New Work and Organizational Structures Flashcards
(58 cards)
Structural Changes in Organization Types
1980 : Functional hierarchies
1980: Matrix Organizations
Early 1990: value chains, Outsourcing
Late 1990: Networks, Alliances & Joint Ventures
Today & tomorrow : Agile Organizations, Holacracy
Types of Organizations (graph)
High market uncertainty and low Product complexity:
–> Network organization (Market networking, Customer- supplier, Strategic alliances: Competitors
Joint ventures: Partner)
Low market uncertainty and low product complexity : classical organization
–> Mass production
–> Standardized services
High Market uncertainty and low product complexity
–> Agile organizations (Task-oriented Ad-hoc Teams)
–> Task oriented Ad-hoc Cooperation
Low market uncertainy and high product complexity
–> Modular organization (Coordination, Process optimization)
Functional Structure
-Oldest organization type in the development history of industrial enterprises
-Persons with similar abilities and tasks are divided into formal work units, which can
be found in the second hierarchy level below the top management
Functional Structure: Advantages
-Strong development of knowledge and
competences
-Clear career paths within functions
-Economies of scale by means of resource bundling
-The skills and experiences match the task assignments
Functional Structure: Disadvantages
-The “big picture” often cannot be seen in single functions
-Interests of the own work unit outweigh
the interests of the organization
-There often is no common goal
-Lack of communication and coordination
between functions
Divisional Structure
-Introduced for the first time in the 1920s by DuPont and General Motors
- Persons who work in the same project or process, work for the same customers or
work in the same region are grouped
Divisional Structure:
Advantages
-Higher flexibility with respect to environmental changes
-Improved collaboration between
functions
-Clear distribution of responsibilities for a
specific product
-Concentration of experiences and
resources on certain customers, products
and regions
Divisional Structure: Disadvantages
-Reduction of scale effects
-Higher costs due to potential doubling of
resources (similar specialists in different
divisions)
-Danger of harmful competition between
divisions (e.g. for resources)
-Interests of the own work unit outweigh the interests of the organization
Matrix Structure
- The matrix structure, often also called matrix organization, combines functional and divisional structures
- Employees in a matrix organization belong to at least two formal work units – to a formal group (e.g., marketing) and to a product team
Matrix Structure: Advantages
-Improved cooperation and
communication between functions
-Improved decision-making, because the
solution of the problem is found on the team level
-Improved strategic management, because top-managers can set a stronger focus on
strategic processes
-Improved customer service, because
project managers serve as permanent
contact persons
Matrix Structure: Disadvantages
-Fights for power between formal team leader and project leader
-The system with two superiors can lead to
uncertainty regarding task priorities
-Team meetings may become very time
consuming and subgroups may evolve
-Project breaks cause a high amount of planning and additional costs
Network Organization: Increased Complexity for Individuals
- Globalization of markets
- Increased competition
- Shorter product life-cycles
- Interdisciplinary task assignments
- Information overload
Network Organization: solution building networks
(„From the lone fighter to a networked service provider“)
- Only work on those tasks which you are an expert for
- Clients want complete solutions from one source
- Cooperation in networks and concentration on core competencies
Network Organization: Advantages
-Network organizations help organizations
to operate cost-efficiently
-Organizations are able to make maximum
use of outsourcing strategies
-Networks allow the use of highly
specialized services
-New jobs are created
Network Organization: Disadvantages
-It is more difficult to control and coordinate a
network than a classically structured
organization
-Tension can arise when working with several partners (unequal level of relationship
management)
-The loss of a network element represents a
risk for the entire system
-When sensitive data is outsourced (e.g.,
financial data, HR data…), there is a danger of misuse
Agile Organizational Structures
-less-
hierarchical system
-more flexibility in business operations
- responds quickly to shifts and changes in the market environment
-learning and decision-making, customer-centricity
-open communication
-a network of
autonomous teams
Holacracy (definition)
takes powers traditionally reserved for executives and managers and spreads them across all employees
-Super circle: one that contains sub-circles (example marketing)
-Sub circle: each is dedicated to a function (example digital advertising)
-Role: a task related a function (example Social Media Producer)
Traditional hierarchy
layers of management establish how products are approved and monitored
-CEO
-Upper management
-Middle management
-Supervisors
-Staff
Holacracy: Self-Organized Organizations (more detailed)
-Teams rather than departments and divisions build up self-organized organizations
- Guidelines are collectively determined and
continuously adjusted. Employees decide how
teams are formed and how they should act - Leadership responsibility is related to roles, not
to individuals. Employees have important roles
in different teams and leadership responsibility
changes rapidly
Agile Organizational Structures: Advantages
-Direct communication between employees and customers allows fast and creative solutions, as well as customer proximity
-Organizations can react and flexibly adapt rapidly to new environmental contexts
-Experimental approaches in development of the organization: new projects and structures can be integrated and
disintegrated flexibly
Agile Organizational Structures: Disadvantages
-Difficult to implement in existing companies
-Very high motivation and self-competence of employees needed
-Parts of the classical management systems
could remain, which would make the company
into a hybrid construct. This leads to uncertainty, stereotyping and diversity problems inside the organization
Epochal change in the world of work: Response to the megatrends of digital transformation and demographic change
- Yesterday : Staff as Executer
- Today: People as Knowledge Worker
- Tomorrow : Purpose - Empowerment - Agile Work - Self Leadership
Working Environments 4.0
- decentralized
- flexible
- delimited
Spatiotemporal Flexibility
- Temporal flexibility
- Spatial flexibility
