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Chapter 4

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Administrative Studies
ADMS 1000
Len Karakowsky

Chapter 4 – Structure of an Organization Oct. 8 What this chapter is about…  Identify 4 broad trends in the changing nature of organizational design (comparing modern to bureaucratic model)  Describing Organizational structure (Mechanistic and Organic)  Concept of re-engineering  Rationale of downsizing – methods and purposes  What are organizations?  What makes up their structure?  Why do diff. organizations have diff. structures? A key feature of many contemporary organizations is how they are changing:  Mergers  Downsizings (p.154)  Restructurings  Going virtual  It is essential to understand not only how but also why they are changing The trends of organizational change point to problems with large scale bureaucracy. But, bureaucracy also has some advantages:  Reliability  Predictability  Structure/ Rules Traditional Bureaucracy Modern Organization Tall/Hierarchical Flatter Rigid, rule-oriented Fluid Buffered from environment Integrated/Embedded Narrow Market Global Flat Organizations (p. 129) Flattening = getting rid of  Flat organizations have wide spans of control compared to Tall org. which = narrow spans of ctrl  Phenomena here has been downsizing = flattening the organizational hierarchy (layers of management) o ex. Toyota eliminated 3 of its 7 layers of management – IBM Canada cut from 10 to about 4 in the 90s WHAT DOES FLATTENING HIERARCHY ACCOMPLISH?   Increase in decision making speed as info takes less time to travel across levels of management  This increases reaction speed to the changing environ.  Management is now @ lower levels = those involved in the actually services or good process are now involved in the decision-making process Chapter 4 – Structure of an Organization Oct. 8 Fluid Organizations (p.129)—Fluidity = Flexibility  Fewer rules & structures – more flexibility  JIT inventories just-in-time= generate inventory as needed through flexible supplier relationships = minimizing costs  Flexible labour contract-based (temporary) employment = ability to adjust to the upswings and downswings of a changing environment. HOW?  Increase in revenue = hire more Decrease in rev. = downsize The FLUID Organization (p.130)  Old business structure = a dominant CEO, board of directors and workplace, goal-orientated employees  New structure= temp workers, moving from a city with deep roots Integrated Organizations (p.130) Internal integrationthe focus on teams such as Cross-Functional teams o Ex: GM’s Saturn plant brought people from different departments such as marketing, to collaborate in engineering- the production of the Saturn car Management sharing info w/ all workers and work teams given power to manage themselves are also examples of internal integration External integration mergers & alliances, e.g. Star Alliance, Molson & Coors = To develop new products and service Global Organizations (p.131)  Relaxing of tariffs & barriers  Global alliances  Extending networks across national boundaries  [Ex. Bata Ltd. has 6,000 shoe stores in about 65 diff. countries they face challenges in terms of responding to the variety of consumer preferences, so a DE-CENTRALIZED decision-making authority is needed to quickly respond to local market changes/needs.] DESCRIBING ORGANIZATONAL STRUCTURES: Mechanistic & Organic In broad terms, organizations range in structure from Mechanistic to Organic. MECHANISTIC=CLASSICAL ORGANIZATION ORGANIC = MODERN ORGANIZATION Mechanistic: 4 key characteristics (p.134)  Narrow division of labour: Jobs narrowly defined  High Centralization of decision-making  High formalization of work procedures (rules and regulations, standardization)  Span of control: Much hierarchy, many levels of administration Organic: 4 key characteristics (p.134)  Wide division of labour: Jobs “enriched”  De-centralization of decision-making  Low formalization of work procedures (rules and regulations, standardization)  Span of control: Little hierarchy, few levels of administration Chapter 4 – Structure of an Organization Oct. 8 Types of Organizational Strategies Elements of Structure Focus on Innovation Focus on cost & efficiency 1. Work Specialization Wide Narrow 2. Centralization Decentralized Centralized 3. Span of control Wide (flat) Narrow (tall) 4. Formalization  Low  High What constitutes an organizations’ structure? 4 things: this answers *How would you describe ______’s organizational structure. Work Specialization (division of labour): How to divide up work that has to be done.  Functional specialization: Refers to the division of jobs into simple, repetitive tasks  Social specialization: Low degree of job spec. = a wide range of tasks Centralization: authority in an organization  Centralized: decision making authority is at the top levels of management and is more time-consuming  Decentralization: decision making authority is spread to different levels  Ex: self-managing teams (IDEO, Microsoft) Span of control: how many levels of authority?  Refers to the # of employees r
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