Organizational Structure

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A New Kind of Structure
1. Describe and evaluate what Pfizer is doing.
What Jordan Cohen has created at Pfizer is a network organization.  It’s a form of the boundaryless organization structure where company employees concentrate on the important aspects of the job, i.e. those elements that are related to the company’s core competencies, and other tasks are outsourced to another organization. 2.  What structural implications—good and bad—does this approach have? (Think in terms of the six organizational design elements.) Have students break into groups and discuss how the advantages and disadvantages of using a network organizational structure from the perspective of: • Work Specialization

• Departmentalization
• Chain Of Command
• Span Of Control
• Centralization And Decentralization
• Formalization
Some groups may be assigned more than one design element.  For more information on Pfizer’s new structure, go to the web 3.  Do you think this arrangement would work for other types of organizations? Why or why not? The network organization design used by Pfizer has helped to balance recent layoffs the company experienced after a nearly $4 billion yearly budget cut. According to managers in the Fast Company article, the OOF has cut some project costs by 100%. While this program has been a success for Pfizer, it may not be realistic for other companies that either (a) have not experienced such deep cuts in personnel, or (b) have such high personnel costs. 4.  What role do you think organizational structure plays in an organization’s efficiency and effectiveness? Explain. Organizational structure plays a key role in enabling a company to function smoothly, to remain responsive to its internal and external stakeholders, and to adapt to changes in the marketplace. Innovation is facilitated by fewer layers of management, and students have already learned that the survival and success of a company is usually dependent upon its ability to function as a learning...
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