CHAPTER 10 : ORGANIZATIONAL STRUCTURE
The organizational structure, control systems, culture, and human resource management systems that together determine how efficiently and effectively organizational resources are used.
Designing Organizational Structure
The process by which managers establish working relationships among employees to achieve goals.
• Organizational Structure
Formal system of task and reporting relationships showing how workers use resources.
• Organizational design
The process by which managers create a specific type of organizational structure and cultures of that a company can operate in the most efficient and effective way
Picture 1 : Four Factor that determine the design of organizational structure
The way an organization’s structure works depends on the choices managers make about:
1. How to group tasks into individual jobs
2. How to group jobs into functions and divisions
3. How to allocate authority and coordinate functions and divisions
INDIVIDUAL JOB DESIGN
- The process by which managers decide how to divide tasks into specific jobs.
- The appropriate division of labor results in an effective and efficient work force.
- The process of reducing the tasks each worker performs.
- Too much simplification and boredom results.
- Increasing the number of different tasks in a given job by changing the division of labor
- Empowering workers to experiment to find new or better ways of doing the job
- Encouraging workers to develop new skills
- Allowing workers to decide how to do the work
- Allowing workers to monitor and measure their own performance
- Increasing the degree of responsibility a worker has over a job
GROUPING JOBS : FUNCTION STRUCTURES
Group of people, working together, who possess similar skills or use the same kind of knowledge, tools, or techniques to perform their jobs
An organizational structure composed of all the departments that an organization requires to produce its goods or services.
Advantages ( + )
• Encourages learning from others doing similar jobs.
• Easy for managers to monitor and evaluate workers.
• Allows managers to create the set of functions they need in order to scan and monitor the competitive environment
Disadvantages ( - )
• Difficult for departments to communicate with others.
• Preoccupation with own department and losing sight of organizational goals.
Picture 2 : Example of Functional Structures
GROUPING JOBS : DIVISIONAL
Place each distinct product line or business in its own self-contained division
- Allows functional managers to specialize in one product area
- Division managers become experts in their area
- Removes need for direct supervision of division by corporate managers
- Divisional management improves the use of resources
Picture 3 : Example of Product Structure
Divisions are broken down by geographic location
- Global geographic structure
Managers locate different divisions in each of the world regions where the organization operates & Generally, occurs when managers are pursuing a multi-domestic strategy
- Global Product Structure
Each product division takes responsibility for deciding where to manufacture its products and how to market them in foreign countries worldwide
Picture 4 : Example of Geographic Structure
- Groups divisions according to the particular kinds of customers they serve
- Allows managers to be responsive to the needs of their customers and act flexibly in making decisions in response to customer's changing needs
Picture 5 : Example of Market Structure
GROUPING JOBS : MATRIX & PRODUCT TEAM
An organizational structure that simultaneously groups people and resources by function and product.
- Results in a complex network of superior - subordinate reporting relationships.
- The structure is very flexible and can respond rapidly to the need for change.
- Each employee has two bosses (functional manager and product manager) and possibly cannot satisfy both.
Picture 6 : Example of Matrix Structure
Product Team Design Structure
Does away with dual reporting relationships and two-boss managers
- Functional employees are permanently assigned to a cross-functional team that is empowered to bring a new or redesigned product to work
- Cross-functional team is composed of a group of managers from different departments working together to perform organizational tasks.
Picture 7 : Example of Product Team Design Structure
COORDINATING FUNCTION : AUTHORITY
The power vested in a manager to make decisions and use resources to achieve organizational goals by virtue of his position in an organization
Hierarchy of Authority
An organization’s chain of command, specifying the relative authority of each manager. Span of Control : the number of subordinates who report directly to a manager
- Line Manager
Someone in the direct line or chain of command who has formal authority over people and resources
- Staff Manager
Managers who are functional-area specialists that give advice to line managers.
Picture 8 : Hierarchy
Tall structures have many levels of authority and narrow spans of control.
–As hierarchy levels increase, communication gets difficult creating delays in the time being taken to implement decisions.
–Communications can also become distorted asitis repeated through the firm.
–Can become expensive
Picture 9 : Tall Structure
Flat structures have fewer levels and wide spans of control.
– Structure results in quick communications but can lead to over worked managers.
Picture 10 : Flat Structure
CHAPTER 11 : ORGANIZATIONAL CONTROL
What Is Organizational Control and The Control Process?
- Controlling is the process where by managers monitor and regulate how efficiently and effectively an organization and its members are performing the activities necessary to achieve organizational goals
- The Controls Process
Picture 11 : The Controls Process
Organizational Control System
Picture 12 : Three Organizational Control Systems
There are 3 (three) type that usualy used for measuring the output control :
- Financial measures of performance
The most common are profit ratios, liquidity ratios, leverage ratios, and activity ratios.
- Organizational goals
Picture 13 : Organizational Goal Setting
- Operating budgets
A budget that states how managers intend to use organizational resources to archives organizational goals efficiently
Behavioral control is a method that consists of three mechanism of behavioral control that managers can use to keep subordinates on track and make organizational structures work as they designed to work : direct supervision, management by objectives, and rules and bureaucratic control via standard operating.
Direct Supervision is managers actively monitor and observe the behavior of their subordinates, teach subordinates the behaviors that are appropriate and in appropriate, and intervene to take corrective action as needed.
Management by Objectives (MBO) is a formal system or evaluating subordinates on their ability to achieve organizational goals or performance standard to meet operating budgets.
Bureaucratic Control is control by means of a comprehensive system of rules and standard operating procedures (SOPs) thats hapens and regulates the behavior of divisions, functions, and individuals.
Clan Control is the control exerted on individuals and groups in an organization by shared values, norms, standards of behavior, and expectations
Organizational change is the movement of an organization away from its present state toward some preferred future state to increase its efficiency and effectiveness
Picture 14 : Organizational Control & Change
The types of change they can implement to increase organizational effectiveness:
1. Evolutionary and Revolutionary Change
Evolutionary Change -> Gradual, Incremental, and Narrowly focused.
Revolutionary Change -> Rapid, Dramatic, and Broadly focused.
2. Managing Change
Picture 15 : Four Steps in the Organizational Change Process
Artikel ini dibuat oleh Team Geronimo :
- Henry Julianto Tarigan
- Riva Selviani Harahap
- Priyonggo Setyoadi
Jones, R Gareth. 2020. Contemporary Management. New York : Mc. Graw Hill Ch. 10 & 11.