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OrganizationalBehaviorEighteenthEditionChapter15FoundationsofOrganizationStructureCopyright©2019,2017,2015,2013PearsonEducation,Inc.AllRightsReserved.LearningObjectives15.1Identifysevenelementsofanorganization’sstructure.15.2Identifythecharacteristicsofthefunctionalstructure,thebureaucracy,andthematrixstructure.15.3Identifythecharacteristicsofthevirtualstructure,theteamstructure,andthecircularstructure.15.4Describetheeffectsofdownsizingonorganizationalstructuresandemployees.15.5Contrastthereasonsforusingmechanisticversusorganicstructuralmodels.15.6Analyzethebehavioralimplicationsofdifferentorganizationaldesigns.IdentifySevenElementsofanOrganization’sStructure(1of10)Exhibit15-1KeyDesignQuestionsandAnswersforDesigningtheProperOrganizationalStructureTheKeyQuestionTheAnswerIsProvidedby1.Towhatdegreeareactivitiessubdividedintoseparatejobs?Workspecialization2.Onwhatbasiswilljobsbegroupedtogether?Departmentalization3.Towhomdoindividualsandgroupsreport?Chainofcommand4.Howmanyindividualscanamanagerefficientlyandeffectivelydirect?Spanofcontrol5.Wheredoesdecision-makingauthoritylie?Centralizationanddecentralization6.Towhatdegreewillthereberulesandregulationstodirectemployeesandmanagers?Formalization7.Doindividualsfromdifferentareasneedtoregularlyinteract?BoundaryspanningIdentifySevenElementsofanOrganization’sStructure
(2of10)Workspecialization:thedivisionoflaborintoseparateactivities.Repetitionofwork.Trainingforspecialization.Increasingefficiencythroughinvention.HenryFordIdentifySevenElementsofanOrganization’sStructure(3of10)Exhibit15-2EconomiesandDiseconomiesofWorkSpecializationIdentifySevenElementsofanOrganization’sStructure(4of10)Groupingjobstogethersocommontaskscanbecoordinatediscalleddepartmentalization.Byfunctionsperformed.Bytypeofproductorservicetheorganizationproduces.Bygeographyorterritory.Byprocessdifferences.Bytypeofcustomer.IdentifySevenElementsofanOrganization’sStructure(5of10)Chainofcommand:anunbrokenlineofauthoritythatextendsfromthetopoftheorganizationtothelowestechelonandclarifieswhoreportstowhom.Onceabasiccornerstoneinorganizationdesign.Twocomplementaryconcepts:UnityofcommandAuthorityIdentifySevenElementsofanOrganization’sStructure(6of10)Thechainofcommandislessrelevanttodaybecauseoftechnologyandthetrendofempoweringpeople.Operatingemployeesmakedecisionsoncereservedformanagement.Increasedpopularityofself-managedandcross-functionalteams.Manyorganizationsstillfindthatenforcingthechainofcommandisproductive.IdentifySevenElementsofanOrganization’sStructure(7of10)Exhibit15-3ContrastingSpansofControlIdentifySevenElementsofanOrganization’sStructure(8of10)CentralizationandDecentralizationCentralizationreferstothedegreetowhichdecisionmakingisconcentratedatasinglepointintheorganization.Advantagesofadecentralizedorganization:Canactmorequicklytosolveproblems.Morepeopleprovideinputintodecisions.Employeesarelesslikelytofeelalienatedfromthosewhomakedecisionsthataffecttheirworklives.IdentifySevenElementsofanOrganization’sStructure
(9of10)Formalization:thedegreetowhichjobswithintheorganizationarestandardized.Ahighlyformalizedjobmeansaminimumamountofdiscretion.Lowformalization–jobbehaviorsarerelativelynon-programmed,andemployeeshaveagreatdealoffreedomtoexercisediscretionintheirwork.IdentifySevenElementsofanOrganization’sStructure(10of10)Boundaryspanningoccurswhenindividualsformrelationshipswithpeopleoutsidetheirformallyassignedgroups.Positiveresultsareespeciallystronginorganizationsthatencourageextensiveinternalcommunication;inotherwords,externalboundaryspanningismosteffectivewhenitisfollowedupwithinternalboundaryspanning.CommonOrganizationalFrameworksandStructures(1of7)Exhibit15-4A
