s Agenda Organizational Structure amp Design Three goals of structure Understand relationships between environment strategy and structure SMA MEPD 3 Inputs Transformation Processes ID: 636190
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Slide1
Organizational DesignSlide2
2
Today
’
s Agenda
Organizational Structure & Design
Three goals of structure
Understand relationships between environment, strategy and
structure
SMA
MEPDSlide3
3
Inputs
Transformation
Processes
Outputs
Interactions of
:
Formal Org
Informal Org
Tasks
Individuals
Environment
Resources
Individual
behavior
Group
behavior
Organizational
functioning
Strategy
Feedback
History
Open Systems ModelSlide4
4
The Three Goals of Structure
Efficiency
minimize costs, time, effort
Coordination
coordinate diverse organizational tasks
ease information flow
Adaptability/Flexibilityscan environmentchange to meet environmental needsSlide5
5
Structural Design Dimensions of Organizations
(Structural) Differentiation: How are activities divided?
Vertical differentiation (hierarchy of authority)
Horizontal differentiation (specialization, e.g. product, process, function, geography)
Complexity (number of activities or subsystems)
Integration: How are activities coordinated/linked?
Centralization (hierarchical level of decision making)
Span of control (# of products, processes, functions supervised)Formalization (amount of written documentation)Standardization (degree similar work is done in uniform manner)Slide6
6
Issues in Differentiation of Subsystems
Differences in time orientation
Differences in objectives
Differences in interpersonal orientation
Differences formal
structure
Divisional (Product or Market, etc.) Structure
President
Product
Group 1
R&D
ProductGroup 2
ProductGroup 3
Mfg
Acct
Mkt
R&D
Mfg
Acct
Mkt
R&D
Mfg
Acct
MktSlide7
7
Structural Integrating MechanismsSlide8
8
Non-structural Integrating MechanismsSlide9
9
Vertical Linkages
Vertical information
systems
Add positions to hierarchy
Rules and plans
Hierarchical referral
Degree of Vertical Coordination
and Control Required
Information Capacity of Linkage Mechanism
Low
High
High
LowSlide10
10
Horizontal Linkages
Costs of Coordination
Degree of Horizontal
Coordination Required
Teams
Full-time integrators
Task forces
Liaison roles
Direct contact
Information Systems
High
Low
Low
HighSlide11
Designing Organizations is the process of purposefully configuring the elements of the organization to foster the achievement of valued business, customer, and employee,
community and environmental
outcomes.
SM14J
(
11
)Slide12
Design at All System Levels
SM22I
(
12
)
Team, Work Unit,
or Work Process
Corporate/
System Wide
Business Unit
Inter-Organizational
Inter-UnitSlide13
Why is organization design important?
SM194P
(
13
)
Resources are aligned or misaligned with strategy and priorities.
Coordination is efficient or inefficient—resource use is optimized or resources are wasted.
Performance capabilities are enabled or disabled—quality, speed, innovation, growth
Work is hard or easy to do—people are frustrated or feel well utilized.
Customer interfaces are effective or ineffective—high value is delivered or not.
Human capital is developed, motivated, and retained or stagnates, becomes cynical and “departs”.
Societies, communities, and ecologies are strengthened or depletedSlide14
Learning Two:
(
14
)
Organizations are designed to fit a context, not a recipeSlide15
Star Model
SM107T
(
15
)
Adapted from: J. Galbraith
Behavior
Culture
Performance
Strategy
Rewards
People
Structure
Management
Processes
Work
Processes/
CapabilitiesSlide16
Self-Design and the Star
SM106T
(
16
)
Implementation
&
Assessment
CRI
TERIA
Designing
Strategy
Laying the Foundation
Valuing
Acquiring
Knowledge
Diagnosing
S
M
R
P
W
S
M
R
P
WSlide17
Learning Three:
(
17
)
Hierarchical structure is
n
ecessary but insufficient
in a dynamic and complex
environment. Slide18
Hierarchical, Functional Organization
SM34I
(
18
)
Benefits
Specialist
Manager
Software
Engineer
Manager
HardwareEngineer
QA
Specialist
Testing
Manager
Manager
Tech
Support
Mfg
QAManager
MfgTesting
Manager
Comp
Manager
Comp.
