Preview Extract
Chapter 15 Foundations of Organization Structure Questions for Review 15-1. What are seven key elements to define an organization’s structure? Answer: The seven key elements that define an organization’s structure are: •Work specialization •Departmentalization •Chain of command •Span of control •Centralization and decentralization •Formalization •Boundary spanning 15-2. What are the characteristics of the functional, divisional, and matrix structures? Answer: The functional structure groups employees by their similar specialties, roles, or tasks. This structure allows specialists to become experts more easily. It works well if the organization is focused on one product or service. The divisional structure groups employees into units by product, service, customer, or geographical market area. It is highly departmentalized and provides clear responsibility for all activities related to a product, but with duplication of functions and costs. The matrix structure combines two forms of departmentalization: functional and product. The matrix attempts to gain the strengths of both functional and product departmentalization, while avoiding their weaknesses. The most obvious structural characteristic of the matrix is that it breaks the unity-of-command concept. Employees in the matrix have two bosses—their functional department managers and their product managers. Therefore, the matrix has a dual chain of command. The strength of the matrix lies in its ability to facilitate coordination when the organization has a multiplicity of complex and interdependent activities. It facilitates the efficient allocation of specialists. The matrix achieves the advantages of economies of scale by providing the organization with both the best resources and an effective way of ensuring their efficient deployment. The major disadvantages of the matrix lie in the confusion it creates, its propensity to foster power struggles, and the stress it places on individuals. 15-3. What are the characteristics of the virtual structure, the team structure, and the circular structure? Answer: The essence of the virtual structure is typically a small, core organization that outsources major business functions. It is highly centralized, with little or no departmentalization. Virtual organizations create networks of relationships that allow them to contract out manufacturing, distribution, marketing, or any other business function where management feels that others can do it better or more cheaply. The virtual organization stands in sharp contrast to the typical bureaucracy in that it outsources many generic functions and concentrates on what it does best. The major advantage to the virtual organization is its flexibility. The primary drawback is that it reduces management’s control over key parts of its business. The team structure seeks to eliminate the chain of command and replace departments with empowered teams. This structure removes vertical and horizontal boundaries in addition to breaking down external barriers between the company and its customers and suppliers. By removing vertical boundaries, management flattens the hierarchy and minimizes status and rank. An organization in which executives are at the center, spreading their vision outward in rings grouped by function has a circular structure. This structure has intuitive appeal for creative entrepreneurs and for spreading a vision of corporate social responsibility. 15-4. How might downsizing affect organizational structures and employees? Answer: Downsizing is a systematic effort to make an organization leaner by closing locations, reducing staff, or selling off business units that don’t add value. Despite the advantages of being a lean organization, the impact of downsizing on organizational performance is not without controversy. Reducing the size of the workforce has an immediately positive outcome in the form of lower wage costs, and companies downsizing to improve strategic focus often see positive effects on stock prices after the announcement. On the other hand, among companies that only cut employees but don’t restructure, profits and stock prices usually decline. Part of the problemis the effect of downsizing on employee attitudes. Employees who remain often feel worried about future layoffs and may be less committed to the organization. Stress reactions can lead to increased sickness absences, lower concentration on the job, and lower creativity. Downsizing can also lead to more voluntary turnover, so vital human capital is lost. The result is a company that is more anemic than lean. 15-5. How are mechanistic structures and organic structural models similar and different? Answer: A mechanistic structure is generally synonymous with the bureaucracy in that it has highly standardized processes for work, high formalization, and more managerial hierarchy. In contrast, the organic structure looks a lot like the boundaryless organization. It’s flat, has fewer formal procedures for making decisions, has multiple decision makers, and favors flexible practices. 15-6. What are the behavioral implications of different organizational designs? Answer: It is impossible to generalize behavioral implications due to individual differences in the employees people seek and those that stay at organizations that match their needs. Some of the research helps to understand some of the behavior such as: 1. Work specialization contributes to higher employee productivity, but it reduces job satisfaction. 2. The benefits of specialization have decreased rapidly as employees seek more intrinsically rewarding jobs. 3. The effect of span of control on employee performance is contingent upon individual differences and abilities, task structures, and other organizational factors. 