Reframing Organizations

Structural Frame Melissa Strickland

Frames Lenses- focus, filter some things and allow others to pass through, help us order experiences.

Frames Tools- Strengths and limitations. Wrong tool gets in the way; right tool makes the job easier. -Possess a tool but know how to use it well.

Structural Frame The structural frame focuses on an organization's goals. Its main components are: -Organizations exist to attain goals, -An organization's structure should be designed to fit circumstances, -Specialization leads to peak performance, -Coordination and control are essential Problems that arise can solved by restructuring.

Structural Assumptions

1. Exist to achieve goals and objectives 2. Work best when rationality prevails over agendas 3. Increase efficiency through specialization and division of labor

4. Have structures to fit goals and objectives 5. Have coordination and controls to align work to goals and objectives 6. Need restructuring to remediate problems and performance gaps

Origins of Structural Perspective ● Frederick W. Taylor, father of time-and-motion studies ● Scientific Management ● Get the most out of every second

Origins Continued... ● Max Weber ● "Monocratic Bureaucracy" ● Several major features of model: ○ ○ ○ ○ ○ ○

Fixed division of labor Hierarchy of offices Set of rules governing performance Separation of personal from official property and rights Use of technical qualifications for selecting personnel Employment as primary occupation and long-term career

Basic Structural Tensions ● Design issues of organizational structure: differentiation—how to allocate work & integration— how to coordinate roles & units ● A job or position channels behavior by prescribing (job descriptions, procedures, routines, or rules) what someone is to do—or not do—to accomplish a task ● Formal constraints can be burdensome, leading to apathy, absenteeism, and resistance, but they help ensure predictability, uniformity, and reliability

Vertical Coordination ●

Authority—integrating the efforts of individuals, units, or divisions by designating someone formally “in charge”

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Rules & policies—with standards & standard operating procedures limit discretion & help ensure predictability & uniformity

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Planning & control systems—performance control imposes output objectives without specifying how the results are to be achieved— action planning specifies methods & time frames for decisions & actions

Lateral Coordination ● Meetings-formal & informal communication ● Task Forces-collaboration among specialties or functions ● Coordination Roles-use of persuasion or negotiation to help others integrate their efforts ● Matrix Structures-crosscutting coordination responsibilities ● Networks-lateral communication devices

Designing A Structure That Works ● ● ● ●

Goals in mind Environment Talents of workforce Available resources

A Structural Odd Couple

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McDonald's For forty years after its founding in the 1950's the company was an unstoppable growth engine that came to dominate the fast-food industry However, McDonald's is: ● Highly Centralized ● Most decisions made from the top ● Employees have limited discretion

Harvard University Harvard University is also highly successful. However, unlike McDonald's, it is significantly more decentralized. ● ● ● ● ●

Each school has its own dean They have fiscal autonomy Each Professor has enormous discretion They control what courses they teach They do their own research

Questions to consider ● Why do McDonald's and Harvard have such radically different structures? ● Is one more effective than the other?

The Facts ● There is no such thing as an ideal structure ● Every organization needs to respond to a universal set of parameters called Structural Imperatives that include: ○ ○ ○ ○ ○ ○

Size and Age Core process Environment Strategy and goals Information Technology Nature of the workforce

1) Size and Age ● Complexity and formality increase with size and age of an organization ● Smaller organizations need less control or restraint ● Bigger organizations will need tighter controls and more centralization

2) Core Process Structure is ideally built around an organization's basic method of transforming raw materials into finished products Assembling a Big Mac ● Relatively routine and programmed ● Task is clear ● Most problems are known in advance and success is high

High-technology electronics firms confront a much higher degree of uncertainty ● New products may be obsolete in 6 months or ●

less Uncertainty presses for new roles and flexible approaches to vertical coordination

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3) Environment ● Stable environments reward centralized structure ● Uncertain, turbulent environments requires a more complex, decentralized structure

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4) Strategy and Goals Strategic decisions are future oriented, concerned with long-term direction

● Major tasks of organizational leadership include: ○ Determined long-range goals ○ Objectives of an organization ○ Allocation of resources necessary to carry out the goals

5) Information Technology New technologies continue to revolutionize the amount of information available and the speed at which it travels ● The information-based organization needs far fewer levels of management than the traditional commandand-control organizations

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6) Nature of the Workforce ● A better-educated workforce expects and often demands more freedom in daily work routines ○ Trying to tell a Harvard professor what to teach is an exercise in futility ○ In contrast, giving too much discretion to a youthful, low-skilled Mcdonald's worker could become a disaster

Structural Configuration Mintzberg's five-sector logo

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Operating Core

(workers who provide service/teachers)

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Administrative Component

(principals/foremen/middle management)

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Senior Managers

(superintendent/schoolboard)

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Specialists

(technicians/analysts)

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Support Staff

(nurses/custodians/secretaries)

Simple Structure Start-up/mom & pop operation

● Two Levels - Strategic apex & Operating level ● Virtue - flexibility/adaptability/1 or 2 people run the show

● Vice - boss too close to operations/authority may block change

Machine Bureaucracy ●

Important decisions are made at the strategic apex

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Day-to-day operations are controlled by managers & standardized procedures

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Large support staffs & technostructure

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Example: McDonalds

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Challenges: 1. Motivate/satisfy workers without undermining consistency/uniformity 2. Constant tension between headquarters and local managers

Professional Bureaucracy ●

Operating core is larger than other structural parts

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Few managerial levels exist between the strategic apex and the professors - creates a flat, decentralized profile.

