Organizational Behaviour (Unit 12)

enviornment, strategy & structure

Organizational Structure

how org divides its labour into spec tasks + achieves cordination among tasks

6 Characteristcs of Organizational Structure

1. work specialization (tasks subdived into seperate jobs→ efficient, boredom/turnover)

2. departmentalization (group people w related jobs, skills, experiences into same department → can create silos)

3. chain of command (line of authority → clarifies who reports to who)

4. span of control (# of employees reporting to spec manager → wide vs. narrow)

5. centralization/decentralization (decision making concentrated at single point in org)

6. formalization (standardization of jobs → min freedom)

Vertical Divison of Labour

= appoint authority for planning/decision making

• DM/authority reduced w more hierarchy

• timely com/coordination harder to achieve (filtering likely)

• divided vertically enough to create control wo preventing vertical com/coordination

Horizontal Division of Labour

= groups basic tasks needing to be performed into jobs (required work flow)

job design: ex. product/service has A/B/C work, structure like:

• ABC department → all workers do ABC work (enriched/less supervision)

• ABC department → workers specialize in A, B, or C work (coordination more important)

• seperate departments (great control, accountability for separate tasks)

differentiaion: managers in diff departments differ in goals, time spans, interpersonal styles

Types of Depatmentalization

• product: spec product/service (cordinate specialists, flexible product line management, departments as profit centers, timely response to customer needs (may be ineffcient))

• geographic: deliver orgs products/services in spec geographic region

• customer: deliver orgs products/services to spec customer groups

• functional: employees w related skills/respon (efficient → com, training, performance eaiser to measure)

• matrix: func + report to project/product manager (func & product)

• hybrid: mix of func, product, geo or customer

6 Methods of Cordination

= facilitate timing, com, & feeback among work tasks

1. algorithmic control: computer generated data records, recommends, rewards, nudges behaviour

2. direct supervision: chain of command → supervisors/managers cordinate subordinate work

3. standardization of work processes: tech/rules

4. standardization of outputs: ensure work meets phys/economic standards

5. standardization of skills: training allows people to know what to expect from others

6. mutual adjustment: informal comm

Integration: 3 Components to Achieve

= cordination across differentiated departments

1. liason role: persons assigned to achieve cordination w another department

2. task forces & teams: temp groups to solve cordination problems

3. integrators: mems perm assigned to facilitate cordination b/w departments (esp for departments: highly interdependent, diverse goals, ambiguous enviornment)

Drawbacks of Narrow Control

Narrow: (manager controls few employees)

• tall org → many levels of hierachy

• expensive to add levels of management

• vertical communication complex

• discourages employee autonomy

Wide: more popular recently

• flat org → few levels of hierachy

Decentralized Organizations

• employees solve problems quicker

• more people provide decision input

• employees less alienated from decision makers

• customer concerns adressed eaiser

Mechanistic vs. Organic Organization

M: stable/simple enviornment

• tall/narrow span of control

• ↑ specialization/centralization/formalization

• clear chain of command

• rigid departmentalization

O: dynamic/unstable environment → quickly adapt to changes

• wide span

• ↓ specialization/formalization

• decentralization

• cross hierarchical/func teams

• free flow of info

Determinats of Organizational Structure

1. enviornment (suppliers, customers, competitiors, interest groups)

2. strategy (structure helps achieve objectives → should support strategy)

3. org size (lrg = specialized, departamentalization, vert levels, more rules)

4. tech (convert financial/human/phys resources to products/services)

• routine activities: mech

• non: organic

Contemporary Organic: Holacracy

= flat, decentralized structure w self managing teams where employees have many roles/respon

• decide on their tasks in governance meetings → track progress in tactical meetings

• more autonomy

Contemporary Organic: Ambidextrous

= org exploits current competencies & explore emerging opportunities

• organic & mechanistic

• exploiting vs. exploring

• innovative unit mantains own culture, structure, process but integrated w core of firm by senior management

Contemporary Organic: Network Organization

= liasons b/w specalist orgs that rely on market mechs for coordination (diffusion of into + innovation)

1. stable: contract out funcs to favoured partners (org concentrates on things they do best)

2. dynamic (virtual org): continually evolving network of independent orgs → share skills/costs/access to eos markets

Modular Organization

= network org performs few core funcs & outsources other activities to specialists/suppliers (complete strategic control)

• costs low/devlop new products rapidly

• focus: intellectual property (patents, advertising)

• outsource: manufacture parts, catering, data processing

Open Systems

= take input from external enviornment → transform + send back as outputs (cope w demands of enviornment)

• inputs: capital, en, materials, people (transformed/assist in transformation → phys/intellectual/em)

• ouputs: products/services

Components of External Enviornment

• gen economy: economic dowturn / profit upturn

• customers: changes in demands

• suppliers: need for labour, raw materials, component parts

• competitiors: compete for customers/suppliers

• social/political factors: public attitudes towards factors (ex. diversity)

• tech: way of doing things & digital enablement

Environment: Interest Groups

parties/orgs (not direct competitors) w vested interest in orgs managment

Enviornment: Simple vs. Complex

• simple: factors influencing org are simillar/few

• complex: factors influencing org are diverse/many

Enviornment: Stable vs. Dynamic

• stable/static: enviornmental factors remain same over months/yrs

• dynamic: enviornmental factors change fast

Enviornment: Abundant vs. Scarce

abundant: generate excess resources → buffer org in difficult times

• more scarce, dynamic, complex = organic

• more abundant, stable, simple = mechanistic

• simple + static: least uncertainty

Resource Dependence

= dependency of org on enviornmental inputs (ex. capital, raw material, hr’s) & outputs (ex. customers)

• devlop strategies to manage resource dependence + enviornmental uncertainty

Strategy Types

=top executives seek to cope w contraints/oppurtuinites than org enviornment poses (percieved enviornment)

• innovation: organic (loose structure, ↓ specialization/formalization, decentralized)

• cost minimization: mechanistic (tight control, ↑ specialization, formalization, centralization)

• imitation: combo (loose & tight propertites → tight over activity + losse over new undertakings)

Symptoms of Structural Problems

• bad job design (ex. tall structure/narrow control in research department→ reduce autonomy)

• right hand doesnt know what lefts doing (coordination/integration issue)

• persistent conflict b/w departments (poor integration)

• structure changed to avoid dealing w interpersonal conflict

• slow response times (centralization may speed up if few decisions about few products)

• decisions w incomplete info

• proliferation of committees

Elaborate Froms of Strategic Response

• vertical integration (formally take control of org supply/distribution → stockpile inputs/outputs)

• mergers & aquistions (join 2 orgs/org purchases another → reduce resource dependence)

• strategic alliances (actively cooperative relations b/w seperate orgs → replace distrust, competition, conflict for current project)

• establish legitimacy (take actions conforming to prevailing norms/expectations → appear rational)

1. imitate management practices by other firms

2. associate w higher status people/orgs

3. seen doing good deeds in community

4. visible responses to social trends/legal legislation

Joint Venture

= 2/more orgs form alliance in creation of new orgs entity

• create new products/services & enter new/foreign markets