SimpleStructure(JackGold’sMen’sStore)CommonOrganizationalFrameworksandStructures
(2of7)Simplestructure:themanagerandtheownerareoneandthesame.Strengths:Simple,fast,andflexible.Inexpensivetomaintain.Accountabilityisclear.Weaknesses:Difficulttomaintaininanythingotherthansmallorganizations.Risky—everythingdependsononeperson.CommonOrganizationalFrameworksandStructures(3of7)Abureaucracyischaracterizedbystandardization.Highlyroutineoperatingtasks.Veryformalizedrulesandregulations.Tasksgroupedintofunctionaldepartments.Centralizedauthority.Narrowspansofcontrol.Decisionmakingthatfollowsthechainofcommand.CommonOrganizationalFrameworksandStructures(4of7)Strengthsofbureaucracy:Abilitytoperformstandardizedactivitiesinahighlyefficientmanner.Weaknessesofbureaucracy:Subunitconflicts.Unitgoalsdominate.Obsessivebehavior.Coveringweakmanagement.CommonOrganizationalFrameworksandStructures(5of7)Twoaspectsofbureaucracies:Functionalstructure:groupsemployeesbytheirsimilarspecialties,roles,ortasks.Divisionalstructure:groupsemployeesintounitsbyproduct,service,customer,orgeographicalmarketarea.CommonOrganizationalFrameworksandStructures(6of7)Thematrixstructurecombinestwoformsofdepartmentalization—functionalandproduct:Thestrengthoffunctionalisputtingspecialiststogether.Productdepartmentalizationfacilitatescoordination.Itprovidesclearresponsibilityforallactivitiesrelatedtoaproduct,butwithduplicationofactivitiesandcosts.CommonOrganizationalFrameworksandStructures(7of7)Exhibit15-5MatrixStructureforaCollegeofBusinessAdministrationAlternateDesignOptions(1of4)TheVirtualOrganizationTheessenceofthevirtualorganizationisthatitistypicallyasmall,coreorganizationthatoutsourcesmajorbusinessfunctions.Alsoreferredtoasamodularornetworkorganization.Itishighlycentralized,withlittleornodepartmentalization.AlternateDesignOptions(2of4)Exhibit15-6A
VirtualStructureAlternateDesignOptions(3of4)Theteamstructure:eliminatesthechainofcommandandreplacesdepartmentswithempoweredteams.Removesverticalandhorizontalboundaries.Breaksdownexternalbarriers.Flattensthehierarchyandminimizesstatusandrank.Whenfullyoperational,theteamstructuremaybreakdowngeographicbarriers.AlternateDesignOptions(4of4)Inthecircularstructure:inthecenteraretheexecutives,andradiatingoutwardinringsgroupedbyfunctionarethemanagers,thenthespecialists,thentheworkers.Hasintuitiveappealforcreativeentrepreneur.However,employeesmaybeunclearaboutwhomtheyreporttoandwhoisrunningtheshow.Wearestilllikelytoseethepopularityofthecircularstructurespread.EffectsofDownsizingonOrganizationsandEmployees(1of2)TheLeanerOrganization:DownsizingThegoaloftheneworganizationalformswe’vedescribedistoimproveagilitybycreatingalean,focused,andflexibleorganization.Downsizingisasystematicefforttomakeanorganizationleanerbysellingoffbusinessunits,closinglocations,orreducingstaff.EffectsofDownsizingonOrganizationsandEmployees(2of2)Strategiesfordownsizinginclude:InvestmentCommunicationParticipationAssistanceMakecutscarefullyandhelpemployeesthroughtheprocess.Mechanisticvs.OrganicStructuralModels(1of8)Exhibit15-7MechanisticversusOrganicModelsMechanisticvs.OrganicStructuralModels(2of8)Anorganization’sstructureisameanstohelpmanagementachieveitsobjectives.Mostcurrentstrategyframeworksfocusonthreedimensions:InnovationstrategyCostMinimizationstrategyImitationstrategyMechanisticvs.OrganicStructuralModels(3of8)Exhibit15-8TheStrategy–StructureRelationshipStrategyStructuralOptionInnovationOrganic:Aloosestructure;lowspecialization,lowformalization,decentralizedCostminimizationMechanistic:Tightcontrol;extensiveworkspecialization,highformalization,highcentralizationImitationMechanisticandorganic:Mixofloosewithtightproperties;tightcontrolsovercurrentactivitiesandloosercontrolsfornewundertakingsMechanisticvs.OrganicStructuralModels(4of8)OrganizationalSizeLargeorganizations—employing2,000ormorepeople—tendtohavemorespecialization,moredepartmentalization,moreverticallevels,andmorerulesandregulationsthandosmallorganizations.Theimpactofsizebecomeslessimportantasanorganizationexpands.Mechanisticvs.OrganicStructuralModels(5of8)Technology:thewayanorganizationtransfersitsinputsintooutputs.Numerousstudieshaveexaminedthetechnology-structurerelationship.Organizationalstructuresadapttotheirtechnology.Mechanisticvs.OrganicStructuralModels(6of8)Anorganization’senvironmentincludesoutsideinstitutionsorforcesthatcanaffectitsperformance.Dynamicenvironmentscreatesignificantlymoreuncertaintyformanagersthandostaticones.Tominimizeuncertainty:Broadenstructuretosenseandrespondtothreats.Formstrategicalliances.Mechanisticvs.OrganicStructuralModels(7of8)Exhibit15-9Three-DimensionalModeloftheEnvironmentMechanisticvs.OrganicStructuralModels(8of8)Anotherfactorthatshapesorganizationalstructureisinstitutions.Regulatorypressures.Simpleinertia.Culture.Fadsortrends.Institutionalpressuresareoftendifficulttoseespecificallybecausewetakethemforgranted,butthatdoesn’tmeantheyaren’tpowerful.AnalyzetheBehavioralImplicationsofDifferentOrganizationalDesigns(1of2)Anorganization’sstructurecanhavesignificanteffectsonitsmembers.It’simpossibletogeneralize!Noteveryoneprefersthefreedomandflexibilityoforganicstructures.Somepeoplearemostproductiveandsatisfiedwhenworktasksarestandardizedandambiguityminimized.AnalyzetheBehavioralImplicationsofDifferentOrganizationalDesigns(2of2)OrganizationalDesignsandEmployeeBehaviorWorkspecialization
contributestohigheremployeeproductivity.Noevidencesupportsarelationshipbetweenspanofcontrolandemployeesatisfactionorperformance.Fairlystrongevidencelinkscentralizationandjobsatisfaction,meaningthatlesscentralizationisassociatedwithhighersatisfaction.Nationalcultureinfluencesthepreferenceforstructure.ImplicationsforManagers(1of3)Exhibit15-10OrganizationalStructure:ItsDeterminantsandOutcomesfromImplicationsforManagers(2of3)Specializationcanmakeoperationsmoreefficient,butrememberthatexcessivespecializationcancreatedissatisfactionandreducedmotivation.Avoiddesigningrigidhierarchiesthatoverlylimitemployees’empowermentandautonomy.Balancetheadvantagesofremoteworkagainstthepotentialpitfallsbeforeaddingflexibleworkplaceoptionsintotheorganization’sstructure.ImplicationsforManagers(3of3)Downsizeyourorganizationtorealizemajorcostsavings,andfocusthecompanyaroundcorecompetencies-butonlyifnecessary,becausedownsizingcanhaveasignificantnegativeimpactonemployeeaffect.Considerthescarcity,dynamism,andcomplexityoftheenvironment,andbalanceorganicandmechanisticelementswhendesigninganorganizationalstructure.CopyrightOrganizationalBehaviorEighteenthEditionChapter16OrganizationalCultureCopyright©2019,2017,2015,2013PearsonEducation,Inc.AllRightsReserved.LearningObjectives16.1Describethecommoncharacteristicsoforganizationalculture.16.2Comparethefunctionalanddysfunctionaleffectsoforganizationalcultureonpeopleandtheorganization.16.3Identifythefactorsthatcreateandsustainanorganization’sculture.16.4Showhowcultureistransmittedtoemployees.16.5Describethesimilaritiesanddifferencesincreatinganethicalculture,apositiveculture,andaspiritualculture.16.6Showhownationalculturecanaffectthewayorganizationalcultureistransportedtoanothercountry.CommonCharacteristicsofOrganizationalCulture(1of6)ADefinitionofOrganizationalCultureOrganizationalculturereferstoasystemofsharedmeaningheldbymembersthatdistinguishestheorganizationfromotherorganizations.CommonCharacteristicsofOrganizationalCulture(2of6)