4. Participative decision making in decentralized organizations is positively related to job satisfaction. Experiential Exercise The Sandwich Shop Divide the class into groups of at least four individuals. As background: The managers of a new chain of sandwich shops will need to determine what types of sandwiches consumers want and find recipes and ingredients. Ingredient sources, prices, and other logistical requirements(like refrigeration) will need to be determined, purchasing decisions will be ongoing, and supplier relationships will need to be managed. Financing must also be arranged at this early phase. With this groundwork, the company will move to the next stage of marketing, including pricing and the development of advertising materials. Finally, selecting and training workers will occur. Each group creates the following: A Simple Structure Determine what a simple structure would look like for this organization. Recall that a simple structure is one in which there is little hierarchy, wide spans of control, and centralized decision making. To whom would the various tasks described above be assigned? What sort of delegation might take place? Who would coordinate the multiple operations? About how many people would beacting in an administrative role, and what sort of spans of control would they have? What challenges will the organization face as it grows? A Bureaucracy Determine what a bureaucratic structure would look like for this organization. Bureaucracies are marked by more hierarchy, small spans of control, and specialized decision making. Again, you will want to establish task assignments, delegation, coordination, and the number of individuals required. Also consider possibilities for future growth with a bureaucratic system. A Virtual Structure Determine what a virtual structure would look like for this organization if many of the aspects of the business are outsourced. Consider which tasks can be adequately performed by individuals who do not work within the restaurant chain, and which should be kep tin house. Debriefing After all groups have developed different structural options, convene for class discussion for groups to describe how they created responsibilities for different individuals. Then the class should talk about which system of organization seems most beneficial for this business. Ethical Dilemma Post-Millennium Tensions in the Flexible Organization The message from the business press has been consistent: don’t count on long-term employment. For years, job seekers have been told they should expect to be responsible for their own careers and prepare for the possibility that they will be changing jobs frequently. A simple look at employment trends also confirms that highly routine and well-defined jobs have been decreasing in number. The shift has often been described in fairly positive terms. Managers work to create organizations that have laudable characteristics like adaptability, flexibility, and creativity. Author Micha Kaufman notes that doing wellin contemporary business environments means “having the flexibility to let go of the ideas of the past, the courage to constantly reevaluate plans for the future, and the presence of mind to adapt to life, as it is, in the moment.” There is a lot of appeal in creating your own future at work. At the same time, many workers land in precarious positions. Researchers find that individuals who feel in secure or uncertain about future employment experience higher levels of psychological strain and worry. Insecure workers also get sick more frequently. Contrary to the positive image of the freelance worker with boundless energy and creativity, evidence shows that for many individuals, a lack of job security can result in exhaustion and an apprehensive approach to work problems. Corporate leaders ask themselves what their role in creating job security should be. Some note that companies built around stability and security are less likely to compete successfully and may go out of business. Many organizations try to maintain flexibility and a certain level of security. For example, Scripps Health has maintained a pool of internal transfer opportunities and training assignments for individuals whose job functions are no longer needed. As a result, even within the highly volatile health care industry ,it has been able to avoid layoffs. However, systems that provide job security do not come cheaply, nor are they feasible for all companies. Sources: M. Kaufman, “The Wisdom of Job Insecurity,” Forbes, October 3, 2014, http://www.forbes.com/sites/michakaufman 2014/10/03/the-wisdom-of-job-insecurity-dont-be-lulled-by-fallingunemployment/; C. Van Gorder, “A No-Layoffs Policy Can Work, Even in an Unpredictable Economy,” Harvard Business Review, January 26, 2015, https://hbr.org/2015/01/a-no-layoffs-policycan-work-even-in-an-unpredictable-economy; J. Zumbrun, “Is Your Job ‘Routine’? If So, It’s Probably Disappearing,” Wall Street Journal, April 8, 2015, http://blogs.wsj.com/economics/2015/04/08/is-your-job-routine-if-so-its-probably-disappearing/; U. Kinnunen, A. Mäkikangas, S. Mauno, N. De Cuyper, and H. De Witte, “Development of Perceived Job Insecurity across Two Years: Associations with Antecedents and Employee Outcomes,” Journal of Occupational Health Psychology19, (2014):.243–58. Questions 15-7. Do you think that stability is good or bad for employees? Answer: Whether stability is good or bad for employees depends on various factors, including individual preferences, job roles, and organizational contexts. Here are some considerations: Benefits of Stability: 1. Peace of Mind: Stable employment provides a sense of security and predictability, reducing anxiety and stress associated with job insecurity. 2. Financial Security: Stable jobs often come with regular paychecks, benefits, and opportunities for career advancement, offering financial stability and peace of mind. 3. Work-Life Balance: Employees with stable jobs may find it easier to maintain a healthy work-life balance, as they can plan their personal and professional lives more effectively. 4. Job Satisfaction: Stable employment can contribute to higher levels of job satisfaction and commitment, as employees feel valued and invested in their roles and the organization. 