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ORGANIZATION SYSTEM, STRUCTURE, AND CULTURE

ORGANIZATION SYSTEM, STRUCTURE, AND CULTURE. Dr. Crazy ’ s Problems - 1. Dr. Crazy left his university to open his own management consulting firm The firm provides training and consulting services on management to organizations in Hanoi

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ORGANIZATION SYSTEM, STRUCTURE, AND CULTURE

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  1. ORGANIZATION SYSTEM, STRUCTURE, AND CULTURE

  2. Dr. Crazy’s Problems - 1 • Dr. Crazy left his university to open his own management consulting firm • The firm provides training and consulting services on management to organizations in Hanoi • The firm has 4 people – 2 of them are trainers and consultants, 1 is secretary. The firm contracts out outside trainers when needed. • How do Dr. Crazy and his friends organize his firm in order to run his business?

  3. Dr. Crazy’s Problems - 2 • After 1 year, the firm has many customers • It now has 5 trainers/ consultants and contracts outside trainers if needed • It also has a number of people who help with marketing, accounting, personnel, and administration works • How would Dr. Crazy organize his firm?

  4. Functional Departmentalization • Advantages • Efficiencies from putting together similar specialties and people with common skills, knowledge, and orientations • Coordination within functional area • In-depth specialization • Disadvantages • Poor communication across functional areas • Limited view of organizational goals Figure 10.2a

  5. Dr. Crazy’s Problems - 3 • After 5 year, the firm has a good reputation • It now has 20 trainers/ consultants and contracts outside trainers if needed • It also provides different training/consulting services - management/marketing, financial/investment, and legal – to organizations • How would Dr. Crazy organize his firm?

  6. Product Departmentalization + Allows specialization in particular products and services + Managers can become experts in their industry + Closer to customers – Duplication of functions – Limited view of organizational goals Figure 10.2c Source: Bombardier Annual Report.

  7. Dr. Crazy’s Problems - 4 • After 10 years, the firm has good reputation internationally • It now provides these services in different countries: Laos, Mainland China, Vietnam, and Cambodia • Different countries require different ways of management: customers/ local trainers/ level of requirements, etc. • How would Dr. Crazy organize his firm?

  8. Geographical Departmentalization • Advantages • More effective and efficient handling of specific regional issues that arise • Serve needs of unique geographic markets better • Disadvantages • Duplication of functions • Can feel isolated from other organizational areas Figure 10.2b

  9. Defining Organizational Structure • Organizational Structure • The formal arrangement of jobs within an organization. • Organizational Design • A process involving decisions about six key elements: • Work specialization • Departmentalization • Chain of command • Span of control • Centralization and decentralization • Formalization

  10. Exercise: NEU Structure • Describe the organizational structure of NEU. Compare the structure in 2007 and today. • Evaluate advantages and disadvantages of this structure • Offer your recommendation for improvement

  11. The Organization’s Culture • Organizational Culture • A system of shared meanings and common beliefs held by organizational members that determines, in a large degree, how they act towards each other. • “The way we do things around here.” • Values, symbols, rituals, myths, and practices • Implications: • Culture is a perception. • Culture is shared. • Culture is descriptive.

  12. Dimensions of Organizational Culture Exhibit 3.2

  13. Benefits of a Strong Culture • Creates a stronger employee commitment to the organization. • Aids in the recruitment and socialization of new employees. • Fosters higher organizational performance by instilling and promoting employee initiative.

  14. Organizational Culture • Sources of Organizational Culture • The organization’s founder • Vision and mission • Past practices of the organization • The way things have been done • The behavior of top management • Continuation of the Organizational Culture • Recruitment of like-minded employees who “fit” • Socialization of new employees to help them adapt to the culture

  15. Three Dot.Com Companies • How do you describe these companies’ structure, cultures? • How do these companies develop their cultures? • What are the pros and cons of these cultures?

  16. The Old and New Ways – Examples from Three Dot.com Companies The old way The new way • Security Opportunity • Detachment Total commitment • Hierarchy We’re all equal • Work and fun don’t mix Pamper me • It’s just a job It’s so much more

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