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Management: Fourteenth Edition, Global Edition
Management: Fourteenth Edition, Global Edition
Chapter 11
Organization Design
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Learning Objectives
11.1 Describe six key elements in organizational design.
11.2 Contrast mechanistic and organic structures.
11.3 Discuss the contingency factors that favor either the
mechanistic model or the organic model of
organizational design.
11.4 Describe traditional organizational design options.
11.5 Discuss organizing flexibility in the twenty-first century.
Develop your skill at acquiring and using power.
Know how to stay connected and “in the loop” when
working remotely.
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Elements of Organizational Design
• Organizing: management function that involves
arranging and structuring work to accomplish the
organization’s goals
• Organizational structure: the formal
arrangement of jobs within an organization
• Organizational chart: the visual representation of
an organization’s structure
• Organizational design: creating or changing an
organization’s structure
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Exhibit 11-1
Purposes of Organizing
Purposes
Exhibit 11-3 illustrates each type of departmentalization as well as the advantages and
disadvantages of each.
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Exhibit 11-3
The Five Common Forms of Departmentalization (2 of 3)
Exhibit 11-3 illustrates each type of departmentalization as well as the advantages and
disadvantages of each.
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Exhibit 11-3
The Five Common Forms of Departmentalization (3 of 3)
Exhibit 11-3 illustrates each type of departmentalization as well as the advantages and
disadvantages of each.
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Cross-Functional Team
• Cross-functional team: a work team composed
of individuals from various functional specialties
As Exhibit 11-4 shows, if one organization has a span of four and the other a span of eight,
the organization with the wider span will have two fewer levels and approximately 800
fewer managers.
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Centralization and Decentralization
• Centralization: the degree to which decision
making is concentrated at upper levels of the
organization
• Decentralization: the degree to which lower-level
employees provide input or actually make
decisions
Mechanistic Organic
High specialization Cross-functional teams
Rigid departmentalization Cross-hierarchical teams
Clear chain of command Free flow of information
Narrow spans of control Wide spans of control
Centralization Decentralization
High formalization Low formalization
A summary of the strengths and weaknesses of each type of organizational design can be
found in Exhibit 11-8.
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Team Structures
• Team structure: an organizational structure in
which the entire organization is made up of work
teams
Benefits Drawbacks
Gives customers what they want—a voice High demands of managing the
process
Allows organizations to respond to complex Extensive support needed
problems
Nurtures internal and external relationships Cultural challenges
Brings focus back to marketplace Greater need for flexibility
Provides way to cope with rising costs and Crucial changes required in how
uncertainties of product development knowledge is controlled and shared