Schermerhorn & Bachrach Exploring Management 6th edition Instructor’s Manual
CHAPTER 8
Organization Structure and Design
It’s all about working together
Chapter 8 Overview
Each Chapter contains several inset features designed to assist the student reader in applying the
concepts to relevant examples. Management Live illustrates how experiences and activities relate
to work performance. Choices provides students with an opportunity to evaluate various sides of
an issue in order to make an informed decision. Hot Topic explores samples of debated topics in
business and strategy. Facts to Consider introduces research or trends that may be used for class
discussion in the classroom or online for distance learning. Insight profiles the importance of
empowerment. Quick Case presents a business related scenario for class analysis and discussion.
The chapter begins with a definition of organizing, one of the management functions, and its
importance to the other management functions. Organizing is the process of arranging people
and other resources to work together so that goals can be carried out. Organizing involves
dividing up the work to be done (division of labor) and coordinating results to achieve a common
Chapter 8 Takeaway Questions
Takeaway 8.1 Understand organizing as a managerial responsibility
Takeaway 8.2 Identify common types of organization structures
Takeaway 8.3 Recognize current trends in organizational design
Schermerhorn & Bachrach Exploring Management 6th edition Instructor’s Manual
Chapter 8 Lecture Outline
Takeaway 8.1 What Is Organizing as a Managerial Responsibility?
• Organizing is one of the management functions.
Takeaway 8.2 What Are the Most Common Organization Structures?
• Functional structures group together people using similar skills.
Takeaway 8.3 What Are the Trends in Organizational Design?
• Organizations are becoming flatter, and using fewer levels of management.
Chapter 8 Supporting Materials
Figures
• Figure 8.1 What Is the Importance of Organizing in the Management Process?
• Figure 8.2 What Does a Typical Functional Organization Structure Look Like?
• Figure 8.3 What Are Some Ways Organizations Use Divisional Structures?
• Figure 8.4 How Does a Matrix Structure Combine Functional and Divisional Structures?
• Figure 8.5 How Do Team Structures Capture the Benefits of Cross-Functional Teams?
• Figure 8.6 How Do Network Structures Take Advantage of Strategic Alliances and
Outsourcing?
• Figure 8.7 What Are the Major Differences Between Mechanistic and Organic
Organization Designs?
What’s Inside
• Management Live: Skills Gap Found in College Students
Schermerhorn & Bachrach Exploring Management 6th edition Instructor’s Manual
• Quick Case: Crowdsourcing Performance Reviews and Flattening Structures
Applications
• TestPrep 8 Multiple-Choice Questions
• Skill Building Portfolio
Chapter Outline
Takeaway 8.1: What is Organizing as a Managerial Responsibility?
• Organizing is one of the management functions
✓ Organizing arranges people and resources to work toward a goal
✓ Figure 8.1 What Is the Importance of Organizing in the Management Process?
• Organization charts describe the formal structures of organizations
✓ Organization structure is formal arrangement of people, tasks, positions, and
reporting relationships
DISCUSSION TOPIC
To introduce this chapter, describe for the students the organization structure that exists at your
college/university. Focus on why the college/university is organized as it is and what is
accomplished through this organization form. Also, give attention to both the formal and
informal structures of the organization.
• Organizations also have informal structures
• Informal structures have good points and bad points
Schermerhorn & Bachrach Exploring Management 6th edition Instructor’s Manual
DISCUSSION TOPIC
Ask students to provide examples of informal organizational structures that they have
encountered. Discuss how these informal structures helped or hindered the operation of the
organization’s formal structure.
8.1 Questions for discussion suggested answers
1) Why is organizing such an important management function?
2) If organization charts are imperfect, why bother with them?
3) Could an organization consistently perform well without the help of its informal
structure?
8.1 Career Situation: What Would You Do?
As the new manager of a branch bank location, you will be supervising 22 employees, most of
whom have worked together for a number of years. How will you identify the informal structure
of the branch? How will you try to use this structure to help establish yourself as an effective
manager in the new situation?
Student answers will vary. However, they all should identify that one of the first task should be to
get to know and work well with the administrative assistant as this individual should be able to
Schermerhorn & Bachrach Exploring Management 6th edition Instructor’s Manual
Takeaway 8.2: What Are the Most Common Organization Structures?
• Functional structures group together people using similar skills
✓ Departmentalization – is the process of grouping together people and jobs into work
units.
Figure 8.2 What Does a Typical Functional Organization Structure Look Like?
Functional structures are common in organizations of all types and sizes. In a typical
business you might have vice presidents or senior managers heading the traditional
functions of accounting, human resources, finance, manufacturing, marketing, and sales.
In a bank, they may head such functions as loans, investments, and trusts. In a hospital,
managers or administrators are usually in charge of functions such as nursing, clinics, and
patient services.
✓ A functional structure groups people together into formal work units based on their
similar skills and performing similar tasks. Example: Marketing, Finance, Production
DISCUSSION TOPIC
Ask students to think about how the curriculum at their college/university addresses the different
functions of business. Are marketing, finance, production, and human resource management, for
instance, taught as stand-alone courses, or are they taught in some integrated fashion? As stand-
alone courses, what does this convey to students about the functional chimneys of business?
What does any integrated format convey about tearing down these functional chimneys?
• Divisional structures group together people by products, customers, or locations
✓ See inset for advantages of divisional structures
Schermerhorn & Bachrach Exploring Management 6th edition Instructor’s Manual
✓ Figure 8.3 What Are Some Ways Organizations Use Divisional Structures?
