Chapter-08 organization structure, culture, and change
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Transcript of Chapter-08 organization structure, culture, and change
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CHAPTER-08
ORGANIZATION STRUCTURE, CULTURE, AND CHANGE
Dr. Gehan Shanmuganathan, (DBA)1
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PROCTER & GAMBLE
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PROCTER & GAMBLE Changing the structure (positions) of the
organization for cultural change
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CHAPTER OBJECTIVES
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9.1
LEARNING OBJECTIVES1 Describe the bureaucratic organization structure and discuss
its advantages and disadvantages.2 Explain the major ways in which organizations are divided into
departments.3 Describe four modifications of the bureaucratic structure.4 Identify key factors that influence the selection of organization
structure 5 Specify how delegation, empowerment, and decentralization
spread authority in an organization 6. Identify major aspects of organizational culture 7 Describe key aspects of managing change, including gaining
support for change.
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BUREAUCRACY AS AN ORGANIZATION STRUCTURE
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ORGANIZATION STRUCTURE The arrangement of people and tasks to
accomplish organizational goals The structure specifies who reports to whom and
who does what The structure specifies who has the
power/authority The structure specifies how to communicate The structure specifies formal and informal social
group behaviors
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BUREAUCRACY
A rational, systematic, and precise form of
organization in which rules, regulations,
and techniques of control are specifically
defined
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PRINCIPLES OF ORGANIZATION IN A BUREAUCRACY
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PRINCIPLES OF ORGANIZATION IN A BUREAUCRACY Hierarchy of authority- each lower organizational
unit is controlled and supervised by a higher one Unity of command- each subordinate receives
assigned duties from one superior only and is accountable to that superior
Task specialization- division of labor is based on task specialization
Responsibilities and job description Line and staff functions
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THE BUREAUCRATIC FORM OF ORGANIZATION
Top-Level
Managers
Middle-Level
Managers
First-Level Managers
Operative Employees
Few
Many
High
Low
Number of Employees
Power and Authority
9.2
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ADVANTAGES AND DISADVANTAGES OF BUREAUCRACY
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ADVANTAGES AND DISADVANTAGES OF BUREAUCRACY
Know who is responsible for what
Helps vertical integration
Knows who has the authority to make decisions
Rigid in handling people and problems
Create inconvenience and inefficiency
Competition between departments
Frustration caused by red-tape
Slow decision making
Advantages Disadvantages
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DEPARTMENTALIZATION
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DEPARTMENTALIZATION
The process of subdividing total work into
departments
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FUNCTIONAL DEPARTMENTALIZATION
An arrangement that defines departments by
the function each one performs, such as
accounting or purchasing The advantage is to increase functional
efficiencies
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GEOGRAPHIC DEPARTMENTALIZATION
An arrangement of departments according to
the geographic area or territory served Advantage is that it allows for decision making at
a local level, where the personnel are most
familiar with the problems and the local culture,
including taste, fashion, and food
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PRODUCT- SERVICE DEPARTMENTALIZATION
The arrangement of departments according
to the products or services they provide Advantage is to increase the product
management efficiencies
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MODIFICATIONS OF THE BUREAUCRATIC ORGANIZATION
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Matrix Organization
Organization by Process
(Instead of Task)
Team Structure
Flat Structures
, Downsizin
g, and Outsourcin
g
Non-bureaucratic Forms of Organization
9.4
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PROJECT AND MATRIX ORGANIZATION
Project organization- A temporary group of
specialists working under one manager to
accomplish a fixed objective
Matrix organization- a project structure
superimposed on a functional structure These organizations are capable of managing the
complexity
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MATRIX ORGANIZATIONAL STRUCTURE
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FLAT STRUCTURES, DOWNSIZING, AND OUTSOURCING
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FLAT ORGANIZATION STRUCTURE A form of organization with relatively few
layers of management, making it less bureaucratic Less span of control (number of subordinates
reporting directly to a manager )
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DOWNSIZING OR BUSINESS PROCESS REENGINEERING (BPR) Laying off employees temporarily or permanently
business process redesigning or engineering The key motives of the downsizing are;
Less bureaucratic Low cost Higher profits and stock value Downsizing also could be expensive
Early retirement pay Disability claims Lower productivity due to staff low moral Against the social responsibility
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OUTSOURCING The methodology of giving out part of the
entire business process to achieve cost, time, and quality benefits by focusing on the organization core competencies Advertising Research Promotions campaigns Productions
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HOME SHORING Moving customer service into workers’
homes as a form of telecommuting
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THE HORIZONTAL STRUCTURE (ORGANIZATION BY TEAM AND PROCESS)
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HORIZONTAL STRUCTURE The arrangement of work by multidisciplinary
teams that are responsible for accomplishing a process New product development Marketing research Quality teams
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HORIZONTAL STRUCTURE
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REENGINEERING
The radical redesign of work to achieve
substantial improvements in
performance
Switching from a vertical (task) emphasis to
horizontal (process) emphasis could be
done through reengineering
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FOCUS OF TEAM OR PROCESS STRUCTURE Reduce cycle time Reduce cost Reduce throughput time
