Organizational Behavior Test 1

Lei Huang- Auburn University

WHAT IS ORGANIZATION?

A consciously coordinated social unit, composed of two or more people, that functions on a relatively continuous basis to achieve a common goal or set of goals

WHAT MAKES ORGANIZATIONS

SUCCESSFUL?

Products that can potentially revolutionize the way people live

Almost perfect strategic planning

Keep innovating

Embracing changes

Reward and retain the best talent

WHAT IS THE FIRST WAY AN ORGANIZATION IS SUCCESSFUL?

Products that can potentially revolutionize the way people live

WHAT IS THE SECOND WAY AN ORGANIZATION IS SUCCESSFUL?

Almost perfect strategic planning

WHAT IS THE THIRD WAY AN ORGANIZATION IS SUCCESSFUL?

Keep innovating

WHAT IS THE FOURTH WAY AN ORGANIZATION IS SUCCESSFUL?

Embracing changes

WHAT IS THE FIFTH WAY AN ORGANIZATION IS SUCCESSFUL?

Reward and retain the best talent

WHAT PUTS ORGANIZATIONS

IN TROUBLE?

Unclear vision

Bad leadership

Stop innovating

Maladaptive to market changes

Losing talents

WHAT IS THE FIRST REASON THAT AN ORGANIZATION CAN GET INTO TROUBLE?

Unclear vision

WHAT IS THE SECOND REASON THAT AN ORGANIZATION CAN GET INTO TROUBLE?

Bad leadership

WHAT IS THE THIRD REASON THAT AN ORGANIZATION CAN GET INTO TROUBLE?

Stop innovating

WHAT IS THE FOURTH REASON THAT AN ORGANIZATION CAN GET INTO TROUBLE?

Maladaptive to market changes

WHAT IS THE FIFTH REASON THAT AN ORGANIZATION CAN GET INTO TROUBLE?

Losing talents

ORGANIZATIONAL STRUCTURE SEVEN KEY

ELEMENTS:

Work specialization

Departmentalization

Chain of command

Span of control

Centralization/decentralization

Formalization

Boundary spanning

Work Specialization

Refers to the degree to which tasks in the

organization are subdivided into separate jobs

Division of Labor Within Work Specialization:

• Repetition of work

• Makes efficient use of employee skills

• Increases employee skills through repetition

• Less between-job downtime increases productivity

• Specialized training is more efficient

• Allows use of specialized equipment

MAJOR PROBLEMS OF WORK SPECIALIZATION:

• Boredom

• Fatigue

• Stress

• Low productivity

• Poor quality

• Absenteeism

• High turnover

(DIS)ECONOMIES OF WORK SPECIALIZATION

Inverted U-shaped relationship between work specialization and productivity – specialization is good until a breaking point; after that, extreme work specialization leads to lower productivity

SOLUTIONS TO FIX JOB BOREDOM

Job Enlargement

Increase the width of the job, increasing the number of tasks for a given job

Job Enrichment

Increase the depth of the job, increasing the degree of responsibility an employee has over a job

What is Job Enlargement used for?

Intended to reduce boredom and fatigue by increasing the variety of tasks performed

Job Enlargement also means..

“HORIZONTAL job expansion”

Job Enrichment means..

“VERTICAL job expansion”

What is Job Enrichment used for?

Intended to increase work autonomy by

allowing greater decision-making power

What does Job Enrichment require?

Requires a flexible organizational structure to allow employees to act flexibly and creatively

Four Basic Ways of Job Crafting

• Acquiring structural support (e.g., requesting

coordination or collaboration from another work

unit on a project)

• Increasing social resources (e.g., expanding

social networks)

• Increasing challenging job demands (e.g.,

setting up more aggressive work goals to fuel up

your energy/passion at work)

• Reducing hindering job demands (e.g., ignoring

requests for unnecessary cross-departmental

meetings)

Departmentalization

Refers to the grouping of jobs so common

tasks can be coordinated

Departmentalization Grouping by:

• FUNCTIONS PERFORMED

• TYPE OF PRODUCT OR SERVICE OFFERED

• GEOGRAPHY OR TERRITORY

• PROCESS DIFFERENCES

• TYPE OF CUSTOMER

Chain of command

Refers to an unbroken line of authority that extends from the top of the organization to the lowest echelon

Authority

Rights inherent to management to give orders and

expect the orders to be obeyed

Unity of command

Specify how many direct supervisors a

person has (typically only one)

What does chain of command clarify?

