UNIT3
Organizing
Chapter 7: Organization Structures and Design
Chapter 8: Human Resource Management
The lessimportant you are onthe table of
organization,the moreyoull be missed if you
dont show upfor work.
Bill Vaughn, American writer and editor
,v
7 ORGANIZATION
AND DESIGN
STRUCTURES
1. Describeorganizingasamanagement 4. Describeorganizationaldesignschanging
function. the workplace.
2.Understand, describe, and sketch the 5.Explain the alternative approaches to
traditional organization structures. job design.
3.Understand the newer types of
organization structures.
LEARNING FROM OTHERS
STRUCTURE SUPPORTING STRATEGY
Edward Jones is an investment firm that does not operate like other
investment firms. Rather than develop large offices with many
employees, Edward Jones has opened up many smaller offices,
each staffed with one investment representative, a licensed bro-
ker, and one branch office administrator. Edward Joness core stra-
tegic belief is that face-to-face interaction with clients is the best
way to build their business; something best done at small, highly
personal, focused centres. While some branches may have addi-
tional brokers and office staff, depending on the level of business,
Edward Jones believes that the one-broker-per office model allows
clients the opportunity to choose their broker and then to deal only
with that broker.
With a strong core surrounded by largely independent satellite
units, the Edward Jones structure is unique. Noted organizational
theorist Peter Drucker described this company as a confederation of
, highly autonomous entrepreneurial units bound together by a Edward Joness way of organizing also seems to be working for its
highly centralized core of values and services. And the approach clients. Edward Jones was ranked Highest in Investor Satisfaction
is working. In the 1980s, it was a small regional firm only in the with Full Service Brokerage Firms by J.D. Power and Associates. It
United States. Today, Edward Jones has over 10,000 offices in is easy to see that Edward Jones has found both an inventive and a
the United States, Canada, and the United Kingdom. successful way to organize.1
The success of Edward Jones is classic managementtackling opportunities and handling growth without compromising principles. It
isnt easy to stay on course while expanding into new territories. But with the right organizational structure, firms such as Edward Jones
can only get better as they get bigger.
LEARNING ABOUT YOURSELF
EMPOWERMENT
EMPOWERMENT QUICK TEST
It takes a lot of trust to be comfortable with empowermentletting In a team situation, which square best
describes your beliefs and behaviours?
others make decisions and exercise discretion in their work. But if
you arent willing and able to empower others, you maytry to do too
much on your own and end up accomplishing too little.
Its faster to do things
How often are you stressed out by group projects at school, feeling myself than explain how
to do them to others
like youre doing all the work? Do you seem to be always rushing
while your peers have time for coffee and chats? If so, perhaps you Some things are
have a problem letting go, or being willing to let others do their just too important
share of the work. not to do yourself ? People make
mistakes, but they
also learn from them
If the above description fits you, your assumptions probably align
with those in the upper left box in the Empowerment Quick Test. Many people are ready to
Alternatively, you could be in the lower right box and perhaps take on more work, but
are too shy to volunteer
find that you work smarter and better while making others
happier, too.
The beauty of organizations is synergybringing together the Many of us suffer from control anxiety. We dont empower others
contributions of many people to achieve something that is much because we fear losing control. Being unwilling to let go, we try
greater than what any individual can accomplish alone. Empower- to do too much and end up running the risk of missed deadlines and
ment gives synergy a chance. It means joining with others to get even poor performance. This behaviour denies others opportunities
things done, allowing and helping them to do even things that you to contribute. We end up losing the benefits of their talents and
might be very good at doing yourself. often alienating them in the process.
GET TO KNOW YOURSELF BETTER
Are you someone who easily and comfortably empowers others? Or do you suffer from control anxiety and lack
the willingness to delegate? The next time you are in a study or work group, be a self-observer. Write a short nar-
rative that would accurately describe your behaviour to someone who wasnt present. Compare that narrative with
where you stand on the Empowerment Quick Test.