5. Health and Well-being: Research suggests that job security is linked to better physical and mental health outcomes, as employees experience lower levels of stress and worry about their future. Drawbacks of Stability: 1. Complacency: Some employees may become complacent in stable roles, leading to a lack of motivation or initiative to pursue growth opportunities or adapt to change. 2. Limited Growth: In highly stable environments, employees may have limited opportunities for career growth and skill development, potentially hindering their long-term professional advancement. 3. Innovation and Creativity: Excessive stability can stifle innovation and creativity, as employees may be less inclined to take risks or challenge the status quo in fear of disrupting the stability of their roles or the organization. 4. Dependency: Employees in stable roles may become overly dependent on their current employer, making them vulnerable to sudden changes in the organization or industry. 5. Adaptability: In rapidly changing industries or markets, overly stable employment may hinder employees' ability to adapt to new technologies, trends, or business models, potentially putting them at a disadvantage in the long run. In conclusion, while stability offers certain benefits such as security and peace of mind, excessive stability may also lead to complacency and limited growth opportunities. Therefore, finding a balance between stability and flexibility is essential for organizations to support employee well-being, foster innovation, and maintain competitiveness in dynamic environments. 15-8. Do employers have an ethical responsibility to provide security for employees or just a warning about a lack of security? Answer: Employers have both an ethical responsibility to provide security for employees and to provide a warning about a lack of security. Here's why: 1. Ethical Responsibility for Security: Employers have a duty to ensure the well-being and welfare of their employees. This includes providing a safe and secure working environment, which extends to job security to the extent feasible. Offering stable employment helps fulfill this ethical responsibility by promoting employees' financial security, mental well-being, and overall quality of life. Employees who feel secure in their jobs are likely to be more engaged, productive, and committed to their work and organization. 2. Warning about Lack of Security: At the same time, employers also have an ethical obligation to be transparent and honest with their employees about the realities of the job market and potential risks to job security. While it may not always be possible for employers to guarantee long-term employment due to factors beyond their control, such as economic downturns or industry disruptions, they should communicate openly about the possibility of job insecurity. Providing advance notice of potential layoffs, changes in business direction, or restructuring efforts allows employees to make informed decisions about their careers and take proactive steps to prepare for any eventualities. In summary, employers should strive to balance their ethical responsibility to provide security for employees with the need for transparency and honesty about the uncertainties of the job market. By doing so, employers can create a supportive and trusting work environment where employees feel valued, respected, and empowered to navigate their careers effectively. 15-9. If long-term employment security isn’t feasible ,what alternatives might employers provide to help employees make smoother transitions? Answer: If long-term employment security isn't feasible, employers can still support their employees by providing alternatives to help them make smoother transitions. Here are some alternatives: 1. Career Development Programs: Employers can invest in career development programs that offer training, upskilling, and reskilling opportunities to employees. By enhancing their skills and competencies, employees can become more adaptable and marketable in the job market, making transitions smoother. 2. Outplacement Services: Outplacement services provide support to employees who are transitioning out of the organization. These services may include career counseling, resume writing assistance, job search workshops, networking opportunities, and access to job listings. By offering outplacement services, employers demonstrate their commitment to supporting employees even during times of transition. 3. Flexible Work Arrangements: Employers can offer flexible work arrangements, such as remote work options, reduced hours, or job-sharing arrangements, to help employees balance work and personal responsibilities during periods of transition. Flexible work arrangements can provide employees with the flexibility they need to explore new opportunities while still maintaining a source of income. 4. Severance Packages: Providing employees with severance packages that include financial compensation, extended healthcare benefits, and career counseling can help ease the financial burden of job loss and facilitate a smoother transition to new employment. 5. Internal Mobility Programs: Internal mobility programs allow employees to explore opportunities within the organization, such as transferring to different departments or locations, taking on new roles, or participating in cross-functional projects. These programs provide employees with options for career advancement and growth within the company. 