Chapter 6

Organization
Structure, Culture,
and Change

Principles of Organization
in a Bureaucracy
1.
2.
3.
4.
5.

Hierarchy of authority
Unity of command (one boss only)
Task specialization
Responsibilities and job descriptions
Line and staff functions (primary
purpose of organization versus
support activities)
2

Departmentalization

Functional: arrange by functions

such as marketing or information
technology
Geographic: arrange by territory,
such as northern and southern
Product-Service: arrange according
to products or services, such as
Gatorade division of PepsiCo.
3

The Matrix
Organization

A project structure is
superimposed on a functional
structure to capitalize on the
advantages ofCEO
both.
Function

Program

Project
Worker

Project
workers
have two
bosses

Flat Structures
Has relatively few layers.
Shorter chain of command can lead
to faster decision making.
Managers have larger spans of
control
Fewer layers can save money, yet
many valuable managers might be
eliminated.

Outsourcing

Other companies perform your work,

often in lower-wage area.
High-level work, such as marketing, is
also subject to outsourcing.
Homeshoring (moving customer service
into workers homes) is popular.
Outsourcing saves money yet not so
good for building loyal and proud
workforce.
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Informal Structures and

Communication Networks

Informal structure adds flexibility

and speed to formal structure
through unofficial relationships.
Informal networks are contacts used
to accomplish work.
Information technology can help
solve problems through information
networks.
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Selection of
Organization Structure

Company strategy and goals

High technology versus low technology
Large size versus small size
Financial condition of the firm (e.g. flat
structure costs less than tall structure)
Environmental stability (flexible
structure better suited for uncertainty)

Delegation Suggestions
1.
2.

3.

4.
5.

Assign duties to right people.

Delegate whole task, let go of
details.
Give as much instruction as
needed.
Retain some important tasks.
Get feedback on delegated task.
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Dimensions of
Organizational Culture
1.
2.
3.
4.
5.

Values
Relative diversity
Resource allocation and rewards
Degree of change
Strength of the culture (strong
culture guides employees in
everyday actions)
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Consequences of
Organizational Culture
1.
2.
3.
4.

5.
6.

Gaining competitive advantage

Productivity, quality, and morale
Innovation if creativity is encouraged
Effectiveness of merger with another
company
Closeness of person-organization fit
Direction of leadership activity
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Why Workers Resist

Change
1.
2.
3.
4.
5.
6.

Fear of unfavorable outcome

Not wanting to break old habits
Personality factors such as rigidity
Fear of not having right skills
Preference for familiar devil
Perceived weaknesses of change
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Gaining Support for

Change
1.

2.
3.
4.
5.
6.

Allow for discussion and

negotiation.
Allow for participation.
Point out financial benefits.
Avoid change overload.
Observation of successful change.
Get best people behind program.
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DICE Framework for

Change Management
D. Short duration of project is better.
I. Integrity (good) of performance
counts.
C. Commitment of senior executives
and staff to the change effort.
E. Additional effort required of all
employees affected by the change.
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