Clearly clarify who reports to whom, still necessary in many organizations to ensure effectiveness

Span of control

Refers to the number of subordinates a manager

supervises

Typical size of span of control:

5-14 (most commonly seen 8-9)

Narrow span of control may lead to:

• expense of additional layer of management

• increased complexity of vertical communication

• overly tight supervision and less autonomy

What does a wider span of control increase?

Organizational efficiency

What does the size of span of control depend on?

Leadership hierarchy and/or leadership capability

Centralization

Refers to the degree to which decision-making is concentrated at a single point/person in the organization

Advantages of a decentralized organization (most popular today)

• Can act more quickly to solve problems

• More people providing input into key decisions made at the top

• Employees less likely feel alienated from those who make decisions that can potentially affect their work

Advantages of a centralized organization (most seen in traditional business & military)

• Can be very efficient if top management demonstrates great leadership

• Direct collective effort towards resolving a critical issue

• Clear direction if leadership has vision and strong execution

Do small businesses favor centralization or

decentralization?

Centralization

Do family businesses favor centralization or

decentralization?

Centralization

CENTRALIZATION VS. DECENTRALIZATION

Formalization

Refers to the degree to which jobs (or ways of doing things) within the organization are standardized

High formalization means what

Minimum amount of discretion

High formalization can increase what

Operational efficiency if standards are great

Low formalization means what

That job behaviors are relatively non-programmed so employees have a great deal of freedom to exercise discretion at work

Low formalization is not necessarily good because why

Everyone has their own agenda while the achievement of team goals/objectives relies on interdependent effort

Boundary spanning

Occurs when individuals form relationships with

people outside their formally assigned groups

Boundary spanning encourages what

Extensive internal communication

Boundary spanning assigns what

Formal liaison roles or develop committees of individuals from different areas of the organization

Employees with experience in multiple functions are more likely to engage in what?

Boundary spanning

To what degree are activities subdivided into

separate jobs?

Work specialization

On what basis will jobs be grouped together?

Departmentalization

To whom do individuals report?

Chain of command

How many individuals can a manager

supervise directly?

Span of control

To what degree will there be rules and

regulations to direct employees?

Formalization

Do individuals from different areas/functions

regularly interact?

Boundary spanning

SIMPLE STRUCTURE

A structure characterized by a low degree of departmentalization, wide spans of control, authority centralized in a single person, and

little formalization

KEY features of Simple Structure

• Clearly defined line of authority/power and responsibilities

• Minimum level of duplicate personnel

• Most commonly seen structure in small businesses

Strengths of Simple Structure

• Simple, fast, and flexible

• Inexpensive to maintain

• Accountability is clear

Weaknesses of Simple Structure

• Difficult to maintain in anything other than

small organizations

• Risky - everything depends on one person

BUREAUCRACY/FUNCTIONAL STRUCTURE

A structure characterized primarily by standardization and hierarchy.

It can be seen as an extension to simple structure but with many more layers/hierarchies

KEY features of BUREAUCRACY/FUNCTIONAL Structure

• Centralized authority

• Decisions flow via chain of command

• Narrow span of control

• Highly routine operating tasks

• Very formalized rules and regulations

• Little flexibility for change

Strengths of BUREAUCRACY/FUNCTIONAL Structure

• Centralized decision-making

• Functional economies of scale

• Minimum duplication of personnel and

equipment

Weaknesses of BUREAUCRACY/FUNCTIONAL Structure

• Obsessive concern with rules and regulations

• Lack of employee discretion to deal with

problems

• Subunit conflicts with organizational goals

DIVISIONAL STRUCTURE

A collection of functions working together to make products and offer services.