6. Networking and Mentorship Opportunities: Employers can facilitate networking and mentorship opportunities for employees to connect with industry professionals, mentors, and peers who can provide guidance, support, and advice during times of transition. Overall, by offering these alternatives, employers can help employees navigate transitions more effectively and support them in achieving their career goals, even in the absence of long-term employment security. Case Incident 1 Kuuki: Reading the Atmosphere Most Japanese businesses have very complex vertically structured organizations. Each of the key departments of the organization has its own vertical structure and operate rather like individual businesses. There is very little inter-relationship between departments. Each department has very clearly defined roles. When the business interacts with customers, it is the sales and marketing department that handles negotiations. Even when the customer needs technical information and support, sales and marketing are often involved as an intermediary between the company engineers and the customer. It is common for sales specialists to take on the role of negotiations on behalf of the manufacturing department or research and development. Inter-departmental communications are not common. One of the problems is the fact that sales people rarely have the technical expertise. The majority of sales people would not have studied science and technology and are more likely to be qualified in the arts. They are chosen for the sales role due to their social skills. The perception is that engineers and technical specialists are not as sociable and therefore not good sellers. In their offices, larger Japanese companies tend to have open plan spaces. This allows the departmental head to learn what other people do and to ensure that they share information. In smaller Japanese businesses it is common for the business owner to also be based in an open plan environment. The key to success is “reading the air” or reading the kuuki. Keeping alert to what is being said and what is being done means that Japanese managers have instant access to up-to-date information. It means that they know what individual employees know. Individuals in a department are comfortable with this situation; informal information sharing is seen as being an effective and vital process. Sources: John Spacey, “Why You Need to Read the Air in Japan,” Japan Talk, http://www.japan-talk.com/jt/new/kuuki-yomenai (accessed January 24, 2014) Questions 15-10. Complex vertical organizational structures are very hierarchical in nature. They are very rigid, with each department having clearly defined roles. Is such an organization capable of being agile and responsive or is it a disadvantage? Answer: The vertically structured organizations have long chains of command. The organization is topped by the CEO (who makes all of the key decisions) and then a series of levels of management to whom authority is delegated. Many smaller businesses may begin with a more horizontal or flat organizational structure, but as the organization grows and becomes more complex, a taller or vertical structure is often adopted. The key to being agile and responsive is the interchange of information and continual communication between different parts of the organization. Provided that this is the case, the business should be flexible and responsive. If the communication and exchange of information is poor, then this is less likely to be the case. 15-11. What are the problems in having such strictly defined roles? Answer: The most obvious problem is that whilst individuals are highly expert in their own area of work, they lack the necessary understanding of the whole of the business. They do not understand the framework, limitations and problems that might exist in other parts of the organization. They will also not appreciate the role that other individuals in the organization play and the contribution that they could make. In designing a new product or service, the research and development people may not understand the complications faced by those who will have to deliver or manufacture it. They will not understand or appreciate how it is to be sold to customers. 15-12. Is reading the air just eavesdropping and spying on others? Would most employees be comfortable with this situation? Answer: Each individual in an open office have their ears constantly tuned to pick up on information and ideas that are being discussed. This could put considerable pressure on people in terms of having to stay alert to conversations whilst getting on with their own work. It appears that most Japanese workers have no problem with this situation. Having the manager or even the CEO listening in to conversations all the time can also be problematic. Case Incident 2 Boeing Dreamliner: Engineering Nightmare or Organizational Disaster? As a flight of imagination, Boeing’s 787 Dreamliner was an excellent idea: made of composite materials, the plane would be lightweight enough to significantly reduce fuel costs while maintaining a passenger load up to 290 seats. Airline carriers chose options from a long list of unprecedented luxuries to entice the flying public and placed their orders well ahead of the expected completion dates. And then the problems started. An airplane like the 787 has a design about as complex as that of a nuclear reactor power plant, and Boeing’s equally complex offshore organizational structure didn’t help the execution. Boeing outsources 67 percent of its manufacturing and many of its engineering functions. While the official assembly site is in Everett, Washington, parts were manufactured at 100 supplier sites in countries across the globe, and some of those suppliers subcontracted piecework to other firms. Because the outsourcing plan allowed vendors to develop their own blueprints, language barriers became a problem back in Washington as workers struggled to understand multilingual assembly instructions. When components didn’t fit together properly, the fixes needed along the supply chain and with engineering were almost impossible to implement. The first aircraft left the runway on a test flight in 2009, but Boeing had to buy one of the suppliers a year later (cost: $1 billion) to help make the planes. The first customer delivery was still years away. If Boeing and industry watchers thought its troubles were over when the first order was delivered to All Nippon Airways (ANA) in 2011, three years behind schedule and after at least seven manufacturing delays, they were wrong. Besides the continuing woes of remaining behind schedule (848 planes have been ordered but only 6 percent have been delivered), Boeing’s Dreamliner has suffered numerous mechanical