Engineering Management (Finals)

Quiz No.2 Handout for Review

Hassan
A.
Sabi
Organizing:
1. Organizational Structure
2. Organizational Designs
3. Organizational Cultures
4. Organizational Change
Organizing - is the process of arranging people and other resources to work together to
accomplish a goal.
Purpose of Organizing - is to create a division of labor and then coordinate results to
achieve a common purpose.
The beauty of organizing - is synergy - bringing together the contributions of many
people to achieve something that is much greater than what an individual can accomplish
alone.
Empowerment - letting others make decisions and exercise discretion in their work.
Empowerment - gives synergy a chance. It means joining with others to get things done;
allowing and even helping them to do things that you might be very good at doing
yourself.

1. ORGANIZATIONAL STRUCTURE
- is the way in which the various parts of an organization are arranged .
- is the system of tasks, workflows, reporting relationships, and
communication channels that link together the work of diverse individuals
and groups.
A structure should do a good job of both allocating tasks through a division of labor and providing
for the coordination of performance results.
1. Formal Structure - is the official structure of the organization.
is a typical organizational chart that identifies positions and job titles as well
as the lines of authority and communication between them.
It shows how the organization is intended to function.
Organizational chart - describes the arrangement of work positions within
an organization.
The basics of an organizations formal structure includes:
Division of work: Positions and titles show work responsibilities.
Supervisory relationships: Lines show who reports to whom.
Communication channels: Lines show formal communication flows.
Major subunits: Positions reporting to a common manager are shown.
Levels of management: Vertical layers of management are shown.
2.
Informal Structure - is a shadow organization made up of
the unofficial, but
often critical, working relationships
between organizational
members.
The informal structure show who talks and
interacts with whom, regardless of their formal
structure.
The lines of the informal structure cut across levels and move from side to
side.
Social network analysis - is one way of identifying informal structures and their embedded
social relationships.
- asks people to identify others to whom they turn for help most often, with
whom they
communicate regularly, and who give them energy and motivation.

- Lines are drawn from person to person according to frequency and

type of relationships
maintained.
Informal structures and social networks are in many ways essential to organizational success.
- They allow people to make contacts with others who can help them get things done.
- They stimulate informal learnings as people work and interact together throughout the
workday.
- They are also sources of emotional support and friendship that satisfy members social
needs.
Informal structures have also potential disadvantages.
- They can be susceptible to rumor, carry inaccurate information, breed resistance to
change, and even divert work efforts from important objectives.
3. Functional Structures - people with similar skills and performing similar tasks are grouped
together into formal work
units. Members of functional departments share technical
expertise, interests, and
responsibilities.

Advantages of a Functional Structure:

1. Economies of scale with efficient use of resources
2. Task assignments consistent with expertise and training
3. High-quality technical problem solving
4. In depth training and skill development within functions
5. Clear career path within functions
Disadvantages:
1. Difficulties in pinpointing responsibilities for things like cost containment, product or
service quality, and innovation.
2. Too little communication across functions.
3. Too many problems referred upward for solution
These problems happen because the functions become formalized not only in organizational
chart, but also in the mindset of the people. A sense of common purpose gets lost and selfcentered, narrow viewpoints become prominent.
4. Divisional Structure - groups together people working on the same product, in the same
area, with similar customers,
or on the same process.
This is common in complex organizations with drivers operations that extend across many
products, territories, customers, and work processes.
The idea is to use as the divisional focus to overcome the disadvantages of a functional

structure.
Product Structure - Groups together people and jobs focused on a single product or service.
Geographical Structure - Groups together people and jobs performed in the same location.
Sometimes called Area Structure.
Customer Structure - Groups together people and jobs that serve the same customers or
clients.
Process Structure - Groups jobs and activities that are part of the same processes.

Advantages of Divisional Structures:

1. More flexible in responding to environmental changes.
2. Improved coordination across functional departments.
3. Clear points of responsibility for product or service delivery.
4. Expertise focused on specific customers, products, and regions.
5. Greater ease in changing size by adding or deleting divisions.
Disadvantages of Divisional Structure
1. Can reduce economies of scale and increase costs through the duplication of resources
and efforts across division.
2. Can create unhealthy rivalries as divisions compete for resources and top management
attention.
5. Matrix Structure - is often called matrix organization. It combines the functional and
divisional structures. This is an attempt to gain the advantages and minimize the disadvantages
of each.
This is accomplished by creating permanent teams that cut across functions to support
specific products, projects or programs.
Workers in the matrix structure belong to at least two formal groups at the same time- a
functional group and a product, program, or project team. They also report to two
bosses- one within the function and the other within the team.

Advantages of Matrix
Structure:
1. Better communication and cooperation across functions.
2. Improved decision making; problem solving takes place at the team level where the best
information is available.
3. Increased flexibility in adding, removing or changing operations to meet changing
demands.
4. Better customer service.
5. Better performance accountability through the project manager.
6. Improved strategic management; top managers are freed from lower level problem solving
to focus time on more strategic issues.
Disadvantages of Matrix Structure:
1. Two boss system is susceptible to power struggles if functional supervisors and team
leaders compete with one exercise authority.
2. Two boss system is frustrating if it creates task confusion and conflicting work priorities.
3. Team meeting in the matrix can take a lot of time and the team may develop groupitisstrong team loyalties that cause a loss of focus on larger organizational goals.
6. Team Structures - uses permanent and temporary crossfunctional teams to improve
lateral functions (like solve problems, complete special projects, and accomplish day to day
tasks).
Cross-functional team - brings together members from different functional
departments.
Team structures use many project teams that are convened to complete a specific task or
project.
Advantages of Team Structure:
1. Breaks down barriers and mobilizes talents.
2. Improved performance by increasing the speed and quality of decisions in many
situations.
3. Boost morale. People working in teams often experience greater sense of task involvement
and identification, and this increases their enthusiasm for the job.
Disadvantages of Team Structure:
1. Conflicting loyalties for persons with both team and functional assignments.

