Designing Organisation Structure

8/8/2019 Designing Organisation Structure

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` Differentiation is the difference in cognitive and

emotional orientations among managers in

different functioal departments, and the difference

in formal structure among these departments.


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` When the external environment is complex andrapidly changing,organisatioal departmentsbecome highly specialised to handle theuncertainty in their external sector.

` Success in each sector requires special expertiseand behaviour.

` Employees in an R&D department thus haveunique attitudes, values, goals and education that

distinguish them from employees in manufacturingor sales departments.


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` They examined three organisational departments.

` Manufacturing, R &D and sales in ten

corporations.

` The finding is that each department is orientedtowards a different orientation and structure to

deal with specialised part of the external

environment.


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` To deal with the scientific sub environment, R &D

had a goal of quality work, along time horizon(upto

5 years), an informal structure and task oriented

employees.

` Sales was at the opposite extreme.

` It had a goal of customer satisfaction, wasoriented towards the short term had a very formal

structure, and socially oriented.


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Characteristics R&D Department Manufacturing

Dept.

Sales Dept.

Goals New

Developments,

Quality

Efficient

production

Customer

satisfaction

Time horizon Long Short Short

Interpersonal

orientation

Mostly task Task Social

Formality of

structure

Low High High


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` Achieving coordination among various

departments when attitudes, goals and work

orientation differ so widely.

` Integration is the quality of collaboration amongvarious departments.

` Formal integrators are often required to coordinate

departments.


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` Sometimes integrators are called liaison

personnel, project managers, brand managers or

coordinators.

` Organisations with highly uncertain environmentsand a highly differentiated structure assign about

22% of management personnel to integration

activities such as serving on committees, on task

forces, or in liaison roles.


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` Lawrence and Lorsch research concluded that

organizations perform better when the levels of

differentiation and integration match the level of

uncertainty in the environment.


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` It refers to the degree of differentiation between

units based on the orientation of members,the

nature of the tasks they perform,and their

education and training.

` If the organisation is staffed by people who have

similar similar backgrounds,skills and training,

they are likely to view the world in more similarterms.


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` If they have diverse backgrounds, they will have

different goal emphasise,time orientations,and

even a different work vocabulary.

` The most visible evidence in organisations of horizontal differentiation is specialisation and

departmentalisation.


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` Vertical differentiation refers to the depth in

structure.

` Differentiation increases as the hierarchical levels

in the organisation increases.` It affects communication.

` It will be difficult to coordinate the decisions of

management personnel.

` Vertical differentiation is a response to an increasein horizontal differentiation.


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` Integration and integrating mechanism.

` Differentiation vs Integration.

` Balancing Standardisation and mutual adjustment.

` Formalisation.` Socialisation.

` Standardisation vs Mutual adjustment.

` Mechanistic and organic structures.


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` Standardisation-Conformity to specific models or

examples-defined by set of rules and norms-that

are considered proper in a given situation.

` Standardised decision making and coordination

procedures make people`s actions predictable in

certain circumstances


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` Mutual adjustment is the process through which

people use their judgment rather than

standardised rules to address problems, guide

decision making ,and promote coordination.

` The right balance between these two make some

actions predictable so that basic organisational

tasks and goals are achieved.


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` The challenge facing all organizations, large and

small is to design a structure that achieves the

right balance between standardization and mutual

adjustment.

` Many companies complain that employees tend to

flow written and unwritten rules too rigidly instead

of adapting them to the needs of a particular situation.


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` The design challenge facing managers is to find

way of using rules and norms to standardize

behaviour while at the same time allowing for

mutual adjustment to provide employees with theopportunity to discover new and better ways of

achieving organisational goals.


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` People at the higher levels in the hierarchy and infunctions that perform complex, uncertain tasksrely more on mutual adjustment than onstandardisation to coordinate their actions.

` Ex. An organisation want its accountants to followcertain standardised procedures.

` R & D- The organisation may want to encouragerisk taking that leads to innovation.


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` Rules are not set in stone, but are just convenient

guidelines for getting work done.


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` How to facilitate communication and coordination

among sub units is a major challenge for

managers.


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` The simplest integrating device which

differentiates people by how much authority they

have.

` Hierarchy dictates who reports to whom, itcoordinates various organisational roles.

` Managers must carefully divide and allocate

authority within a function and between onefunction and others to promote coordination.


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` Direct contact between people in different subunits isan integrating mechanism that is more complex than ahierarchy of authority.

`

Establishing personal relationship between people atall levels in different functions to overcome subunitorientations.

` Managers from different functions who haveopportunities for direct contact with each other canwork together to solve common problems


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` When the need for communication among

subunits increases, one member or a few

members from a subunit are likely to have

responsibility for coordinating with other subunits.

` To develop in-depth relationship with people in

other subunits.


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` A temporary committee set up to handle a specificproblem .

` One person from each function joins a task force ,which meets until it finds a solution to the problem.

` Task force members are responsible for taking thesolution back to their functional groups for group

input and approval.


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` When the issue a task force is dealing with

becomes an ongoing strategic or administrative

issue, the task force becomes permanent.

