Organization Structure Design

Yi Guo: 19132891 Minh Duc Hoang: 19064632

Ziyuan Chen: 15132579
 2

Warm-up Process

Prefrontal Cortex
memory, judgment,
analysis, thinking, Occipital Lobe
operation
Visual process

Posterior Frontal Lobe

emotion,
perception

Temporal Lobe
hearing, smelling
Parietal Lobe
reading, writing,
language,
movement
 3

Content
Evaluate Analyze
1 Introduce basic fundamentals of 2 Clarify the importance of
organizing : integration based on the
mechanistic and organic
differentiation & integration
approach

Apply Conclude
3 Use the case in China to illustrate 4 Purify the theory and provide the
the transformation of the insight for managers
organizational design
 4

Fundamentals of Organizing
Differentiation
Integration
different units –
different tasks, work methods, units coordinate for a common
competencies goal

Division of labor Mechanistic management

work = smaller tasks practices

Job specialization Organic management

specific tasks – specific units practices
 5

Integratio
n
Nature of tasks Roles
Organic: Interdependent, Organic: generalized
adjustable Mechanistic: specific
Mechanistic: specialized, rigid

Communication and decision making

Structure Organic: horizontal and vertical
Organic: network mutual influence and advice of all
Mechanistic: hierarchical levels
Mechanistic: vertical
directions and decisions of
superiors
 6

Why structural design is important?

Determination Success
growth and
mechanistic
Collaboration satisfaction
Factors organic
environment organization value,
strategy leadership, motivate
employee,
teamwork

In order to boost the growth of the corporation and meet the satisfaction of the
customer, it is crucial to take environmental and strategical factors into consideration.
 7

Organization design based on the strategy

Differentiation strategy
APPLE corporation

Mechanistic approach
Cost leadership strategy
Most Chinese manufacturing
factory

Organic approach
Focused strategy
Great Wall Motor
Company
 8

Organization design based on the strategy

Differentiation Cost leadership Focused

strategy strategy strategy
APPLE corporation Most Chinese manufacturing factory Great Wall Motor Company
 9

Transformati
on
Does organization structure
always fit
the change of the environment?

Technology

Customization

Job specialization
 10

 Based on Qingdao, China

 World's largest appliance maker
 Average annual revenue $35 millon
 15.3 % market share in whole world
 11

Enviornment has Changed

Employees Competitive Advantage
1 Skilled
2 Innovation
Not illiterate Not sheer size

Communication Shape of the world

3 Instantaneous 4 Internet of Things,
Decentralization
Not tortuous
Not vertical
 12

“Rendanheyi” model
'Ren': people, represents employees
'Dan': order, represents customers
'Heyi': combination, combines user value and participant value
together

Employees Customers
How it works? 13
 Differences with 14

Bureaucracy

• Sharp boundary Connect with outside

• Secrecy Open partnership ecosystem
• Closed system A hub in a much larger network
Summary: 15

 There is no correct or incorrect way of

designing an organization.
 The needs, goals and the mission of the
organization should be understood before
undertaking the task of designing.
 There are 4 major environmental factors-
suppliers, distributors, competitors, and
customers.
 Summary: 16

 The business strategy indicates how the

organizations intends to compete in the
markets.
 A cost-leadership strategy: focuses on cost
efficiencies to better compete with rivals.
 Differentiation strategy: focuses on customers
to provide them with a unique product/service.
 Focused strategy: targeting a specific, narrow
market
Summary: 17

 There are two fundamentals of organizing:

- Differentiation: division of tasks/specialized

labour.
- Integration: co-ordination between
departments.
How to effectively design an organization 18

 Declare war on the past- look forward.

 Design with DNA.
 Build on your strengths.
 Make the most of your top talent.
 Focus on the controllables.
 Promote accountability
 Benchmark sparingly, if at all.
 Let the lines and boxes fit your company’s
purpose.
 19

Reference
1. Christian Busch, 2017, https://www.12manage.com/forum.asp?TB=mintzberg_configurations&S=24

2. Nieuworganiseren, 2018, https://www.nieuworganiseren.nu/toolbox/wiki/wiki-het-rendanheyi-model/attachment/rendanheyi/

 20

•I N T E R A C T I V E
SESSION
Q&A
 21

T H A N K S F O R W AT C H I N G