Please use the uploaded file as it shows the guidelines much clearier. Module 3 - Home Organizational Structure and Performance Modular Learning Objectives By the end of this module, the student shall be able to satisfy the following outcomes expectations: • Case o Differentiate types and facets of organizational structure o Analyze the relationship between organizational strategy and structure o Assess the role of leadership in determining organizational structure The structure of a corporation amounts to a framework of how tasks are grouped and coordinated. The process of creating this framework is called "organization design." In the logic of explaining human behavior within institutions, emphasis is too often placed on individual choice. To be sure, people do choose to do things. But just as important to the CEO who wishes to develop a successful company, is the need to provide structural incentives. Too often management theories miss the nature of structural explanation. Structuralists argue that human beings act based on the incentives a particular structure gives them. It does not matter, a s tructuralist will say, who is in that position. Any person will do the s ame thing given the same structure. To my mind, this is only half the picture. People do act on interests other than those afforded by the place they occupy. But the structural part in explaining why people do what they do is often the most important part. When a CEO sets up a structure he or she is creating incentives to act. If a CEO decides to limit the budget of a particular department, it should not be surprising that he or she will meet resistance from the head of that department. A CEO must be sensitive to the incentives he or she sets up when doing organizational design. Beyond explaining action, we need to understand just what a structure does. The structure clarifies expectations. A clear structure divides work in order to avoid duplication, wasted effort, conflict, and misuse of resources. The logical flow of work activities, helps to establish communication channels, provide coordinating mechanisms, and enhance planning and control. In short, the structure of a company gives it shape and purpose. Six Elements of Organizational Structure • Specialization: divided tasks • Departmentalization: grouping of jobs for organizational goals • Chain of Command: clarifies decision making • Span of Control: the number of subordinates a manager can effectively supervise • Centralization and Decentralization: decision making from top down vs. delegation to subsidiary units. • Formalization: degree to which jobs are standardized versus left to individual choice Mechanistic Organizations tend to have rigid structures, extensive departmentalization, a narrow span of control, high formalization, limited informational networks, and little decision making participation. Organic Companies tend to be highly adaptive and flexible, with a division of labor that is not highly standardized. In this case, formalization and tight controls are said to be unnecessary because employees are well trained. When speaking of organizational structure, the word "Bureaucracy" has almost become obscene. However, bureaucracies, that is organizations with a high level of work specialization and division of labor, are much easier to manage. Sociologist Max Weber was the first to use the term. He and other classical theorists such as Frederick Taylor and Henri Fayol saw a hierarchical structure based on legalized formal authority as the only way to manage a large organization. The problem, of course, comes when such organizations get out of control and perpetuate intrinsic power structures, rather than adapt to the needs of the company. Some would say that large companies necessarily become bureaucracies in the most negative sense of the term. Heads of departments always have the incentive to increase their departmental power, people within the department will always be worried with their position first and foremost. Why should the head of a department sacrifice his or her own power base for the good of the company? Why should the employee sacrifice his or her position for the good of the company? When the incentive is always to protect your own interests within your own department there is no reason to look to the overall good. This can have disastrous results. When everyone is looking out for his or her own interest, the collective good can be in danger. Making sure that individual rewards and disincentives match, to the greatest degree possible, the overall corporate desiderata is the essence of proper organizational design. Today, it is in fashion to look to team-based structures in order to avoid the bureaucratic incentives to self promotion. Self-directed work teams are said to break down barriers and decentralize decision making. This takes power out of