Chapter 14

Nelson & Quick

Organizational Design
& Structure
 Organizational Design
Organizational Design - the process of constructing
and adjusting an organizations
organizationsstructure to achieve its
structure
goals.

the linking of
departments and
jobs within an
organization
Key Organizational Design
Processes
 The process of deciding
how to divide the work
in an organization

Four Dimensions
Managers goal orientation
Time orientation
Interpersonal orientation
Formality of structure
 Horizontal
Differentiation

The degree of differentiation between

organizational subunits
Based on employees specialized knowledge,
education, or training
 Vertical
Differentiation

The difference in authority and responsibility in the

organizational hierarchy
Greater in tall, narrow organizations than in flat,
wide organizations
 Spatial
Differentiation

Geographic dispersion of an organizations

offices, plants, and personnel
Complicates organizational design, but may
simplify goal achievement or protection
 Differentiation Between
Marketing and Engineering

Basis for Difference Marketing Engineering

Goal orientation Sales volume Design

Time orientation Long run Medium run
Interpersonal People Task
orientation oriented oriented
Structure Less formal More formal
The process of coordinating
the different parts
of an organization

Designed to achieve unity among individuals and

groups
Supports a state of dynamic equilibrium - elements of
organization are integrated, balanced
Vertical
Integration

Hierarchical referral
Rules and procedures
Plans and schedules
Positions added to the organization structure
Management information systems
Horizontal
Integration

Liaison roles
Task forces
Integrator positions
Teams
Formalization - the degree Centralization - the degree
to which the organization to which decisions are
has official rules, made at the top of the
regulations, and procedures organization

Hierarchy of Specialization -
Authority - the degree to
the degree of Basic which jobs are
vertical narrowly
differentiation
Design defined and
across Dimensions depend on
levels of unique
management expertise

Complexity - the degree to Standardization - the

which many different types degree to which work
of activities occur in the activities are accomplished
organization in a routine fashion
Power & Politics
 A
A Definition
Definition of
of Power
Power
Power
The capacity that A has to
influence the behavior of B so
that B acts in accordance with
As wishes
Exists as a potential or fully
actualized influence over a
dependent relationship

Dependency
Bs relationship to A when A
possesses something that B
requires
The greater B's dependence, 13-14
 Bases
Bases of
of Power:
Power: Formal
Formal Power
Power

Formal Power
Established by an individuals position in an
organization
Three bases:
Coercive Power
A power base dependent on fear of
negative results
Reward Power
Compliance achieved based on the
ability to distribute rewards that others
view as valuable
Legitimate Power
The formal authority to control and use
resources based on a persons position
in the formal hierarchy

13-15
Bases
Bases of
of Power:
Power: Personal
Personal Power
Power

Power that comes from an individuals

unique characteristics these are the most
effective
Expert Power

Influence based on special skills or knowledge
Referent Power

Influence based on possession by an individual of
desirable resources or personal traits

13-16
 Dependency:
Dependency: The
The Key
Key to
to Power
Power

The General Dependency Postulate

The greater Bs dependency on A, the greater
the power A has over B
Possession/control of scarce organizational
resources that others need makes a manager
powerful
Access to optional resources (e.g., multiple
suppliers) reduces the resource holders power

Dependency increases when resources are:

Important
Scarce
13-17

 Power
Power Tactics
Tactics

Power Tactics
Ways in which individuals translate power bases
into specific actions
Nine influence tactics:

Legitimacy

Rational persuasion*

Inspirational appeals*

Consultation*

Exchange

Personal appeals

Ingratiation * Most effective

Pressure (Pressure is the least effective)

Coalitions 13-18