Chapter 8: Designing Adaptive Organizations P a g e | 14
complex global businesses. Another advantage is the pool of resources available to carry out large,
complex tasks. Because of the ability to pull in expert help from all the functional areas of the
company quickly, matrix project managers have a much more diverse set of expertise and experience
2. What are the advantages and disadvantages of promoting decentralization in GMs operations in
China?
Centralization of authority is the location of most authority at the upper levels of the organization. In
a centralized organization, managers make most decisions, even relatively small ones.
Decentralization is the location of a significant amount of authority in the lower levels of the
organization. An organization is decentralized if it has a high degree of delegation at all levels. In a
decentralized organization, workers closest to problems are authorized to make the decisions
Practice Being a Manager
WORK DYNAMICS
Exercise Overview and Objective
This is a role-play exercise that provides an experiential base for discussion of job design and
organizational design. Students are assigned to teams, and then each team member is assigned to a role as
Copy Editor, Senior Editor, or Project Manager. Teams compete against one another in a timed work
period. A variation of the exercise is to conduct two timed work periods (e.g., two 10 minute sessions),
with a brief (3 5 minute) break in between in which teams may make changes in order to improve
performance.
Preparation
No student preparation is required for this exercise. You may want to decide in advance on work team
and role assignments. Students will need plenty of available copy material for the editing work. Each
team should have an identical, or quite similar, stack of annual reports, business magazines, or similar
business publications. This material should be appropriate for the sort of mechanical tasks assigned to the
Chapter 8: Designing Adaptive Organizations P a g e | 15
In-Class Use
Once teams are organized and roles assigned, you should begin the first work session (Step 3). You
should announce, Start at the opening of a work period, and Stop at the conclusion. Ask each Project
Manager to total the results for their team and submit them to you. If you used Observers, you might
confer with them while teams are completing their work reports. Observers should be prepared to
contribute to the class discussion following the exercise.
Immediately upon completion of the exercise, you should move to class debriefing and discussion.
Some possible discussion questions are included in Step 5 of the exercise:
What factors seemed to play a role in the efficiency and effectiveness of work groups?
What role did organization and job design play?
If this were an actual organizational work group, what might you do to improve worker
performance and worker satisfaction?
If you elected to use the option of two work periods, then you should also explore the differences
between the two sessions. What adjustments did teams make, and why? Did these changes improve
performance?
Self-Assessment
FLEXIBILITY AND STRUCTURE
Exercise Overview and Objective
Every organization needs some degree of flexibility to adapt to new situations, and some degree of
standardization to make routine tasks and decisions as efficient and effective as possible. One of the key
differences between flexibility and standardization is the extent to which manages use or apply
organizational rules and procedures. For some, rules and procedures are restrictive and stifle innovation
and creativity. For others, rules and procedures streamline operations, enhance efficiency, and ensure
consistency and fairness.
In-Class Use
Give students 5 7 minutes to complete the inventory. The research supporting this inventory can be found
in Bruner, James, and Hensel, Marketing Scales Handbook (Chicago: American Marketing Association,
2005).
Scoring
Scoring instructions are given at the end of the inventory. Students will compute a raw score, but they
will want to know what it means. Heres what you can tell them:
For this exercise, lower scores indicate a rather informal organization where rules and regulations are
rare or rarely enforced, and higher scores indicate that set rules and procedures are frequently used
Management Workplace
Management Workplace videos can support several in-class uses. In most cases you can build an entire
50-minute class around them. Alternatively, they can provide a springboard into a group lesson plan. The
Management Workplace video for Chapter 8 would be a nice companion to your introduction to the
course on the first day of teaching this chapter.
VIDEO: MODERN SHED
Designing Adaptive Organizations
Summary:
Modern Shed, based in Seattle, builds paneled dwellings for use as studio spaces, home offices, pool
houses, project sheds, guesthouses, and more. Like the sheds, the company is built to be adaptive,
scalable, and suited to the needs of the environment. Modern Shed counts only 12 to 14 full-time
Discussion Questions:
1. Describe how Modern Shed functions as a modular organization.
As defined in the text, modular organizations focus on one or two core activities while
outsourcing all remaining business activities to outside companies, contractors, suppliers,
Chapter 8: Designing Adaptive Organizations P a g e | 17
2. What are the advantages and disadvantages of Modern Sheds organizational structure?
The advantages of operating as a virtual network include fast response to market needs; access to
Workplace Video Quiz
Students are able to take the following video quiz on CourseMate. The video is broken into segments, and
each segment has related questions to make sure students understand how the clip connects to the chapter
concepts.
Video Segment 1
Video segment title Designing Adaptive Organizations
Start time (in sec) 0:00
Stop time (in sec) 2:33
Quiz Question 1 According to owner Ryan Smith, which of the following variables has had
a major influence on the type of organization structure used at Modern
Shed?
a. Limited number of resources and employees
b. Consumer segments
c. Location
d. Technology
responsible for particular business functions.
