Mullins L.J. Management and organisational behaviour, Seventh edition
Подождите немного. Документ загружается.
on the role of the hierarchy, the traditional boss–subordinate relationship and the
extent to which managers can rely solely on their perceived formal authority within
the structure of the organisation. However, although the hierarchy has changed its
form, arguably it is not dead.
■ There are many variables and situational factors which influence the most appro-
priate structure. However, there is an underlying need to establish a framework of order
and system of command through which the activities of the organisation can be
planned, organised, directed and controlled. This demands attention to certain basic
considerations in the design of organisation structure, and presents management with
a series of decision points. There is a general movement towards ‘flatter’ organisation
structures but this can give rise to particular difficulties.
■ The essence of structure is the division of work among members of the organisa-
tion and the co-ordination of their activities. Work can be divided and activities linked
in a number of ways. Most organisations will contain examples of alternative combina-
tions for grouping activities and relating different jobs to each other. A particular form
of structure which can cause difficulty is the line and staff organisation. With the need
to provide integration of a wide range of functional activities, greater attention has
been given to more flexible forms of structure, such as matrix organisation.
■ A badly designed structure can have a number of negative effects and is likely to
give rise to inefficiency, low motivation and morale, late and inappropriate decisions,
conflict, rising costs and lack of development. The structure of an organisation is
depicted usually in the form of an organisation chart which may be used as a basis for
the analysis and review of structure, and may indicate apparent weaknesses. It is
important to remember relationships between structure and the realities of organisa-
tional behaviour. Some writers draw attention to the changing world of management
and organisational democracy.
CHAPTER 15 ORGANISATION STRUCTURE AND DESIGN
625
1 What are the objectives of organising? Distinguish different levels in the hierarchical struc-
ture of an organisation.
2
What is the importance of good structure? How does structure relate to the overall
effectiveness of an organisation? Discuss critically the continuing importance of the
hierarchy.
3 How might the work of a large organisation be divided among its members? Give ex-
amples where each method might be most appropriate. Examine the means for division of
work in your own organisation and comment upon their effectiveness.
4 Explain the main factors to be considered in the design of organisation structure. Debate
critically the value of ‘principles’ of organisation.
5 Distinguish clearly between ‘span of control’ and ‘chain of command’. Discuss the practi-
cal implications for the structure and effective operation of a large organisation.
6 Discuss main issues arising from the movement towards flatter structures of organisation.
Where possible, support your answer with practical examples.
7 Prepare your own diagrams to help explain: (i) line and staff organisation, and (ii) a matrix
form of organisation structure. What are the reasons for adopting each of these forms of
structure and what problem areas might arise?
REVIEW AND DISCUSSION QUESTIONS
626
PART 6 ORGANISATIONAL STRUCTURES
8 To what extent would you agree with the contention that a logical structure for organisa-
tion is better for efficiency and morale than a structure allowed to develop around
personalities? What are the likely consequences of a poorly designed structure?
9 Debate critically how the ‘realities’ of organisational behaviour influence organisation
structure and design. Give your own examples.
10 What are your views on the idea of ‘the end of management and the rise of organisational
democracy’?
Review and discussion questions continued
Examine closely arrangements for the division of work and linking together of activities in your
own or some other organisation of your choice.
a Investigate and make notes on the variety of ways in which work is divided and combina-
tions for grouping of activities within the organisation.
b Comment critically on the apparent effectiveness of different methods adopted for the divi-
sion of work among members of the organisation.
c Give reasons, and where possible practical examples, in support of your comments.
d Explain any changes you would recommend in order to help improve organisational per-
formance. Where appropriate, prepare a revised, or a new, organisation chart.
Following the appointment of a new Chief Executive, Drive plc is undergoing a period of restruc-
turing. Traditionally the business has been organised around two sites which are 45 miles apart.
Each site is headed by a Managing Director and also has senior managers for the production,
sales, personnel, and research and development functions. Site A has a very stable workforce
of 450 people, and Managing Director Mr Johnson has been in post for eight years. Site B
employs 500 people and has a staff turnover of around 30 per cent per year. Mrs Haynes has
been Managing Director for one year, having been recruited from a major competitor.
