Organizations
Tenth
Edition
Behavior
Structure
Processes
Gibson
Ivancevich
Donnelly
Chapter 15
Designing Effective Organizations
Learning Objectives
After completing Chapter 15, you should be able to:
Define
Organizational design
Describe
The ways organizations can respond to the need to process information about their
environments
Discuss
The important conclusions from studies of the relationship among structure and
technology, environmental uncertainty, and information processing demands
Compare
The mechanistic and organic models of organization design
Identify
The circumstances that would cause management to design an organization according to
mechanistic or organic principles
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Organizations
Tenth
Edition
Behavior
Structure
Processes
Gibson
Ivancevich
Donnelly
Chapter Outline
 Mechanistic & Organic Models of Organization
Design
 Contingency Design Theories
 Technology & Organizational Design
 Environment & Organization Design
 An Integrated Framework of Organization Design
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Organizations
Tenth
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Behavior
Structure
Processes
Gibson
Ivancevich
Donnelly
PRINCIPLES OF THE MECHANISTIC MODEL
Scalar chain
Authority &
responsibility
Specialization
Unity of direction
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Organizations
Tenth
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Behavior
Structure
Processes
Gibson
Ivancevich
Donnelly
THE MECHANISTIC MODEL
Organizational design emphasizing importance
of achieving high levels of production and efficiency
through extensive use of rules and procedures, centralized
authority, and high specialization of labor
Characteristics:



It’s highly complex because of its emphasis on specialization
of labor
It’s highly centralized because of its emphasis on authority
and accountability
It’s highly formalized because of its emphasis on function as
the basis for departments
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Organizations
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Behavior
Structure
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Ivancevich
Donnelly
CHARACTERISTICS OF WEBER’S BUREAUCRACY
 Jobs are highly specialized.
 Each task is performed according to abstract rules.
 Each employee or office is accountable for
performance to only one manager.
 Employees relate to each other & to clients in a
formal, impersonal manner, maintaining social
distance.
 Employment is based on technical qualifications &
is protected from arbitrary dismissal.
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Organizations
Tenth
Edition
Behavior
Structure
Processes
Gibson
Ivancevich
Donnelly
THE ORGANIC MODEL
Organizational design emphasizing importance of achieving
high levels of flexibility and development through limited use
of rules and procedures, decentralized authority, and relatively
low degrees of specialization
Characteristics:



It’s relatively simple because of its de-emphasis of
specialization and its emphasis on increasing job range
It’s relatively decentralized because of its emphasis on
delegation of authority and increasing job depth
It’s relatively informal because of its emphasis on product and
customer as bases for departments
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Organizations
Tenth
Edition
Behavior
Structure
Processes
Gibson
Ivancevich
Donnelly
TABLE 15-1: COMPARISON OF MECHANISTIC
AND ORGANIC STRUCTURES
Leadership
No perceived confidence and trust.
Lack of open communication.
Perceived confidence and trust.
Open communication.
Motivation
Taps only physical, security, and economic
motives, through fear and sanctions.
Taps a full range of motives through
participatory methods.
Communication Flows downward and tends to be
inaccurate and viewed with suspicion.
Flows freely throughout the organization.
Is accurate and undistorted.
Interaction
Closed and restricted.
Open and extensive.
Decision
Relatively centralized.
Relatively decentralized.
Goal setting
Located at the top; lack of involvement.
Encourages group participation in setting
high, realistic objectives.
Control
Centralized. Emphasizes fixing of blame
for mistakes.
Dispersed throughout organization.
Emphasizes self-control and problem solving.
Performance
goals
Low and passively sought by managers.
High and actively sought by superiors.
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Organizations
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Behavior
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ENVIRONMENT AND ORGANIZATIONAL DESIGN
Differentiation
Integration
Environment
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Differentiation
The degree of
differences among
organizational units due
to individual &
structural differences.
Integration
Achieving unity of effort
among different
organizational units &
individuals through rules,
planning, & leadership.
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FIGURE 15-1: CONCEPTUALIZATION OF
THE LAWRENCE & LORSCH MODEL
Integrative subsystem
Marketing
subsystem
Production
subsystem
Research
subsystem
Market
subenvironment
Technical-economic
subenvironment
Science
subenvironment
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Behavior
Structure
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FIGURE 15-2: MANAGEMENT’S RESPONSES TO
ENVIRONMENTAL DEMANDS FOR
INCREASED INFORMATION PROCESSING
Environmental
demand
Intensified
pressure to
process
information
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Management’s
responses
to episodic or
temporary demand
Management’s
responses
to persistent or
permanent demand
Reduce need for information by
1. Creating slack resources
2. Creating self-contained units
3. Creating virtual organizations
Develop
a matrix
organization
Increase capacity to process
information by
1. Investing in information systems
2. Creating boundary spanning roles
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Organizations
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Environmental
factors
Technical
subenvironment
Market
subenvironment
Production
subenvironment
Size
Managerial
factors
Strategic choices
Skills
Values
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Behavior
Structure
Processes
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FIGURE 15-3: INTEGRATIVE FRAMEWORK
FOR ORGANIZATIONAL DESIGN
Key design
decisions
Job design
Departmental
bases
Spans of control
Delegation of
authority
Organization
designs
Mechanistic
Matrix
Organic
12
Organizational
dimensions
Formalization
Centralization
Complexity
Organizational
effectiveness
Production
Quality
Flexibility
Efficiency
Satisfaction
Competitiveness
Development
Survival
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