JOB DESIGN/SPECIALIZATION AND DEPARTMENTALIZATION

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Principles of Management MGT503

Lesson 10.30

JOB DESIGN/SPECIALIZATION AND DEPARTMENTALIZATION

Building Blocks of Organizing

Job design

Job design is an essential part of organizational structure.

Job design is the specification of task activities, usually repeated on a regular

basis, associated with each particular job.

Task activities need to be grouped in reasonably logical ways for each job.

The way the jobs are configured influences employee motivation.

Work specialization is the degree to which the work necessary to achieve

organizational goals is broken down into various jobs.

In Work specialization the tasks in an organization are divided into separate jobs. Another term for this is

division of labor.

Work specialization can be traced back to the writings of Adam Smith.

Work specialization was seen as a way to make the most efficient use of workers' skills because

workers would be placed in jobs according to their skills and paid accordingly.

Other advantages of work specialization included improvement in employees' skills at performing a

task, more efficient employee training, and encouragement of special inventions and machinery to

perform work tasks.

Work specialization was viewed as a source of unending productivity improvements. And it was--

up to a certain point.

The human diseconomies from work specialization included boredom, fatigue, stress, lowered

productivity, poor quality of work, increased absenteeism, and higher job turnover.

There are four approaches to job design.

Job simplification is the process of configuring or designing jobs so that job

holders have only a small number of narrow, repetitive, activities to perform.

The concept of job simplification was championed by economist Adam

Smith and by Frederick Taylor

Training new workers becomes relatively easy and workers become almost

interchangeable.

The advantage is that major production efficiencies may be gained.

The disadvantages are that, if carried too far, job satisfaction may be

destroyed by narrow, repetitive, boring jobs and the firm may become too

inflexible to serve customers with varying needs.

Types of Departmentalization

Departmentalization is the clustering of individuals into units and units into departments and larger units

in order to facilitate achieving organizational goals.

An organization design is an overall pattern of departmentalization.

There are four major patterns of departmentalization.

The functional structure groups jobs into units based upon similarity of

expertise, skills, and work activities, e.g., marketing, accounting.

The divisional structure groups jobs into units according to the similarity

of products or markets.

The hybrid structure combines aspects of both the functional and

divisional forms, with some jobs grouped into departments by functions

and other grouped by products or markets.

The matrix structure superimposes a horizontal set of divisional reporting

relationships onto a hierarchical functional structure.

Principles of Management MGT503

Assessing Structural Alternatives

Each of the four most common types of departmentalization has major advantages and

disadvantages.

Functional structure is a type of departmentalization in which positions are grouped

according to their main functional (or specialized) area.

Typical functional form of organization has several major advantages.

The functional form of organization has several major advantages.

In-depth development of expertise is encouraged.

Employees have clear career paths within their function.

Resources are used more efficiently.

Economies of scale may be possible because of specialized people and

equipment.

Intradepartmental coordination is facilitated.

Specialized technical competencies may be developed and may constitute

a competitive advantage.

The functional form of origination has several disadvantages.

Response time on multifunctional problems may be slow due to

coordination problems.

Major issues and conflicts between departments may have to be resolved

by top management, with resultant delays.

Bottlenecks due to sequential tasks.

Over specialization may lead to a restricted view of the department's and

the organization's needs.

Performance may be difficult to measure because several functions are

responsible for organizational results.

Managers may be trained too narrowly in a single department.

The functional form of departmentalization is more appropriate under certain

circumstances.

The organization is small or medium-sized.

There is a limited number of related products or services, or a relatively

homogeneous set of customers or clients.

The organization is large and diverse, but the environment is stable.

Divisional structure is a type of departmentalization in which positions are grouped according to

similarity of products, services, or markets.

Divisional structures are also called "self-contained structures" because each

division contains the major functional resources it needs to pursue its own goals

with little or no reliance on other divisions.

The three major forms of divisional structure differ according to the rationale for

forming the divisions.

Product divisions are divisions created to concentrate on a single

product or service or at least a relatively homogeneous set of products or

services.

Geographic divisions are divisions designed to serve different

geographic areas.

Customer divisions are divisions set up to service particular types of

clients or customers.

Divisional structure has several major advantages.