Both sites produce components for the motor industry – Site A concentrates on interior com-
ponents such as door handles and headrests and Site B concentrates on exterior
components such as fog lights and mirrors.
Staff costs are considerably higher than the average for the sector and the new Chief
Executive is seeking to reduce these by combining the two senior management teams into
one, based at a new head office between the sites. In addition, plans are being made to
review employee benefits in order to identify where savings can be made.
ASSIGNMENT 2
ASSIGNMENT 1
CHAPTER 15 ORGANISATION STRUCTURE AND DESIGN
627
The Chief Executive has identified the need to change the culture of the organisation in order
to achieve his goals of improved efficiency, and wants to introduce a team-based approach to
working. He wants to increase the levels of motivation amongst the workforce, and to encour-
age them to generate new ways of working.
As Company Secretary you have been asked to produce a report to the Chief Executive deal-
ing with the following questions:
a Identifying one writer, what motivational theories could be put to practical use in the cur-
rent situation?
b In restructuring the functions of the business, what advice would you give about the most
effective span of control for a manager? What are the benefits of a wide span of control.
c What should the communication process with staff involve in order to achieve the neces-
sary changes?
d What would be the benefits of introducing a matrix style of organisation structure?
PART 6 ORGANISATIONAL STRUCTURES
OBJECTIVES
Completing this exercise should help you to enhance the following skills:
Depict how organisations are represented formally by charts.
Explore the complex patterns of interrelationships that exist below the surface.
Distinguish between how organisations look and how they actually work.
EXERCISE
Using the pictorial example in Figure 15.12 and working in small self-selecting groups, you
are required to:
1 Refer to an organisation with which you are familiar (or a department of a large organisa-
tion) and draw a formal ‘How we look’ organisation chart.
2 Identify key people in the organisation and interview them informally. From your discus-
sions and own observations draw an alternative ‘How we work’ organisation chart.
3 Explain the significant variables that impact upon the alternative chart and give an honest
evaluation of how realistic you believe your chart to be.
DISCUSSION
■ How difficult was it for you to find out what is ‘really going on’ in the organisation?
■ How would you explain the differences between the two charts? What actual or potential
difficulties do you foresee?
■ Is there ever such a thing as a ‘real’ and ‘factual’ view of organisations?
Visit our website www.booksites.net/mullins for further questions, annotated weblinks,
case material and Internet research material.
628
PERSONAL AWARENESS AND SKILLS EXERCISE
CHAPTER 15 ORGANISATION STRUCTURE AND DESIGN
Zeton Ltd is an engineering company based in Kuala
Lumpur, Malaysia. It has been established for nearly
60 years. The company originally began by supply-
ing components for small machines and war
equipment during the Second World War. However,
since the early seventies it has undergone rapid
transformation under the founder’s son, Tommy
Lee. Tommy Lee has diversified the company into
supplying automobile components and machine
tools to the Malaysian market. The company now
employs some 1000 staff around the city and is well
known for the quality of its workmanship. The com-
pany operates under three divisions. One division is
concerned with the manufacture of automobile
parts, a second division with machine tools and a
third small division with specific one-off work in
engineering and engineering design. The automo-
bile section is by far the biggest and accounts for 70
per cent of the total turnover. The smaller specialist
engineering design section is by far the most prof-
itable in terms of the capital employed, and it relies
a great deal on a senior engineer, Chow Fung, who
has been with the company for 20 years.
Recently, the company was invited to send
sample component supplies to a German car manu-
facturer which was keen to set up in Malaysia. These
components were needed within eight months.
However, Mr Lee was concerned that his company
might not be able to meet the strict standards
imposed by the Germans. The deal would also make
sure that Zeton Ltd became known in the west as an
important auto components supplier, thus opening
up the potential for exports. Lee realised that the
export potential was great and that any export ini-
tiative would get full backing from the government.
While this was happening, the machine tools divi-
sion was also showing signs of growth. Recent
reforms in Eastern Europe meant that companies in
that area were very keen to modernise and develop
their old manufacturing bases. Zeton had received
enquiries from that area.
