8-ORGANIZATION-THEORIES-FOR-EFFECTIVE-BUSINESS.pdf

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1. ORGANIZATION
DESIGNS FOR
EFFECTIVE
BUSINESS

2. OBJETIVES:
A. Identify the different organization designs;
B. Explain the advantages and disadvantages
of each organizational design.
C. Apply organization designs in solving
business cases.

3. Key Terms

4. Accountability
●Accountability in the
workplace means that all
employees are responsible
for their actions, behaviors,
performanceand decisions.

5. Transparency
●It is the process of being
open, honest, and
straightforwardabout
various company
operations.

6. Formalization
●It is the extent to which an
organization's policies,
procedures, job
descriptions, and rulesare
writtenand explicitly
articulated.

7. Overhead
●AKA overhead cost or operating
expenses.
●These are the ongoing expenses of
operating a business that are not
directly tied to the production of
goods or services. (e.g.: rent,
salaries, and utilities)

8. Organization
Design

9. Organization Design
It is the process of aligningthe
organizationstructureof an
organization with its objectives,
with the ultimate aim of improving
efficiencyand effectiveness.

10. •Organizational design involves
implementingorganizational
structuresand systems that
align to an organization's core
strategies.

11. There are two main
classifications of theories
regarding organizational design.
Traditional Modern

12. •Traditional and modern
organizational designs represent
different approaches to organizing
and managing businesses.

13. Here's a comparison between the
two:
Traditionalorganizational design is characterized by a
hierarchical structure, with clear lines of authority and
communication.
Modernorganizational design is more flexible
and adaptablethan traditional design.

14. ORGANIZATION DESIGNS
TRADITIONAL
1.Simple design
2.Functional design
3.Divisional design
MODERN
1.Team Design
2.Matrix-Project Design
3.Project design
4.Boundaryless Design

15. Traditional
Designs
include:

16. 1. Simple
This organizational design has:
a.Few departments.
b.Wide spans of control.
c.Big number of subordinates directly
reporting to a manager.

17. d.Centralized authority figure.
e.Very little formalizationof work.
f.Usually used by companies that
start as entrepreneurial ventures.

18. Simple Organizational Design
Strengths Weaknesses
•Flexible.
•Fast decision-making
and result.
•Clear accountability.
•The risk of
overdependence on a
single person.
•No longer appropriate
as the company
grows.

19. 2. Functional
•This organizational design groups together
similaror related specialties.
•Jobs are grouped in departments with the
specified skills and/or business functions.

20. Functional Organizational Design
Strengths Weaknesses
•Cost-saving advantages.
•Management is facilitated
because workers with
similar tasks are grouped.
•Managers have little
knowledge of other units’
function.
•Potential for
departmental silos.

21. 3. Divisional
•This organizational design is made up of
separate business divisions or units, where the
parent corporation acts as overseerto
coordinateand controlthe different divisions
and provide financial and legal support services.

22. Example:
•Municipal Health Centers set up “barangay
health units” to provide the health services of
each barangay in the town. This “barangay
health units” report and coordinate with the
Municipal Health Centers.

23. Divisional Organizational Design
Strengths Weaknesses
•Enhanced focus on
specific products or
markets.
•Managers are
responsible for what
happens to their
products and services.
•Possible duplication
of activities and
resources.
•Increased cost and
reduced efficiency.

24. Modern
Designs
include:

25. 1. Team Design
•This organizational design is made up of
workgroups or teams.
•Focus on collaborationand collective
decision-making.

26. Team Design
Strengths Weaknesses
•Better Communication.
•Teams resolve problems quicker.
•Flexible and Empowered
Workforce.
•Empowerment of team members
and reduced barriers among
functional areas.
•Potential conflict.
•Some people are not team
players.
•Under-performing employees
hide behind the team.

27. 2. Matrix-Project Design
•This refers to an organization design
where specialists from different
departmentswork on projects that are
supervised by a project manager.

28. •This design results in a double chain
of commandwherein workers have
two managers -their functional area
manager and their project manager -
who share authorityover them.

29. Matrix-Project Design
Strengths Weaknesses
•A specialist is involved in the
project.
•Increased communication
efficiency.
•Improved employee
motivation.
•Increased teamwork.
•Maximize resource usage.
•Increase professional
development.
•Task and personality
conflicts.
•The potential conflict
between managers and
projects.
•Authority confusion.
•Reduced employees’
effectiveness.
•Increased management
overhead costs.

30. 3. Project design
•Temporary structure focused on
specific projects.
•Teams are formed for the duration of
the project and disband afterward.

32. Project design
Strengths Weaknesses
•Highly flexible.
•Expertise is concentrated on
the project.
•Responsive and draws on
talent where it is found.
•Lack of control.
•Presents communication
difficulties.
•Team members may
struggle with transitions
between projects.

33. 4. Boundaryless Design
•This refers to an organization design
where the design is not defined or
limitedby vertical, horizontal, and
external boundaries.

34. •There are no hierarchical levels that
separate employees, no departmentation,
and no boundaries that separate the
organization from customers, suppliers, and
other stakeholders.

37. •Boundaryless organizations remove
obstacles to innovation and promote the
generation and implementationof new ideas.
•The goal is to permeate boundaries so that
ideascan travel through the organization with
little hindrance.

38. •The key to this design is electronic
communication, where information is
shared with the member enterprise
with distinct competencies.

39. Boundaryless Design
Strengths Weaknesses
•Enhanced creativity and
innovation.
•Flexible designs.
•Fast decision making.
•Task and personality
conflict.
•Requires a cultural shift
and mindset change.
•Potential for information
overload.

