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Week 5: Organizational Design

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Week 5: Organizational Design

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Read the issue for debate in Chapter 10 on page 323. A number of high profile firms, including Tata Motors and Tesla, have taken steps to flatten their organizational structures. In removing layers of management, these firms are trying to improve the flexibility and responsiveness of the firm. But critics of these actions argue that managers are left with a wider scope of authority and too taxed with their communication responsibilities to be effectively engaged in organizational initiatives. Also, some argue that long-serving middle managers are highly knowledgeable and serve as a steadying influence in the firm. This issue for debate looks at the opportunities and challenges of flattening organizations.

Tata Motors and Tesla Partnership (Links to an external site.)

  • What are the benefits and costs of flattening the organization? In your view, do the benefits outweigh the costs?
  • What industries or firms are most likely to benefit from flattening? In what situations does it not make sense?
  • Why is it important for managers to carefully consider the type of organizational structure that they use to implement their strategies?
  • Briefly trace the dominant growth pattern of major corporations from simple structure to functional structure to divisional structure. Discuss the relationship between a firm’s strategy and its structure.
  • What are the relative advantages and disadvantages of the types of organizational structure—simple, functional, divisional, matrix—discussed in the chapter?
  • When a firm expands its operations into foreign markets, what are the three most important factors to take into account in deciding what type of structure is most appropriate? What are the types of international structures discussed in the text, and what are the relationships between strategy and structure?

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