MAN3025 Module 6: Organizational Structure and Culture

What three factors work in alignment to support strategic implementation?

1. Organizational culture

2. Organizational structure

3. HR practices

organizational culture

The shared assumptions that affect how work gets done

organizational structure

Formal system of task and reporting relationships

HR practices

All of the activities an organization uses to manage its human capital

3 Levels of Organizational Culture

1. Observable artifacts

2. Espoused values

3. Basic assumptions

observable artifacts

Physical manifestations of culture

espoused values

Explicitly stated values and norms preferred by an organization

enacted values

Values and norms actually exhibited in the organization

basic assumptions

Core values of the organization

How employees learn culture

• Symbols

• Stories

• Heroes

• Rites and rituals

• Organizational socialization

hero

A person whose accomplishments embody the values of the organization

rites and rituals

The activities and ceremonies, planned and unplanned, that celebrate important occasions and accomplishments in organizational life

organizational socialization

The process by which people learn the values, norms, and required behaviors to be a member of an organization

4 Types of Organizational Culture

1. Clan

2. Adhocracy

3. Market

4. Hierarchy

CVF horizontal dimension

Inward or outward focus?

Internal dynamics and employees (internal focus and integration) vs external environment and customers and shareholders (external focus and differentiation)

CVF vertical dimension

Flexibility or stability?

Decentralized decision making (flexibility and discretion) vs Centralized authority (stability and control)

clan culture

Internal focus and values flexibility rather than stability and control

adhocracy culture

External focus and values flexibility

market culture

Strong external focus and values stability and control

hierarchy culture

Internal focus and values stability and control over flexibility

person-organization (PO) fit

Extent to which your personality and values match the climate and culture in an organization

12 Levers for Organizational Culture Change

1. Formal statements

2. Slogans and sayings

3. Rites and rituals

4. Stories, legends, and myths

5. Leader reactions to crises

6. Role modeling, training, and coaching

7. Physical design

8. Rewards, titles, promotions, and bonuses

9. Organizational goals and performance criteria

10. Measurable and controllable activities

11. Organizational structure

12. Organizational systems and procedures

organization

A group of people who work together to achieve some specific purpose

7 Major Features of Organizations

1. Common purpose

2. Coordinated effort

3. Division of labor

4. Hierarchy of authority

5. Span of control

6. Authority—accountability, responsibility, and delegation

7. Centralization versus decentralization of authority

4 Features of Organizations Proposed by Schein

1. Common purpose

2. Coordinated effort

3. Division of labor

4. Hierarchy of authority

common purpose

Unifies employees or members and gives everyone an understanding of the organization’s reason for being

coordinated effort

The coordination of individual efforts into a group or organizationwide effort

division of labor

Work specialization; the arrangement of having discrete parts of a task done by different people

hierarchy of authority

Chain of command; control mechanism for making sure the right people do the right things at the right time

flat organization

Organizational structure with few or no levels of middle management between top managers and those reporting to them

unity of command

Principle that an employee should report to no more than one manager to avoid conflicting priorities and demands

span of control

The number of people reporting directly to a given manager; narrow (or tall) and wide (or flat)

authority

The rights inherent in a managerial position to make decisions, give orders, and utilize resources

accountability

Managers must report and justify work results to the managers above them

responsibility

The obligation one has to perform the assigned tasks

delegation

Process of assigning managerial authority and responsibility to managers and employees lower in the hierarchy

centralized authority

Important decisions are made by higher-level managers

decentralized authority

Important decisions are made by middle-level and supervisory-level managers

organization chart

Box and line illustration showing the formal lines of authority and the organization’s official positions or work specializations

8 Types of Organizational Structures

1. Simple

2. Functional

3. Divisional

4. Matrix

5. Horizontal

6. Hollow

7. Modular

8. Virtual

simple structure

Authority centralized in a single person, a flat hierarchy, few rules, and low work specialization

functional structure

People with similar occupational specialties are put together in formal groups

divisional structure

People with diverse occupational specialties are put together in formal groups by similar products or services, customers or clients, or geographic regions

matrix structure

Combines functional and divisional chains of command in a grid so that there are two command structures—vertical and horizontal

horizontal structure

Also called team-based design, teams or workgroups, either temporary or permanent, are used to improve collaboration and work on shared tasks by breaking down internal boundaries

boundaryless organization

A fluid, highly adaptive organization whose members, linked by information technology, come together to collaborate on common tasks

Includes hollow, modular, and virtual structures

hollow structure

Network structure; the organization has a central core of key functions and outsources other functions to vendors

modular structure

A firm assembles product chunks, or modules, provided by outside contractors

virtual structure

An organization whose members are geographically apart and connected through the internet and remote work software