LECTUREPEDIA - Ajarn Paul Tanongpol, J.D.; M.B.A.;B.A.; CBEST
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LECTUREPEDIA - Ajarn Paul Tanongpol, J.D.; M.B.A.;B.A.; CBEST
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CHAPTER 11 Organizational design and work processes
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A manager must be alert to see opportunities to improve the structure of the organization, and improvement of performance through adjustment in structure. Today, we find more sharing of tasks, reduced emphasis on hierarchy, greater emphasis on lateral communication, and team work, and more decentralization if decision making and empowerment.
i. Organizational design is the process of choosing and implementing structures that best arrange resources to serve the organization’s mission and objective.
ii. The ultimate purpose of organizational design is to create an alignment between supporting structures and situational challenges.
iii. In the view from the contingency perspective, there is no best organizational design, the choice of organizational design should always be made to achieve the best fit with situational needs.
i. A bureaucracy is a form of organization based on logic, order, and the legitimate use of formal authority. Its distinguishing features are clear-cut division of labor, strict hierarchy of authority, formal rules and procedures, and promotion based on competency. This is called meritocracy. 1. Mechanic approach This is a more bureaucratic form of an organization. It thrives when the environment is stable. However, this type of an organization experience difficulty when the environment is changing and uncertain.
2. Organic approach The environment is less bureaucratic and this type of organization thrives best when there is dynamics in the environment. It is capable of adapting to changes and uncertainty.
ii. A mechanistic design is centralized with many rules and procedures, a clear-cut division of labor, narrow span of control, and formal coordination.
i. An adaptive organization operates with a minimum of bureaucratic features and encourages worker empowerment and teamwork.
ii. An organic design is decentralized with fewer rules and procedures, open division of labor, wide span of control, and more personal coordination.
iii. A learning organization is designed for continuous adaptation through problem solving, innovation, and learning.
iv. Adaptive organizations are built upon the trusting that people will do the right things on their own initiative. They move organizational design in the direction of what some might called self-organization. The focus is on freeing otherwise capable people from unnecessary centralized control and restrictions.
Good organizational design decisions should result in supportive structures that satisfy situational demands and allow all resources to be used to the best advantage. This is true contingency thinking. Contingency thinking must consider following points: o Environment o Strategy o Technology o Size and life cycle o Human resources
i. The external environment and the uncertainty of that external environment influence organizational design. 1. Certainty A certain environment is composed of relatively stable and predictable elements. As the result, the organization can succeed with relatively few changes in the goods and services over time.
2. Uncertainty This environment is more dynamic and less predictable. Changes occur frequently and may catch decision makers by surprise. As the result, the organization must be flexible and responsive over relatively short time horizon.
ii. Increasing uncertainty in the external environment calls for more horizontal and adaptive design.
i. Vertical structures and bureaucratic designs focus on efficiency and predictability.
ii. Horizontal structures and adaptive designs focus on innovation and flexibility.
i. Technology is a combination of knowledge, skills, equipment, computers, and work methods used to transform resource input into organizational outputs. ii. Manufacturing technology is classified into three main categories: 1. Small batch production Manufacture in small batch to fit customer needs. This tends to be more custom made production.
2. Mass production Produce large quantity of uniform products in an assembly line system. Workers are highly dependent on one another, as the product passes from stage to stage until completion. 3. Continuous-process production This is highly automated production process. They produce few products by continuously feeding raw materials – such as liquid, solid, and gases--- through a highly automated production system with largely computerized control.
iii. Technological imperative Technology is the major influence in the organizational structure. The influence of technology can be appreciated in the manufacturing, as well as in service industries.
1. Intensive technology Focus on the talents and efforts of many workers to serve the clients.
2. Mediating technology Link together people in a beneficial exchange of values.
3. Long-linked technology A client moves from point-to-point in during service delivery.
i. Birth ii. Youth iii. Midlife iv. Maturity
i. Another factor in organizational design is people - - - the human resources that staff the organization for action. A good organizational design provides people with the supporting structures they need to achieve both high performance and satisfaction in their work.
ii. An important human resource issue is skill. Any design must allow the full utilization of skills and talents of the people in the organization.
A subsystem is a work unit or smaller component within a large organization. Ideally, the work of a subsystem serves the general purpose and goals of the main system of the organization.
i. Differentiation is the degree of difference between subsystems in an organization.
ii. Subsystem differentiation 1. Differences in time orientation Planning and actions horizon of managers vary from short term to long term.
2. Differences in objectives Different tasks assigned to work units may result in differences in objectives. For example, cost conscious production managers and volume conscious marketing managers may have difficulty agreeing on solution to common problems.
3. Differences in interpersonal orientation To the extent that patterns of communication, decision making, and social interaction vary, it may be harder for personnel from different subsystems to work together.
4. Differences in formal structures Someone who is used to flexible problem solving in an organic setting may find it very frustrating to work with a manager from a mechanistic setting who is used to strict rules.
i. Integration is the level of coordination achieved between subsystems in an organization.
ii. Increased differentiation in organization subsystems creates the need for greater integration; however, integration becomes harder to achieve as differentiation increases.
Process reengineering systematically analyzes work process to design new and better ones. It is the systematic and complete analysis of work process and the design of new and better ones. The goal of the reengineering effort is to focus attention on the future, on customers, and on improved ways of doing things.
A work process is a related group of tasks that together create a value for the customer. Following are important: o Group o Together o Result o Customer Work flow is the movement of work from one point to another in a system.
Core process is the work process that added value to the work. In order to determine what are the core processes in the firm, we need to do process value analysis. In process value analysis, core processes are identified and carefully evaluated for their performance contributions. Each step in the work flow performance is examined. Unless a step is found to be important, useful, and contributing to the value added, it is eliminated.
Traditional organizations were design for execution, not for change; they lack the mechanisms for recognizing and responding to change, and their rigid structures made accommodating change a traumatic event. Not so in a process enterprise. Its intrinsic customer focus and its commitment to outcome measurement make it vigilant and proactive in perceiving the need for change. The boss has to welcome change. The employees must be customer oriented, flexible and adaptable. |
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