Organizational Design

Organizational design is engaged when managers develop or change an organization's structure. Organizational Design is a process that involves decisions about the following six key elements

I. Work Specialization II. Departmentalization III. Chain of command IV.Span of Control V. Centralization and Decentralization VI.Formalization

Departmentalization
Functional Departmentalization

Departmentalization
Functional Departmentalization

Positive Aspects
o

Negative Aspects
o

Efficiencies from putting together similar specialties and people with common skills, knowledge, and orientations Coordination within functional area In-depth specialization

Poor communication across functional areas Limited view of organizational goals

Departmentalization
Product Departmentalization

Departmentalization
Product Departmentalization

Positive Aspects
o

Negative Aspects
o o

Allows specialization in particular products and services Managers can become experts in their industry Closer to customers

Duplication of functions Limited view of organizational goals

Departmentalization
Geographical Departmentalization

Departmentalization
Geographical Departmentalization

Positive Aspects
o

Negative Aspects
o o

More effective and efficient handling of specific regional issues that arise Serve needs of unique geographic markets better

Duplication of functions Can feel isolated from other organizational areas

Departmentalization
Process Departmentalization

Departmentalization
Process Departmentalization

Positive Aspects
o

Negative Aspects
o

More efficient flow of work activities

Can only be used with certain types of products

Departmentalization
Customer Departmentalization

Departmentalization
Customer Departmentalization

Positive Aspects
o

Negative Aspects
o

Customers' needs and problems can be met by specialists

Duplication of functions

Departmentalization
Customer Departmentalization

Positive Aspects
o

Negative Aspects
o

Customers' needs and problems can be met by specialists

Duplication of functions

Departmentalization
Matrix Organization

Centralization VS Decentralization
More Centralization

More Decentralization

Environment is stable Lower-level managers are not as capable or experienced Lower-level managers X type Decisions are significant. Company is large. Effective implementation of company strategies does not largely depend on managers direct involvement in decision making

Environment is complex, uncertain. Company is geographically dispersed. Lower-level managers are capable and experienced at making decisions. Lower-level managers are Y type. Decisions are relatively minor. Corporate culture is supportive. Effective implementation of company strategies largely depends on managers input in decisions.

Job Design/ Redesign

The main purpose : To increase both employee motivation and productivity. How Productivity can be increased ? (Job Analysis >Operational Perspective) Improving quality and quantity of goods and services Reduce operation costs, and/or reduce turnover and training costs. How much specialization is enough? (Behavioral Perspective) How Satisfaction can be increased? (Enlargement and Enrichment > Motivational Perspective)

Job Enlargement

make a job more varied by removing the dullness associated with performing repetitive operations. Increases the scope of a job through extending the range of job duties and responsibilities Example: assembly lines replaced with modular work

Job Enrichment
Two Factor Theory by Herzberg
Leading to Dissatisfaction

Leading to Satisfaction

Company policy Supervision Relationship with Boss Work conditions Salary Relationship w/Peers

Achievement Recognition Work itself Responsibility Advancement Growth

Can also be compared to Need Hierarchy Theory

Factors Affecting Job Attitudes

Job Enrichment
People likes to be appreciated for the work they do and for their contributions to the company, and to feel more a part of the company team. Giving them increased responsibility and variety in their jobs. Allowing the employees to have more control in planning their work and deciding how the work should be accomplished.

Factors Affecting Job Attitudes

Job Enrichment
How to enrich a job
1. Giving worker more opportunity in deciding the work method, sequences and pace.
2. Letting them make decisions about accepting or rejecting materials 3. Giving workers a felling of personal responsibility for their tasks. 4. Taking steps to let them see how their tasks contribute to a finished products and the welfare of the enterprises. 5. Giving people feedback on their job performance

Job Design/ Redesign

Job Characteristics Model by Hackman & Oldham

Evaluate the following job using the Job Characteristics Model and calculate the numerical score by summing up the numbers in parentheses. Job Title: Course Instructor in a University
Skill variety Task Identity Task Significance Autonomy POOR =0 ADEQUATE =1 GOOD =2 OUTSTANDING = 3

Feedback

a. Compute the score for your job. Does the score match your subjective feelings about the job as a whole? Explain. b. Compare your score with the scores generated by your classmates. Is there one kind of job that everybody likes/ dislikes?