In products structures, divisions are based on the product or service provided, such as
consumer products and industrial products. In geographic structures, divisions are
✓ Potential advantages of divisional structures:
• Expertise is focused on special products, customers, or regions.
• Matrix structures combine the functional and divisional structures
✓ Sets up permanent teams that operate across functions to support specific products,
✓ Figure 8.4 How Does a Matrix Structure Combine Functional and Divisional
Structures?
A matrix structure is designed to combine the best of the functional and divisional
DISCUSSION TOPIC
Ask students to consider the project teams on which they most likely have worked in one or
more of their courses. Have them describe the challenges they have encountered in responding to
the expectations of both the project team leader and the course instructor. Relate their
descriptions to the preceding discussion of the advantages and disadvantages of matrix
structures.
✓ Cross-functional teams are teams whose members come together from different
functional departments, to work on a common task.
Schermerhorn & Bachrach Exploring Management 6th edition Instructor’s Manual
• Team structures make extensive use of permanent and temporary teams
✓ Team structures use permanent and temporary cross-functional teams to improve
lateral relations and solve problems, projects, and for day-to-day tasks
✓ Figure 8.5 How Do Team Structures Capture the Benefits of Cross-Functional
Teams?
Team structures make extensive use of teams to improve organizations through better
communication and problem solving across functions. Some teams are temporary,
✓ Potential advantages of team structures:
• Network structures make extensive use of alliances and outsourcing
✓ A network structure links a central core with “networks” of relationships with
outside contractors and partners that supply essential services
✓ May lower costs, increase speed, and offers flexibility
✓ A strategic alliance – cooperation with other firms to pursue business activities of
mutual interest
➢ Outsourcing alliances – contract to purchase important services from another
organization
➢ Figure 8.6 How Do Network Structures Take Advantage of Strategic
Alliances and Outsourcing?
Schermerhorn & Bachrach Exploring Management 6th edition Instructor’s Manual
Schermerhorn & Bachrach Exploring Management 6th edition Instructor’s Manual
Student answers will vary. This should be a good team assignment and a presentation from each
team at the end to generate a better integrated solution.
Takeaway Question 8.3: What Are the Trends in Organizational Design?
• Organizations are becoming flatter, and using fewer levels of management
✓ Organizational design is the process of aligning the structure of the organization to
best accomplish the organizational mission and respond to the challenges of the
external environment.
• Organizations are increasing decentralization
✓ Centralization – top management keeps strong control over decision-making
• Organizations are increasing delegation and empowerment
✓ Delegation is the process of entrusting work to others by giving them the right to
✓ Empowerment is the process of giving people the freedom to contribute ideas, make
• Organizations are becoming more horizontal and adaptive
✓ A bureaucracy emphasizes formal authority, rules, order, fairness, and efficiency
✓ Mechanistic designs are bureaucratic, using a centralized and vertical structure
✓ Organic designs are adaptable using a decentralized and horizontal structure
✓ Based on work of Burns and Stalker
✓ Figure 8.7 What Are the Major Differences Between Mechanistic and Organic
Organizations Designs?
Schermerhorn & Bachrach Exploring Management 6th edition Instructor’s Manual
• Organizations are using more alternative work schedules
✓ Compressed workweek – full time work is completed in less than five days. For
example, a 4-10 work week means that employees work four 10 hours days and have
8.3 Questions for discussion suggested answers
1) Is “empowerment” just a buzzword, or is it something that can really make a difference in
organizations today?
2) Knowing your personality, will you fit in better with an organization that has a
mechanistic or an organic design?
3) How can alternative work schedules work to the benefit of both organizations and their
members?
8.3 Career Situation: What Would You Do?
As the owner of a small computer repair and services business you would like to allow
employees more flexibility in their work schedules. But you also need consistency of
coverage to handle drop-in customers as well as at-home service calls. There are also
times when customers need what they consider to be “emergency” help outside normal 8
a.m. to 5 p.m. office hours. A meeting with the employees is scheduled for next week.
Schermerhorn & Bachrach Exploring Management 6th edition Instructor’s Manual
How can you work with them to develop a staffing plan that includes flexible work
options that meet their needs as well as yours?
Teaching Notes
In this section, ideas, exercises, and assignments are provided to assist you in integrating the
concepts in Exploring Management for your students, especially the special features of the text.
Management Live: Skills Gap Found in College Students
The data are sobering. Complex reasoning skills – four of ten college students graduate without
it. Read a data plot, construct a clear argument, evaluate evidence in an argument, identify a
Richard Arum, author of Academically Adrift, says: “Colleges are increasing their attention to
the social aspects on campus to keep students happy; there is not enough rigorous academic
instruction.” Is this the case on your campus and with you? Are our colleges and universities
organized well to serve students’ long-term needs?
Student answers will vary.
Choices: Empowered into Exhaustion
Many issues in this hypothetical situation are far too familiar in corporate life as organizations
trim staff and create leaner structures. Doing more with less, being evaluated on “face time”
rather than productivity, difficulty balancing family and work life all take a toll on workers as it
has on “Overworked in Cincinnati.”
Ethics Check: Holocracy says “No!” to CEO power
Is it time to say good-bye to bureaucracy and “No!” to CEO power? Welcome to a fashion–
forward Holacracy. Trade-marked by Holacracy-One, it is described as a “new ‘operating
system’” that “replaces today’s top-down predict-and-control paradigm with a new way of
achieving control by distributing power.”