Summary Chapter 11 (Fundamentals Of Organizing) & 12 (Organization Change and Development) PDF

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Chapter 11 : Fundamentals Of Organizing(Dasar-dasar Pengorganisasian)1. Organizing as a Management FunctionOrganizing is the process of arranging people and other resources to work together to accomplish a goal.Figure 11 shows the central role that organizing plays in the management process. Once pl...

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Chapter 11 : Fundamentals Of Organizing (Dasar-dasar Pengorganisasian) 1. Organizing as a Management Function Organizing is the process of arranging people and other resources to work together to accomplish a goal.

Figure 11.1 shows the central role that organizing plays in the management process. Once plans are created, the manager’s task is to see to it that they are carried out

A. What is Organization Structure Organization structure is a system of tasks, reporting relationships, and communication linkages.

B. Formal structures An organization chart describes the arrangement of work positions within an organization. A typical organization chart identifies positions and job titles as well as the lines of authority and communication between them. It shows the formal structure, or how the organization is intended to function or the official structure of the organization. The basics of an organization’s formal structure includes:  Division of work—Positions and titles show work responsibilities.  Supervisory relationships—Lines show who reports to whom.  Communication channels—Lines show formal communication flows.  Major subunits—Positions reporting to a common manager are shown.  Levels of management —Vertical layers of management are shown.

C. Informal structures Informal structure is the set of unofficial relationships among an organization’s members. If the informal structure could be drawn, it would show who talks and interacts with whom, regardless of their formal titles and relationships. The lines of the informal structure would cut across levels and move from side to side.

A tool known as social network analysis or sociometrics identifies the informal structures and their embedded social relationships that are active in an organization.

2. Traditional Organization Structures A. Functional structures

A functional structure groups together people with similar skills who perform similar tasks. Members of functional departments share technical expertise, interests, and responsibilities.

Advantages of Functional Structures     

Economies of scale with efficient use of resources. Task assignments consistent with expertise and training. High-quality technical problem solving. In-depth training and skill development within functions. Clear career paths within functions.

Disadvantages of Functional Structures Common problems of functional structures include difficulties in pinpointing responsibilities for things like cost containment, product or service quality, and innovation. One of the major problems with functional structures is the tendency for each department or function to focus primarily on its own concerns, the “big picture” issues can easily get neglected. This relates to something called the functional chimneys or functional silos problem—a lack of communication, coordination, and problem solving across functions. This happens because the functions become formalized not only on the organization chart, but also in the mind-sets of people.

B. Divisional structures A divisional structure groups together people working on the same product, in the same area, with similar customers, or on the same processes.

Divisional structures are common in complex organizations with diverse operations that extend across many products, territories, customers, and work processes. The idea is to use the divisional focus to overcome the disadvantages of a functional structure, such as the functional chimneys problem.

1) Product Structures A product structure groups together people and jobs focused on a single product or service.

2) Geographical Structures A geographical structure groups together people and jobs performed in the same location.

3) Customer Structures A customer structure groups together people and jobs that serve the same customers or clients. This is a common structure in the consumer products industry. Customer structures are also useful in services such as Banks and government agency for example.

4) Process Structures A work process is a group of related tasks that collectively creates something of value to a customer. A process structure groups together jobs and activities that are part of the same processes.

Advantages and Disadvantages of Divisional Structures The potential advantages of divisional structures include:  

More flexibility in responding to environmental changes. Improved coordination across functional departments.

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Clear points of responsibility for product or service delivery.

 Expertise focused on specific customers, products, and regions.  Greater ease in changing size by adding or deleting divisions. Divisional structures also have potential disadvantages such as they can reduce economies of scale and increase costs through the duplication of resources and efforts across divisions. They can also create unhealthy rivalries as divisions compete for resources and top management attention, and as they emphasize division needs over the goals of the organization as a whole.

C. Matrix structures The matrix structure, often called the matrix organization, combines the functional and divisional structures. It is an attempt to gain the advantages and minimize the disadvantages of each. This is accomplished by creating permanent teams that cut across functions to support specific products, projects, or programs.

Advantages and Disadvantages of Matrix Structures The potential advantages of matrix structures include:

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Better communication and cooperation across functions.

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Increased flexibility in adding, removing, or changing operations to meet changing demands.

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Better performance accountability through the program, product, or project managers.

Improved decision making; problem solving takes place at the team level where the best information is available. Better customer service; there is always a program, product, or project manager informed and available to answer questions.

Improved strategic management; top managers are freed from lower-level problem solving to focus time on more strategic issues. Predictably, matrix structures also have potential disadvantages. The two-boss system is susceptible to power struggles if functional supervisors and team leaders compete with one another to exercise authority. The two-boss system can be frustrating if it creates task confusion

and conflicting work priorities. Team meetings in the matrix can take lots of time, and the teams may develop “groupitis”— strong team loyalties that cause a loss of focus on larger organizational goals. The requirement of adding the team leaders to a matrix structure can also result in higher costs.

