Organizational theory, design, and change: Texts and cases (7th Ed.). New York, NY: Pearson.
This section is one of the most important topic areas in the course. A solid grasp of this material is instrumental to understanding how and why organizations structure themselves as they do. While organizations can structure themselves in a myriad of ways, the basic principles remain the same. To illustrate this notion, there are nearly a billion ways to combine 6 eight-stud Lego bricks, yet the basic building block remains the same; an eight-stud brick. However, organization designs are not merely chosen from a list of theories or structures used in the past. Organizations are influenced by their environments, members, leaders, and a variety of forces. However, in the simplest of terms, leaders need to ask themselves: 1) Who does what? 2) What authority do these people have? 3) How do we best group people together and 4) How do we best coordinate their activities? As organizations become larger, the answers to these questions become increasingly complex and have a direct bearing on a given organization’s effectiveness and efficiency.
Chapter 4: Basic Challenges of Organizational Design
The questions posed in the previous section, who does what and what authority do they have, are linked. In this section, we explore this further. How much control do people have over their actions? Do they do follow instructions, on one extreme, or can they make important decisions independently, on the other? Organizations in which people have more restricted authority naturally lead to a structure with many layers or levels, a tall hierarchy. In this arrangement, individuals have narrow spans of control. On the other hand, organizations where people, in general, have more authority have fewer layers or a flatter structure; individuals have a wide span of control and more responsibility. Organizational theorists refer to the way in which layers of authority are structured as a vertical differentiation. Both types of structures, tall, more bureaucratic organizations and flatter, more organic structures are useful for resolving problems, however, each approach also has its unique challenges to be managed.
Chapter 5: Designing Organizational Structure: Authority and Control
Articles, Websites, and Videos:
The Malcolm Baldrige School of Business bases much of its curriculum in what has become known as the Baldrige Principles. While still thought of by many as a set of quality standards, the Baldrige principles can serve as a guide to every aspect of an organization’s activities, not least of which is the influence on its organizational design. Please review the document below. The document from the National Institute of Standards and Technology administers the Baldrige Excellence Program. While the entire document is worth your attention, for our purposes please focus your attention on pages 5 through 7.
National Institute of Standards and Technology. (2019. 2019 – 2020 Baldrige Excellence Builder
Seven sources of power
One of the more interesting subjects in organization development and organizational behavior is the issue of individual and group power. In this video, you’ll see a quick presentation on the seven forms accepted by many authorities as the most common types of power exhibited in an organization.
Basic Challenges of Organization Design
Teamwork concept illustration
Leaders can structure organizations in myriad ways; however, the basic principles remain the same. To illustrate this notion, there are nearly a billion ways to combine 6 eight-stud Lego bricks! However, the basic building block remains the same – an eight-stud brick. In the simplest of terms, leaders need to ask themselves:
Who does what?
What authority do these people have?
How do we best group people together
How do we best coordinate their activities?
As organizations become larger, the answers to these questions become increasingly complex and have a direct bearing on a given organization’s effectiveness and efficiency.
In this unit, we will also examine what organizational theorists refer to as vertical differentiation (the way in which layers of authority are structured). Leaders can build a structure with more restricted authority (a tall, or bureaucratic hierarchy), or the structure can be flatter (more organic). In this flatter structure, managers have a wider span of control. Each structure has strengths but also has unique challenges to be managed.
Objectives:
Describe the basic challenges leaders face relevant to the way organizations are structured.
Discuss the way in which these challenges must be addressed to achieve maximum efficiency and effectiveness.
Distinguish among the design choices that underlie the creation of either a mechanistic or an organic structure.
Discuss the issues involved in designing a hierarchy to coordinate and motivate effective organizational behavior.
Describe the principles of bureaucratic structure and explain their implications for the design of effective organizations.
Explain why organizations are flattening their hierarchies and making more use of empowered teams of employees