RESERVED FOR YTHOMIT

Module 4 - Background

Organizational Structure and Culture

Note: All Background and Module Home materials are required unless designated as optional or general reference.

Organizational Structure and Design

The way an organization is designed and structured can have significant effects on its members and its ability to execute its strategy. In this module we will try to understand those effects and analyze the behavioral implications of different organizational designs.

An organizational structure defines how job tasks are formally divided, grouped, and coordinated. According to Robbins and Judge (2014) managers need to address six key elements when they design their organization’s structure:

Work specialization—the extent to which activities are subdivided into separate jobs.

Departmentalization—the basis on which jobs will be grouped together.

Chain of command—the people to whom individuals and groups report.

Span of control—the number of individuals that a manager can direct efficiently and effectively.

Centralization and decentralization—the locus of decision-making authority.

Formalization—the extent to which there will be rules and regulations to direct employees and managers.

A simple, but classical, classification of organizational designs focuses on mechanistic versus organic design. The mechanistic design is characterized by extensive departmentalization, high formalization, a limited information network, and centralization. The organic design is characterized by low formalization, flat hierarchy and the use of cross-hierarchical and cross-functional teams, free flow of information, and decentralization. Each design has advantages and disadvantages. For example, a mechanistic design is good for keeping the costs of standardized products or services down, but it inhibits innovation and creativity. Read this short summary comparing mechanistic and organic organizational structures:

Mechanistic vs. Organic Organizational Structure: Contingency Theory (2014) BusinessMate.Org http://www.businessmate.org/Article.php?ArtikelId=44

A more sophisticated look at organizational structure considers the different ways that work is organized and coordinated to best fit the organization’s mission and objectives. Common forms are divisional structures, functional structures, team-based or process structures, and flexible structures. The key learning here is that the structure selected should match the organization’s strategy—or it will be very difficult for the organization to be successful.

The following reading explains these different structures, reviews their advantages and disadvantages, and suggests the strategic considerations for when each should be used. Though this article is on the older side, it is still right on target.

Anand, N. & Daft, R. L. (2007). What is the right organizational design? Organizational dynamics, 36, 329-344. retrieved from http://faculty.cbpp.uaa.alaska.edu/afgjp/PADM610/What%20is%20the%20Right%20Organization%20Design.pdf

There are newer names for the types of structures discussed by Anand and Daft in the section of their article titled Era 3. This updates the terminology in the article above, though all of the forms Anand and Daft discuss are still common today. The virtual organization and the boundaryless organization are among these new structures. The virtual organization is a relatively small, core organization that outsources major business functions. The boundaryless organization has teams instead of departments, and aspires to have as flat a hierarchy as possible.

Organizational Culture

Have you ever observed how some organizations just seem to be shining stars in their fields, even if the product or service they produce is not that much different from their competitors? Have you noticed that it seems that they are the ones who are the most successful? Did you ever wonder why? Read the following material on organizational culture for some insights into what culture is, what it does, how it is formed, and how it is taught to newcomers in the organization. This reading is available in the Trident University Library.

Denison, D., Hooijberg, R., & Lane, N. (2012). Building a high-performance business culture. Leading Culture Change in Global Organizations: Aligning Culture and Strategy. (pp. 1-23), Hoboken, NJ, USA: John Wiley & Sons. Retrieved from http://media.wiley.com/product_data/excerpt/4X/04709088/047090884X-373.pdf

The following material on organizational culture type may be particularly helpful as you prepare your Module 4 SLP assignment:

McNamara, C. (2000) Organizational Culture. Adapted from the Fieldguide to Organizational Leadership and Supervision. Free Management Library. http://managementhelp.org/organizations/culture.htm

Combining Culture and Structure

Designing an organization’s structure involves more than just shifting boxes and lines on an organizational chart. Mootee (2012) offers several critical tests when considering the adequacy of designing an organization’s structure:

a.    The Future Test: Does the design reflect the needs for how a company plans to compete in the future?