3. Horizontal Organization Structures The matrix structure is a step toward better cross-functional integration in an organization. But it is just one part of a broader movement toward more horizontal structures that harness the powers of teams and information technology to improve communication, collaboration, and flexibility.

A. Team structures A team structure uses permanent and temporary cross-functional teams to improve lateral relations. A cross-functional team brings together members from different functional departments. Project teams are convened for a particular task or project and disband once it is completed.

Advantages and Disadvantages of Team Structures The advantages of team structures trace to the fact that putting people into teams and giving them common goals to work on together breaks down barriers and mobilizes talents, and because teams focus shared knowledge and expertise on specific problems, they can improve performance by increasing the speed and quality of decisions in many situations, they can also boost morale and also people working in teams often experience a greater sense of task involvement and identification, and this increases their enthusiasm for the job. The complexities of teams and teamwork contribute to the potential disadvantages of

team structures. These include conflicting loyalties for persons with both team and functional assignments. They also include issues of time management and group process.

B. Network Structures A network structure uses information technologies to link with networks of outside suppliers and service contractors. A strategic alliance is a cooperation agreement with another organization to jointly pursue activities of mutual interest. Some are outsourcing strategic alliances in which they contract to purchase important services such as accounting or document processing from another organization. Others may be supplier strategic alliances that link businesses in preferred relationships that guarantee a smooth and timely flow of quality supplies among the partners.

Advantages and Disadvantages of Network Structures In respect to advantages, network structures are lean and streamlined. They help organizations stay cost-competitive by reducing overhead and increasing operating efficiency. Network concepts allow organizations to employ outsourcing strategies and contract out specialized business functions. Within the operating core of a network structure, furthermore, interesting jobs are created for those who coordinate the entire system of relationships. Network structures have potential disadvantages as well. The more complex the business or mission of the organization, the more complicated it is to control and coordinate the network of contracts and alliances. If one part of the network breaks down or fails to deliver, the entire system suffers. The organization may lose control over activities contracted out. It may also experience a lack of loyalty among contractors who are used infrequently rather than on a long-term basis. Some worry that outsourcing can become so aggressive as to be dangerous to the firm, especially when critical activities such as fi nance, logistics, and human resources management are outsourced.

C. Boundaryless structures A boundaryless organization eliminates internal boundaries among subsystems and external boundaries with the external environment.

The virtual organization takes the boundaryless concept to the extreme. It operates as a shifting network of alliances that are engaged as needed using IT and the Internet. The virtual organization calls an alliance into action to meet specific operating needs and objectives; when the work is complete, the alliance rests until next called into action. This mix of mobilized alliances is continuously shifting, and an expansive pool of potential alliances is always ready to be called upon.

4. Organizational Designs Organizational design is the process of creating structures that accomplish mission and objectives.

A. Contingency in organizational design A bureaucracy emphasizes formal authority, order, fairness, and efficiency. Two quite different organizational forms could be successful, depending on the nature of a firm’s external environment. A more bureaucratic form, which Burns and Stalker called “mechanistic” thrived when the environment was stable. But it experienced difficulty when the environment was rapidly changing and uncertain. In dynamic situations a much less-bureaucratic form, called “organic” performed best.

B. Mechanistic and organic designs A mechanistic design is centralized, with many rules and procedures, a clear-cut division of labor, narrow spans of control, and formal coordination. Mechanistic designs work best for organizations doing routine tasks in stable environments. An organic design is decentralized, with fewer rules and procedures, open divisions of labor, wide spans of control, and more personal coordination. When organizations operate in dynamic and often uncertain environments, their effectiveness depends on being able to change with the times and this requires the more organic designs. Organic designs create adaptive organizations that operates with a minimum of bureaucratic features and encourages worker empowerment and teamwork.

C. Trends in organizational designs 1) Fewer Levels of Management Trend: Organizations are cutting unnecessary levels of management and shifting to wider spans of control. Managers are taking responsibility for larger teams whose members operate with less direct supervision. A typical organization chart shows the chain of command, or the line of authority that vertically links each position with successively higher levels of management. One of the influences on management levels is span of control—the number of persons directly reporting to a manager. Narrow spans of control are characteristic of tall structures with many levels of management. Wider spans of control run with flat structures that have fewer levels of management. This not only reduces overhead costs, it also tends to give workers more empowerment and independence because less-direct supervision is available.

2) More Delegation and Empowerment Trend: Managers are delegating more. They are finding ways to empower people at all levels to make more decisions that affect themselves and their work.