2. Issues concerning time management and group process, by nature team spend a lot of
time for meetings.
3. Quality of outcomes depend a lot on how well tasks, relationships and overall team
dynamics are managed.
7. Network Structures - uses information technologies to link with networks of outside
suppliers and service contractors.
Network structure have a central core of full time employees surrounded by networks of
outside contractors and partners that supply essential services.
The network structure helps lower costs and improve flexibility in dealing with changing
environments.
Instead of doing everything for itself with full time employees, the network organization
employs minimum staff and contracts out as much work as possible.
Advantages of Network Structure:
1. Reduces overhead cost and increase operating efficiency.
2. Employ outsourcing strategies and contract out specialized business functions.
3. Interesting jobs are created for those who coordinate the entire system of relationships.
Disadvantages of Network Structure:
1. The more complex the business, the more complicated it is to control and coordinate the
network of contracts and alliances.
2. If one part of the network breaks down or fails to deliver, the entire system suffers.
3. Organization may lose control over activities contracted out.
4. Outsourcing can become aggressive and become dangerous to the firm especially on
activities such as finance, logistics and human resources.
8. Boundaryless Structures - a combination of the team and network structures with the
addition of temporariness.
This structure eliminates internal boundaries among subsystems and external boundaries
with the external environment.
In boundaryless structure, spontaneous teamwork and communication replace formal lines
of authority.
People work in teams that form and disband as needed. There is less hierarchy but a lot of
empowerment and technology utilization.

2. ORGANIZATIONAL DESIGNS
is the process of choosing and implementing structures to accomplish the organizations
mission and objectives.
- Every organization is unique; hence no design applies to all circumstances.
- The best design at the moment is the one that achieves a good match between structure
and situational contingencies.
Mechanistic Designs
Mechanistic design is highly bureaucratic. It is also described as tight structures.
Bureaucracy - is a form of organization based on logic, order, and the legitimate use of
formal authority. It is a vertical structure and its distinguishing features include a clear cut
division of labor, strict hierarchy of authority, formal rules and procedures and promotion
based on competency.
Mechanistic design work best for organizations doing routine tasks in stable environments.
Organic Designs
Organic designs create adaptive organizations. It can perform well in environments that
demand flexibility in dealing with changing conditions.
-

These are horizontal structures with decentralized authority, fewer rules and procedures,
less precise division of labor, wider spans of control, and more personal means of
coordination.
They are relatively loose systems where a lot of work gets done through informal
structures and networking. It is built on a foundation of trust that people will do the right
things on their own initiative.

3. ORGANIZATIONAL CULTURE
is the system of shared beliefs and values that guides behavior in organizations. It is also
called corporate culture.
influence employees and customers that it can have big impact on performance. It creates
unique identities and help to distinguish them from one another.

Types of Organizational Cultures

1. Hierarchical culture: this emphasize tradition and clear roles.
2. Dependable culture: this emphasize process and slow change.
3. Enterprising culture: This emphasize creativity and competition.
4. Social culture: emphasize collaboration and trust.
Organization build a strong and positive culture through socialization.
Socialization - is the process through which members learn the culture of an organization.
Levels of Organizational Culture
1. Outer level
2. Inner level
Outer level - is the observable culture. The observable culture is visible and readily apparent
at the surface of every
organization.
- It is expressed in the way people dress at work, how they arrange their offices, how they
speak to and behave towards one another, the nature of their conversations, and how they
talk about and treat their customers.
Inner level - is the core culture. It consists of the core values or underlying assumptions and
beliefs that shape and guide
peoples behaviors.
Core values - are beliefs and values shared by organization members.
Values of best companies have been found to emphasize performance excellence,
innovation, social responsibility, integrity, worker involvement, customer service, and
teamwork.
Multicultural Organization - has a culture with core values that respect diversity and support
multiculturalism. It
involves inclusiveness, pluralism, and respect for diversity.
Characteristics of a Multicultural Organization
1. Pluralism: Members of both minority and majority cultures are influential in setting key
values and policies.
2. Structural integration: Minority culture members are well represented in jobs at all levels
and in all functional responsibilities.
3. Informal network integration: various forms of mentoring and support groups assist in the
career development of minority culture members.
4. Absence of prejudice and discrimination: A variety of trainings and task force activities
address the need to eliminate culture group biases.

5. Minimum intergroup conflict: Diversity does not lead to destructive conflicts between
members of majority and minority cultures.
4. ORGANIZATIONAL CHANGE
What if the existing culture of an organization is flawed, doesnt drive high performance, and
needs to be changed?
A change leader is needed. A change leader is someone who takes initiative to change
the existing pattern of behavior of another person or social system. These are managers
who act as change agents and make things happen.
In theory, every manager should act as a change leader, but people show more tendencies
toward staying status quo- accepting things as they are and not wanting change.
Change Leaders versus Status quo Managers
Top Down Change - the
change initiatives come from
senior management.
Bottom Up Change - the
change initiatives come from all
levels in the organization.
How to lead organizational
change?
1. Establish a sense of urgency for
change.
2. Form a powerful coalition to lead
the change.
3. Create and communicate a
change vision.
4. Empower others to move change
forward.
5. Celebrate short term wins and
recognize those who help.
6. Build on success; align people and
systems with the new ways.
7. Stay with it; keep the message
consistent; champion the vision.