Ch15

ORGANIZATIONAL BEHAVIOR
S T E P H E N P. R O B B I N S
WWW.PRENHALL.COM/ROBBINS

T E N T H E D I T I O N

© 2003 Prentice Hall Inc. All rights reserved. PowerPoint Presentation by Charlie Cook

O B J E C T I V E S
AFTER STUDYING THIS CHAPTER,
YOU SHOULD BE ABLE TO:

1. Identify the six key elements that define an
organization’s structure.
2. Explain the characteristics of a bureaucracy.
L E A R N I N G

3. Describe a matrix organization.
4. Explain the characteristics of a virtual
organization.
5. Summarize why managers want to create
boundaryless organizations.

© 2003 Prentice Hall Inc.
All rights reserved. 15–2

O B J E C T I V E S (cont’d)
AFTER STUDYING THIS CHAPTER,
YOU SHOULD BE ABLE TO:

6. Contrast mechanistic and organic structural
models.
7. List the factors that favor different
organizational structures.
8. Explain the behavioral implications of different
organizational designs.
L E A R N I N G


What Is Organizational Structure?
What Is Organizational Structure?

Key Elements:
Key Elements:
• • Work specialization
Work specialization
• • Departmentalization
Departmentalization
• • Chain of command
Chain of command
• • Span of control
Span of control
• • Centralization and
Centralization and
decentralization
decentralization
• • Formalization
Formalization


What Is Organizational Structure? (cont’d)

Division of labor:
Division of labor:
• • Makes efficient use of
Makes efficient use of
employee skills
employee skills
• • Increases employee skills
Increases employee skills
through repetition
through repetition
• • Less between-job
Less between-job
downtime increases
downtime increases
productivity
productivity
• • Specialized training is
Specialized training is
more efficient
more efficient
• • Allows use of specialized
Allows use of specialized
equipment
equipment

Key Design Questions and Answers for Designing the
Key Design Questions and Answers for Designing the
Proper Organization Structure
Proper Organization Structure

© 2003 Prentice Hall Inc. EXHIBIT 15-1


Economies and Diseconomies of Work
Economies and Diseconomies of Work
Specialization
Specialization

© 2003 Prentice Hall Inc. EXHIBIT 15-2



Grouping Activities By:
Grouping Activities By:
• • Function
Function
• • Product
Product
• • Geography
Geography
• • Process
Process
• • Customer
Customer


Narrow Span Drawbacks:
Narrow Span Drawbacks:
• •Expense of additional
Expense of additional
layers of management.
layers of management.
Concept: • •Increased complexity of
Increased complexity of
Concept:
vertical communication.
vertical communication.
Wider spans of
Wider spans of
management increase • •Encouragement of overly
Encouragement of overly
management increase tight supervision and
organizational efficiency.
organizational efficiency. tight supervision and
discouragement of
discouragement of
employee autonomy.
employee autonomy.

© 2003 Prentice Hall Inc. 15–
All rights reserved. 10

Contrasting Spans of Control
Contrasting Spans of Control

© 2003 Prentice Hall Inc. EXHIBIT 15–
15-3


Common Organization Designs
Common Organization Designs

A Simple Structure:
A Simple Structure:
Jack Gold’s Men’s Store
Jack Gold’s Men’s Store

15-4


Common Organization Designs (cont’d)


The Bureaucracy
The Bureaucracy
 Strengths  Weaknesses
– Functional – Subunit conflicts with
economies of scale organizational goals
– Minimum duplication – Obsessive concern
of personnel and with rules and
equipment regulations
– Enhanced – Lack of employee
communication discretion to deal
– Centralized decision with problems
making



Key Elements:
Key Elements:
+ Gains advantages of
+ Gains advantages of
functional and product
functional and product
departmentalization while
departmentalization while
avoiding their
avoiding their
weaknesses.
weaknesses.
+ Facilitates coordination of
+ Facilitates coordination of
complex and
complex and
interdependent activities.
interdependent activities.
– Breaks down unity-of-
– Breaks down unity-of-
command concept.
command concept.