KEY features of DIVISIONAL STRUCTURE

• Divisions create smaller, manageable parts of a firm

• Divisions are created based on the nature and the needs of the firm

• Functional managers (e.g., HR, accounting, marketing) report to divisional managers who then report to corporate management

PRODUCT STRUCTURE

GEOGRAPHIC STRUCTURE

MARKET STRUCTURE

HYBRID STRUCTURE

Combines elements from different traditional organizational structures, most typically mixing aspects of both functional and divisional structures and therefore allowing for more flexibilities in adapting to the specific needs of each business or

market or consumer group

KEY features of HYBRID STRUCTURE

• Decentralized decision-making due to

high level of scalability

• Cross-divisional/functional collaboration

• High adaptability to market changes

• High flexibility with changeable

structures if needed

Hybrid Structure

MATRIX STRUCTURE

A structure that creates dual lines of authority and combines functional and product departmentalization

KEY features of MATRIX STRUCTURE

• Gains the advantages of functional and product departmentalization while avoiding their weaknesses

• Facilitates coordination of complex and interdependent activities

• Breaks down the unity-of-command concept

Matrix Structure

Strengths of Matrix Structure

• Facilitate significant level of task

interdependence

• Facilitate much greater level of boundary

spanning that leads to employee creativity

• Knowledge is not institutionalized within a

specific domain, so employees can learn more

as they engage different areas of work

Weaknesses of Matrix Structure

• Create employees’ confusion about how to

prioritize different things

• Foster power struggles or even conflicts among

managers over their own agenda

• Place greater level of stress on employees

• Create unbalanced expectations across areas

VIRTUAL STRUCTURE

Typically a small, core organization that outsources major business functions

Virtual Structure does what?

• Builds on a small network of “collaborators”, not necessarily employees

• Highly centralized with little or no departmentalization

• Extremely flexible – can quickly adapt to task environment with re-assembly of

a new network of “collaborators” depending on what needs to be done

• Major weakness: Reduces management’s control over key parts of its business

• Typical example: social-media based small business

Virtual Structure

CIRCULAR STRUCTURE

A structure with less formal reporting structures where employees are able to regularly interact with core executives/managers and work together on different projects

Things to know about Circular Structure

• Leader-follower communication channel is very open and flexible

• Characterized with very high level of mutual trust, respect, and confidence in each other’s professional capabilities

• Very popular structure among technology-based start-ups

• Other examples: small law firms or consulting companies

Circular Structure

WHAT IS ORGANIZATIONAL CULTURE?

• A common perception held by

members of the organization

• A system of shared meaning – a

set of key characteristics that the

organization values

• The shared beliefs, values and

assumptions that exist in an

organization

CHARACTERISTICS OF ORGANIZATIONAL CULTURE

• Stable over time – not changing

with people moving in/out

• Shaped by the founder or people at

the VERY TOP of the hierarchy

• Implicit (not explicitly observable)

• Reflects who we are, NOT who we

aspire to be

Important things to note about Organizational Culture

Significant structural change may

reshape culture and lead to employee

perceptions of misfit with new culture

• Takes time for newcomers to

understand and adapt to

• Serves as means of institutionalization

– people act and think in similar ways,

but this may hinder creativity

TYPICAL MISCONCEPTIONS ABOUT

ORGANIZATIONAL CULTURE

• Only large organizations/companies need to worry about culture

• Culture = Workplace harmony

• Once a strong culture is in place, it WILL take care of itself and live through all the turbulence

• Consultants can come in fixing the culture problem

FUNCTIONS OF ORGANIZATIONAL CULTURE

• Conveys a sense of identity for its members

• Defines the boundary between one organization and others (i.e., differences in products, services, structures, people)

• Enhances the stability of the social system – when

confronted with change or uncertainty, culture unites & guides people

• Facilitates the generation of commitment to something larger than self-interests

• Serves as a sense-making and “control” mechanism to direct employees’ work behaviors

Dominant Culture

Expresses the core values shared by the

majority of an organization’s members

Subcultures

• Mini-cultures within an organization, typically

defined by department designations and

geographical separation

• Those who have strong informal influence

shape subcultures

• Subcultures may change – NOT as stable as

dominant culture