The Nature of Organizing

Organizing Defined
The activity of designing, structuring, arranging, and
rearranging the components of an organizations
internal environment that creates the socio-
technical systems that will accomplish
the organizations goals.

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 The Nature of Organizing (contd)
Formal organization
The official structures and systems consciously
designed by organizational members to accomplish
organizational goals.
The relatively enduring people-to-people and people-to-
work interaction patterns created to accomplish
organizational goals.

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 The Nature of Organizing (contd)
Informal organization
A joint activity between two or more individuals not
formally designed that possibly contributes to joint
results. Organized to meet the social and personal
needs/wants of organizational members.
Structure (membership), communication networks
(grapevine), and relationships (behaviors and norms)
do not necessarily follow those of the formal
organization.

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 The Nature of Organizing (contd)
Organizingtiming and tactics
Timing
Atthe birth of the organization
On a continuing basis to meet external environmental
challenges and internal operational needs
Tactics
Top-down approachmission-oriented
Bottom-up approachtask-oriented
Hybrid approachmission- and task-oriented
Incremental approachongoing general management
of change

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 DifferentiationOrganizational
Departmentalization
Organizational differentiation
The differences in time and goal orientation, work
performed, and organizational function and
responsibility served by employees and work units.
Management becomes more complex as organizational
differentiation increases.
Organizational integration
The means used to coordinate the work of employees
and work units in a differentiated organization.

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 Organizational Departmentalization
Departmentalization
The process of grouping jobs/teams into organizational
units and those units into larger units.
Approaches to departmentalization:
Grouping activities within the same family
Grouping activities by their interdependence
Grouping activities around clusters of teams

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 Departmentalization:
The Grouping
of Jobs at
Different
Levels Vice President,
Academic
Affairs

Dean, Dean,
College of School of
Liberal Arts Management

Accounting Finance

Job Job Job Job

Group
Level 1
Group
Level 2
Group
Level 3

FIGURE 121
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 DepartmentalizationTraditional Approaches
Functional
Products/Services
Territorial/geographical
Customer/client
Production processes
Transformational process/equipment
Development process

Project

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 Hybrid Approach to Departmentalization:
The Comfort Living Corporation

CEO

Special Human
Projects Financial Operations Marketing Resources
Financial Analysis
Budgeting
Accounting

Bedroom Living room East West Midwest Market

Research
Gluing

Woodcutting

Sales

Sales
Sanding
Painting

Shipping

Advertising

Advertising

Advertising

Sales
Gluing
Painting

Sanding
Shipping

Woodcutting

FIGURE 122
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 DepartmentalizationThe Interdependence
Approach
Forms of Interdependence
Sequential
Pooled Reciprocal Team
(serial)

FIGURE 123
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 DifferentiationOrganizational
Superstructures
Superstructure
The division of activities at the top of the organizational
hierarchy. It is managements attempt to balance the
operation of the organizations internal environment and
its strategic response to the external environment.

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 A Functional Superstructure

President

Human Research and

Finance Marketing Operations
Resources Development

Marketing The grouping of

Advertising Sales
Research activities at the top
of the organization
by function.

FIGURE 126
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 Functional Superstructure
Advantages Disadvantages
Versatile and applicable Information overload
regardless of Creates a closed
organizational size environment focused on
Focused orientation itself
fosters: Lack of external
collaboration communication,
specialization understanding, and
economies of scale
coordination with other
organizational units
efficiency
Bottlenecks at upper
quality
levels

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 A Territorial Divisional
Superstructure President

Western Eastern
Division Division

West Midwest Northeast Southeast

British Columbia

Saskatchewan
California

Washington

Minnesota
Oregon

Manitoba
Illinois
Alberta

FIGURE 127
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 Divisional Superstructure
Advantages Disadvantages
Improved information
flows
Improved internal controls
Fewer bottlenecks
Increased focus on
strategic activities
High level of coordination
Improved flexibility,
adaptability, and
specialization
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Loss of functional
economies of scale
Difficulty in sharing
resources
Duplication of activities
Lack of standardization
Communication and
coordination problems in
widely separated
territories
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 A Matrix Superstructure

