Reminders

1. Reminders • C & C Grocery case will be in your mail files by the end of the week. • University Art Museum revisions are due by 2:00 PM on Monday. • Aquarius Advertising case is due by 2:00 PM on Monday. Think carefully about possible structural changes. Don’t jump to conclusions about appropriate structures simply as a function of what you have read most recently.

2. Review of last week • What is structure? • What influences the structure chosen? • What are the options for structuring work? • Functional Structures • Task forces and task teams for coordination • Divisional Structures • What are the characteristics, advantages and disadvantages of functional/divisional structures? • Questions?

3. Understanding and ManagingOrganizational Structure: B BA 152

4. From last week’s discussion • Functional structures work well when the environment demands efficiency. • Divisional structures work well when the environment demands responsiveness.

5. But what happens if . . . • The environment demands both efficiency and responsiveness?

6. Other approaches to putting organizations together • Hybrid Structures • Matrix Structures • Horizontal/Team Structures • Network/Network/Virtual Structures

7. President International Sales Domestic Sales Vice-President Vice-President Vice-President Vice-President Manufacturing Engineering Research & Dev. Finance & Acct. International Director Domestic Manufacturing Manufacturing Manufacturing A Hybrid Organization

8. President Finance & Accounting Personnel Vice-President Vice-President Vice-President Vice-President Eastern Region Southern Region Northern Region Western Region Director Same as East Same as East Same as East R & D Director Manufacturing Director Marketing Building a Hybrid Organization

9. CEO Prod. Director MFG ENG MKT F&A Prod. A Prod. B Prod. C A Matrix Organization

10. Characteristics of Matrix Structures • Individuals or work units can have a combination of functional and divisional assignments. • Methods and procedures will change by assignment.

11. Characteristics of Matrix Structures • Shared control and decision making between functional and divisional leaders • Dual reporting relationships and balance of power needed for success

12. Characteristics of Matrix Structures • Competitive in dynamic environments requiring responsiveness and efficiency

13. CEO Engineer. Program Director Propulsion Flight Cont. Operations Shuttle Mars Space Station A Matrix Organization-NASA

14. CEO Program Director MFG ENG MKT F&A Prog. A Prog. B Prog. C A Matrix Organization

15. CEO Country Director MFG ENG MKT F&A USA Canada Mexico A Matrix Organization

16. DEAN Management Accounting Finance Marketing Operations UDG MBA MAC PhD Exec. Ed. Kenan-Flagler Business School Matrix Structure DB DB DB DB

17. Function Country Product Can you imagine a 3-D Matrix Organization?

18. Advantages Can meet dual environmental demands Flexible use of resources Relatively quick reaction times Good training for both generalists and specialists Disadvantages Lose some economies of scale Difficult to maintain balance of power Having two bosses can be stressful Conflict resolution can be time-consuming Requires talented management Matrix StructuresAdvantages & Disadvantages

19. CEO Matrix StructureWhat happens when the economy goes bad? ENG MKT F&A MFG

20. CEO Proj. A Proj. B Proj. C Matrix StructureWhat happens when the economy looks good? Project. Director

21. Process Owner Research Purchasing Product Planning Material Flow Execution Testing Integration Distribution NEW PRODUCT DEVELOPMENT Process Owner Top Management Team MERGERS & ACQUISTIONS Process Owner SUPPLY CHAIN MANAGEMENT Horizontal/Team Structures Identification

22. Characteristics of Horizontal/Team Structures • Organized around cross-functional core processes • Self-directed teams are the basis for the design of the organization. • Focus must be on the “customer” of the process. • Requires non-traditional organizational culture.

23. Horizontal/Team StructuresAdvantages • Rapid response to changes in customer demands • Focus is on delivering value to the customer. • Employees have a broader view of organizational goals. • Promotes focus on teamwork/collaboration • Improves quality of work-life for employees

24. Horizontal/Team StructuresDisadvantages • Identifying core processes can be difficult. • Requires major changes in most organizational systems and culture. • Requires managers to give up power/authority. • Requires significant training for employees. • Can limit in-depth skill development

25. Process Owner Admissions Research Support Service Support Internships MBA Teaching Support PHD Placement ADMISSIONS & PLACEMENT Process Owner DEAN CURRICULUM DEVELOPMENT Process Owner FACULTY DEVELOPMENT Kenan-Flagler Business School Horizontal/Team Structure BSBA

26. Designers Producers Suppliers Distributors A Modular/Network/Virtual/ Structure Corporate Headquarters

27. Facilities Faculty Kenan-Flagler Business School Modular/Network/Virtual Structure Admissions Placement DEAN’S OFFICE

28. Small organizations can obtain talent and assistance from anywhere. Organization can “ramp up” without huge investments in facilities. Increases organization flexibility and responsiveness. Reduces administrative overhead costs. A Modular/Network/Virtual Structure:Advantages

29. Little hands-on control of “partners” Expenses of establishing monitoring systems Reduced partner-employee loyalty Weakened corporate culture, if you can talk about a corporate culture at all. A Modular/Network/Virtual/ Structure:Disadvantages

30. Is It the Wrong Structure? How can you tell? • If we replaced the people, would the problems remain? • Is the firm inefficient or inflexible? • Are decisions made too late? • Are decisions of poor quality? • Is there too much conflict between units?

31. Next Time: Aquarius Advertising Agency