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Organizational Design
How things work (ex. do we want to use teams? How often, and what kind of teams?) - Also about improving people’s lives at work (ex. what customer service?)
Why is organizational design important?
Something’s changed in the business, internally or externally
New strategies/goals
Current design no longer works
Bureaucracy
Logical, radical, and efficient
Has lots of rules
Impersonal
Distinct division of labor
Job specialization
breaking down a task into smaller and smaller parts (however, nothing gets done quickly) Usually large organizations = UCF
Job rotation
one day one worker does one job and then another day another job
Job Enlargement
increasing the scope of tasks and responsabilities
Job Enrichment
taking more, and more challenging and advanced tasks
Types of organizational environments
Mechanistic
Organic
Mechanistic Organization
Lots of job specialization
Lots of top-down communication
Little Task Flexibility
Authoritative decision making
(Do as a say mentality)
Simple to organize but doesn’t handle change well
Usually manufacturing companies
Organic Organization
Low specialization (work in teams)
Open communication
Less rules
Usually entrepreneurial companies
Team Organization
use project teams, people float from project to project
Virtual Organizations
Little formal structure, only a few employees
PROS: Less overhead costs
CONS: Some employees miss the togetherness from in-person organizations
Learning organizations
All about lifelong learning and personal development
Five ways to identify learning organizations
Collaborative learning
Lifelong learning mindset
Room for innovation
Forward-thinking leadership
Knowledge sharing
Job Specialization Pros & Cons
PROS: Workers can become proficient at one task, and specialized equipment can be more easily developed, employee replacement becomes easier
CONS: Workers can become bored and dissatified
Job Characteristics Approach
An alternative to job specialization that suggests that jobs should be diagnosed and improved along five core dimensions, taking into account both the work system and employee preferences
IN OTHER WORDS
Framework for enriching jobs based on core characteristics = improve motivation, performance, and satisfaction
What are the five core characteristics of the job characteristics model?
Skill variety: tasks that make up a job and skills used to perform them
Task Identity: the degree to which an employee performs a specific task
Task significance: employees’ perception of the importance of the task to others
Autonomy: the degree to which the employee can make decisions
Feedback: how employees find out how well they’ve done in their tasks
Job Characteristics Model Order
The 5 CORE CHARACTERISTICS
lead to = PSYCHOLOGICAL STATES (meaningfulness of work, experience responsibility for the outcomes of work, and knowledge of the actual results of work activities)
= which leads to PERSONAL AND WORK OUTCOMES (high motivation, performance, and satisfaction)
Departmentalization
the process of grouping jobs according to a logical arrangement (ex. finance department, marketing department)
PROS: each department can be staffed with experts in that area
CONS: decision making is slower and bureaucratic
Product Departmentalization Pros & Cons
Grouping activities around products or product groups
PROS: faster and more effectiveness
CONS: mangers in each department focus on their own products and tend to isolate and exclude
Customer Departmentalization Pros & Cons
Grouping activities to respond to and interact with specific customers or customer groups
PROS: Specialists can focus on unique customers or customer groups
CONS: A large staff is required to integrate activities of various customer departments (ex. corporate clients, retail clients)
Location Departmentalization
Grouping jobs on the basis of defined geographic sites or areas
PROS: Easy to respond to specific environmental and customer characteristics
CONS: a large staff may be required to keep track of units in all different locations
Chain of Command
a clear and distinct line of authority among the positions of an organization
Functional Departmentalization
grouping jobs involving the same or similar activities
Work teams
An alternative to job specialization that allows an entire group to design the work system it will use to perform an interrelated set of tasks
Authority
Power that has been legitimized by the organization
Decentralization
The process of systematically delegating power and authority throughout the organization to middle- and lower-level managers
Delegation
The process by which a manager assigns a portion of his or her total workload to others
Centralization
The process of systematically retaining power and authority in the hands of higher-level managers
Tall Organizations
Many levels of authorities
Flat Organization
Mainly one source of authority that everyone reports to
Coordination
The process of linking the activities of the various departments of the organization
Span of Management
The number of people who report to a particular manager
Technology
Conversion process used to transform inputs into outputs
Sequential interdependence
When the output of one unit becomes the input for another in a sequential fashion
Situational view of organization design
Based on the assumption that the optimal design for any given organization depends on a set of relevant situational factors
Integration
Degree to which the various subunits must work together in a coordinated fashion
Organizational size
Total number of full-time or full-time-equivalent employees
Organizational life cycle
Progression through which organizations evolve as they grow and mature
Differentiation
The extent to which the organization is broken down into subunits
Functional design
U-form: grouped into functional departments
PROS: facilitates coordination and coordination
CONS: functional focus and centralization
Conglomerate Design
h-form: Used by an organization made up of a set of unrelated businesses
PROS: allocated resources across companies, enhance the performance of each business
CONS: complexity associated with dealing with diverse businesses
Divisional Design
m-form: Based on multiple businesses in related areas operating within a larger organizational framework
Basic objective is to optimize internal competition and cooperation.
