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CHAPTER 15 Organizational Structure and Culture

Organizational Design
Managers select and manage components and dimensions of (a) organizational structure (b) organizational culture ..... to achieve organizational goals.

CHAPTER 15 Organizational Structure and Culture

Organizational Structure
The formal system of task and reporting relationships that controls, coordinates, and motivates employees so that they cooperate and work together to achieve an organizations goals.

CHAPTER 15 Organizational Structure and Culture

Organizational Culture
The informal set of values and norms that controls the way people and groups in an organization interact with each other and with people outside the organization.

CHAPTER 15 Organizational Structure and Culture

Figure 15.1 Environment Technology Tasks

Structure

Culture

Performance level of individuals, groups, & the organization

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CHAPTER 15 Organizational Structure and Culture

FIGURE 15.3

Dell's Functional Structure

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CHAPTER 15 Organizational Structure and Culture

Advantages of a Functional Structure

Coordination Advantages Motivational Advantages

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CHAPTER 15 Organizational Structure and Culture

Disadvantages of a Functional Structure

When a range of products or services that a company produces increases, the various functions can have difficulty efficiently servicing the needs of a wide range of products. Coordination problems may arise. As companies grow, they often expand their operations nationally, and servicing needs becomes difficult.
Copyright 1999 Addison Wesley Longman

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CHAPTER 15 Organizational Structure and Culture

Product Type of Divisional Structure

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CHAPTER 15 Organizational Structure and Culture

Market Type of Divisional Structure

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CHAPTER 15 Organizational Structure and Culture

Geographic Type of Divisional Structure

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CHAPTER 15 Organizational Structure and Culture

Advantages of Divisional Structures

Coordination Advantages Motivation Advantages

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CHAPTER 15 Organizational Structure and Culture

Disadvantages of Divisional Structures

Operating costs Communication may suffer Divisions may start to compete for organizational resources Divisions may pursue own goals at the expense of organizational goals

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CHAPTER 15 Organizational Structure and Culture

FIGURE 15.5

A Matrix Structure

Copyright 1999 Addison Wesley Longman

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CHAPTER 15 Organizational Structure and Culture

Org. Culture: Types of Values

Terminal Value a desired goal Instrumental Value desired behavior (leads to the goal) Ethical Values the moral values and norms that guide how employees deal with each other and with outsiders

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CHAPTER 15 Organizational Structure and Culture

Organizational Rites
Rites of Passage, e.g., basic training Rites of Integration, e.g., annual office party Rites of Enhancement, e.g., annual awards Rites of Degradation, e.g., fire the CEO

Delphi Automotive Systems (in Columbus - part of GM)

Plant Manager

Pers.

Materials

Prod.

Q.C.

Actg.

Door Frames

Door Locks

Mouldings

Other

CHAPTER 15 Organizational Structure and Culture

Changing The Culture At Delphi in Columbus

1. Management Initiated Changes:
Symbols Rites Rituals Language

2. OD Changes: Action Research by OSU

Survey Feedback Method Specific Projects (based on the survey results)

The Action Research Model

Identification of problem Consultation with change agent

Data gathering & provisional diagnosis Feedback to client organization

Joint diagnosis and action planning

Post-action data gathering

Action

CHAPTER 15 Organizational Structure and Culture

What Survey Questions Should Be Asked?

1. OB theory-based items: level-of-analysis
individual group organizational

2. OB theory-based items: stage-of-process

inputs process outcome

3. Items of local concern - based on interviews

CHAPTER 15 Organizational Structure and Culture

Applying OB Theory
Process Stage Level
Individual Inputs
Desire for PD-M

Process
Leader Style

Outcome
Satisfaction

Group

Organizational

CHAPTER 15 Organizational Structure and Culture

Four Task Forces

1. Preventive Maintenance (Wanous) 2. Trust & Credibility (Reichers) 3. Physical Environment (Heaney)

4. Quality vs. Quantity (Billings)

CHAPTER 15 Organizational Structure and Culture

You are the Consultant

SITUATION: Expensive machines are

not maintained; frequent breakdowns; nobody seems to be responsible.

QUESTION: How can you get

employees to act more like owners instead of like renters?

CHAPTER 15 Organizational Structure and Culture

OB Principles Used
1. Participation by all involved in maintenance. 2. Goal setting: specific & challenging 3. accountability (public display of goals) 4. Clarify expectations for roles of all who are involved.

CHAPTER 15 Organizational Structure and Culture

Changing Organizational Culture: Key Points About OD Efforts

1. Diagnosis is crucial. 2. Outside consultants need credibility:
learn their language form joint task forces

3. Survey data alone can be a powerful tool for change:

eliminates majority ignorance eliminates rationalizations reduces stereotypes

CHAPTER 15 Organizational Structure and Culture

Changing Organizational Culture:

(continued)

4. Evaluation of OD efforts is very complicated:

how long do you wait? what do you measure? (attitudes vs. behavior) can you isolate causes of change?

CHAPTER 15 Organizational Structure and Culture

G.M.s Saturn Corp.: A Clean Sheet of Paper

History: 1980 - how to compete? 1984 - group of 99 1990 - first car made Key Points:
1. Focused on mgt., not design or technology. 2. New labor agreement. 3. Consensus decisions: * moving platform

CHAPTER 15 Organizational Structure and Culture

A Clean Sheet of Paper

(cont.) 4. Training!!
decision-making interpersonal skills cross-train skills trust & fears

5. Green fields also used by Toyota, Honda, Nissan, Mercedes, & BMW.

Typical High Involvement Organizations

Hiring Practices: Very careful screening for skills & personality Realistic job previews Training Practices: Continuous improvement Focus on ones career Human relations skills Compensation: Cafeteria fringe benefits Salary (vs. hourly) basis Gain sharing bonus & team bonus Skill based pay

CHAPTER 15 Organizational Structure and Culture

Typical High Involvement Organizations (continued)

Work Design:
Teams (vs. work alone) Job enrichment

Organizational Structure:
Flat - few levels Few status symbols Representation on the board of directors

CHAPTER 15 Organizational Structure Paradoxes in Highand Culture Performance Organizations: How to do both?

Clear direction vs. high flexibility Use of teams vs. accountability High quality vs. innovation Discipline vs. entrepreneurship Company interests vs individual respect Doing well vs. always pressing for more Decisive leadership vs. participation