1331275663.5053Organizational Structure.pptVIP

Designing Organizational Structure Organizing: the process by which managers establish working relationships among employees to achieve goals. Organizational Structure: formal system of task reporting relationships showing how workers use resources. Organizational design: managers make specific choices resulting in a given organizational structure. Successful organizational design depends on the organization’s unique situation. Factors Affecting Organizational Design Determinants of Structure The environment: The quicker the environment changes, the more problems face managers. Structure must be more flexible when environmental change is rapid. Usually need to decentralize authority. Strategy: Different strategies require the use of different structures. A differentiation strategy needs a flexible structure, low cost may need a more formal structure. Increased vertical integration or diversification also requires a more flexible structure. Determinants of Structure Technology: The combination of skills, knowledge, tools, equipment, computers and machines used in the organization. More complex technology makes it harder for managers to regulate the organization. Technology can be measured by: Task Variety: new problems a manager encounters. Task Analyzability: programmed solutions available to a manager to solve problems. High task variety and low analyzability present many unique problems to managers. Flexible structure works best in these conditions. Low task variety and high analyzability allow managers to rely on established procedures. Technology People Small Batch Technology: produces small quantities of one-of-a-kind products. Based on the skills of the workers who need a flexible structure. Mass Production Technology: automated machines make high volumes of standard products. Workers perform repetitive tasks so a formal structure works well. Continuous Process Technology: totally mechanized systems of automatic machines. Workers must watch for unexpected p