Session Three Organizational structure design and change

Size: px

Start display at page:

Download "Session Three Organizational structure design and change"

Homer Floyd
7 years ago
Views:

1 Session Three Organizational structure design and change Slide 3.1 Learning objectives: Define what is meant by organizational structure and the organizational forms through which it manifests itself Discuss the relationship between an organization s strategy and its structure Evaluate the contingency relationships between organizational structure, size, technology and the external environment Assess the extent to which different types of organizational structure and form can cope with and adapt to a variety of change processes

2 Slide 3.2 The meaning of organizational structure Wilson and Rosenfeld (1990, p.215) The established pattern of relationships between the component parts of an organization, outlining both communication, control and authority patterns. Structure distinguishes the parts of an organization and delineates the relationship between them. Bartol and Martin (1994, p.283) The formal pattern of interactions and coordination designed by management to link the tasks of individuals and groups in achieving organizational goals. Stacey (2003, p. 62) The structure of an organization is the formal way of identifying who is to take responsibility for what; who is to exercise authority over whom; and who is to be answerable to whom. The structure is the hierarchy of managers and is the source of authority, as well as the legitimacy of decisions and actions.

3 Slide 3.3 The dimensions of structure Pugh et al. (1969) Six dimensions of organizational structure: Specialization Standardization Formalization Centralization Configuration Traditionalism

4 Slide 3.4 Further underlying dimensions Structuring of activities Concentration of authority Line control of workflow Support Component Pugh et al. 1969

5 Slide 3.5 Models of structure Bureaucratic structure Matrix organization Network organizations Virtual organization

6 Slide 3.6 Influences on structure Stability/Turbulence PEST Environment Strategy Technology Size Culture Creativity Politics Leadership Structure

7 Slide 3.7 Consequences of deficient organizational structures Child 1988 Motivation and morale may be depressed Decision making may be delayed and lacking in quality There may be conflict and lack of coordination An organization may not respond innovatively to changing circumstances Costs may rise rapidly, particularly in the administrative area

8 Slide 3.8 Activity Consider your own organization, or one you know well or, if the organization is large, a particular section of it. Do any of the five proposed consequences of structural deficiencies listed apply to the prevailing situation? If the answer is yes to any of the points, what does this imply for the way the organization is structured? What changes could be made? Justify your conclusions with reference to the discussions of different structural forms.

9 Slide 3.9 The strategy structure fit Chandler s strategy structure thesis Miles and Snow s strategic types Mintzberg s forces and forms

10 Slide 3.10 Other influences to consider The influence of size on structure The influence of changing technology The influence of the external environment Socio-cultural influences

11 Slide 3.11 Organizational structure and change There are many influences on the way an organization might structure for successful performance and to cope with change Organizations do need to consider the internal and external environments in relation to the need for change, whether it was structured along strict bureaucratic, mechanistic lines or as one of the newer network forms If organizations are able, to some extent, to manipulate their environments to suit their strategies and structures, this will enable them to preserve existing structures and operational arrangements

12 Slide 3.12 Concluding Comments Organizational structure can be likened to the skeleton of the organization supporting the implementation of strategic decision making and operational processes A number of organizational forms have been described and their appropriateness to different situations We have considered issues associated with strategy, size, technology, environment and structural fit Redesigning an organization s structure has to be carefully planned with change taking place as current business performance has to be sustained. This implies a mixture of incremental and transformational change

13 Slide 3.13 Case study questions Mitsubishi Motors revises organization 1. How would you categorize these changes in terms of the types of change discussed in Chapter 1? 2. Attempt to match the proposals and the structure shown in the case example to any, or a mixture, of the types of organizational structure discussed in this chapter. 3. What might be the advantages and disadvantages of Mitsubishi s proposed structural changes?

Chapter 8: The Internal Environment

Chapter 8: The Internal Environment Key Revision Points The Internal Functions of Commercial Organisations In competitive business environments, customers are at the centre of all of an organisation's