Tommy Lee faced a dilemma. He knew that the
opportunities that had presented themselves would
establish the company on a worldwide footing. At
the same time he knew that the companies were
solely under his management as Chief Executive.
Tommy Lee held 80 per cent of the shares. The
other directors held 10 per cent each. Although the
other divisions had Managing Directors, they relied
on him for decision-making. The Managing
Directors were drawn from family members; one
was a brother-in-law and the other a cousin. Their
knowledge of the industry and workings was gener-
ally poor. He made these appointments to please his
father so that he could be left to run the company
as he saw fit. Tommy knew that in order to satisfy
the German auto manufacturer he needed to reor-
ganise that division and consider issues of Total
Quality Management. His time would be fully taken
up. He needed to delegate to the divisions, but felt
uncomfortable in doing so.
The company was at a crossroads. The divisions
were doing well, and potentially could do even
better. The systems driving these divisions were old,
bureaucratic, and hierarchical. Some of the younger
managers and engineers would prefer a more open
flexible management structure. Some of them had
studied both engineering and management in the
UK and the USA and were keen to see changes. He
knew that these opportunities could not be missed,
but how was he going to ensure that they were han-
dled successfully so that the future for Zeton Ltd was
even brighter? He knew that he needed to make
some harsh decisions and restructure the company
within the next few months. He still had time.
CASE STUDY 15.1
A small cog in a big wheel: company restructuring at Zeton
YOUR TASKS
(a) What are the key issues facing Zeton Ltd? Give
justifications for your priorities.
(b) How should Mr Lee restructure the company, and
what leadership skills will he need to exhibit?
629
630
PART 6 ORGANISATIONAL STRUCTURES
CASE STUDY 15.2
Loud and clear: leadership in telecommunications
The Chairman of Direct Telecommunications PLC
(DT), David Williams, had come under increasing
pressure from the shareholders because of the com-
pany’s poor performance. DT has gone from being
one of the most successful telecommunications com-
panies of the 1980s and 1990s when the company
was asset rich, to a position where it has accumulated
an enormous debt. Much of the responsibility for this
dreadful decline in the fortunes of DT has been attrib-
uted to David Williams. Business analysts of the
telecommunications industry have suggested a
number of reasons why the company’s performance
has deteriorated. They include:
■ DT didn’t introduce new technology quickly
enough and didn’t adapt to the changes in the
consumer telecommunications market; for ex-
ample, the rapid changes that have occurred in
the mobile phone industry.
■ The competition in the telecommunications
sector has dramatically increased. This reduced
DT’s market share and weakened its competitive
position.
■ The competition responded faster to the changes
in the market.
■ DT is still organised in a traditional hierarchical
structure, as it has always been. Decision-making
is still made by committees, which take far too
long to make the necessary decisions in a rapidly
changing environment.
■ DT’s competitors have far more responsive organ-
isation structures, which allow decisions to be
made within days.
■ Analysts also pointed out that David Williams
does not have the leadership skills that a modern
company requires. They said he is more of a tra-
ditional manager, who is more concerned with
maintaining and controlling DT. These skills,
they argue, are more suited to organisations of
the past, which didn’t need to respond quickly to
the changes in the market place.
YOUR TASKS
Produce a business report that would provide David
Williams with the advice he requires on how to
change DT and enable it to respond to the increased
competition. The report should address the following
questions.
(a)
Explain why David Williams should become much
more of a leader as opposed to just being a manager.
(b) What are the characteristics of a successful leader?
(c) Discuss the disadvantages of a hierarchical
organisation structure.
(d) Outline the benefits of a more responsive organisa-
tion structure and suggest how DT can achieve it.
Photo: Mikki Rain/Science Photo Library
CHAPTER 15 ORGANISATION STRUCTURE AND DESIGN
1. Giordano, R. (Chairman BG plc) Annual Review (1996).
2.
Birkinshaw, J. ‘The Structure behind Global Companies’
in Pickford, J. (ed.), Financial Times Mastering Management
2.0, Financial Times Prentice Hall (2001) p. 75.
3. Adapted from Knight, K. (ed.) Matrix Management: A
Cross-functional Approach to Organization, Gower (1977),
pp. 114–15.
