts who form an alliance with an organization, fulfill their contractual obligations, and then move on to the next project
5.4. knowledge management system
5.4.1. Consultants are connected by laptops
5.4.2. a company-specific virtual information system that systematizes the knowledge of its employees and facilitates the sharing and integration of expertise within and between functions and divisions through real-time interconnected technology.