` A team is a permanent task force or committee.


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` Most companies, for example now have product

development and customer contact teams to

respond to the threat of increased competition in a

global market.


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Mechanistic and organic

organization structure


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` Structures which are designed to induce people to

behave in predictable, accountable ways.

` Decision making is centralised.

` Subordinates are closely supervised.` Information flows in a vertical direction down a

clearly defined hierarchy.

` Tasks associated with a role are clearly defined.


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` At the functional level, each function is separate ,

communication and cooperation among functions

are the responsibility of someone at the top of

hierarchy.` Hierarchy is the integrating mechanism


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` Structures which promote flexibility, so people

initiate change and can adapt quickly to changing

conditions.

`

Decision making is decentralised.` People assume the authority to make decisions as

organisational needs dictate.

` Roles are loosely defined-people perform various

tasks and continually develop skills in newactivities.


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` Is an organic structure better than a mechanistic

structure?


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` Characterised by high complexity, formalisation

and centralisation.

` Performs routine tasks, depends heavily on

programmed behaviour.` Relatively slow in responding to the unfamiliar.


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` Flexible and adaptive.

` Influence based on expertise and knowledge

rather than on authority of position.

` Loosely defined responsibilities rather than rigidjob definitions.

` Emphasis is on exchanging information rather

than on giving directions.


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` Mechanistic design in a stable, certain

environment.

` An organic form in a turbulent environment.


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Characteristic Mechanistic Organic

Task Definition Rigid Flexible

Communication Vertical Not vertical

Formalisation High Low

Influence Authority Expertise

Control Centralised Diverse


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Mechanistic Organic

Tasks are broken down into

specialized, separate parts.

Employees contribute to the common

tasks of the department

Tasks are rigidly defined. Tasks are adjusted and redefined

through employee team work.

There is a strict hierarchy of authority

and control, and there are many rules.

There is less hierarchy of authority

and control and there are few rules.

Knowledge and control of tasks are

centralized at the top of the

organization.

Knowledge and control of tasks are

located anywhere in the organization.

Communication is vertical. Communication is horizontal.


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` The second important component of organisationstructure.

` Formalisation refers to the degree to which the

jobs within the organisation are standardised.

` If a job is highly formalised,the job incumbent hasa minimum amount of discretion over what is to be

done and how he or she should do it.


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` Formalisation-Explicit job descriptions,Lots of

organisational rules, Clearly defined procedures

covering work processes.


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` Regulating the behaviour of employees.` Mc Donalds same taste whether it is made in Portland,Alaska, Bangalore or Holland.

`

Secret behind the success of Mc Donald`s is productconsisency and uniformity.

` Strict stndards of employee grooming.

` The manual states that the basic hamburger pattymust be 1.6 ounces of pure beef with no more than 19% fat content.


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` Hamburger buns must have 13.3 %sugar in them.


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` Managers have at their disposal a number of

techniques by which they can bring about the

standardisation of employee behaviour.

`

1. Selection.A

n effective selection process will bedesigned to determine if job candidates fit into the

organisation.

` Selection of successful job performers.


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` 2. Role Requirements-Job Analysis defines the

job that need to be done in the organisation and

outlines what employee behaviours are necessary

to perform the jobs.

` 3. Rules, Procedures and Policies.

` 4. Training


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` Employees feel anxious upon joining an

organisation.

` Worry may be regarding how well they will performin the job. They may feel inadequate compared to

more experienced employees.

` New joinees may be concerned about how wellthey will get along with their co-workers.


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` An adaption process by which individuals learn the

values , norms and expected behaviour patterns

for the job and the organization of which they will

be a part.

` All employees will receive at least some molding

and shaping on the job, but for certain members ,

the socialisation process will be substantially

accomplished before they join the organisation-

Professionals


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` Employees feel anxious upon joining an

organisation.

` Worry may be regarding how well they will performin the job. They may feel inadequate compared to

more experienced employees.

` New joinees may be concerned about how wellthey will get along with their co-workers.


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` Effective socialization programs reduce the

anxiety of new employees by giving them

information about the job environment and about

supervisors, by introducing them to co-workers,

and by encouraging them to ask questions.


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` Socialization conveys three types of information.

` 1.General information about the daily work routine.

` 2.A review of the organization's history, purpose,

operations and products or services


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` 3. A sense of how the employee`s job contributes

to the organization's needs, may be a detailed

presentation(perhaps a brochure) of the

organization's policies, work rules and employee

benefits.


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SOCIALISATION

PROCESS


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` The human resource specialist performs the first partof the socialisation process by explaining basicmatters like working hours, benefits and vacations.

` Then, he introduces the employee to his or her new

supervisor.` The supervisor continues the orientation by explaining

the organisation of the department and by introducingthe person to his or her new colleagues familiarisingthe new employee with the workplace and helping to

reduce first day jitters.


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` It typically includes information on employee

benefits, personnel policies, the daily routine,

company organisation and operations, safety

measures and regulations.


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` Employers use employee handbooks.

` Some firms provide preloaded personal digital

assistants.

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Designing Organisation Structure

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