problems. After the plane’s technologically advanced lithium-ion batteries started a fire on one aircraft and forced another into an emergency landing in January 2013, ANA and Japan Airlines grounded their fleets. The FAA followed suit, grounding all 787s in the United States. The remaining 50 flying Dreamliners worldwide were then confined to the tarmac until a solution could be found. This looked like an organizational structure problem, both at corporate headquarters and abroad. However, there have been so many management changes during the 787’s history that it would be difficult for anyone to identify responsibility for errors in order to make changes in the team or the organizational structure. For the work done abroad, restructuring reporting relationships in favor of smaller spans of control to heighten management accountability and tie suppliers to the organizational structure of corporate Boeing could be considered. Or “reshoring “to bring manufacturing physically close to the final assembly site and under Boeing’s control while centralizing the organization structure could be an option. Sources: S. Denning, “The Boeing Debacle: Seven Lessons Every CEO Must Learn,” Forbes (January 17, 2013). http://www.forbes.com/sites/stevedenning/2013/01/17/the-boeing-debacle-seven-lessons-every-ceo-must-learn/; E. Frauenheim, “Homeward Bound,” Workforce Management (February, 2013), pp. 26-–31; C. Hymowitz, “Boeing CEO’s Task: Get the Dreamliner Airborne Again,” Bloomberg BusinessWeek (January 24, 2013),. http://www.businessweek.com/articles/2013-01-24/boeing-ceos-task-get-the-dreamliner-airborne-again/; D. Nosowitz, “Why Is Boeing's 787 Dreamliner Such a Piece of Crap?” Popsci (January 17, 2013),. http://www.popsci.com/technology/article/2013-01/why-boeings-787-dreamliner-such-piece-crap; J. Ostrower and A. Pasztor, “Boeing Plays Down 787 Woes; Net Falls 30%,” The Wall Street Journal (January 31, 2013), p. B3; and D. Terdiman, “Boeing's Dreamliner Struggles Despite Tech Superiority,” C/Net (February 24, 2012), http://news.cnet.com/8301-13772_3-57385001-52/boeings-dreamliner-struggles-despite-tech-superiority/. Questions 15-13. Do you think this is a case of the difficulty of launching new technology (there are “bugs” in any system), or one of an unsuccessful launch? Answer: The case of Boeing's 787 Dreamliner presents a combination of challenges that contribute to the perception of an unsuccessful launch rather than just the difficulty of launching new technology with inherent bugs. 1. Complex Organizational Structure: Boeing's decision to outsource a significant portion of its manufacturing and engineering functions resulted in a highly complex organizational structure. This complexity, compounded by language barriers and disparate reporting relationships among suppliers, created coordination challenges and hindered effective problem-solving. The inability to seamlessly integrate components from various suppliers contributed to delays and quality issues. 2. Persistent Manufacturing Delays: The Dreamliner experienced multiple manufacturing delays, with the first delivery to All Nippon Airways (ANA) occurring three years behind schedule. Despite efforts to address production challenges, the delivery rate remained significantly below expectations, with only a small percentage of the ordered planes being delivered. 3. Mechanical Problems: In addition to manufacturing delays, the Dreamliner faced numerous mechanical issues, including incidents related to its technologically advanced lithium-ion batteries. These problems led to safety concerns and regulatory interventions, such as the grounding of all 787s by the FAA. 4. Management Changes and Accountability: The frequent management changes within Boeing's leadership team further complicated the situation by creating uncertainty and hindering accountability for errors. Without clear responsibility for addressing issues and implementing necessary changes, the organization struggled to effectively address underlying problems. Overall, while the development and launch of new technology often involve challenges and unforeseen issues, the extent and persistence of the problems faced by the Dreamliner suggest broader systemic issues within Boeing's organizational structure and management practices. Therefore, this case is more indicative of an unsuccessful launch resulting from systemic issues rather than simply the typical challenges associated with new technology implementation. 15-14. What type of executive management structure do you think would be most conducive to getting the Dreamliner past a component failure and back in flight? Is this a different structure than you would suggest for fixing the ongoing manufacturing problems? Sketch out the potential design. Answer: Addressing component failures and resolving ongoing manufacturing problems require different approaches in executive management structure due to the distinct nature of these challenges. Here are potential designs for each scenario: 1. Addressing Component Failures: • Centralized Command Structure: Implementing a centralized command structure with a clear chain of command and decision-making authority could be effective in addressing component failures swiftly. • Cross-Functional Crisis Management Team: Forming a dedicated cross-functional crisis management team comprising experts from engineering, quality control, supply chain management, and aviation safety would facilitate rapid problem identification and resolution. • Direct Reporting Lines: Ensure direct reporting lines between the crisis management team and top executives, including the CEO and relevant department heads, to expedite communication and decision-making. • Transparent Communication: Foster a culture of transparent communication to promptly share updates on component failures, investigation findings, and corrective actions with stakeholders, including regulatory authorities and customers. 