, 202 CHAPTER 7ORGANIZATION STRUCTURES AND DESIGN
Management scholar and consultant Henry Mintzberg points out that, as orga-
nizations change rapidly in todays world, people within them are struggling to find their
places.2 One of his points is that people need to understand how their organizations work if
they are to work well within them. Mintzberg notes some common questions: What parts
connect to one another? How should processes and people come together? Whose ideas
have to flow where? These and related questions raise critical issues about organization struc-
tures and how well they meet an organizations performance needs.
Organizing as a Management Function
Organizing arranges people Organizing is the process of arranging people and other resources to work together to accom-
and resources to work toward plish a goal. As one of the basic functions of management, it involves creating a division of
a goal.
labour and then coordinating results to achieve a common purpose.
Figure 7.1 shows the central role that organizing plays in the management process. Once
plans are created, the managers task is to see to it that they are carried out. Given a clear mis-
sion, core values, objectives, and strategy, organizing begins the process of implementation by
clarifying jobs and working relationships. It identifies who is to do what, who is in charge of
whom, and how different people and parts of the organization relate to and work with one
another. All of this, of course, can be done in different ways.The strategic leadership challenge
is to choose the best organizational form to fit the strategy and other situational demands.
Organizing
to create structures
Divide up the work
Arrange resources
Coordinate activities
Planning Controlling
to set the direction to ensure results
Leading
to inspire effort
Figure 7.1 How organizing relates to other management functions.
WHAT IS ORGANIZATION STRUCTURE?
The way in which the various parts of an organization are formally arranged is usually
Organization structure is a referred to as the organization structure. It is the system of tasks, workflows, reporting
system of tasks, reporting rela- relationships, and communication channels that link together the work of diverse indivi-
tionships, and communication
duals and groups. Any structure should both allocate tasks through a division of labour and
linkages.
provide for the coordination of performance results. A structure that does both of these
things well is an important asset, helping to implement an organizations strategy.3 Unfor-
tunately, it is easier to talk about good structures than it is to actually create them. This is
why you often read and hear about organizations changing their structures in an attempt to
improve performance.
Organizing
Chapter 7: Organization Structures and Design
Chapter 8: Human Resource Management
The lessimportant you are onthe table of
organization,the moreyoull be missed if you
dont show upfor work.
Bill Vaughn, American writer and editor
,v
7 ORGANIZATION
AND DESIGN
STRUCTURES
1. Describeorganizingasamanagement 4. Describeorganizationaldesignschanging
function. the workplace.
2.Understand, describe, and sketch the 5.Explain the alternative approaches to
traditional organization structures. job design.
3.Understand the newer types of
organization structures.
LEARNING FROM OTHERS
STRUCTURE SUPPORTING STRATEGY
Edward Jones is an investment firm that does not operate like other
investment firms. Rather than develop large offices with many
employees, Edward Jones has opened up many smaller offices,
each staffed with one investment representative, a licensed bro-
ker, and one branch office administrator. Edward Joness core stra-
tegic belief is that face-to-face interaction with clients is the best
way to build their business; something best done at small, highly
personal, focused centres. While some branches may have addi-
tional brokers and office staff, depending on the level of business,
Edward Jones believes that the one-broker-per office model allows
clients the opportunity to choose their broker and then to deal only
with that broker.
With a strong core surrounded by largely independent satellite
units, the Edward Jones structure is unique. Noted organizational
theorist Peter Drucker described this company as a confederation of
, highly autonomous entrepreneurial units bound together by a Edward Joness way of organizing also seems to be working for its
highly centralized core of values and services. And the approach clients. Edward Jones was ranked Highest in Investor Satisfaction
is working. In the 1980s, it was a small regional firm only in the with Full Service Brokerage Firms by J.D. Power and Associates. It
United States. Today, Edward Jones has over 10,000 offices in is easy to see that Edward Jones has found both an inventive and a
the United States, Canada, and the United Kingdom. successful way to organize.1
The success of Edward Jones is classic managementtackling opportunities and handling growth without compromising principles. It
isnt easy to stay on course while expanding into new territories. But with the right organizational structure, firms such as Edward Jones
can only get better as they get bigger.
