Organizational Design and style – The procedure through which managers select the mix of organizational structure and control systems that they believe will enable the corporation to create and sustain a competitive benefit. Coordinate and motivate personnel To create valueand Obtain a competitive advantage Koontz and O’Donnell The Process Institution of Management Planning Arranging Staffing Leading Controlling Building blocks of organizational structure Differentiation Vertical – how much authority to assign Horizontal – how to separate people
Into functions and divisions The use – organize people and functions To perform organizational desired goals and jobs Tall framework (7 – 10 levels) Flat framework (2 – 4 levels) Tall Structure Problems Dexterity Information distortion Motivation Way too many middle managers McKinsey Asking Company Improved height of company corporation structures Presidents Office President of each section Centralization or Decentralization (tending toward) Decentralization 1 . Delegate decision making authority to middle and lower level managers 2 .
Adapt to local circumstances. Promotes versatility 3. Fewer managers required Centralization 1 ) Facilitates dexterity and planning 2 . Decisions fit extensive organizational aims Management Insurance plan – Rules for making decisions are made at highest levels And passed down to lower amounts Horizontal Differentiation – How you can group jobs and activities to meet tactics Functional Structure – Grouping by expertise. Most U. S. firms have a practical structure Advantages Good place to learn Easy to control Effective and efficient Down sides
Geographical curve causes copying of people and costs Connection problems Way of measuring problems Area problems Strategic problems Merchandise Structure – Group simply by product line. Item Team framework Matrix Supervision Concurrent Design and style Methodology Cross-functional teams Geographic Structure Multidivisional Structure Self-contained product line or perhaps business unit (Operating responsibility) Corp head office staff. Economic Control. (Strategic Responsibility) Advantages of Multidivisional Structure Enhanced company financial control
Strategic control Growth Inside efficiency Disadvantages of a Multidivisional Structure Establish Division-Corporate expert levels GENERAL MOTORS and Alfred Sloan Litton Industries Contortion of information Competition for resources Transfer charges (GE example) Focus on short-term High operating costs Every functions will be in each division Incorporation and Organizational Control Varieties in Developing Mechanisms 1 . Direct speak to 2 . Interdepartmental liaison tasks 3. Momentary task forces – tempor?r committees 5. Permanent groups – position committees a few. Integrating functions
Differentiation and Integration The Nature of Organizational Control 1 . Monitor 2 . Examine 3. Compare actual to goals 5. Take corrective action Proper Controls Financial controls Inventory Sales Development ROI Revenue Output Controls Set Goals Evaluate output performance against desired goals Behavior Control – Rules and Techniques Common handles 1 . Functioning budgets 2 . Standardization three or more. Rules and procedures some. Organizational Tradition a. Values – morals and desired goals b. Rules – Expectations for behavior Culture and Strategic Management Walt Disney example