Quiz Question 3 If all 12 to 14 full-time employees at Modern Shed report directly to owner
Ryan Grey Smith, this results in:
a. A bureaucracy
b.A tall structure
c. Unity of command
d. Line function
Correct option c: Unity of command
Feedback Unity of command means that workers report to just one boss.
Chapter 8: Designing Adaptive Organizations P a g e | 18
Video Segment 2
Video segment title Designing Adaptive Organizations
Start time (in sec) 2:33
Stop time (in sec) 5:09
Quiz Question 1 To build individual sheds for customers, Modern Shed sets up temporary
partnerships with independent third-party businesses, which provide
building materials, interior components, and marketing and sales services.
As a result, Modern Sheds organization design is best characterized as:
a. Functional structure
Quiz Question 2 Eric Johnson, the independent paneling specialist mentioned in the clip, is
an outside contractor and member of Modern Sheds dealer network. This
means Eric Johnson is:
a. Not an employee of Modern Shed
b. Not included in Modern Sheds formal span of management
c. Not part of Modern Sheds chain of command
d. All of these
Correct option d: All of these
Feedback An outside contractor works with a company but is not formally a part of
the organization.
Quiz Question 3 Modern Sheds organizational structure provides all the following benefits
except:
a. Allows a small company with limited resources to manufacture a
Video Segment 3
Video segment title Designing Adaptive Organizations
Start time (in sec) 5:10
Stop time (in sec) 7:20
Quiz Question 1 Modern Sheds ability to quickly develop a new product in response to a
request by a national home-and-garden company highlights the following
characteristic of the firms organization structure:
a. High efficiency in stable, predictable environment
Quiz Question 2 Modern Shed founder and CEO Ryan Smith would appear in the following
position on a traditional organization chart:
a. Top of the chart
b. Underneath the director of marketing
c. Side by side with company vice presidents
d. None of these
Correct option a: Top of the chart
Feedback An organizational chart shows line of authority within a company.
Quiz Question 3 A key advantage of Modern Sheds business structure is:
a. Lack of control over independent contractors
Additional Assignments and Activities
Review Questions
1. Compare an organizational structure and an organizational process.
Organizational structure is the vertical and horizontal configuration of departments, authority, and
Chapter 8: Designing Adaptive Organizations P a g e | 20
2. What five methods have traditionally been used to departmentalize work and workers? Give one
advantage and one disadvantage of each.
Departmentalization is subdividing work and workers into separate organizational units responsible
for completing particular tasks. Traditionally, these five methods of departmentalization have proved
to be the most common:
Functional departmentalization is the structure in which workers are organized into separate
units responsible for particular business functions or areas of expertise. Advantages include
work done by highly qualified specialists and lower costs through reduced duplication; also,
with everyone in the same department having similar work experience or training,
communication and coordination are less problematic for departmental managers.
Disadvantages include slower decision making, managers and workers with narrow
experience and expertise, and difficulty with cross-department coordination because
3. How do managers generally describe organizational authority?
Organizational authority is determined by the chain of command, line versus staff authority,
delegation, and the degree of centralization in a company. Line authority is the right to command
immediate subordinates in the chain of command. In contrast, staff authority is the right to advise but
not command others who are not subordinates in the chain of command. An example of line authority
Chapter 8: Designing Adaptive Organizations P a g e | 21
4. When delegating work, what is the relationship between responsibility, authority, and accountability?
Managers can exercise their authority directly by completing the tasks themselves, or they can choose
to pass on some of their authority to subordinates. Delegation of authority is the assignment of direct
authority and responsibility to a subordinate to complete tasks for which the manager is normally
5. Why do companies use job specialization? How can specialized jobs be modified to eliminate the
boredom and low job satisfaction associated with them?
6. What is the main concern of the Job Characteristics Model?
The primary goal of the Job Characteristics Model (JCM) is to create jobs that result in positive
personal and work outcomes such as internal work motivation, satisfaction with ones job, and work
effectiveness. Of these, the central concern of the JCM is internal motivation. Internal motivation is
motivation that comes from the job itself rather than from outside rewards, such as a raise or praise
from the boss. A job that can produce internal motivation has these characteristics:
Skill variety: the number of different activities performed in a job
7. What differentiates a mechanistic organization from an organic organization?
A mechanistic organization is characterized by specialized jobs and responsibilities; precisely
Chapter 8: Designing Adaptive Organizations P a g e | 22
8. How do companies use reengineering to redesign organizational processes?
Reengineering is fundamental rethinking and radical redesign of business processes to achieve
dramatic improvements in critical measures of performance, such as cost, quality, service, and speed.
In essence, reengineering changes work by changing task interdependence, which is the extent to
9. How do formal workplaces differ from informal workplaces?
Behavioral formality is a workplace atmosphere characterized by routine and regimen, specific rules
about how to behave, and impersonal detachment. Behavioral informality is a workplace atmosphere
characterized by spontaneity, casualness, and interpersonal familiarity. You can tell whether a
workplace is formal or informal by the following:
Language usage: Formal environments use formal word choices and grammatically correct
10. What are the differences between modular and virtual organizations? What are their advantages and
disadvantages?