Primarycharacteristicsthatcapturetheessenceofanorganization’sculture:AdaptabilityDetailorientationResults/OutcomeorientationPeople/CustomerorientationCollaboration/TeamorientationIntegrityCommonCharacteristicsofOrganizationalCulture(3of6)
Anothercommonculturalframeworkgroupsorganizationsinto:TheClanTheAdhocracyTheMarketTheHierarchyCommonCharacteristicsofOrganizationalCulture(4of6)CultureasaDescriptiveTermOrganizationalcultureisconcernedwithemployees’perceptionsofthecharacteristicsoftheculture,notwhethertheylikethem.Doesitencourageteamwork?Doesitrewardinnovation?Doesitstifleinitiative?Itdiffersfromjobsatisfaction:Jobsatisfactionisevaluative.Organizationalcultureisdescriptive.CommonCharacteristicsofOrganizationalCulture(5of6)DoOrganizationsHaveUniformCultures?Mostorganizationshaveadominantcultureandnumeroussetsofsubcultures.Thedominantcultureexpressesthecorevaluesamajorityofmembersshareandthatgivetheorganizationdistinctpersonality.Subculturestendtodevelopinlargeorganizationstoreflectcommonproblems,situations,orexperiencesthatmembersface.CommonCharacteristicsofOrganizationalCulture(6of6)StrongversusWeakCulturesStrongculture:corevaluesareintenselyheldandwidelyshared.Themorememberswhoacceptthecorevaluesandthegreatertheircommitment,thestrongerthecultureandthegreateritsinfluenceonmemberbehavior.WhatDoCulturesDo?(1of9)TheFunctionsofCultureBoundary-definingrole.Conveysasenseofidentityformembers.Facilitatesthegenerationofcommitment.Enhancesthestabilityofthesocialsystem.Servesasasense-makingandcontrolmechanism.WhatDoCulturesDo?(2of9)CultureCreatesClimateOrganizationalclimateissharedperceptionsabouttheorganizationandworkenvironment.Teamspiritattheorganizationallevel.Climatescaninteractwithoneanothertoproducebehavior.Climatealsoinfluencesthehabitspeopleadopt.WhatDoCulturesDo?(3of9)TheEthicalDimensionofCultureOrganizationalculturesarenotneutralintheirethicalorientation,evenwhentheyarenotopenlypursuingethicalgoals.Overtime,theethicalculture,orthesharedconceptofrightandwrongbehaviorinthatworkplace,developsaspartoftheorganizationalclimate.Theethicalclimatereflectsthetruevaluesoftheorganizationandshapestheethicaldecisionmakingofitsmembers.WhatDoCulturesDo?(4of9)Ethicalclimatetheory(ECT)andthe
ethicalclimateindex(ECI)categorizeandmeasuretheethicaldimensionsoforganizationalcultures.Fiveclimatecategories:instrumental,caring,independence,lawandcode,andrules.Eachexplainsthegeneralmindset,expectations,andvaluesofthemanagersandemployeesinrelationshiptotheirorganization.Ethicalclimatepowerfullyinfluencesthewayitsindividualmembersfeeltheyshouldbehave.WhatDoCulturesDo?(5of9)Studiesofethicalclimatesandworkplaceoutcomessuggestthatsomeclimatecategoriesarelikelytobefoundincertainorganizations.Bymeasuringthecollectivelevelsofmoralsensitivity,judgment,motivation,andcharacterofourorganizations,wemaybeabletojudgethestrengthoftheinfluenceourethicalclimateshaveonus.WhatDoCulturesDo?(6of9)Sustainability:practicesthatcanbemaintainedoververylongperiodsoftimebecausethetoolsorstructuresthatsupportthepracticesarenotdamagedbytheprocesses.Socialsustainabilitypractices.Sustainablemanagementdoesn’tneedtobepurelyaltruistic.Tocreateatrulysustainablebusiness,anorganizationmustdevelopalong-termcultureandputitsvaluesintopractice.Likeotherculturalpracticeswe’vediscussed,sustainabilityneedstimeandnurturingtogrow.WhatDoCulturesDo?