4. Heller, R. ‘Resist That Urge to Reorganise’, Management
Today, January 1996, p. 21.
5. Drucker, P. F. The Practice of Management, Heinemann
Professional (1989), p. 223.
6. Child, J. Organization: A Guide to Problems and Practice,
Second edition, Paul Chapman (1988), p. 4.
7. See, for example: Heller, R. In Search of European
Excellence, HarperCollins Business (1997), p. 34.
8. Worrall, L. and Cooper, C. L. The Quality of Working
Life, The Institute of Management (1997).
9. See, for example: Lynch, R. Corporate Strategy, Third
edition, Financial Times Prentice Hall (2003), Chapter
16.
10. Forte, C. (Lord Forte) Forte: The Autobiography of Charles
Forte, Sidgwick and Jackson (1986), p. 122.
11. Vollmann, T. ‘Restructuring: How to Improve your
Success Ratio’, FT Mastering Management, The Reader 2,
Financial Times, June 1997.
12. Hannagan, T. Management: Concepts and Practices, Third
edition, Financial Times Prentice Hall (2002).
13. Argyris, C. Integrating the Individual and the
Organization, Wiley (1964).
14. Stewart, R. The Reality of Management, Third edition,
Butterworth-Heinemann (1999), p.125.
15. For a fuller discussion, see: Sadler, P. Designing
Organisations: The Foundation for Excellence, Mercury
(1991).
16. Parsons, T. ‘Some Ingredients of a General Theory of
Formal Organization’, in Litterer, J. A. Organizations:
Structure and Behaviour, Third edition, Wiley (1980).
17. Department of the Environment, The New Local
Authorities: Management and Structure (The Bains Report),
HMSO (1972).
18. Ibid., pp. 10–11.
19. Audit Commission Form Follows Function, HMSO (1996).
20. Rawson, M. ‘Whose Side Are You On?’, Professional
Manager, November 1997, p. 3.
21. Stewart, R. The Reality of Management, Third edition,
Butterworth-Heinemann (1999), p. 190.
22. Jebb, F. ‘Don’t Call Me Sir (Everyone Knows I’m the
Boss)’, Management Today, August 1998, pp. 44–7.
23. Drucker, P. F. Management Challenges for the 21st
Century, Butterworth-Heinemann (1999), p. 11.
24. Butcher, D. ‘Breaking out of Organizational Mindsets’,
in Crainer, S. and Dearlove, D. (eds), Financial Times
Handbook of Management, Second edition, Financial
Times Prentice Hall (2001), p. 91.
25. Cloke, K. and Goldsmith, J. The End of Management and
the Rise of Organizational Democracy, Jossey-Bass (2002).
26. Heller, R. ‘Resist That Urge to Reorganise’, Management
Today, January 1996, p. 21.
27. Drucker, P. F. Management Challenges for the 21st
Century, Butterworth-Heinemann (1999), p. 11.
28. Lynch, R. Corporate Strategy, Third edition, Financial
Times Prentice Hall (2003), p. 666.
29. Lundy, O. and Cowling, A. Strategic Human Resource
Management (1996), p. 141.
30. For a fuller discussion on strategy and structure see:
Lynch, R. Corporate Strategy, Third edition, Financial
Times Prentice Hall (2003), Chapter 16.
31. Woodward, J. Industrial Organization: Theory and Practice,
Second edition, Oxford University Press (1980).
32.
See, for example: Mullins, L. J. Hospitality Management and
Organisational Behaviour, Fourth edition, Longman (2001).
33. Woodward, J. Industrial Organization: Theory and Practice,
Second edition, Oxford University Press (1980), p. 113.
34. Barnevik, P. cited in Evans, P. A. L. ‘The Dualistic Leader:
Thriving On Paradox’, in Chowdhury, S. Management
21C, Financial Times Prentice Hall (2000), p. 71.
35. Urwick, L. Notes on the Theory of Organization, American
Management Association (1952).
36.
See, for example: Moorcroft, R. ‘Managing in the 21st
Century’, The British Journal of Administrative Management,
January/February 2000, pp. 8–10.