2. Resolving Ongoing Manufacturing Problems: • Decentralized Decision-Making: Adopt a decentralized decision-making structure that empowers manufacturing teams and suppliers to address issues at their respective levels promptly. • Cross-Functional Collaboration: Promote cross-functional collaboration among engineering, manufacturing, and supply chain management teams to identify root causes of manufacturing problems and implement sustainable solutions. • Continuous Improvement Culture: Establish a culture of continuous improvement by encouraging employees at all levels to identify inefficiencies, propose innovative solutions, and implement best practices. • Performance Metrics and Accountability: Define key performance indicators (KPIs) related to manufacturing efficiency, quality, and timeliness, and hold responsible individuals and teams accountable for meeting targets. • Regular Review Meetings: Conduct regular review meetings involving top executives, department heads, and frontline managers to assess progress, address challenges, and realign strategies as needed. While both scenarios require strong leadership, effective communication, and collaboration, the specific executive management structures should be tailored to the unique characteristics and objectives of addressing component failures versus resolving ongoing manufacturing problems. 15-15. What organizational structure would you suggest to effectively tie in Boeing’s managers and suppliers abroad? Sketch your ideas. (Goals for managers might include facilitating teams, coordinating efforts, maintaining organizational transparency, and creating conversations.) Answer: To effectively tie in Boeing's managers and suppliers abroad, I would suggest implementing a matrix organizational structure combined with elements of a network organizational structure. This approach would facilitate coordination, communication, and collaboration between managers and suppliers across different geographical locations while maintaining organizational transparency and promoting teamwork. Here's a sketch of the proposed organizational structure: 1. Matrix Organizational Structure: • Functional Departments: Traditional functional departments such as engineering, manufacturing, procurement, quality control, and logistics would exist within the organization. • Project Teams: Cross• functional project teams would be formed to manage specific aspects of the Dreamliner project, such as design, production, testing, and supply chain management. • Dual Reporting Lines: Employees would report to both functional department heads and project managers, allowing for seamless coordination and integration of efforts. 2. Network Organizational Structure: • Supplier Network: Suppliers located abroad would be integrated into the organizational structure as strategic partners within a supplier network. • Collaborative Platforms: Digital platforms and communication tools would be used to facilitate real• time collaboration and information sharing between Boeing and its suppliers. • Regular Meetings: Regular meetings, both virtual and face• to• face, would be scheduled to discuss project progress, address challenges, and align objectives. 3. Managerial Roles and Responsibilities: • Facilitating Teams: Managers would be responsible for facilitating cross• functional and cross• cultural teams, providing guidance, resolving conflicts, and fostering a collaborative work environment. • Coordinating Efforts: Managers would coordinate efforts between internal departments and external suppliers to ensure alignment with project goals and timelines. • Maintaining Organizational Transparency: Managers would promote transparency by communicating project updates, performance metrics, and strategic decisions to all stakeholders. • Creating Conversations: Managers would encourage open communication channels and create opportunities for dialogue and knowledge sharing among team members and suppliers. 4. Centralized Oversight: • Central Project Management Office (PMO): A central PMO would oversee the entire project, ensuring consistency, adherence to standards, and effective coordination between all parties involved. • Executive Steering Committee: An executive steering committee comprising top• level executives from Boeing and key suppliers would provide strategic direction, review project progress, and make decisions to address critical issues. By adopting this hybrid organizational structure, Boeing can effectively tie in its managers and suppliers abroad, promote collaboration, enhance efficiency, and ultimately overcome the challenges encountered during the Dreamliner project. My Management Lab Go to mymanagementlab.com for Auto-graded writing questions as well as the following Assisted-graded writing questions: 15-16. Considering Case Incident 2, how would you have envisioned the best organizational structure for Boeing during its development of the Dreamliner? How might you change the structure during the production phase of the airplane? Answer: In envisioning the best organizational structure for Boeing during the development of the Dreamliner, I would have focused on creating a structure that fosters effective communication, collaboration, and accountability across various departments and global suppliers. Given the complex nature of the project and the extensive outsourcing involved, a matrix organizational structure combined with elements of a network organizational structure would have been beneficial. During the development phase: 1. Matrix Organizational Structure: • Functional departments such as engineering, manufacturing, procurement, quality control, and logistics would exist within the organization. • Cross• functional project teams would be formed to manage different aspects of the project, such as design, production, testing, and supply chain management. • Employees would report to both functional department heads and project managers, allowing for seamless coordination and integration of efforts. 2. Network Organizational Structure: • Suppliers located globally would be integrated into the organizational structure as strategic partners within a supplier network. • Collaborative platforms and regular meetings would facilitate real• time communication and information sharing between Boeing and its suppliers. 