Chapter 10 Basic Organizational Design

Topics: Management, Strategic management, Project management, Marketing, Balance sheet, Strategy / Pages: 18 (4291 words) / Published: Mar 29th, 2013
Chapter 10 Basic Organizational Design

Once managers are done planning, then what? This is when managers need to begin to “work the plan.” And the first step in doing that involves designing an appropriate organizational structure. This chapter covers the decisions involved with designing this structure. Focus on the following learning outcomes as you read and study this chapter.

LEARNING OUTCOMES

10.1 Describe six key elements in organizational design.
10.2 Contrast mechanistic and organic structures.
10.3 Discuss the contingency factors that favor either the mechanistic model or the organic model of organizational design.
10.4 Describe traditional organizational designs.

A MANAGER’S DILEMMA

How can we design an organizational structure that will help us accomplish our company’s goals? Should our structure be tall or flat? Traditional or contemporary? Will our chosen design enhance our capacity to continuously learn, adapt, and change in a dynamic global environment? As tomorrow’s managers, many of your students will soon face these questions. In Chapter 10, students learn about various elements of organizational structure, the contingency factors that influence organizational design, and traditional and contemporary design. In addition, they will study design challenges encountered by managers who work in a variety of organizational structures.

“A Manager’s Dilemma” highlights some of the problems in store for Eli Lilly & Company, a major US pharmaceutical company. Eli Lilly & Co. stands to lose $10 billion in annual revenues between now and 2016 as three of its major drug patents expire. As CEO, John Lechleiter’s job is to find foster new drug development to replace the projected loss revenue. While other pharmaceutical companies are seeking a merger route to acquire new drugs, Eli Lilly One has decided to revamp the company’s operational structure into five global business units and create an improved product research and development

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