(7of9)CultureandInnovationThemostinnovativecompanieshaveopen,unconventional,collaborative,vision-driven,andacceleratingcultures.Startupfirmsoftenhaveinnovativecultures.Theyareusuallysmall,agile,andfocusedonsolvingproblemsinordertosurviveandgrow.WhatDoCulturesDo?(8of9)CultureasanAssetCulturecansignificantlycontributetoanorganization’sbottomlineinmanyways.Therearemanymorecasesofbusinesssuccessstoriesbecauseofexcellentorganizationalculturesthanthereareofsuccessstoriesdespitebadcultures,andalmostnosuccessstoriesbecauseofbadones.WhatDoCulturesDo?(9of9)CultureasaLiabilityInstitutionalizationBarrierstoChangeBarrierstoDiversityToxicityandDysfunctionsBarrierstoAcquisitionsandMergersCreatingandSustainingCulture(1of6)HowaCultureBeginsUltimatesourceofanorganization’scultureisitsfounders.Foundershavethevisionofwhattheorganizationshouldbe.Neworganizationsaretypicallysmall,whichfacilitatesthefounders’impartingoftheirvisiononallorganizationalmembers.CreatingandSustainingCulture(2of6)Culturecreationoccursinthreeways:Foundershireemployeeswhothinkandfeelthewaytheydo.Employeesareindoctrinatedandsocializedintothefounders’wayofthinking.Founders’ownbehaviorencouragesemployeestoidentifywiththemandinternalizetheirbeliefs,values,andassumptions.CreatingandSustainingCulture
(3of6)KeepingaCultureAliveSelectionIdentifyandhireindividualswiththeknowledge,skills,andabilitiestoperformsuccessfully.Two-waystreet.TopManagementEstablishnormsofbehavior.CreatingandSustainingCulture(4of6)Exhibit16-2ASocializationModelCreatingandSustainingCulture(5of6)OBPOLLJobIsNotasGoodasAdvertisedCreatingandSustainingCulture(6of6)Exhibit16-4HowOrganizationalCulturesFormShowHowCultureisTransmittedtoEmployeesHowEmployeesLearnCultureCultureistransmittedtoemployeesthrough:StoriesRitualsSymbolsMaterialsymbolsLanguageInfluencinganOrganizationalCulture(1of5)Howcanmanagementcreateamoreethicalculture?Beavisiblerolemodel.Communicateethicalexpectations.Provideethicstraining.Visiblyrewardethicalactsandpunishunethicalones.Provideprotectivemechanisms.InfluencinganOrganizationalCulture(2of5)Thereisatrendtodayfororganizationstoattempttocreateapositiveorganizationalculture:Emphasizesbuildingonemployeestrengths.Rewardsmorethanitpunishes.Emphasizesindividualvitalitygrowth.Positivecultureisnotacure-all.InfluencinganOrganizationalCulture(3of5)WhatIsSpirituality?Workplacespiritualityisnotaboutorganizedreligiouspractices.ItisnotaboutGodortheology.Workplacespiritualityrecognizesthatpeoplehaveaninnerlifethatnourishesandisnourishedbymeaningfulworkthattakesplaceinthecontextofcommunity.InfluencinganOrganizationalCulture(4of5)Exhibit16-5ReasonsfortheGrowingInterestinSpiritualitySpiritualitycancounterbalancethepressuresandstressofaturbulentpaceoflife.Contemporarylifestyles—single-parentfamilies,geographicmobility,thetemporarynatureofjobs,newtechnologiesthatcreatedistancebetweenpeople—underscorethelackofcommunitymanypeoplefeelandincreasetheneedforinvolvementandconnection.Formalizedreligionhasn’tworkedformanypeople,andtheycontinuetolookforanchorstoreplacelackoffaithandtofillagrowingfeelingofemptiness.Jobdemandshavemadetheworkplacedominantinmanypeople’slives,yettheycontinuetoquestionthemeaningofwork.Peoplewanttointegratepersonallifevalueswiththeirprofessionallives.Anincreasingnumberofpeoplearefindingthatthepursuitofmorematerialacquisitionsleavesthemunfulfilled.InfluencinganOrganizationalCulture(5of5)CharacteristicsofaSpiritualOrganizationCulturalcharacteristicspresentinspiritualorganizationsinclude:BenevolenceStrongsenseofpurposeTrustandrespectOpen-mindednessIdentifyCharacteristicsofaSpirit
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