President

Vice President Vice President Vice President Vice President Vice President
Products Finance Marketing Operations Human Resources

Product A
Manager
Manager A

Product Line:
Authority, Responsibility,
Product B Coordination Systems
Manager Functional Line:
Authority, Responsibility,
Coordination Systems

FIGURE 128
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 The Matrix Superstructure
Matrix superstructure
The simultaneous and integrated use of two or more
organizational structures.
All of the superstructure is both product and function-
based.
Matrix design is used to respond to:
Multipleexternal demands
Extensive information needs
The need for shared resources

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 The Network Organization Structure

Organization D Organization E
Human Resource Services Legal Services

Organization C The partnership of

The Central
Sales and Distribution several organizations
Office/Organization who pool their core
competencies

Organization B Organization A
Advertising Agency Manufacturer in Korea

FIGURE 129
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 The Network Organizational Structure
The virtual corporation
A temporary network of independent companies
working together as a joint venture.
Key components of virtual corporations:
Excellenceeach participating firm brings a core
competence to the partnership.
Opportunismthe network is informal, and disbands once
the business opportunity has been realized.
Technologyinformation networks enable participating
firms to gather quickly around opportunities.

Modular corporation
An organization that performs its core competency and
outsources all other vital business activities.

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 IntegrationCoordinating Organizational
Activities and Units
Coordinating
The linking of two or more organizational members
and/or work units so that they function together well.
Coordination is achieved by:
Programmingrules, policies, procedures, plans, and
schedules
Feedbackcommunications, interaction, and
feedback
Cultureshared beliefs and values

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 IntegrationCoordinating Organizational
Activities and Units (contd)
Vertical coordination
The linking of work units (individuals, teams,
departments) separated by hierarchical level.
Vertical coordination is achieved by:
Direct supervisioncommunicating between
organizational levels.
Standardizationimplementing rules and procedures
to govern routine events.
Goal statementscreating a hierarchy of goals rather
than specifying employee behaviors.

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 IntegrationCoordinating Organizational
Activities and Units (contd)
Horizontal coordination
The linking of work units (individuals, teams,
departments) at the same hierarchical level.
Horizontal coordination is achieved by:
Direct contact
Liaison and integrator roles
Task forces and teams
Managerial linking roles
Multiple command systems

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 Multiple Command Systems of Coordination
Universe
Products, Ltd.

Oceans Grounds Aerospace Mechanical Chemical Electrical

Division Division Division Division Division Division

Functional
Command
Systems

Engineering Materials
Space
and and
Project Manager
Research Procurement
Group Group

Engineering Materials
and and
Mars Project Research Procurement
Project Command
Group Group
Systems

Engineering Materials
and and
Venus Project Research Procurement
Project Command Group
Group
Systems
FIGURE 1211
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 Matching Coordination Techniques and
Needs
Factors affecting the coordination of
organizational units:
Formality of the organizations structurerigid or
flexible.
Interpersonal orientationtask or relationship focus.
Time orientationlag time in gaining knowledge of
results or consequences of actions.
Goal orientationincompatibilities or conflicts among
various organizational units goals.

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 Employee Responses to Organizational
Design
Hierarchical level
Higher-level employees are more satisfied than lower-
level employees with their organization.
Line and staff positions
Current research indicates that there are no differences
in line and staff satisfaction with their organizations.
Project groups
Although untested, it is believed that employees in
groups experience high levels of intrinsic motivation,
organization-based self-esteem, and job satisfaction.

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 Employee Responses to Organizational
Design (contd)
Matrix structures
Employees may experience role conflict, role ambiguity,
and role overload as psychological and physiological
stress. Employees satisfaction and work attitudes are
negatively affected.
Coordination modes
Human-to-human conduct creates more job
satisfaction and less alienation than does an
organizations use of impersonal modes of coordination
(schedules, rules, policies, and procedures).

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