Specialist
Comp.AnalystComp &BenefitsManager
etc.
etc.
etc.
etc.
etc.
etc.
etc.
etc.
etc.
General Manager
Director of
Marketing
Director of
Manufacturing
Administrative
Director
Manager
Product
Marketing
Manager
Marketing
Support
Manager
Mfg
Engineer
Manager
Operations
Manager
HR
Finance
Manager
Manager
Info
Systems
QA
Specialist
QA
Specialist
Training
Specialist
QA
Manager
Director of
EngineeringSlide19
Team-Based Organization
(
19
)
Shared Services
Team
Executive Team
Councils
Process
Teams
Business Unit 1
Leadership Team
Process Team
Team
Team
Team
Team
Business Unit 2
Leadership Team
Process Team
Team
Team
Team
Team
Team
Cross Unit Opportunity TeamsSM50TSlide20
Networks
Integrating Councils
Management Team
Unit 1
Integrating Teams
Team
Team
Team
Executive Team
Shared Services
Integrating Teams
Team
Team
Team
Management Team
Unit 2
Knowledge
Network
Opportunity Team
(
20
)
SM33MSlide21
Common Aims of Internal Restructuring
Enhance flow of information and expertise across organizational boundaries to increase:
Learning
Catching Mistakes
Innovation
Efficiency
Shared Understanding
CoordinationSlide22
Implement the Internal Restructuring
Over communicate honestly
Align goals with the restructuring Efforts
Avoid the creation of bottle-necks that require certain people to be brokers
Involve employees in the process and take their input into account
Create a climate that supports speaking up in order to enhance the flow of information resources across organizational boundaries.Slide23
Managing Internal Change: Downsizing
Downsizing= Layoffs + Restructuring
Given economic weakness, majority of CEOs report the need to reduce staff amid continued economic weakness and tight profit margins
More than 3 M people are laid off every year
Downsizing can happen even during good economic times.Slide24
Effect on Work
Try to figure out which departments and people matter and protect them.
Be ready to adjust work processes now that there are fewer people to accomplish the work.
Be mindful of how it will affect customers and their expectations.Slide25
Announcing a Downsizing
Use as a last
resort
Be clear about long and short term goals.
Communicate rationale and allow for questions and answers
Involve senior management
Let everyone know at the same time
Provide counseling at the locationTry not to make an announcement before the holidays or before the weekendSlide26
Implement the Downsizing
Over communicate honestly
Be fair
(Procedural Justice, Trevor & Nyberg, 2008)Help victims find other jobs
Senior management should share this burden
Reduces likelihood of voluntary turnover
Explain the selection process
Focus on merit or future skill needsFit this criterion with the vision for the futureSlide27
Implementing the Downsizing (Cont
’
d)
Involve employees
Don
’
t just take people out
Work out procedures and processesIf you can’t offer job security, provide ways to enhance employabilityTraining and DevelopmentLink incentives to performance in order to motivate skill developmentSlide28
Surviving Organizational Downsizing
Depends a great deal on the way that survivors respond:
If they support the change initiative, downsizing is perceived to meet its objectives
If they feel that the downsizing has violated them and their work environment, workers will tend to work against the objectives of downsizing. Slide29
From a Worker
’
s Perspective: Survivor’
s experience
Recommended text:
-Healing the Wounds (Noer, 2009)Slide30
SMA MEPD: Performance?
How is SMA MEPD performing?
Profitability
Product developmentMorale?Anything else?Slide31
SMA MEPD: Diagnostic Question
What are the sources of the intergroup and inter-functional challenges in
MEPD
?Management and Org problems & practices
External Environment
Organizational Design
Leadership
PeopleSlide32
SMA MEPD: Action Question
What should
Spichty
do about these problems or what should a consultant recommend to Spichty?Slide33
Recommendations for Change
Increase integration by development product organization, communication, and decision-making systems
Communicate new project organization to division and R&D group
Develop interpersonal competence
Improve group relations through inter-group problem-solving meetings
More personal leadershipSlide34
34
SMA Lessons
Structure should follow strategy
MEPD
’
s structure has become misaligned with its strategy and market conditions
Structure shapes interactions and accountability inside the organization
Structure influences communication patterns and qualitySplit accountability and control leads to conflictLinking mechanisms can compensate for mismatches, but only so far!Slide35
Midterm Results
2016