Matrix design
based on two overlapping bases of departmentalization
m-form: company strttcure where employees report to two leaders/managers
Best when:
1. Strong pressure from the environment
2. Information needs to be processed
3. Pressure for shared resources
Assembly line = mass production
true
Organization change
Any substantive modification to some part of the organization
Planned change
Change that is designed and implemented in an orderly and timely fashion in anticipation of future events (LOWER RISK)
Business Process Change
The radical redesign of all aspects of a business to achieve major gains in cost, service, or time
Organization development (OD)
An effort that is planned, organization-wide, and managed from the top, intended to increase organizational effectiveness and health through planned interventions in the organization’s process, using behavioral science knowledge
Reactive change
A piecemeal response to circumstances as they develop
Entreprise resource planning
A large-scale information system for integrating and synchronizing the many activities in the extended enterprise
Radical innovations
A new product, service, or technology that completely replaces an existing one
Incremental innovations
A new product, service, or technology that modifies an existing one
Management innovations
A change in the management process in an organization
(changes to the broad context of development without necessarily affecting the physical appearance or performance of products or services)
Process innovation
A change in the way a product or service is manufactured, created, or distributed
Technological Innovations
A change in the appearance or performance of products or services or of the physical processes through which a product or service passes
Product Innovations
A change in the physical characteristics or performance of an existing product or service or the creation of a new product or service
Intrapreneurs
Similar to entrepreneurs except that they develop new businesses in the context of a large organization
The need for the business process change
entropy
Reasons for failing to innovate
lack of resources
resistance to change
failure to recognize opportunities
The Lewin Model
managers have to unfreeze negative employee behaviors - change those behaviors, and then refreeze the new positive behaviors
How to promote innovation in an organization
Organizational culture
rewards system
intrepreneurship
Inventor
a person who actually conceives of and develops the new idea, product, or service by means of the creative process
The order of steps in the change process is:
recognition of the need for change
establishment of goals for the change
diagnosis of the relevant variables
selection of the appropriate change technique
planning for implementation of the change
the actual implementation
evaluation and follow-up
The #1 reason people leave their job is lack of clear growth plan
true
Self fulfilling prophecy
encourage our employees that they have the skills and abilities, as well as knowledge to succeed and or complete a task = can lead to them succeeding
Human resource management
The set of organizational activities directed at attracting, developing, and maintaining an effective workforce
Human capital
Reflects the organization’s investment in attracting, retaining, and motivating an effective workforce
Equal Employment Opportunity Commission
Federal agency charged with enforcing Title VII of the Civil Rights Act of 1964 (outlaws discrimination based on age, gender, sex, race, pregnancy)
Adverse impact
When minority group members pass a selection standard at a rate less than 80 percent of the pass rate of majority group members (ex. only 10 women selected for a job while 90 men are selected)
Affirmative action
Intentionally seeking and hiring qualified or qualifiable employees from racial, sexual, and ethnic groups that are underrepresented in the organization
Age discrimination in employment act
Outlaws discrimination against people older than age 40; passed in 1967, amended in 1978 and 1986
Civil rights act of 1991
Amends the original Civil Rights Act, making it easier to bring discrimination lawsuits while also limiting punitive damages
Americans with disabilities act
Prohibits discrimination against people with disabilities
Equal pay act of 1963
Requires that men and women be paid the same amount for doing the same job
Family and Medical Leave Act of 1993 (FMLA)
Requires employers to provide up to 12 weeks of unpaid leave for family and medical emergencies
Employee Retirement Income Security Act of 1974 (ERISA)
Regulates how organizations manage their pension funds
Fair labor standards act
Sets a minimum wage and requires overtime pay for work in excess of 40 hours per week; passed in 1938 and amended frequently since then
National labor relations act
Passed in 1935 to set up procedures for employees to vote on whether to have a union; also known as the Wagner Act
Labor management relations act
Passed in 1947 to limit union power; also known as the Taft-Hartley Act
Occupational Safety and Health Act of 1970
Directly mandates the provision of safe working conditions
Nationa labor relations board
Established by the Wagner Act to enforce its provisions
Job analysis
A systematized procedure for collecting and recording information about jobs within an organization
Replacement chart
Lists each important managerial position in the organization, who occupies it, how long he or she will probably remain in the position, and who is or will be a qualified replacement
Employee information system
Contains information on each employee’s education, skills, experience, and career aspirations; usually computerized
Recuriting
The process of attracting individuals to apply for jobs that are open
Employment at will
A traditional view of the workplace that says organizations can fire their employees for whatever reason they want; recent court judgments are limiting employment-at-will
Internal Recruiting
Considering current employees as applicants for higher-level jobs in the organization
Training
Teaching operational or technical employees how to do the job for which they were hired
realistic job preview (RJP)
Provides the applicant with a real picture of what performing the job that the organization is trying to fill would be like
Development
Teaching managers and professionals the skills needed for both present and future jobs
Validation
Determining the extent to which a selection device is really predictive of future job performance
External recruiting
Getting people from outside the organization to apply for jobs
Performance appraisal
A formal assessment of how well an employee is doing his or her job
behaviorally anchored rating scale (BARS)
A sophisticated rating method in which supervisors construct a rating scale associated with behavioral anchors
Job evaluation
An attempt to assess the worth of each job relative to other jobs
360 degree feedback
Performance appraisal of managers done by their boss, peers, and subordinates
Compensation
money
Labor relations
The process of dealing with employees who are represented by a union
Collective bargaining
The process of agreeing on a satisfactory labor contract between management and a union
