-Good Information related Organizational Design and Culture. -Types of Organizational Designs -Characteristics of Culture and many more other things are included in it..

1. Chapter#3
OrganizationalContext:Design&Culture
BY: MA’AM SYEDA TOOBA SALEEM

2. OrganizationalDesign
Organizational Design is a process of constructing and adjusting
an organization’s structure so that a company can operate in the
most effective & efficient way in order to achieve its goals.
Where Organization’s Structure refers towards the linking of
departments and formal arrangement of jobs within the
organization. In other words, Organizational structure defines the
purpose, accountabilities, and key performance indicators (KPIs)
for each business function and role.
Moreover, Organizational Design involves decisions regarding six
elements of the org. structure.

3. ElementsOfOrganizationalStructure
Following are the six elements of Organizational Structure :
 Work specialization (Describes degree to which activities in
an organization are subdivided into separate jobs.)
 Departmentalization (the basis by which jobs are grouped
together.)
 Chain of command (who will report to whom?)
 Span of control (refers to the number of subordinates under
the manager's direct control.)
 Centralization and Decentralization (Degree to which
decision making is concentrated at a single point in the
organization,)
 Formalization (the degree to which jobs within the
organizations are standardized & extent to which employee
behavior is guided by rules & regulation.)

4. TraditionalOrganizationalDesign
 Simple Structure:
Low departmentalization, wide spans of control,
centralized authority, little formalization
 Functional Structure:
Departmentalization by function such as Operations,
finance, human resources, and product research and development
 Divisional Structure:
Composed of separate business units or divisions with
limited autonomy under the coordination and control of the
parent corporation

5. ContemporaryOrganizationalDesigns
 Team Structures:
The entire organization is made up of work groups or self-
managed teams of empowered employees.
 Matrix Structures:
Specialists for different functional departments are
assigned to work on projects led by project managers. Matrix
participants have two managers.
 Project Structures:
Employees work continuously on projects, moving on to
another project as each project is completed. E.g: Bahria towns
>> Riaz Malik.

6. AMatrixOrganizationStructure

7. LearningOrganization
The learning organization represents contemporary
organization theory and is compatible with and is
relevant to the new paradigm environment facing
today’s organizations.
An organization that has developed the capacity to
continuously learn, adapt, & change through the
practice of knowledge management by employees
is known as Learning Organization.

8. LearningOrganizations
There are two types of learning organization according to Chris
Argyris which are as follows:
1.Single-loop learning: (1st order)
involves improving the organization’s capacity to
achieve known objectives. It is associated with routine and
behavioral learning. Under single-loop, the organization is
learning without significant change in its basic assumptions.
(e.g. thermostat > detects temp. & maintain accordingly)
2. Double-loop learning: (2nd order)
reevaluates the nature of the organization’s
objectives and the values and beliefs surrounding them. This
type of learning involves changing the organization’s culture.
Importantly, double-loop consists of the organization’s learning
how to learn. (e.g. themostat > which temp. is best for the
room? After detecting)

9. LearningOrganizations
Peter Senge & his teams helps understand the difference between adaptive
learning and generic learning.
 Adaptive Learning (routine related, TQM, benchmarking etc)
 Generic Learning (creativity & innovation)
Note:
Must read book chap# 3 page 59. & understand it with the context of
previous slide as explained in the class.
Book:
https://bdpad.files.wordpress.com/2015/05/fred-luthans-organizational-
behavior-_-an-evidence-based-approach-twelfth-edition-mcgraw-hill_irwin-
2010.pdf

10. TraitsOfLearningOrganization

11. TraitsOfLearningOrganization
“Creative tension”—serves as a catalyst or motivational need to
learn.
this tension stems from/ caused by the gap between the
organization’s vision and reality and suggests the learning
organization’s continually questioning and challenging the status
quo/ existing state.
The “systems thinking” of learning organizations recognizes the
shared vision of employees throughout the whole organization
and the openness to new ideas.
An “organizational culture” favorable to learning & set
mechanisms in place for suggestions, teams, empowerment, and,
most subtly but importantly, empathy
An open team-based organizational design that empowers
employees.