All managers must decide what work they should do themselves and what should be left for others. At issue here is delegation—the process of entrusting work to others by giving them the right to make decisions and take action. Unfortunately, many managers and team leaders don’t do enough delegation and one of the reasons is self-enhancement bias that is the tendency to view oneself as more capable, intelligent, and ethical than others. The authority-and-responsibility principle states that authority should equal responsibility when work is delegated from a supervisor to a subordinate. When done well the process of delegation involves these three action steps:  Step 1—The manager assigns responsibility by carefully explaining the work or duties someone else is expected to do. This responsibility is an expectation for the other person to perform assigned tasks.  Step 2—The manager grants authority to act. Along with the assigned task, the right to take necessary actions ( for example, to spend money, direct the work of others, or use resources) is given to the other person.  Step 3—The manager creates accountability. By accepting an assignment, the person takes on a direct obligation to the manager to complete the job as agreed. Delegation that is done well leads to empowerment that defined as letting others make decisions and exercise discretion in their work.

3) Decentralization with Centralization Trend: Delegation, empowerment, and horizontal structures are contributing to more decentralization in organizations; at the same time, advances in information technology help top managers maintain centralized control. Centralization is the concentration of authority for most decisions at the top level of an organization. Decentralization is the dispersion of authority to make decisions throughout all organization levels. Today’s organizations can operate with greater decentralization without giving up centralized control. High speed computer networks and advanced information systems allow managers at higher levels to easily stay informed about a wide range of day-to-day performance matters throughout an organization. Because they have information so readily available, they can allow more decentralization in decision making. If something goes wrong, the information systems should sound an alarm and allow corrective action to be taken quickly.

4) Reduced Use of Staff Trend: Organizations are lowering costs and increasing efficiency by employing fewer staff personnel and using smaller staff units.

Staff positions provide technical expertise for other parts of the organization. What is best for any organization will be a cost-effective staff component that satisfies, but doesn’t overreact to, needs for specialized technical assistance to line operations. But overall, the trend toward reduced use of staff is quite clear.

Chapter 12 : Organization Change and Development (Perubahan dan Pengembangan Organisasi) 1. Organizational Cultures Organizational culture is the system of shared beliefs and values that guides behavior in organizations. It is also often called the corporate culture, and through its influence on employees and customers it can have a big impact on performance.

A. Understanding organizational culture 1) Types of Organization Cultures Based on a model called the competing values framework, it identifies four different culture types :  Hierarchical cultures emphasize tradition and clear roles;  Dependable cultures emphasize process and slow change;  Enterprising cultures emphasize creativity and competition; 

Social cultures emphasize collaboration and trust

2) Strong Organizational Cultures In strong organizational cultures, the culture is clear, well defined, and widely shared among members. These cultures encourage positive work behaviors and discourage dysfunctional ones. One of the ways organizations build strong and positive cultures is through socialization. Socialization is the process through which new members learn the culture of an organization.

B. Observable Culture of Organizations

Organizational culture is usually described from the perspective of the two levels. The outer level is the “observable” culture— Visible actions and events, and the inner level is the “core” culture—Underlying values . The observable culture is also found in the stories, heroes, rituals, and symbols that are part of daily organizational life. 

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Heroes—the people singled out for special attention and whose accomplishments are recognized with praise and admiration; they include founders and role models. Ceremonies, rites, and rituals—the ceremonies and meetings, planned and spontaneous, that celebrate important events and accomplishments. Legends and stories—oral histories and tales, told and retold among members, about dramatic sagas and incidents in the life of the organization. Metaphors and symbols—the special use of language and other nonverbal expressions that communicate important themes and values of the organization.

C. Values and the core culture The core culture consists of the core values, or underlying assumptions and beliefs that shape and guide people’s behaviors in an organization. Core values are beliefs and values shared by organization members. Values in some of the best companies have been found to emphasize performance excellence, innovation, social responsibility, integrity, worker involvement, customer service, and teamwork.

1) Value-Based Management Value-based management actively develops, communicates, and enacts shared values.

2) Workplace Spirituality Workplace spirituality creates meaning and shared community among organizational members. A culture of workplace spirituality will have strong ethics foundations, recognize human dignity, respect diversity, and focus on linking jobs with an organization’s contributions to society. Anyone who works in or leads a culture of workplace spirituality should derive pleasure from knowing that what is being accomplished is personally meaningful, created through community, and valued by others.

2. Multicultural Organizations and Diversity A. Multicultural organizations Multiculturalism in organizations involves inclusiveness, pluralism, and respect for diversity. A multicultural organization has a culture with core values that respect diversity and support multiculturalism. Common characteristics of multicultural organizations include:  Pluralism—Members of both minority cultures and majority cultures are influential in setting key values and policies.  Structural integration—Minority-culture members are well represented in jobs at all levels and in all functional responsi...