Designing Organisation Structure
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Transcript of Designing Organisation Structure
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` Differentiation is the difference in cognitive and
emotional orientations among managers in
different functioal departments, and the difference
in formal structure among these departments.
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` When the external environment is complex andrapidly changing,organisatioal departmentsbecome highly specialised to handle theuncertainty in their external sector.
` Success in each sector requires special expertiseand behaviour.
` Employees in an R&D department thus haveunique attitudes, values, goals and education that
distinguish them from employees in manufacturingor sales departments.
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` They examined three organisational departments.
` Manufacturing, R &D and sales in ten
corporations.
` The finding is that each department is orientedtowards a different orientation and structure to
deal with specialised part of the external
environment.
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` To deal with the scientific sub environment, R &D
had a goal of quality work, along time horizon(upto
5 years), an informal structure and task oriented
employees.
` Sales was at the opposite extreme.
` It had a goal of customer satisfaction, wasoriented towards the short term had a very formal
structure, and socially oriented.
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Characteristics R&D Department Manufacturing
Dept.
Sales Dept.
Goals New
Developments,
Quality
Efficient
production
Customer
satisfaction
Time horizon Long Short Short
Interpersonal
orientation
Mostly task Task Social
Formality of
structure
Low High High
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` Achieving coordination among various
departments when attitudes, goals and work
orientation differ so widely.
` Integration is the quality of collaboration amongvarious departments.
` Formal integrators are often required to coordinate
departments.
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` Sometimes integrators are called liaison
personnel, project managers, brand managers or
coordinators.
` Organisations with highly uncertain environmentsand a highly differentiated structure assign about
22% of management personnel to integration
activities such as serving on committees, on task
forces, or in liaison roles.
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` Lawrence and Lorsch research concluded that
organizations perform better when the levels of
differentiation and integration match the level of
uncertainty in the environment.
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` It refers to the degree of differentiation between
units based on the orientation of members,the
nature of the tasks they perform,and their
education and training.
` If the organisation is staffed by people who have
similar similar backgrounds,skills and training,
they are likely to view the world in more similarterms.
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` If they have diverse backgrounds, they will have
different goal emphasise,time orientations,and
even a different work vocabulary.
` The most visible evidence in organisations of horizontal differentiation is specialisation and
departmentalisation.
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` Vertical differentiation refers to the depth in
structure.
` Differentiation increases as the hierarchical levels
in the organisation increases.` It affects communication.
` It will be difficult to coordinate the decisions of
management personnel.
` Vertical differentiation is a response to an increasein horizontal differentiation.
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` Integration and integrating mechanism.
` Differentiation vs Integration.
` Balancing Standardisation and mutual adjustment.
` Formalisation.` Socialisation.
` Standardisation vs Mutual adjustment.
` Mechanistic and organic structures.
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` Standardisation-Conformity to specific models or
examples-defined by set of rules and norms-that
are considered proper in a given situation.
` Standardised decision making and coordination
procedures make people`s actions predictable in
certain circumstances
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` Mutual adjustment is the process through which
people use their judgment rather than
standardised rules to address problems, guide
decision making ,and promote coordination.
` The right balance between these two make some
actions predictable so that basic organisational
tasks and goals are achieved.
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` The challenge facing all organizations, large and
small is to design a structure that achieves the
right balance between standardization and mutual
adjustment.
` Many companies complain that employees tend to
flow written and unwritten rules too rigidly instead
of adapting them to the needs of a particular situation.
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` The design challenge facing managers is to find
way of using rules and norms to standardize
behaviour while at the same time allowing for
mutual adjustment to provide employees with theopportunity to discover new and better ways of
achieving organisational goals.
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` People at the higher levels in the hierarchy and infunctions that perform complex, uncertain tasksrely more on mutual adjustment than onstandardisation to coordinate their actions.
` Ex. An organisation want its accountants to followcertain standardised procedures.
` R & D- The organisation may want to encouragerisk taking that leads to innovation.
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` Rules are not set in stone, but are just convenient
guidelines for getting work done.
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` How to facilitate communication and coordination
among sub units is a major challenge for
managers.
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` The simplest integrating device which
differentiates people by how much authority they
have.
` Hierarchy dictates who reports to whom, itcoordinates various organisational roles.
` Managers must carefully divide and allocate
authority within a function and between onefunction and others to promote coordination.
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` Direct contact between people in different subunits isan integrating mechanism that is more complex than ahierarchy of authority.
`
Establishing personal relationship between people atall levels in different functions to overcome subunitorientations.
` Managers from different functions who haveopportunities for direct contact with each other canwork together to solve common problems
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` When the need for communication among
subunits increases, one member or a few
members from a subunit are likely to have
responsibility for coordinating with other subunits.
` To develop in-depth relationship with people in
other subunits.
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` A temporary committee set up to handle a specificproblem .
` One person from each function joins a task force ,which meets until it finds a solution to the problem.
` Task force members are responsible for taking thesolution back to their functional groups for group
input and approval.
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` When the issue a task force is dealing with
becomes an ongoing strategic or administrative
issue, the task force becomes permanent.