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Example: Harvard

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Challenges: 1.nQuality control and coordination 2. Responds slowly to change

Divisionalized Form ●

Quasi-autonomous units (multispecialty hospital) serve defined markets

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Division heads (presidents) are accountable to the corporate office

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As long as the division performs, they have free rein Benefits: 1. Offers economies of scale, resources, and responsiveness while controlling economic risks

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Challenges: 1. Headquarters may lose touch with operations 2. Headquarters wants oversight & divisional managers try to evade corporate control.

Adhocracy ●

Loose, flexible, and organic structure

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Characteristics: 1. Don’t believe in hierarchy, rule books, dress codes, etc… 2. Ambiguous authority structure 3. Unclear objectives 4. Contradictory assignments

Helgeson's Web of Inclusion ●

Organizational structure form more circular than a defined hierarchical pyramid (spider web)

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Emphasis on lateral relationships rather than hierarchy

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Leadership at the center rather than at the top

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Web builds from the center out through a network of interconnections

Issues in Restructuring ●

Restructuring must take into account structural configurations

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Each component exerts distinct pressures. ○ Strategic apex pushes for more alignment, centralization. ○ Middle managers try to protect autonomy and room to run their own units. ○ Technostructure pushes for standardization, believes in measurement and monitoring. ○ Support staff prefers less hierarchy, more collaboration.

Why Restructure ●

The environment shifts (regulation/compliance) ○ Example: Health Insurance Portability and Accountability Act (HIPPA)

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Technology changes ○ Example: Boeing’s shift from piston to jet engines ○ Example: Automotive mfg shift to hybrid cars

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Organizations grow

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Leadership changes

Making Restructuring Work Citibank’s “back room”

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Back room structure - machine bureaucracy (ex. McDonalds) Issues:

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Productivity, errors, expenses rising 20% per year

Phases:

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Phase 1 – Implemented new computer system for control and forecasting

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Phase 2 – Studied how the back room’s processes worked

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Phase 3 – Broke pipeline into smaller lines (different product) with managers for each line

Challenges:

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Technical core strongly resisted the intrusion

Need for Change ● Emphasized customers and employees ● Historic Roots ● Competition ○ ○ ○ ○

Low morale High costs Threats Declining customer service

● Six flows

Structural Change Top down management Poor patient care High turn-over Change from pyramid system to inclusive web ● Implementing Care Teams ● ● ● ●

One Boss ● One person has authority ● Top down management ○ Production delays ○ Slow communication ○ Frustrated employees & customers

Dual Authority ● Two individuals given authority over specific areas of the groups work ○ ○ ○ ○

Reduces boss's control Slows communications Erodes morale Decrease performance

Simple Hierarchy ● Middle Management ● Friction ● Limits access to the top

Circle Network ● Information flows sequentially ● Deal with only two others ■ Requires strong links ■ Easier management ■ Can be bogged down

All Channel Network ● Multiple connections ● Information flows ● High morale ● Requires effective communication skills

Teamwork and Interdependence Team Sports ○ Every competition calls for its own unique patterns of interactions ○ Unique team structures are required ■ Baseball ■ Football ■ Basketball

Baseball ● Individual goals ● Loosely integrated ● Individual efforts are mostly independent ● Manager's decision are tactical ● Managers come and go ● Players transfer with ease

Football ● ● ● ● ● ● ●

Perform in close proximity Each play involves every player Efforts are linked in prearranged plan Special teams Individual efforts tightly coordinated Strategic decisions made by head coach Tactical decisions made by others (assistant coaches, players)

Basketball ● ● ● ● ● ●

Operate in closer proximity Rapid transitions (offense-defense) Individual efforts depends on others Spontaneous, mutual adjustments Move in emerging pattern Newcomers experience difficulty in adjusting ● Individual "I" becomes collective "we"

Determinants of Successful Teamwork ● What is the nature and degree of dealings among individuals? ● What is the spatial distribution of unit members? ● Given a group's objectives and constraints, where does authority reside? ● How is coordination achieved? ● Which word best describes the required structure; conglomerate, mechanistic or organic? ● What sports expression captures the task of management?

Team Structure and Top Performance Katzenbach and Smith ○ Interviewed hundreds of people on more than 50 teams (Motorola, HP, Girls Scouts) in developing their book The Wisdom of Teams

"A team is a small number of people with complementary skills, who are committed to a common purpose, set of performance goals and approach for which they hold themselves mutually accountable."

Characteristics of High-Quality Teams (Katzenbach and Smith) ● High-performing teams shape purpose in response to a demand or an opportunity placed in their path, usually by higher management. ● High-performing teams translate common purpose into specific, measurable performance goals. ● High-performing teams are of manageable size. (2 to 25 people) ● High-performing teams develop the right mix of expertise. ● High-performing teams develop a common commitment to working relationships. ● Member of high-performing teams hold themselves collectively accountable.

Self-Managing Teams ● ● ● ● ●

Manage themselves Assign jobs to members Plan and schedule work Make productive service related decisions Take action to remedy problems

Examples of Self-Managing Teams

Classic Multi-decade Example