12. TraditionalVSLearningOrganizations

13. ModernOrganizationalDesign
Following are the types of modern organizational design:
 Horizontal organizational design
 Hollow & modular organizational design (contemporary)
 Network organizational design
 Virtual organizational design

14. HorizontalOrganizationalDesign
Anand and Daft noted that “the horizontal organization advocates
the dispensing of internal boundaries that are an impediment to
effective business performance. If the traditional structure can be
likened to a pyramid, the metaphor that best applies to the
horizontal organization is a pizza—flat, but packed with all the
necessary ingredients.”
The modern environment covered in the last chapter has stimulated
the change to horizontal designs that better facilitate cooperation,
teamwork, and a customer orientation rather than a functional
orientation.

15. HorizontalOrganizational Design
Frank Ostroff, a McKinsey & Company consultant, along with colleague
Douglas Smith, is given credit for developing some of the following guiding
principles that define horizontal organization design:
1.Organization revolves around the process, not the task.
Instead of creating a structure around the traditional functions, the
organization is built around its three to five core processes. Each process
has an “owner” & specific performance goals.
2. The hierarchy is flattened.
To reduce levels of supervision (command & control), fragmented
tasks are combined, work that fails to add value is eliminated, & activities
within each process are cut to the minimum.
3. Teams are used to manage everything.
Self-managed teams are the building blocks of the organization.
The teams have a common purpose & are held accountable for measuring
performance goals.

16. HorizontalOrganizational Design
4. Customers drive performance.
Customer satisfaction, not profits or stock appreciation, is the
primary driver & measure of performance.
5. Team performance is rewarded.
The reward systems are geared toward team results, not just
individual performance. Employees are rewarded for multiple skill
development rather than just specialized expertise.
6. Supplier and customer contact is maximized.
Employees are brought into direct, regular contact with suppliers &
customers. Where relevant, supplier & customer representatives may be
brought in as full working members of in-house teams.
7. All employees need to be fully informed and trained.
Employees should be provided all data, not just sanitized
information on a “need to know” basis. However, they also need to be
trained how to analyze & use the data to make effective decisions.

17. ContemporaryDesigns
Holloworganizationdesigns:
 When the management outsourced/offshore its selected tasks, functions
and processes and left with what has been to focus termed as “Hollow
Organization Design”.
 organizations involved in labor intensive manufacturing of toys, apparel,
shoes (e.g., Nike and Reebok) moved to hollow designs that outsourced
the entire process of making of their products and left them to focus on
product design and marketing.
 Anand and Daft summarized the advantages of this design in terms
of cost savings, tapping into best sources of specialization and
technology, supplier competition and technology, and flexibility,
 But also the disadvantages of loss of in-house skills and
innovation, reduced control over supply and quality, and even the
threat of being entirely supplanted by suppliers.

18. ContemporaryDesigns
Modular organization designs:
 the modular designs are also based on outsourcing, but instead of the
entire process being taken offshore, as in hollow designs (e.g.,
manufacturing, logistics, or customer service), the modular design
consists of “decomposable product chunks provided by internal and
external subcontractors.”
 Anand and Daft summarize the advantages of modular designs in terms
of cost, speed of response to market changes, and innovation through
recombination of modules in different ways.
 Nissan’s modular design is known for being very efficient because parts
such as the frame, dashboard, and seats are made by subcontractors and
then shipped to the Nissan plant for assembly.

19. ContemporaryDesigns
Networkdesigns:
 A small core organization that outsources its major business functions
(e.g., manufacturing) in order to concentrate on what it does best.
 All three of these contemporary designs are sometimes subsumed under
the single term “Network Designs” because of the boundaryless
conditions created by advanced information technology and
globalization.
 This involves a unique combination of strategy, structure, and
management processes.
 Delayered, highly flexible, and controlled by market mechanisms rather
than administrative procedures, firms with this new structure arrayed
themselves on an industry value chain according to their core
competencies, obtaining complementary resources through strategic
alliances and outsourcing.

20. ContemporaryDesigns
Virtual organization:
 An organization that consists of a small core of full- time employees and
that temporarily hires specialists to work on opportunities that arise.
 Highly centralized & No departmentalization
 Allow them to contract
 Manufacturing, distribution, marketing that to be done better or more
cheaply
 The managers in virtual structures spend their time coordinating &
controlling external relations.
 Culture based on high trust.
 Virtual organizations can help competitiveness in the global economy.
 The alliances and partnerships with other organizations can extend
worldwide, the spatial and temporal interdependence easily transcend
boundaries, and the flexibility allows easy reassignment and reallocation
to take quick advantage of shifting opportunities in global markets.