Team members; Need to develop a process mentality rather than
a task mentality
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A TEAMWORK FORMULA
Team Triangle
Team
Forming, Storming, Norming, PerformingTrust
CongruenceCohesiveness [Bond]
4 stages
Individual Group
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TEAM APPROACH TO A PROCESS
B
A
C
Collective Efforts
Results
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INFORMAL ORGANIZATION STRUCTURE AND COMMUNICATION NETWORK
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INFORMAL ORGANIZATION STRUCTURE A set of unofficial relationships that emerge to
take care of events and transactions not covered by the formal structure
Social network analysis- the mapping and measuring of relationships and links between and among people, groups, and organizations
Discuss how informal networks could be influenced by the information technology. E.g- emails, Skype, video conferencing
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POWER SHARING AT THE HIGHEST LEVEL OF MANAGEMENT
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POWER SHARING AT THE HIGHEST LEVEL OF MANAGEMENT Top of the organization has the highest level
of power Current trend is that one person holds two or
more positions such as CEO and Chairman This avoids the confusion of understanding of
“who has the ultimate power to control” This is designed in line with the flexible or
matrix organizations concept
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KEY FACTORS THAT INFLUENCE THE SELECTION OF AN ORGANIZATION STRUCTURE
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KEY FACTORS THAT INFLUENCE THE SELECTION OF AN ORGANIZATION STRUCTURE
Strategy and goals - structure follows the strategy Technology – high-tech companies use flexi organizations
as technology connects worker, supplier, and customer Size – higher the size of the organization, highly centralized
the control would be Financial condition of the firm – flatter organizations to
reduce the cost factor Environmental stability – when the business faces
uncertain and unstable environments, they need flexi organizations
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DELEGATION, EMPOWERMENT, AND DECENTRALIZATION
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DELEGATION AND EMPOWERMENT
Delegation- Assigning formal authority and
responsibility for accomplishing a specific task to
another person
Empowerment- The process by which managers
share power with group members, thereby
enhancing employees’ feeling of personal
effectiveness
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INCREASING PRODUCTIVITY THROUGHDELEGATION AND EMPOWERMENT
5. Obtain feedback on
the delegated
task
1. Assign duties to the right people
2. Delegate the whole
task
3. Give as much
instruction as needed
4. Retain some
important tasks for yourself
9.5
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DECENTRALIZATION AND CENTRALIZATION Decentralization- The extent to which
authority is passed down to lower levels in an organization
Centralization- The extent to which authority is retained at the top of the organization
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ORGANIZATIONAL CULTURE
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ORGANIZATIONAL CULTURE (CORPORATE CULTURE)- THE SOFT SIDE OF THE ORG: The system of shared values and beliefs that
actively influence the behavior of organization members Subculture- a pocket in which the organizational
culture differs from the dominant culture and from other pockets of the subculture
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DIMENSIONS OF ORGANIZATIONAL CULTURE
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DIMENSIONS OF ORGANIZATIONAL CULTURE Values – the organization’s philosophy expressed through
values guides behavior on a day-to-day basis Relative diversity – the degree of homogeneity Resources allocations and rewards – resources
allocation send messages to employee what is valued in the firm
Degree of change – influences the organizational culture A sense of ownership – ownership of stocks will create a
culture of commitment and loyalty Strength of the culture – strong cultures influence day-
to-day behavior of the people
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HOW WORKERS LEARN THE CULTURE
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SOCIALIZATION The process of coming to understand the
values, norms, and customs, essential for adapting to the organization
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CONSEQUENCES AND IMPLICATIONS OF ORGANIZATIONAL CULTURE
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CONSEQUENCES AND IMPLICATIONS OF ORGANIZATIONAL CULTURE
The Culture of an
Organization Affects
Employee Productivity, Quality, and Morale
Its Competitive Advantage in the Marketplace
Person- Organization fit
Direction of Leadership Activity
Adapted from Exhibit 9.9
9.7
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MANAGING CHANGE
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THE CHANGE PROCESS
To bring about change, you have to break old habits, then create and solidify new
habits . . .
Unfreezing Changing Refreezing
Adapted from Exhibit 9.10
9.8
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GAINING SUPPORT FOR CHANGE
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Invest time in planning the change
Allow for discussion
and negotiation
Allow for participatio
n
Point out the financial
benefits
Avoid change
overload
Gain political
support for change
Build strong working
relationships
Ask effective
questions to involve workers
How to Gain
Support for Change
12
3
4
56
7
8
9.9
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SIX SIGMA Refers to a philosophy of driving out waste
and improving quality, and the cost and the time performance of a company
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WRITE FIVE KEY THINGS (AREAS) THAT YOU CAN CRITICALLY REMEMBER IN TODAY’S DISCUSSION
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WHAT WE DISCUSSED TODAY?
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9.1
LEARNING OBJECTIVES1 Describe the bureaucratic organization structure and discuss
its advantages and disadvantages.2 Explain the major ways in which organizations are divided into
departments.3 Describe four modifications of the bureaucratic structure.4 Identify key factors that influence the selection of organization
structure 5 Specify how delegation, empowerment, and decentralization
spread authority in an organization 6. Identify major aspects of organizational culture 7 Describe key aspects of managing change, including gaining
support for change.
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WEEKLY ASSIGNMENT
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WEEKLY ASSIGNMENT
How can a manager tell whether an
employee is resisting change? Discuss with
examples.