the CEO`s hands, to be sure. However, proponents suggest that this only makes the CEO more effective by having an effective team and freeing up his or her time for "big picture" kinds of things. A CEO that has problems delegating and is used to a more authoritarian style will have difficulties here. Another organizational style in vogue today is called the Matrix Organization. Here the structural design assigns specialists to functional team that are autonomous, decentralized internal units. Similarly, the Boundaryless Organization is an organizational design with no fixed boundaries or traditional structure. This anarchistic style of organization, if that is not a contradiction in terms, is supposed to be more flexible and more responsive to technological advances, global change, and other exogenous transformations. Technological structure is another crucial element of the organizational design process. How the CEO develops an informational structure will determine the success in the flow of information for the company. We will be looking at this issue in module 5. The relationship of structure to strategy is an inextricable one. The formal structure of a company will determine how the company will compete. Different strategies require different structures. Matching strategy to structure, in essence, is the fundamental internal goal of any CEO. Module 3 - Background Module 3: Organizational Structure and Performance ProQuest Instructions Many of the assigned readings have links to ProQuest. Clicking on these readings may encounter password protection. For initial access to ProQuest files, follow these instructions: Your ProQuest username is: your TUI username. Your ProQuest password is: your TUI password. In the event that you are prompted for a second username and password, or your TUI password is rejected, please enter the following: ProQuest username: 4kw2wkdpbx. ProQuest password: welcome Now click again on the item you wish to see. Required Readings Ford, B. (2005). To improve aviation safety, improve aviation organization. Marine Corps Gazette, 89:5(October):50-52. Retrieved 2/20/10 from http://proquest.umi.com/pqdweb?index=15&did=835747411&SrchMo de=3&sid=6&Fmt=3&VInst=PROD&VType=PQD&RQT=309&VName=PQD&TS=1235836313&c lientId=29440&aid=5 Lawler, E.E., and C. G. Worley (2006). Designing organizations that are built to change. MIT Sloan Management Review, 48:1(Fall):19-23. Retrieved 2/20/10 from http://proquest.umi.com/pqdweb?index=6&did=1145080661&SrchMo de=3&sid=8&Fmt=6&VInst=PROD&VType=PQD&RQT=309&VName=PQD&TS=1235836521&c lientId=29440&aid=6 Mitchell, D. J. (2002). Good riddance, IRS commissioner Charles Rossotti. Capitalism Magazine, December 17. Retrieved 2/20/10 from http://www.capmag.com/article.asp?id=2230 Raine y, H. G., and J. Thompson (2006). Leadership and the transformation of a major institution: Charles Rossotti and the Internal Revenue Service. Public Administration Review, 66:4(July/August):596-604. Retrieved 2/20/10 from http://proquest.umi.com/pqdweb?index=13&did=1081557931&SrchM ode=3&sid=9&Fmt=4&VInst=PROD&VType=PQD&RQT=309&VName=PQD&TS=1235837731& clientId=29440&aid=7 Wilson, P. A., J. Gordon IV, and D.E. Johnson (2004). An alternative future force: Building a better army. Parameters, 33:4:(Winter):19-39. Retrieved 2/20/10 from http://proquest.umi.com/pqdweb?index=4&did=515440231&SrchMod e=3&sid=11&Fmt=3&VInst=PROD&VType=PQD&RQT=309&VName=PQD&TS=1235837887&c lientId=29440&aid=8 Supplementary Readings Hodgetts, R. (1999). Dow Chemical`s CEO William Stavropoulos on structure and decision making. The Academy of Management Executive. 13:4(November):29-36. Retrieved 2/20/10 from http://proquest.umi.com/pqdweb?index=5&did=46853000&SrchMode =3&sid=13&Fmt=4&VInst=PROD&VType=PQD&RQT=309&VName=PQD&TS=1235838165&cl ientId=29440&aid=9 Oliver, S., & Kandadi, K. R. (2006). How to develop knowledge culture in organizations? A multiple case study of large distributed organizations. Journal of Knowledge Management, 10(4):6-24. Retrieved 2/20/10 from http://proquest.umi.com/pqdweb?index=3&did=1174073971&SrchMo de=3&sid=15&Fmt=3&VInst=PROD&VType=PQD&RQT=309&VName=PQD&TS=1235838468& clientId=29440&aid=11 Schelte, A.F. (1998). Foundations of organizational structure. Retrieved 2/20/10 from http://mars.wnec.edu/~achelte/ob1/lprob13/index.htm Siggelkow, N. (2002). Evolution toward fit. Administrative Science Quarterly, 47:1(March): 125-59. Retrieved 2/20/10 from: http://www.findarticles.com/cf_0/m4035/1_47/87918559/p1/article.jhtml?t erm=organizational+structure Module 3 - Case For the case assignment, please begin by reading the required background readings. The case is based on two of those readings, but draws upon all of them. Mitchell, D. J. (2002). Good riddance, IRS commissioner Charles Rossotti.Capitalism Magazine, December 17. Retrieved 2/20/10 from t;http://www.capmag.com/article.asp?id