Because modular organizations outsource all non-core activities to other businesses, they are less
expensive to run than traditional companies. However, modular organizations require extremely close
Management Team Decision
DRESSING UP (OR DOWN) FOR WORK
Purpose
Every manager must make decisions on a daily basis. Sometimes its large-scale decisions like creating a
new strategic plan to increase sales. At other times, its smaller-scale decisions like smoking policies, or
as in the case here, an office dress code. In this case, students are asked to decide whether a company
should allow a casual dress code or require its employees to dress up. While it may not be a monumental
decision on the scale of a new marketing strategy, it will have considerable effect on the morale and
effectiveness of the employees.
Chapter 8: Designing Adaptive Organizations P a g e | 23
Setting It Up
You can introduce this case to students by asking them to imagine a very formal workplace, one in which
employees are given a dress code. What would be the pros and cons of such a workplace? Next, ask
students to imagine a very informal workplace, with no dress code, or titles, or hierarchy. What would be
the pros and cons of such a workplace?
Scenario
Does it matter what people wear to the office? Youve never thought about that question before. When
you first started at your architectural firmmore than 40 years ago noweveryone dressed formally.
And it wasnt just to the office; you remember when families dressed to their best to go to the movies, go
out to dinner, take an airplane flight. When you look around your office lately, its quite a different scene.
There are interns wearing T-shirts and jeans and mail clerks wearing flip-flops. There are folks sitting at
Sources:
Elena Berton, Dress to Impress, UBS Tells Staff, The Wall Street Journal, December 14, 2010,
Questions
1. What are the advantages and disadvantages of having an informal work place? What are the
advantages and disadvantages of having a formal work place?
In an informal setting, employees feel more relaxed, less pressured, and less constrained by the need
to adhere to hierarchical relationships. Compared with formal work atmospheres, the language in
informal workplaces is often slurred (Whatcha doin?), elliptical (Coffee? versus Would you
Chapter 8: Designing Adaptive Organizations P a g e | 24
2. As the manager of this firm, would you institute a formal dress code?
Develop Your Career Potential
WORK IN SOMEONE ELSES SHOES
Purpose
One of the least discussed aspects of organizational design and job design is how strongly they can
influence individual behavior, attitudes, and perspectives. The purpose of this assignment is to have
students recognize this powerful influence by literally “working” in someone else’s shoes. Of course, not
everyone will have this opportunity. Students who don’t have the chance to do a different job can
interview those who do different jobsencourage your students to be creative.
Setting It Up
Since this is an individual exercise, you can set it up as an assignment by simply previewing it at the close
of class. Enforce the point that even students who don’t have jobs can find ways to “work” in someone
Questions
1. Describe the job-related differences or tensions where you work. Who is involved? What jobs do they
do? Explain why the job-related differences or tensions exist.
As usual, discussion of this question can be processed via class discussion or in small groups in which
the group members discuss their answers and then choose a spokesperson to summarize and share
responses with the class.
A good place to start is to have students describe the pairs of jobs for which there are job-related
differences or tensions (i.e., managers-employees, students-faculty, doctors-nurses, etc.). Writing
these on the board will help students see that job-related differences are universal. Ask students if
they see a pattern. In other words, try to identify the jobs for which there are frequent or common job-
related differences.
Next, write “Tensions” on the board, and ask students to describe the tensions or
Chapter 8: Designing Adaptive Organizations P a g e | 25
2. Since the best way to see things from someone else‘s perspective is to “work” in his or her shoes, see
if you can spend a day, a morning, or even two hours performing one of these jobs. If that’s not
possible, spend some time carefully observing the jobs and then interview several people who
perform them. Describe your boss’s reaction to this request. Was he or she supportive? Why or why
not?
3. Answer the following questions after you have worked the job or conducted your interviews. What
most surprised you about this job? What was easiest? What was hardest? Explain. Now that you’ve
had the chance to see things as others see them, what do you think would happen, good or bad, from
letting other people in your organization work in someone else’s shoes? Explain.
At this point, for variety, if youve run a general class discussion, you might want to switch to 3 5
minutes of group discussion, after which group spokespersons report their findings (typically 3 5
Additional Activities
Out-of-Class Project: “College Organizational Structure.” Divide the class into small groups. Each
group should thoroughly research your colleges organizational structure, including the types of
departmentalization used and the chain of command between you (the instructor) and the highest level of
management. Each group should present their findings and the organizational chart to the class; the most
accurate work should be rewarded.
In-Class Activity: “Job Design.” Divide the class into small groups (3 4 students). Ask each group to
come up with some ideas on how to use job rotation, job enlargement, and job enrichment for the
following types of jobs: 1) a janitor in a large company; 2) a secretary in an insurance company; 3) a fifth-
grade teacher; 4) a paralegal who usually does nothing but research in a large law firm; and 5) an intern
for the state government.
