8 Organizational Structure CThe McGraw-Hill Companies, Inc, 2000
8-1 Irwin/McGraw-Hill ©The McGraw-Hill Companies, Inc., 2000 Organizational Structure 8
8-2 Designing organizational Structure oOrganizing: the process by which managers establish working relationships among employees to achieve goals. Organizational Structure: formal system of task reporting relationships showing how workers use resources Organizational design: managers make specific choices resulting in a given organizational structure Successful organizational design depends on the organizations unique situation " win/MeGraw-HHill CThe McGraw-Hill Companies, Inc, 2000
8-2 Irwin/McGraw-Hill ©The McGraw-Hill Companies, Inc., 2000 Designing Organizational Structure ⚫Organizing: the process by which managers establish working relationships among employees to achieve goals. ◼ Organizational Structure: formal system of task & reporting relationships showing how workers use resources. ◼ Organizational design:managers make specific choices resulting in a given organizational structure. ⚫Successful organizational design depends on the organization’s unique situation
8-3 Factors Affecting Organizational Design Figure 8.1 Environment Determine design Strategy or organizational Technology structure Human Resources " win/MeGraw-HHill CThe McGraw-Hill Companies, Inc, 2000
8-3 Irwin/McGraw-Hill ©The McGraw-Hill Companies, Inc., 2000 Factors Affecting Organizational Design Environment Strategy Human Resources Technology Determine design or organizational structure Figure 8.1
8-4 Determinants of structure The environment: The quicker the environment changes, the more problems face managers e Structure must be more flexible when environmental change Is rapid a Usually need to decentralize authority Strategy: Different strategies require the use of different structures o a differentiation strategy needs a flexible structure low cost may need a more formal structure o Increased vertical integration or diversification also requires a more flexible structure " win/MeGraw-HHill CThe McGraw-Hill Companies, Inc, 2000
8-4 Irwin/McGraw-Hill ©The McGraw-Hill Companies, Inc., 2000 Determinants of Structure The environment: The quicker the environment changes, the more problems face managers. ◆ Structure must be more flexible when environmental change is rapid. ◼ Usually need to decentralize authority. Strategy: Different strategies require the use of different structures. ◆ A differentiation strategy needs a flexible structure, low cost may need a more formal structure. ◆ Increased vertical integration or diversification also requires a more flexible structure
8-5 Determinants of structure Technology: The combination of skills, knowledge, tools equipment, computers and machines used in the organization o More complex technology makes it harder for managers to regulate the organization. Technology can be measured by a Task Variety: new problems a manager encounters Task Analyzability: programmed solutions available to a manager to solve problems High task variety and low analyzability present many unique problems to managers a Flexible structure works best in these conditions Low task variety and high analyzability allow managers to rely on established procedures " win/MeGraw-HHill CThe McGraw-Hill Companies, Inc, 2000
8-5 Irwin/McGraw-Hill ©The McGraw-Hill Companies, Inc., 2000 Determinants of Structure ◼ Technology:The combination of skills, knowledge, tools, equipment, computers and machines used in the organization. ◆ More complex technology makes it harder for managers to regulate the organization. Technology can be measured by: ◼ Task Variety: new problems a manager encounters. ◼ Task Analyzability: programmed solutions available to a manager to solve problems. ◆ High task variety and low analyzability present many unique problems to managers. ◼ Flexible structure works best in these conditions. ◆ Low task variety and high analyzability allow managers to rely on established procedures