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7-28-2018 Organization Theory and Design

This document provides an overview of organization theory and design. It discusses current challenges organizations face related to globalization, competition, ethics, and diversity. It also defines key dimensions of organization design, including structural and contextual dimensions. Structural dimensions include formalization, specialization, hierarchy, and centralization. Contextual dimensions include size, technology, environment, goals, and culture. The document outlines Mintzberg's five basic parts of an organization and his five organizational types: entrepreneurial, machine bureaucracy, professional bureaucracy, diversified, and adhocracy. It also discusses contemporary design ideas and frameworks for selecting strategy and design.

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Verlin Ann Lacastesantos
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268 views37 pages

7-28-2018 Organization Theory and Design

This document provides an overview of organization theory and design. It discusses current challenges organizations face related to globalization, competition, ethics, and diversity. It also defines key dimensions of organization design, including structural and contextual dimensions. Structural dimensions include formalization, specialization, hierarchy, and centralization. Contextual dimensions include size, technology, environment, goals, and culture. The document outlines Mintzberg's five basic parts of an organization and his five organizational types: entrepreneurial, machine bureaucracy, professional bureaucracy, diversified, and adhocracy. It also discusses contemporary design ideas and frameworks for selecting strategy and design.

Uploaded by

Verlin Ann Lacastesantos
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
You are on page 1/ 37

ORGANIZATION THEORY &

DESIGN
By RICHARD DAFT
ENGR. ERLYN JALON FRANCISCO-GODINEZ
PA205
Chapter 1

ORGANIZATIONS AND
ORGANIZATION THEORY
Current Challenges

1. Globalization – advances in technology


2. Intense competition- research and
development
3. Ethics and Social responsibilities –
high ethical and professional standards
4. Speed and Responsiveness – respond
quickly and decisively
5. The Digital Workplace – computer
network
6. Diversity – operate on a global field
ORGANIZATION
social entities that are goal-directed,
are designed as deliberately
structured and coordinated activity
systems, and are linked to the
external environment.
DIMENSIONS OF ORGANIZATION DESIGN

TYPES OF ORGANIZATIONAL DIMENSION


1. Structural Dimension – provide labels to
describe the internal characteristics of an
organization. They create a basis for measuring
and comparing organizations.
2. Contextual Dimension – Characterize the
whole organization, including its size,
technology, environment, and goals. They
describe the organizational setting that
influences and shapes the structural dimension.
Interacting contextual & Structural Dimensions of
Organization Design
STRUCTURAL DIMENSION

1. Formalization – Written documentation


2. Specialization – Division of labor
3. Hierarchy of authority
4. Centralization – Authority to make a
decision
5. Professionalism- level of formal
education and training of employees.
6. Personnel Ratios – deployment of
people to various functions
CONTEXTUAL DIMENSIONS
1. Size – Number of employees, total sales/
asset
2. Organizational Technology – tools,
techniques, and actions
3. Environment – elements outside the
boundary of the organization
4. The Organization’s Goal and Strategy –
Competitive techniques; scope of
operations
5. An organization’s culture – values and
norms shared by employees
ORGANIZATIONAL CONFIGURATION

1. Mintzberg’s Organizational types


2. Contemporary Design Ideas

Mintzberg’s Organizational Types


by Henry Mintzberg suggests that every
organization has five parts.
MINTZBERG’S FIVE
BASIC PARTS OF
ORGANIZATION
People who do the basic Work of the Organization

Primary transformation from input to output takes place


Helps the Organization
adapt to the Environment

Responsible for creating


innovations in the technical
core
Responsible for the
smooth operation and
upkeep of the organization

Physical and human


elements
Responsible for directing
and coordinating other Provides Direction,
parts of the organization planning, strategy, goals
and policies

Responsible for implementation & coordination at the


department level
MINTZBERG’S FIVE ORGANIZATIONAL TYPES
1. ENTREPRENEURIAL STRUCTURE

- Typically a new Start-up company

TOP KEY part of


MANAGER the structure

WORKER IN THE
TECHNICAL CORE

Goal – is to survive and become established in its


industry
2. Machine Bureaucracy
-very large, established organization

TECHNICA ADMINISTRATI
L VE
The narrow MIDDLE
MANAGEMENT
TECHNICAL reflects the tall
CORE hierarchy for control

This form reflects extensive formalization and


specialization, with a primary goal of efficiency. This
form is suited to a simple, stable environment. It
would not do well in a dynamic environment because
the bureaucracy is not adaptable.
3. PROFESSIONAL
BUREAUCRACY
- Complex and Stable

Support the
ADMINISTRATIVE
TECHNICAL professionals &
handle the
org’s routine &
TECHNICAL CORE administrative
activities
Highly Skilled Professionals
The primary goals are quality and effectiveness
Professional organizations typically provide services
rather than tangible goods, and they exist in
complex environments
4. DIVERSIFIED FORM
Mature firms that are extremely large and are
subdivided into product or market groups

ADMINISTRATIV
To Handle
E
Paper work
to and from
the division

INDEPENDENT
- CombinationDIVISION
of machine bureaucracies, each producing a
different products or services, all topped by one central head
quarters.
5. ADHOCRACY
Develop in complex, rapidly changing
environment

Usually young or
middle-aged and
can go quiet large.