Divisions can react quickly to changes in the environment.

Principles of Management MGT503

Coordination across functions is simplified.

Each division can focus upon serving its customers.

The division's goals can be emphasized.

Performance is more easily measured.

Managers can be trained in general management skills.

Divisional structure has several disadvantages.

Duplication of resources in each division often occurs.

In-depth expertise may be sacrificed.

Divisions may compete for limited resources.

Expertise across divisions may not be shared.

Innovations may be restricted to single divisions.

Divisional goals may take priority over overall organizational goals.

The divisional structure is likely to be used in large organizations where substantial

differences exist among products or services, geographic areas, or customers

served.

Hybrid structure is a form of departmentalization that adopts parts of both functional and

divisional structures at the same level of management.

Hybrid structures are adopted by large organizations to gain the advantages of

functional and divisional structures.

Functional departments are created to take advantage of resource

utilization efficiencies, economies of scale, or in-depth expertise.

Divisional departments are usually created to benefit from a stronger

focus on products, services, or markets.

The hybrid structure has several advantages.

Corporate and divisional goals can be aligned.

Specialized expertise and economies of scale can be achieved in major

functional areas.

Adaptability and flexibility may be achieved in handling diverse product or

service lines, geographic areas, or customers.

The hybrid structure has several disadvantages.

Conflict may arise between departments and divisions.

Hybrid organizations tend to develop excessively large staffs in the

corporate-level functional departments.

There may be a slow response to exceptional situations requiring

coordination between a division and a corporate functional department.

The hybrid structure is best used under particular conditions.

The organization faces environmental uncertainty best met by a divisional

structure.

The organization requires functional expertise and/or efficiency.

The organization has sufficient resources to justify the structure.

A matrix structure is a type of departmentalization that superimposes a horizontal set of divisional

reporting relationships onto a hierarchical functional structure.

An organization with a matrix structure has a functional and a divisional structure

at the same time.

Employees who work in a matrix organization report to two "bosses," thus, the

unity-of-command principle is violated.

Organizations that adopt a matrix structure usually go through several identifiable

structural stages.

Principles of Management MGT503

Stage 1 is a traditional structure, usually a functional structure, which

follows the unity-of-command principle.

Stage 2 is a temporary overlay in which managerial integrator positions are

created to handle issues of finite duration that involves coordinating

across functional departments.

Stage 3 is a permanent overlay in which the managerial integrator

positions become permanent.

Stage 4 is a mature matrix, in which matrix bosses have equal power.

As an organization passes through the matrix stages, horizontal integration

increases at the cost of greater administrative complexity. The matrix form of

organization has several advantages.

The matrix form of organization has several advantages.

Decision making can be decentralized.

Horizontal coordination is strengthened.

Environmental monitoring is improved.

Responses to environmental changes are quickly made.

Functional specialists can be added to or resigned to projects as needed.

Support systems can be allocated to projects as needed.

Matrix designs have several disadvantages.

Administrative costs are increased.

Lines of authority and responsibility may not be clear to individual

employees.

Possibilities of conflict are increased.

Individuals can become preoccupied with internal relations at the expense

of clients and project goals.

All decisions may become group decisions, leading to gross inefficiency.

Reactions to change may be slowed if interpersonal skills are lacking or

top management fights for control.

Matrix designs are usually appropriate when the following three conditions are

met:

The considerable pressure from the environment that necessitates a

simultaneous and strong focus on both functional and divisional

dimensions.

The demands placed on the organization are changing and unpredictable,

making it important to have a large capacity for processing information

and coordinating activities quickly.

There is pressure for shared resources.

Research indicates some of the factors that may be necessary to the success of a

matrix systems

The organizational culture may need to be changed to support

collaboration.

Managers may need special training, especially in interpersonal relations.

Of particular interest are two new types of organizational structure that have recently emerged: the

process structure and the networked structure.

A process structure is a type of departmentalization which groups positions into process team

which are given beginning-to-end responsibility for that process or that specified work flow. The process

structure is sometimes called the horizontal organization.

The networked structure is a form of organizing in which many functions are

contracted out to other independent firms and coordinated through the use of

information technology networks. Sometimes the networked structure is called the

virtual corporation because it performs as virtually one corporation.

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