LEARNING ABOUT YOURSELF
EMPOWERMENT
EMPOWERMENT QUICK TEST
It takes a lot of trust to be comfortable with empowermentletting In a team situation, which square best
describes your beliefs and behaviours?
others make decisions and exercise discretion in their work. But if
you arent willing and able to empower others, you maytry to do too
much on your own and end up accomplishing too little.
Its faster to do things
How often are you stressed out by group projects at school, feeling myself than explain how
to do them to others
like youre doing all the work? Do you seem to be always rushing
while your peers have time for coffee and chats? If so, perhaps you Some things are
have a problem letting go, or being willing to let others do their just too important
share of the work. not to do yourself ? People make
mistakes, but they
also learn from them
If the above description fits you, your assumptions probably align
with those in the upper left box in the Empowerment Quick Test. Many people are ready to
Alternatively, you could be in the lower right box and perhaps take on more work, but
are too shy to volunteer
find that you work smarter and better while making others
happier, too.
The beauty of organizations is synergybringing together the Many of us suffer from control anxiety. We dont empower others
contributions of many people to achieve something that is much because we fear losing control. Being unwilling to let go, we try
greater than what any individual can accomplish alone. Empower- to do too much and end up running the risk of missed deadlines and
ment gives synergy a chance. It means joining with others to get even poor performance. This behaviour denies others opportunities
things done, allowing and helping them to do even things that you to contribute. We end up losing the benefits of their talents and
might be very good at doing yourself. often alienating them in the process.
GET TO KNOW YOURSELF BETTER
Are you someone who easily and comfortably empowers others? Or do you suffer from control anxiety and lack
the willingness to delegate? The next time you are in a study or work group, be a self-observer. Write a short nar-
rative that would accurately describe your behaviour to someone who wasnt present. Compare that narrative with
where you stand on the Empowerment Quick Test.
, 202 CHAPTER 7ORGANIZATION STRUCTURES AND DESIGN
Management scholar and consultant Henry Mintzberg points out that, as orga-
nizations change rapidly in todays world, people within them are struggling to find their
places.2 One of his points is that people need to understand how their organizations work if
they are to work well within them. Mintzberg notes some common questions: What parts
connect to one another? How should processes and people come together? Whose ideas
have to flow where? These and related questions raise critical issues about organization struc-
tures and how well they meet an organizations performance needs.
Organizing as a Management Function
Organizing arranges people Organizing is the process of arranging people and other resources to work together to accom-
and resources to work toward plish a goal. As one of the basic functions of management, it involves creating a division of
a goal.
labour and then coordinating results to achieve a common purpose.
Figure 7.1 shows the central role that organizing plays in the management process. Once
plans are created, the managers task is to see to it that they are carried out. Given a clear mis-
sion, core values, objectives, and strategy, organizing begins the process of implementation by
clarifying jobs and working relationships. It identifies who is to do what, who is in charge of
whom, and how different people and parts of the organization relate to and work with one
another. All of this, of course, can be done in different ways.The strategic leadership challenge
is to choose the best organizational form to fit the strategy and other situational demands.
Organizing
to create structures
Divide up the work
Arrange resources
Coordinate activities
Planning Controlling
to set the direction to ensure results
Leading
to inspire effort
Figure 7.1 How organizing relates to other management functions.
WHAT IS ORGANIZATION STRUCTURE?
The way in which the various parts of an organization are formally arranged is usually
Organization structure is a referred to as the organization structure. It is the system of tasks, workflows, reporting
system of tasks, reporting rela- relationships, and communication channels that link together the work of diverse indivi-
tionships, and communication
duals and groups. Any structure should both allocate tasks through a division of labour and
linkages.
provide for the coordination of performance results. A structure that does both of these
things well is an important asset, helping to implement an organizations strategy.3 Unfor-
tunately, it is easier to talk about good structures than it is to actually create them. This is
why you often read and hear about organizations changing their structures in an attempt to
improve performance.