21. VirtualOrganization
The key attributes of the virtual organization are as followed:
1. Technology. Informational networks will help far-flung
companies and entrepreneurs link up and work together from
start to finish. The partnerships will be based on electronic
contracts to keep the lawyers away and speed the linkups.
2. Opportunism. Partnerships will be less permanent, less
formal, and more opportunistic. Companies will band together
to meet all specific market opportunities and, more often than
not, fall apart once the need evaporates.

22. VirtualOrganization
3. No borders. This new organizational model redefines the
traditional boundaries of the company. More cooperation among
competitors, suppliers, and customers makes it harder to
determine where one company ends and another begins.
4. Trust. These relationships make companies far more reliant on
each other and require far more trust than ever before. They share
a sense of “co-destiny,” meaning that the fate of each partner is
dependent on the other.
5. Excellence. Because each partner brings its “core competence”
to the effort, it may be possible to create a “best-of-everything”
organization. Every function and process could be world class—
something that no single company could achieve.

23. Organizational Culture
A system of shared meanings, values and common beliefs
held by the organizational members that determine, to a large
degree, how they think & act towards each other as well as
on challenges & opportunities facing by organization.
“The way we do things around here.”
Values, symbols, rituals, myths, and practices.

24. OrganizationalCulture
 Sources of Organizational Culture
 The organization’s founder
 Past practices of the organization
 Continuation of the Organizational Culture
 Recruitment of employees who “fit”
 Behavior of top management
 Socialization of new employees to help them adapt
to the culture

25. HowEmployeesLearnCulture
Stories
• Narratives of significant events or actions of people that
convey the spirit of the organization
Rituals
• Repetitive sequences of activities that express and reinforce
the values of the organization
Material Symbols
• Physical assets distinguishing the organization
Language
• Acronyms and jargon of terms, phrases, and word
meanings specific to an organization

26. CharacteristicsOfTheOrganizationalCulture
Organizational culture has a number of important
characteristics. Some of the most readily agreed upon are the
following:
1. Observed behavioral regularities. When organizational
participants interact with one another, they use common
language, terminology, and rituals related to deference and
demeanor.
2. Norms. Standards of behavior exist, including guidelines
on how much work to do, which in many organizations come
down to “Do not do too much; do not do too little.”
3. Dominant values. There are major values that the
organization advocates and expects the participants to share.
Typical examples are high product quality, low absenteeism,
and high efficiency.

27. CharacteristicsOfTheOrganizationalCulture
4. Philosophy. There are policies that set forth the
organization’s beliefs about how employees and/or
customers are to be treated.
5. Rules. There are strict guidelines related to getting
along in the organization. Newcomers must learn those
“ropes” in order to be accepted as full-fledged members
of the group.
6. Organizational climate. This is an overall “feeling”
that is conveyed by the physical layout, the way
participants interact, and the way members of the
organization conduct themselves with customers or other
outsiders.

28. UniformityOf Culture
A common misconception is that an organization has
a uniform culture.
 “All organizations ‘have’culture in the sense that
they are embedded/rooted in specific societal
cultures and are part of them.” According to this
view, an organizational culture is a common
perception held by the organization’s members.
Everyone in the organization would have to share
this perception. However, all may not do so to the
same degree. As a result, there can be a dominant
culture as well as subcultures throughout a typical
organization.

29. CulturalLiabilities
Barriers to Change
Barriers to diversity
Barriers to acquisitions & mergers

30. Creating&Maintaining TheCulture
How Organizational Cultures Start:
Although organizational cultures can develop in a number of different ways, the
process usually involves some version of the following steps:
 A single person (founder) has an idea for a new enterprise.
 The founder brings in one or more other key people and creates a core group
that shares a common vision with the founder. That is, all in this core group
believe that the idea is a good one, is workable, is worth running some risks
for, and is worth the investment of time, money, and energy that will be
required.
 The founding core group begins to act in concert to create an organization by
raising funds, obtaining patents, incorporating, locating space, building, and
so on.
 At this point, others are brought into the organization, and a common history
begins to be built.

31. Creating&MaintainingTheCulture