3. Managerial Roles and Responsibilities: • Managers would facilitate cross• functional and cross• cultural teams, coordinate efforts, maintain transparency, and create opportunities for dialogue and knowledge sharing. • A central project management office (PMO) would oversee the entire project, ensuring consistency, adherence to standards, and effective coordination. As the project transitions to the production phase: 1. Streamlined Structure: • With a clearer understanding of project requirements and supplier capabilities, the organizational structure could be streamlined to focus on execution and delivery. • Project teams may be restructured to optimize efficiency and minimize bureaucracy. 2. Increased Focus on Quality Control: • Quality control departments may be strengthened to address any manufacturing challenges and ensure compliance with safety standards. • Close collaboration between engineering and production teams would be emphasized to address any design or manufacturing issues promptly. 3. Continued Supplier Integration: • The network structure would remain essential to maintain strong relationships with suppliers and address any supply chain disruptions effectively. • Regular performance evaluations and feedback sessions with suppliers would be conducted to ensure alignment with project goals. In summary, the best organizational structure for Boeing during the Dreamliner's development would have been a hybrid approach combining matrix and network structures. This structure would facilitate collaboration, innovation, and adaptability throughout the project lifecycle, ensuring successful development and production of the aircraft. 15-17. Based on what you’ve discovered about your personality traits on the Big Five Model through your organizational behavior studies in Chapter 5, in which organizational structures might you work best? Answer: Based on my personality traits as assessed by the Big Five Model, certain organizational structures may align better with my preferences and tendencies. Here's how my personality traits might influence my compatibility with different organizational structures: 1. Open and Conscientious (High Conscientiousness): • In an organization that values efficiency, precision, and adherence to rules and procedures, such as a bureaucratic or mechanistic structure, my conscientiousness would be well• suited. • I may excel in roles where attention to detail, organization, and following established protocols are crucial, such as quality control, project management, or regulatory compliance. 2. Adaptable and Open to New Experiences (High Openness to Experience): • In innovative and dynamic organizations, such as those with organic or adhocracy structures, my openness to experience would thrive. • I might enjoy roles that involve creativity, problem• solving, and exploring new ideas, such as research and development, innovation labs, or creative departments. 3. Sociable and Cooperative (High Extraversion): • In organizations that emphasize teamwork, collaboration, and interpersonal relationships, such as those with a team• based or matrix structure, my extraversion would be an asset. • I might excel in roles that require networking, relationship• building, leadership, or customer/client interaction, such as sales, marketing, or project management. 4. Stable and Emotionally Resilient (Low Neuroticism): • In organizations where stability, predictability, and emotional stability are valued, such as those with a hierarchical or functional structure, my low neuroticism would be beneficial. • I may thrive in roles that require composure, resilience, and the ability to handle pressure or stressful situations, such as crisis management, operations management, or customer service. 5. Conventional and Respectful of Authority (Moderate Agreeableness and Conscientiousness): • In traditional and hierarchical organizations with clear chains of command and formalized procedures, my moderate agreeableness and conscientiousness would fit well. • I might perform effectively in roles that require adherence to rules, policies, and authority, such as compliance, administration, or regulatory affairs. Overall, the compatibility between my personality traits and organizational structures would depend on the specific characteristics and culture of the organization, as well as the requirements of the role I occupy within it. While some structures may naturally align more closely with my personality traits, adaptability and flexibility are key in navigating different organizational contexts effectively. 15-18. My Management Lab Only – comprehensive writing assignment for this chapter. Answer: Introduction: Organizational structure serves as the backbone of any business, providing a framework for defining roles, responsibilities, and relationships within the organization. It influences how work is coordinated, decisions are made, and information flows throughout the organization. Understanding the foundations of organizational structure is crucial for managers and leaders to design and manage effective and efficient organizations. Key Components of Organizational Structure: 1. Hierarchy: Hierarchy refers to the arrangement of authority and responsibility within an organization. It establishes reporting relationships and defines the levels of authority from top management to lower-level employees. Hierarchical structures can be tall, with many levels of management, or flat, with fewer levels and broader spans of control. 2. Departmentalization: Departmentalization involves grouping employees and activities based on common functions, products, customers, or geographic locations. Common forms of departmentalization include functional, product-based, customer-based, and geographical. 3. Span of Control: Span of control refers to the number of subordinates that a manager can effectively supervise. A wide span of control involves fewer levels of management with each manager overseeing a large number of subordinates, while a narrow span of control involves more levels of management with each manager supervising a smaller number of subordinates. 