Organizational Design

Organization and Design

I. TERMS 1. Chain of command 2. Division of labor - Job specialization 3. Span of Control - flat (horizontal) - tall (vertical)

I. TERMS (cont’d) 4. Line vs. Staff 5. Centralized vs. Decentralized Authority 6. Organization Chart 7. Bureaucracy 8. Mechanistic versus Organic

II. Organization Structure 1. Contingency theory – Type of structure should reflect environmental conditions a. types of structure: i. mechanistic – rigid hierarchy, many rules, formalized communication, centralized authority, taller structures ii. Organic – collaboration, few rules, informal communication, decentralized authority, flatter structures

1. Contingency theory (cont’d.) b. environmental conditions i. technology (routine or innovative) ii. size iii. environmental stability/uncertainty

1. Contingency theory (cont’d.) c. Routine technology, large size, stable/certain environment suggests a mechanistic structure d. Innovative technology, smaller size, unstable/uncertain environments suggest an organic structure

II. Organization Structure (cont’d) 2. Departmentalization (structure) a. functional b. product c. customer d. geographic e. matrix – combines functional and product forms f. divisional g. horizontal team organization h. network/virtual organization i. learning organization

III. Job design 1. Job simplification (specialization) 2. Job expansion (less specialization) a. job rotation – Boeing? b. job enlargement - horizontal integration of a job by h increasing perception of ownership. Sony did this in their manufacturing plant. “At a plant here, men are dismantling conveyor belts on which as many as 50 people assembled camcorders. Nearby, Sony has set up tables to form a snail-shaped shop for four people. Walking through this “spiral line,” workers assemble an entire camera themselves, doing everything from soldering to testing. Output per worker is 10% higher! WSJ

c. Job enrichment - vertical integration of a job by v adding responsibility/motivators. 3. Other job expansion methods - job sharing, flextime, homework, shift scheduling, compressed workweek. 4. Work teams – cross-functional (integrated) autonomous, self-managed, leaderless etc.

5. The Job characteristics model is a description of the job!!!! Job characteristics  critical Psy states  outcomes a. How do you find out if job has characteristics? MPS = (skill var + task ID + task sig) x Aut x Feedback

3 b. Equation is moderated by growth need strength. c. Implication? Design jobs with intrinsic rewards to substantially increase morale and performance. AETNA uses this model to design jobs.