37. Graicunas, V. A. ‘Relationship in Organization’, in
Papers on the Science of Administration, University of
Columbia (1937).
38. Woodward, J. Industrial Organization: Theory and Practice,
Second edition, Oxford University Press (1980).
39. See, for example: Benton, P. ‘Turbulent Times’,
Management Today, January 1991, p. 5.
40. Foster, G. ‘The Central Question’, Management Today,
April 1994, pp. 56–61.
41. See, for example: Stewart, R. Managing Today and
Tomorrow, Macmillan (1991).
42. See, for example: Robey, D. Designing Organizations,
Third edition, Irwin (1991).
43. Rosselli, M. ‘Take Your Own ****** ‘Letter!’, The British
Journal of Administrative Management, January/February
1997, pp. 22–3.
44.
See, for example: Armitage, K. ‘The Problems Raised by
“Flatter” Management’, The British Journal of Administrative
Management, vol. 4, February 1991, pp. 28–9.
45.
Gretton, I. ‘Striving to Succeed in a Changing
Environment’, Professional Manager, July 1993, pp. 15–17.
46. Audit Commission, Form Follows Function, HMSO (1996).
47. Learner, P. M. ‘Beware the Gatekeeper’, Amtrak Express,
July/August 1994, pp. 14–17.
48. Clutterbuck, D. ‘Marketing the Staff Departments’,
Professional Manager, January 1994, pp. 7–9.
49. Heller, R. ‘The Manager’s Dilemma’, Management Today,
January 1994, pp. 42–7.
50. Quinn, J. B., Anderson, P. and Finkelstein, S.
‘Leveraging Intellect’, in Crainer, S. and Dearlove, D.
(eds), Financial Times Handbook of Management, Second
edition, Financial Times Prentice Hall (2001), p. 592.
51. Mann, S. ‘Working around Projects’, Professional
Manager, November 2002, pp. 29–32.
NOTES AND REFERENCES
631
632
PART 6 ORGANISATIONAL STRUCTURES
52. Adapted from Kolondy, H. F. ‘Managing in a Matrix’,
Business Horizons, March/April 1981, pp. 17–24.
53. Bartlett, A. and Ghoshal, S. ‘Matrix Management: Not a
Structure, a Frame of Mind’, Harvard Business Review,
July–August 1990, pp. 138–45.
54. Senior, B. Organisational Change, Second edition,
Financial Times Prentice Hall (2002), p. 87.
55. Urwick, L. The Elements of Administration, Second edi-
tion, Pitman (1947), p. 38.
56. Ibid., p. 39.
57. Child, J. Organisation: A Guide to Problems and Practice,
Second edition, Paul Chapman (1988), pp. 5–6.
58. Tibballs, G. Business Blunders, Robinson Publishers
(1999), Chapter 2.
59. Townsend, R. Further Up the Organisation, Coronet
Books (1985), p. 159.
60. Kay, J. Financial Times, 17 January 1997.
61. Dunderdale, P. ‘Analysing Effective Organisations’,
Professional Manager, September 1994, pp. 23–4.
62.
Gray, J. L. and Starke, F. A. Organizational Behavior: Concepts
and Applications, Fourth edition, Merrill Publishing
Company, an imprint of Macmillan Publishing (1988).
63. Heller, R. In Search of European Excellence, HarperCollins
Business (1997), p. 4.
64. Birchall, D. W. ‘What Managers Do’, in Crainer, S. and
Dearlove, D. (eds), Financial Times Handbook of
Management, Second edition, Financial Times Prentice
Hall (2001), pp. 110–31.
65. Cloke, K. and Goldsmith, J. The End of Management and
the Rise of Organizational Democracy, Jossey-Bass (2002),
p. 41.
FT
Use the Financial Times to enhance your understanding of the context and practice of management and
organisational behaviour. Refer to article 16 in the BUSINESS PRESS section at the end of the book for
relevant reports on the issues explored in this chapter.
It is important to design at least parts of the
organisation so that it can recognise early on the
direction in which uncertain situations will unfold,
and so respond to change and uncertainty in an
opportunistic, flexible and effective manner.