b.    The People/Culture Test: Does the design adequately reflect the motivations, strengths and weaknesses of employees?

c.    The Competitive Advantage Test: Does the design allocate sufficient management emphasis to the strategic priorities?

d.    The Power Test: Does the design provide the desired allocated power to groups/individuals that is linked to the strategic value of the unit or functions?

e.    The Agility Test: Is the design adaptable and swift to respond to future changes? (p. 1)

It makes intuitive sense that organizational culture and organizational structure should affect each other. Indeed, the way work is coordinated, the way hierarchies are designed, and the way communications are channeled should align with the norms and values of the people who work there. If they do not, there will be tension and conflict between the way people feel comfortable working and the structures that force work to be done in a different way. The following article is an excellent and compelling analysis of why management should consciously insure that culture and structure support each other so that the organization can function as smoothly and effectively as possible.

Janicijevic, N. (2013). The mutual Impact of organizational culture and structure. Economic Annals 58(198). Retrieved from http://www.doiserbia.nb.rs/img/doi/0013-3264/2013/0013-32641398035J.pdf

Module 4 - Case

Organizational Structure and Culture

Assignment Overview

This assignment focuses on the importance of organizational structure and its possible impact on employees. After finishing with the Background page and readings, go to the following interview with Rosabeth Moss Kanter, who is a renowned Professor of Business Administration at Harvard Business School, and an influential business advisor. Among other things, in this interview she talks about the evolution of changes in organizational structure in the past decades, and the link to employees’ well-being and functioning.

Required Reading

Puffer, S. (2004) Changing organizational structures: An interview with Rosabeth Moss Kanter. Academy of Management Executive, 18(2).

The following article looks at changing organizational structures as open systems and the effect on managers:

Buhler, P. M. (2011). Changing organizational structures and their impact on managers. Supervision, 72(2), 24-26.

Both of these articles can be found in the Trident University Library.

Case Assignment

Write a 4- page critique answering the questions below.

·      An organization’s structure can have significant effects on its members. What might those effects be? Analyze the behavioral implications of different organizational designs and use at least two examples.

·      Is it possible to generalize and say that a certain structure is better than others? That is, is there a structure that is superior in terms of its effects on its members? Take a stand and defend your comments with references to the concepts in the readings in this module and any previous modules that you find relevant. Demonstrate that you have read, understood, and can apply the background materials by citing them in support of your analysis.

Module 4 - SLP

Organizational Structure and Culture

For the SLP 4 assignment, you will explore some aspects of an organization's culture, at least as you see it. (Select an organization you have worked with, if possible.) Since the concept of organizational culture is open to many interpretations and classifications, this assessment offers a slightly different approach from your background reading on organizational culture.

Required Reading

Debra Woog McGinty and Nicole C. Moss have compiled a short corporate culture survey aimed at identifying characteristics of workplaces. The categories of workplace description that it generates are fairly self-explanatory.

Assignment

When you have completed the assessment think about it for a minute, and how it compares to the Academy, Baseball Team, Fortress, and Club cultures described by McNamara in the Background reading. Then prepare a 2- page paper addressing:

·      Your scores on the McGinty/Moss assessment and whether or not they fit your general expectations or constitute a surprise in some ways. Interpret the results of the assessment in terms of your own experience, either to confirm or to question the results. Compare your findings with the McNamara categories.

·      The degree to which the McGinty/Moss assessment and the McNamara information tell you similar or dissimilar things about your organization.

·      Do the assessment and the McNamara categories help improve your managerial understanding and/or skills? What can you infer from the assessment results about how your organization’s culture fits or doesn't fit with you? What (if anything) can you do to make your interaction with the culture more effective?

·      Provide your opinion on whether or not the questions asked help you understand the organization and how you cope with it. Do they accurately assess what is needed to analyze a company’s culture?  

·      Include the actual results to the survey in an Appendix section in your paper.