4. Centralization vs. Decentralization: Centralization involves decision-making authority being concentrated at the top levels of the organization, while decentralization involves delegating decision-making authority to lower levels of the organization. The degree of centralization or decentralization can impact organizational flexibility, responsiveness, and employee empowerment. 5. Formalization: Formalization refers to the extent to which roles, procedures, and rules are explicitly defined and standardized within the organization. Highly formalized organizations have strict rules and procedures, while less formalized organizations allow more flexibility and discretion. Importance of Organizational Structure: • Clarifies Roles and Responsibilities: A well• defined organizational structure clarifies who is responsible for what tasks, reducing confusion and ambiguity among employees. • Facilitates Coordination: Organizational structure facilitates coordination and collaboration among employees and departments, ensuring that activities are aligned with organizational goals. • Enhances Communication: Clear reporting relationships and lines of authority facilitate communication within the organization, enabling information to flow efficiently. • Supports Decision Making: Organizational structure provides a framework for decision• making processes, allowing decisions to be made at the appropriate levels of the organization. • Promotes Efficiency: An effective organizational structure optimizes resource allocation, minimizes duplication of efforts, and streamlines workflows, leading to improved efficiency and productivity. Conclusion: Understanding the foundations of organizational structure is essential for designing, implementing, and managing effective organizations. By carefully considering factors such as hierarchy, departmentalization, span of control, centralization, decentralization, and formalization, managers can create structures that support the achievement of organizational goals, enhance employee performance, and adapt to changing business environments. A well-designed organizational structure serves as a blueprint for success, providing the framework for building and sustaining competitive advantage in today's dynamic marketplace. Instructor’s Choice Applying the Concepts If one were to chart the growth spurts of Volkswagen over the past three decades, the chart would look like a roller coaster. Plans were for former BMW boss Bernd Pischetsrieder to fix ailing VW when he came aboard in 2002. However, the best laid plans often go astray. VW’s share price is down almost 50% and profits fell by 36%. What is wrong at VW? First, VW has always been able to charge more for its cars because of quality, innovation, styling, and an implied lifetime guarantee. In recent years, however, consumers have decided that the company is going to have to come up with more value for the dollar if loyalty is to be retained. Second, sales in China’s booming market (VW was one of the first car makers on the scene in this giant economy) have plummeted and GM has driven VW from its number one ranking. Third, cost-cutting moves have not worked. Fourth, VW uncharacteristically has labor pains. The CEO has had little luck in reversing these problems because his consensus management techniques are having little impact on VW’s change-resistant bureaucracy. Over half of the company’s 100 managers are not used to making their own decisions. This spells even more trouble for the company in the year ahead. 1. Using a search engine of your own choosing, investigate Volkswagen’s performance over the past two years. Write a brief summary of their fortunes and misfortunes. 2. Visit the Volkswagen website at www.vw.com. From information supplied, characterize the company’s existing structure. 3. Based on what you have observed in Steps 1 and 2 above, suggest a new organizational structure for the company. Cite any assumptions that you made when you developed your structure. Instructor Discussion Students will be able to find a wealth of information on VW (particularly negative information because of their recent performance). A nice summary article appears in BusinessWeek (see “Volkswagen Slips into Reverse,” dated August 9, 2004). Students are free to pick any organizational form that they believe is best given the existing situation. However, they should be aware that the current CEO is not having much success with modern structures as the company seems to be very tradition-bound at present. Students might also interview a local VW dealer for opinions. Exploring OB Topics on the Web
1. The chapter discusses span of control and the various advantages and disadvantages of wide versus narrow. Let us see how that looks in actual numbers. First, determine how many hierarchical levels there are in at least three organizations of varying sizes that you are currently involved with. One could be the college or university you attend, another where you work, and finally a club or religious institution you belong to. Or, for one of the choices, select a non-profit organization you have some interest in (for example, Red Cross, MDS, American Cancer Society, etc.). Obtain their hierarchical structure either by searching the Internet (most annual reports have information on this), calling or visiting them, or drawing the structure yourself if you are involved in the organization. Use www.google.com to help you search. 2. What factors influence virtual teams? For a short analysis, go to: http://www.seanet.com/~daveg/articles.htm. Write a short paragraph or two outlining why you would or would not like working in a virtual environment. Do you see a time later in your career when you would prefer working in a virtual team? Why or why not? Solution Manual for Organizational Behavior Timothy A. Judge Stephen P. Robbins 9781292146300, 9780133507645, 9780136124016