Flexible, adaptable and informal organization structure


without bureaucratic policies and principles.
CONTEMPORARY DESIGN IDEAS
FIVE ELEMENTS OF ORGANIZATIONAL DESIGN
1. Structure 4. Culture
2. Tasks 5. Strategy
3. Systems

LEARNING ORGANIZATION
Promotes communication and collaboration
so that everyone is engaged in identifying and
solving problems, enabling the organization to
continuously experiment, improve, and increase
its capability
TWO ORGANIZATIONAL DESIGN APPROCHES
LEVELS OF ANALYSIS IN ORGANIZATION
ORGANIZATIONAL BEHAVIOR
The micro approach to organizations because
it focuses on the individuals within organizations
as the relevant units of analysis.
ORGANIZATIONAL THEORY
A macro examination of organizations because
it analyzes the whole organization as a unit
MESO THEORY
Concerns the integration of both micro and macro
levels of analysis. Individuals and groups affect the
organization, and the organization in return
influences individuals and group.
Chapter 2

STRATEGY, ORGANIZATION DESIGN


& EFFECTIVENESS
FRAMEWORK FOR SELECTING
STRATEGY AND DESIGN
Two models for formulating strategies
1. Porter’s Competitive Forces and Strategies – Michael
E. Porter
- Five forces in the industry :
 The Threat of New Entrants
 The Power of Suppliers
 The Power of Buyers
 The Threat of Substitutes
 Rivalry among Existing Competitors

2. Miles and Snow’s Strategy Typology


Raymond Miles and Charles Snow
Prospector Analyzer
Defender Reactor
CONTINGENCY FACTORS AFFECTING
ORGANIZATION DESIGN
BALANCED SCORECARD EFFECTIVENESS
CRITERIA
Chapter 3

FUNDAMENTALS OF
ORGANIZATION STRUCTURE
ORGANIZATIONAL STRUCTURE
THREE KEY COMPONENTS IN THE DEFINITION
1. Designates formal reporting relationships,
including the number of levels in the hierarchy
and the span of control of managers and
supervisors.
2. Identifies the grouping together of individuals
into departments and of departments into the
total organization.
3. Includes the design of systems to ensure
effective communication, coordination, and
integration of efforts across departments
INFORMATION-SHARING PERSPECTIVE
ON STRUCTURE
1. Vertical Information Sharing
a. Hierarchical referral – chain of command
b. Rule and Plans – standard information source
c. Vertical Information system- reports
2. Horizontal Information Sharing
a. Information System
b. Direct Contract
c. Task Force
d. Full Time Integrator
e. Teams
ORGANIZATIONAL DESIGN ALTERNATIVES
ORGANIZATIONAL STRUCTURE
 Required Work Activities – perform task important to
company
 Reporting Relationships – chain of commands
 Departmental Grouping Options
 Functional Grouping
Divisional Grouping
Multi-focused Grouping
Horizontal Grouping
Virtual Network Grouping
FUNCTIONAL, DIVISION & GEOGRAPHIC DESIGNS
 Functional Structure - activities are grouped together
by common functions
 Functional Structure with Horizontal Linkages
 Division Structure – grouped based on organization
output
 Geographic Structure – functions required to produce
and services in that region.
MATRIX STRUCTURE
Conditions for Matrix
1. Condition 1 – shared & flexible use of people & equipment.
2. Condition 2 - Environmental pressure exists for two or
more critical outputs.
3.Condition 3 - The environmental domain of the organization
is both complex and uncertain.
Variations of Matrix
4.Functional Matrix- functional bosses have primary
authority and the project or product managers simply
coordinate product activities.
5.Product Matrix - the project or product managers have
primary authority and functional managers simply assign
technical personnel to projects and provide advisory
expertise as needed.
HORIZONTAL STRUCTURE
- Organizes employees around core processes.
Organizations typically shift toward a horizontal
structure during a procedure called reengineering.
VIRTUAL NETWORK OUTSOURCING
means to contract out certain tasks or functions,
such as manufacturing, human resources, or credit
processing, to other companies

HYBRID STRUCTURE
combines characteristics of various approaches
tailored to specific strategic needs. Most companies
combine characteristics of functional, divisional,
geographic, horizontal, or network structures to
take advantage of the strengths of various
structures and avoid some of the weaknesses.
THANK
YOU!

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