Chpt. 17 Org. Design,Innovation
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system of consciously coordinated activities or sources of two or more people.
4 Common Denominators of Org.
- Coordination of effort
- Common goal
- Division of labor
- Hierarchy of authority
Unity of Command Principle
each employee should report to a single manager
graphic representation of formal authority and division of labor relationships
Dimensions of Org. Structure
- 1)Hierarchy of Authority
- 2)Division of Labor
- 3)Spans of Control
- 4)Line and Staff Positions
Span of Control
the number of people reporting directly to a given manager.
- Generally, the narrower the span of
- control, the closer the supervision and the higher the administrative costs as
- a result of a higher manager-to-worker ratio.
- Do background research and provide technical advice, and recommendations to line
have authority to make organizational decisions.
self-sufficient entity, closed to the surrounding environment.
depends on constant interaction with the environment for survival
- one that proactively creates, acquires, and transfers knowledge and that changes
- its behavior on the basis of new knowledge and insights
Team Mental model
- represents team members’ “shared, organized understanding and mental representation of
- knowledge about key elements of the team’s relevant environment
- The structures of accountability and responsibility used to develop and implement
- strategies, and the human resource practices and information and business
- processes that activate those structures
- groups people according to the business functions they perform, for example,
- manufacturing, marketing, and finance
groups together activities related to outputs, such as type of product or customer
- combines functional and divisional chains of command to form a grid with two command
- organization identifies core competencies and outsources noncore processes to vendors who
- can do them cheaper or faster
Outsources parts of a product instead of processes
- organization identifies partners with the needed talents and negotiates an agreement in
- which the participants typically work in separate facilities, linked by
Contingency Approach to Org. Design
- organizations tend to be more effective when they are structured to fit the demands of the
- Rigid bureaucracies with strict rules, narrowly defined tasks, and top-down
Flexible networks of multitalented individuals who perform a variety of tasks
Centralized Decision Making
key decisions made by top management
Decentralized Decision Making
important decisions are made by middle- and lower-level managers
can save money by grouping together ppl who need similar materials+equipment
increase employees' focus on customers and products
Successful Matrix Structure
- requires superior managers who
- communicate extensively, foster commitment and collaboration, manage conflict
- and negotiate effectively to establish goals and priorities consistent with the
- organization’s strategy
Getting Right Fit
Horizontal designs improve coordination and communication
- Organizations that become hollow,
- modular, or virtual can
- generate superior returns by focusing on what they do best
- Key organizational results or outputs are compared with previously stated goals or
most widely used effectiveness criteria
org. is effective if it acquires necessary factors of production
- focuses on “what the organization must excel at” to effectively meet its financial
- objectives and customers’ expectations.
Strategic Constituencies Satisfaction
- Strategic constituency: any group of people with a stake in the organization’s operation
- or success.
creation of something new that is USED by consumers
Seeds of Innovation
- 1)Hard work in a specific direction
- 2)Hard work with direction change
- 3)Curiosity and Experimentation
- 4)Wealth and money
- 6)Combination of seeds
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