` A team is a permanent task force or committee.
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` Most companies, for example now have product
development and customer contact teams to
respond to the threat of increased competition in a
global market.
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Mechanistic and organic
organization structure
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` Structures which are designed to induce people to
behave in predictable, accountable ways.
` Decision making is centralised.
` Subordinates are closely supervised.` Information flows in a vertical direction down a
clearly defined hierarchy.
` Tasks associated with a role are clearly defined.
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` At the functional level, each function is separate ,
communication and cooperation among functions
are the responsibility of someone at the top of
hierarchy.` Hierarchy is the integrating mechanism
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` Structures which promote flexibility, so people
initiate change and can adapt quickly to changing
conditions.
`
Decision making is decentralised.` People assume the authority to make decisions as
organisational needs dictate.
` Roles are loosely defined-people perform various
tasks and continually develop skills in newactivities.
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` Is an organic structure better than a mechanistic
structure?
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` Characterised by high complexity, formalisation
and centralisation.
` Performs routine tasks, depends heavily on
programmed behaviour.` Relatively slow in responding to the unfamiliar.
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` Flexible and adaptive.
` Influence based on expertise and knowledge
rather than on authority of position.
` Loosely defined responsibilities rather than rigidjob definitions.
` Emphasis is on exchanging information rather
than on giving directions.
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` Mechanistic design in a stable, certain
environment.
` An organic form in a turbulent environment.
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Characteristic Mechanistic Organic
Task Definition Rigid Flexible
Communication Vertical Not vertical
Formalisation High Low
Influence Authority Expertise
Control Centralised Diverse
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Mechanistic Organic
Tasks are broken down into
specialized, separate parts.
Employees contribute to the common
tasks of the department
Tasks are rigidly defined. Tasks are adjusted and redefined
through employee team work.
There is a strict hierarchy of authority
and control, and there are many rules.
There is less hierarchy of authority
and control and there are few rules.
Knowledge and control of tasks are
centralized at the top of the
organization.
Knowledge and control of tasks are
located anywhere in the organization.
Communication is vertical. Communication is horizontal.
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` The second important component of organisationstructure.
` Formalisation refers to the degree to which the
jobs within the organisation are standardised.
` If a job is highly formalised,the job incumbent hasa minimum amount of discretion over what is to be
done and how he or she should do it.
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` Formalisation-Explicit job descriptions,Lots of
organisational rules, Clearly defined procedures
covering work processes.
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` Regulating the behaviour of employees.` Mc Donalds same taste whether it is made in Portland,Alaska, Bangalore or Holland.
`
Secret behind the success of Mc Donald`s is productconsisency and uniformity.
` Strict stndards of employee grooming.
` The manual states that the basic hamburger pattymust be 1.6 ounces of pure beef with no more than 19% fat content.
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` Hamburger buns must have 13.3 %sugar in them.
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` Managers have at their disposal a number of
techniques by which they can bring about the
standardisation of employee behaviour.
`
1. Selection.A
n effective selection process will bedesigned to determine if job candidates fit into the
organisation.
` Selection of successful job performers.
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` 2. Role Requirements-Job Analysis defines the
job that need to be done in the organisation and
outlines what employee behaviours are necessary
to perform the jobs.
` 3. Rules, Procedures and Policies.
` 4. Training
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` Employees feel anxious upon joining an
organisation.
` Worry may be regarding how well they will performin the job. They may feel inadequate compared to
more experienced employees.
` New joinees may be concerned about how wellthey will get along with their co-workers.
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` An adaption process by which individuals learn the
values , norms and expected behaviour patterns
for the job and the organization of which they will
be a part.
` All employees will receive at least some molding
and shaping on the job, but for certain members ,
the socialisation process will be substantially
accomplished before they join the organisation-
Professionals
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` Employees feel anxious upon joining an
organisation.
` Worry may be regarding how well they will performin the job. They may feel inadequate compared to
more experienced employees.
` New joinees may be concerned about how wellthey will get along with their co-workers.
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` Effective socialization programs reduce the
anxiety of new employees by giving them
information about the job environment and about
supervisors, by introducing them to co-workers,
and by encouraging them to ask questions.
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` Socialization conveys three types of information.
` 1.General information about the daily work routine.
` 2.A review of the organization's history, purpose,
operations and products or services
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` 3. A sense of how the employee`s job contributes
to the organization's needs, may be a detailed
presentation(perhaps a brochure) of the
organization's policies, work rules and employee
benefits.
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SOCIALISATION
PROCESS
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` The human resource specialist performs the first partof the socialisation process by explaining basicmatters like working hours, benefits and vacations.
` Then, he introduces the employee to his or her new
supervisor.` The supervisor continues the orientation by explaining
the organisation of the department and by introducingthe person to his or her new colleagues familiarisingthe new employee with the workplace and helping to
reduce first day jitters.
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` It typically includes information on employee
benefits, personnel policies, the daily routine,
company organisation and operations, safety
measures and regulations.
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` Employers use employee handbooks.
` Some firms provide preloaded personal digital
assistants.