MAN3025 - Exam 2

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?

1. Something’s changed in the business, internally or externally

2. New strategies/goals

3. 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

1. Mechanistic

2. 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

1. Collaborative learning

2. Lifelong learning mindset

3. Room for innovation

4. Forward-thinking leadership

5. 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?

1. Skill variety: tasks that make up a job and skills used to perform them

2. Task Identity: the degree to which an employee performs a specific task

3. Task significance: employees’ perception of the importance of the task to others

4. Autonomy: the degree to which the employee can make decisions

5. 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

• REPORT TO TWO PEOPLE (DECENTRALIZED)

• 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

a normal process leading to system decline

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:

1. recognition of the need for change

2. establishment of goals for the change

3. diagnosis of the relevant variables

4. selection of the appropriate change technique

5. planning for implementation of the change

6. the actual implementation

7. 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