Colin Eden
‘Coping with strategic risk’, in S. Crainer and D. Dearlove (eds) Handbook of
Management, Financial Times Prentice Hall (2001)
Organization structure, like so many other
aspects of business, is hostage to fads and
fashions … In looking at contemporary trends, we
should note that many ‘new’ ideas have in fact
been around in some form for decades.
Julian Birkinshaw
Mastering Management 2.0, Financial Times Prentice Hall (2001)
There are many variables which influence the
most appropriate organisation structure and
system of management. It is necessary to
analyse structure in terms of the relationships
among its components. Attention needs to be
given to pressures for greater flexibility in
patterns of organisation and the workforce, and
the nature of the manager–subordinate
relationship. The ‘fit’ between structure,
systems of management, and the behaviour of
people, will depend upon situational variables
for each particular organisation.
LEARNING OUTCOMES
After completing this chapter you should be able to:
explain the meaning and nature of the contingency
approach to organisation structure;
examine main contingency models and assess their
implication for management;
explain the importance of external environmental
influences for the management and structure of
organisations;
evaluate the relevance and practical value of the
contingency approach;
recognise the importance of alternative forms of
structure and the demand for flexibility;
assess the significance and influence of developments
in computerisation and telecommunications;
review the importance of situational variables for
patterns of structure and work organisation.
PATTERNS OF STRUCTURE
AND WORK ORGANISATION
16
Photo: David Oliver/Getty Images
In Chapter 15 we looked at structure as providing the framework of management and
at a number of basic principles and considerations which underlie the design of organi-
sation structure. These principles and considerations suggest a prescriptive stance
towards structure. There are, however, a number of variables and other factors which
affect the most appropriate organisation structure and systems of management, the
manner in which the work of the organisation is carried out, and how people actually
behave within the formal structure and system of the organisation. We need to remind
ourselves of the point made in Chapter 15 that:
Organisational form and organisational behaviour are not one and the same thing
.
1
Earlier approaches to organisation and management believed in one best form of struc-
ture and tended to concentrate on limited aspects of organisation. They also tended to
study the organisation in isolation from its environment.
■ The classical approach focused attention on the formal structure, technical require-
ments of the organisation and general sets of principles. There was an assumption of
rational and logical behaviour. The identification of general objectives and the clari-
fication of purposes and responsibilities at all levels of the organisation would lead
to the most effective structure. Bureaucracy, as a sub-group of the classical approach,
views the structure of the organisation in terms of specialisation, hierarchy of
authority, system of rules and impersonality.
■ The human relations approach focused attention on the informal organisation,
and on the psychological and social needs of people at work. The neo-human re-
lations writers concentrated on the personal adjustment of individuals within the
structure of the organisation. Members were assumed to be committed to achieving
the goals of the organisation. Attention was given to design of a structure which
removed alienating aspects of work and restrictions on effective performance.
■ The systems view of organisation and management placed emphasis on the socio-
technical approach, the interrelationships of sub-systems and multiple channels of
interaction, and recognised the importance of the external environment.
According to Bouchikhi and Kimberly, a feature that differentiates the nineteenth, twen-
tieth and twenty-first century management paradigms is that as customers and
shareholders have been more proactive, market-driven strategies and flexible organisa-
tions have developed as a consequence.
2
The changing nature of the work
environment, the increasing demands for flexibility and concerns with the contextual
factors influencing structure have drawn attention to the contingency approach to
organisational design.
The contingency approach can be seen as a development of the systems approach; it
goes a stage further in relating the environment, and other variables, to specific struc-
tures of organisation. The contingency approach takes the view that there is no one
best, universal structure. There are a large number of variables, or situational fac-
tors, which influence organisational design and performance. The contingency
approach emphasises the need for flexibility.
For example, as Vecchio puts it: ‘The goal of the contingency view is to explain how
differences in the contextual and structural dimensions are related. As the term contin-
gency implies, this approach does not seek universal principles that can be used for
PART 6 ORGANISATIONAL STRUCTURES
VARIABLES INFLUENCING ORGANISATION STRUCTURE
634
Earlier
approaches to
organisation
and
management
THE CONTINGENCY APPROACH