Review of Day 3
• Drivers of globalization and reasons for market entry
• Market selection
• Methods of entry
• Strategy dilemma – how local, how global?
2
Day 4 Objectives
• Historical origins of structure
• Major dimensions of organizational structure
• Strengths/drawbacks of various structures
3
Organizations: How are they structured?
• Case study
Organizations: How are they structured?
• Work specialization
– Ford (Henry)
• Efficient, train replacement,
• Inflexible, dissatisfied
• Chain of command
– (Boss)
• Span of control
• Centralization
• Formalization
Frederick Taylor:
The Four Principles of Scientific Management
• Evaluate a task by scientifically studying each part of the task
• Carefully select workers with the right abilities for the task
• Give workers the training and incentives to do the task with the proper work methods • Use scientific principles to plan the work methods and ease the way for workers to do their jobs
Elton Mayo & the Hawthorne Effect
• Started out trying to see if different lighting affects worker productivity
• In later experiments, variables such as wage levels, rest periods and length of the work day were varied
• Worker performance seemed to increase over time leading Mayo and his colleagues to hypothesize the Hawthorne Effect
• Employees worked harder if they received added attention, if they thought managers cared about their welfare and that supervisors paid attention to them
Hugo Munsterberg:
Founder of “Industrial Psychology”
He set out to “sketch the outlines of a new science which is to intermediate between the modern laboratory psychology and the problems of economics: the psychological experiment is systematically to be placed at the service of commerce and industry." Hugo Munsterberg:
Founder of “Industrial Psychology”
• Study jobs and determine which people are best suited to specific jobs
• Identify the psychological conditions under which employees do their best work • Devise management strategies to influence employees to follow the management’s interests
Mary Parker Follett:
Democratic Organizations
• Organizations should be operated as
“communities” with managers and subordinates working together in harmony
• “Authority of Expertise”: The work process should be under the control of workers with relevant knowledge, rather than of managers who should act as facilitators
• Conflicts should be resolved by having the managers and workers talk over differences and find solutions that would satisfy both parties: integration
Organizations: How are they structured?
• Work specialization
– Ford (Henry)
• Efficient, train replacement,
• Inflexible, dissatisfied
• Chain of command
– (Boss)
• Span of control
Factors Influencing Span of Control Decisions
Job
Complexity
Job
Similarity
Technology
Ability of
Management
Span of Control
Degree of
Employee
Empowerment
Geographic
Proximity of
Supervised
Employees
Amount of Coordination
Abilities
of
Employees
Organizations: How are they structured?
• Work specialization
– Ford (Henry)
• Efficient, train replacement,
• Inflexible, dissatisfied
• Chain of command
– (Boss)
• Span of control
• Centralization
• Formalization
Organizations: How are they structured?
•
•
•
•
•
Work specialization
Chain of command
Span of control
Centralization
Formalization
– McDonald’s French Fries
– Alcoa Casters
General Organization Types
Mechanistic
Organization
Organic
Organization
Centralized hierarchy of authority
Decentralized hierarchy of authority
Many rules and procedures
Few rules and procedures
Specialized tasks
Shared tasks
Formalized communication
Informal communication
Few teams or task forces
Many teams or task forces
Narrow span of