40. Delegating

41. Learning Objectives
●Define the concept of delegation and
explain its importance in effective
leadership.
●Simulate the process of assigning tasks to
team members, providing guidance and
support as needed.

42. Delegating
•refers to assigninga new or additional task
to a subordinate;
•it may also refer to getting work done
through othersby giving them the right to
make decisions and take an action.

43. Elements of delegating
•Authority –the right to set officially or legally.
•Accountability–to be liable to be called to explain.
•Communication-ensuring that the person receiving
the delegation understands the objectives and
requirements

44. Advantages
and
Disadvantages

45. Advantages
•It prevents work overload among
organization managers
•It provides opportunities for employee or
subordinates assigned to do the task to
fully utilize their talents on the job.

46. Advantages
•It leads to empowerment of employees or subordinates
assigned to do the task, as it allows them freedom to
contribute ideas and to perform their job in the best possible
way.
•It increases job satisfaction among the assigned employees
or subordinates, that may lead to better job performance.

47. Disadvantages
•It may cause laziness among organization managers.
•It may encourage too much dependence on others.
•It may cause lack of control over priority management
problems.
•It may cause low confidence among managers.

48. Steps in
delegating

49. Steps in delegating
1. Defining the
goal clearly.
2. Select the
Right Person.
3. Trust and
Empower
4. Provide
Resources and
Authority
8. Training and
Support
7. Monitor
Progress
6. Adjust as
Needed
5. Evaluate and
Provide
Feedback
9. Provide
Recognition
10. Learn for
Future
Delegations

50. 1. Defining the goalclearly.
•Clearly articulate the task
or project that needs to be
delegated.
•Ensure that the scope,
objectives, and expected
outcomes are well-defined.

51. Example:
•The organization is planning to launch a new marketing campaign
to promote a product and increase sales.
•The leader defines the goal clearly by setting specific objectives
for the campaign, such as increasing brand awareness, reaching a
target audience, and achieving a specified percentage increase in
sales within a defined timeframe.

52. 2. Select the Right Person.
•Identify individuals on your
team with the skills, expertise,
and capacity to handle the
delegated task.
•Consider each team member's
strengths and weaknesses.

53. Example:
•The leader identifies a team member, Sarah, who has
experience in marketing and a proven track record of
successful campaign execution.
•The leader selects Sarah based on her expertise and
past performance, aligning her skills with the
requirements of the marketing campaign.

54. 3. Trust and Empower
•Asking the person assigned about
his or her planned approaches to
accomplish the task objectives.
•Allow them the autonomy to make
decisions and take ownership of the
task.

55. Example:
•The leader communicates trust in Sarah's abilities and
empowers her to lead the marketing campaign
independently.
•The leader assures Sarah that they believe in her
capabilities, providing the autonomy to make decisions
related to the campaign strategy, creative elements, and
execution plan.

56. 4. Provide Resources and
Authority
•Ensure that the person to whom you are
delegating has the necessary resources
(financial, human, or material) to accomplish
the task.
•Also, grant the appropriate level of authority
needed to make decisions related to the
delegated work.

57. Example:
•Sarah needs resources to execute the campaign effectively.
•The leader ensures Sarah has access to the necessary
budget, marketing tools, and collaboration with other
departments. The leader also grants authority for decision-
making within the defined scope of the campaign.

58. 5. Training and Support
•If the team member lacks specific skills
or knowledge required for the task,
provide necessary training or support.
•Ensure they have access to the
information and tools needed to succeed.

59. Example:
•Sarah identifies a need for additional skills to
implement a new digital marketing strategy.
•The leader arranges for a digital marketing training
session for Sarah and provides ongoing support
through access to industry experts or relevant
resources.

60. 6. Monitor Progress
•Regularly check in on the progress
of the delegated task.
•This doesn't mean constant
oversight but involves being
available for support and guidance
as needed.

61. Example:
•The marketing campaign is underway.
•The leader monitors the progress by scheduling regular check-ins
with Sarah to discuss milestones, address challenges, and ensure
the campaign is on track. This involves reviewing key performance
indicators (KPIs) and adjusting strategies as needed.

62. 7. Adjust as Needed
•Be open to adjustments and
learning from the delegation
process.
•If issues arise or if the task needs
modification, be flexible and
address them promptly.

63. Example:
•Midway through the campaign, Sarah encounters
unexpected challenges due to changes in market
conditions.
•The leader collaborates with Sarah to adjust the
campaign strategy, reallocating resources, and adapting
the plan to respond to the changing circumstances.

64. 8. Evaluate and Provide
Feedback
•After the task is completed,
conduct a thorough evaluation.
•Provide constructive feedback
on what went well and areas for
improvement.
•This helps in continuous
learning and improvement.

65. Example:
•The marketing campaign concludes, and results are
analyzed.
•The leader conducts a thorough evaluation of the
campaign's success against the predefined goals.
Constructive feedback is provided to Sarah, highlighting
areas of achievement and suggesting improvements for
future campaigns.

66. 9. Provide Recognition
•Acknowledge and appreciate the
efforts of the team member when they
meet milestones or successfully
complete the delegated task.
•Recognition reinforces positive
behavior.

67. Example:
•The marketing campaign surpasses its sales target
and receives positive feedback from customers.
•The leader publicly recognizes Sarah's efforts and the
success of the marketing team, acknowledging their
contribution to the organization's overall objectives.

68. 10. Learn for Future
Delegations
•Reflect on the delegation process.
•Consider what worked well and
what could be improved.
•Apply these lessons to future
delegation efforts.

69. Example:
•The leader reflects on the delegation process.
•The leader identifies lessons learned from the campaign,
such as effective strategies, areas for improvement, and
insights into team dynamics. These lessons inform future
delegation decisions and contribute to continuous
improvement in the delegation process.