Matrix Structure (College of Business Administration)
Matrix Structure (College of Business Administration)

(Director)

(Dean) Employee

15-5


New Design Options
New Design Options

Characteristics:
Characteristics:
• •Breaks down
Breaks down
departmental barriers.
departmental barriers.
• •Decentralizes decision
Decentralizes decision
making to the team level.
making to the team level.
• •Requires employees to
Requires employees to
be generalists as well as
be generalists as well as
specialists.
specialists.
• •Creates aa“flexible
Creates “flexible
bureaucracy.”
bureaucracy.”


New Design Options (cont’d)

Concepts:
Concepts:
Provides maximum
Provides maximum
flexibility while
flexibility while
concentrating on what
concentrating on what
the organization does
the organization does
best.
best.
Disadvantage is reduced
Disadvantage is reduced
control over key parts of
control over key parts of
the business.
the business.

A Virtual Organization
A Virtual Organization

© 2003 Prentice Hall Inc. EXHIBIT
15–
15-7


T-form Concepts:
T-form Concepts:
Eliminate vertical
Eliminate vertical
(hierarchical) and
(hierarchical) and
horizontal (departmental)
horizontal (departmental)
internal boundaries.
internal boundaries.
Breakdown external
Breakdown external
barriers to customers and
barriers to customers and
suppliers.
suppliers.

Why Do Structures Differ?


Mechanistic Versus Organic Models
Mechanistic Versus Organic Models

15-8


Why Do Structures Differ? – Strategy
Why Do Structures Differ? – Strategy


The Strategy-Structure Relationship
The Strategy-Structure Relationship

15-9


Why Do Structures Differ? – Technology
Why Do Structures Differ? – Technology

Characteristics of routineness (standardized or
Characteristics of routineness (standardized or
customized) in activities:
customized) in activities:
• •Routine technologies are associated with tall,
Routine technologies are associated with tall,
departmentalized structures and formalization in
departmentalized structures and formalization in
organizations.
organizations.
• •Routine technologies lead to centralization when
Routine technologies lead to centralization when
formalization is low.
formalization is low.
• •Nonroutine technologies are associated with delegated
Nonroutine technologies are associated with delegated
© 2003decisionauthority.
decision authority.
Prentice Hall Inc. 15–

Why Do Structures Differ? – Environment
Why Do Structures Differ? – Environment

Key Dimensions:
Key Dimensions:
• • Capacity: the degree to
Capacity: the degree to
which an environment
which an environment
can support growth.
can support growth.
• • Volatility: the degree of
Volatility: the degree of
instability in the
instability in the
environment.
environment.
• • Complexity: the degree
Complexity: the degree
of heterogeneity and
of heterogeneity and
concentration among
concentration among
environmental
environmental
elements.
elements.

The Three Dimensional Model of the
The Three Dimensional Model of the
Environment
Environment

Volatility

Capacity

Complexity

15-10


Organizational Designs and Employee
Organizational Designs and Employee
Behavior
Behavior

Research Findings:
Research Findings:
• • Work specialization contributes to higher employee
Work specialization contributes to higher employee
productivity, but it reduces job satisfaction.
productivity, but it reduces job satisfaction.
• • The benefits of specialization have decreased rapidly as
The benefits of specialization have decreased rapidly as
employees seek more intrinsically rewarding jobs.
employees seek more intrinsically rewarding jobs.
• • The effect of span of control on employee performance is
The effect of span of control on employee performance is
contingent upon individual differences and abilities, task
contingent upon individual differences and abilities, task
structures, and other organizational factors.
structures, and other organizational factors.
• • Participative decision making in decentralized
Participative decision making in decentralized
organizations is positively related to job satisfaction.
organizations is positively related to job satisfaction.

Organization Structure: Its Determinants and
Organization Structure: Its Determinants and
Outcomes
Outcomes

15-11


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