Organization Theory & Design, Thirteenth Edition
By Richard L. Daft
Contents:
Preface xv
PART 1 Introduction to Organizations 001
Chapter 1: Organizations and
Organization Design 002
A Look Inside General Electric 003
The Jack Welch Era 1981–2001, 003 • The
Jeff Immelt Era 2001–2017, 005 • Events
Since 2017, 006
Organization Design in Action 007
Topics, 007 • Purpose of This Chapter, 008 •
Current Challenges, 009
BOOKMARK 1.0: The Vanishing American
Corporation: Navigating the Hazards of a New
Economy 010
IN PRACTICE: Foot Locker 013
What Is an Organization? 014
Definition, 014 • From Multinationals
to Nonprofits, 014 • Importance of
Organizations, 016
IN PRACTICE : Zara SA 017
Dimensions of Organization Design 018
Structural Dimensions, 018
IN PRACTICE: Shizugawa Elementary School Evacuation
Center and BP Transocean Deepwater Horizon Oil Rig 020
Contingency Factors, 020
IN PRACTICE: Valve Software 023
Performance and Effectiveness
Outcomes, 023
The Evolution of Organization Design 025
Historical Perspectives, 025
HOW DO YOU FIT THE DESIGN? Evolution of Style 027
It All Depends: Key Contingencies, 028
The Contrast of Organic and Mechanistic Designs 029
The Emerging Bossless Design Trend 032
IN PRACTICE: Morning Star 033
Framework for the Book 034
Levels of Analysis, 034 • Plan of the Book, 035
Plan of Each Chapter, 035
Chapter 1 Workshop: Measuring Dimensions of
Organizations 038
Case for Analysis: Craft Originalities, Inc. 039
PART 2 Organization Purpose and Structural Design 047
Chapter 2: Strategy, Organization Design,
and Effectiveness 048
Purpose of This Chapter, 050
The Role of Strategic Direction in Organization
Design 050
IN PRACTICE: The Kroger Company 051
Organizational Purpose 054
Strategic Intent, 055
BOOKMARK 2.0: Blue Ocean Shift: Beyond
Competing; Proven Steps to Inspire Confidence and
Seize New Growth 057
Operating Goals, 058 • Goal Conflict, 060 •
The Importance of Goals, 060
IN PRACTICE: Wells Fargo 061
Two Frameworks for Selecting Strategy and Design 063
Porter’s Competitive Strategies, 063
HOW DO YOU FIT THE DESIGN? Your Strategy/
Performance Strength 065
IN PRACTICE: Allegiant Air 066
Miles and Snow’s Strategy Typology, 067 •
How Strategies Affect Organization
Design, 068 • Other Contingency Factors
Affecting Organization Design, 069
Assessing Organizational Effectiveness 071
Definition of Organizational Effectiveness, 071
Who Decides?, 072 • Goal Approach, 073
Resource-Based Approach, 075 • Internal
Process Approach, 076
IN PRACTICE: BNSF Railway 077
Strategic Constituents Approach, 077
An Integrated Effectiveness Model 079
IN PRACTICE: Samsung Group 082
Chapter 2 Workshop: Identify Your Goal Preferences 084
Case for Analysis: The Addlington Gallery of Art 084
Case for Analysis: Millier Machine Parts & Services 086
Chapter 3: Fundamentals of Organization
Structure 92
Purpose of This Chapter, 94
Organization Structure 094
Information-Sharing Perspective
on Structure 097
Centralized Versus Decentralized, 097
BOOKMARK 3.0: The Future of Management 098
IN PRACTICE: Toyota 099
Vertical Information Sharing, 099
Horizontal Information Sharing and
Collaboration, 100
IN PRACTICE: AT&T WarnerMedia 102
HOW DO YOU FIT THE DESIGN? The Pleasure/Pain of
Working on a Team 106
Relational Coordination, 106
IN PRACTICE: Southwest Airlines 107
Organization Design Alternatives 108
Required Work Activities, 109 • Reporting
Relationships, 109 • Departmental Grouping
Options, 109
Functional, Divisional, and Geographic Designs 111
Functional Structure, 111 • Functional
Structure with Horizontal Linkages, 112 •
Divisional Structure, 113
IN PRACTICE: Google and Alphabet 114
Geographic Structure, 116
Matrix Structure 118
Conditions for the Matrix, 119 • Strengths
and Weaknesses, 120
IN PRACTICE: Englander Steel 121
Virtual Network Structure and Outsourcing 123
How the Structure Works, 123 • Strengths
and Weaknesses, 124
Holacracy Team Structure 126
IN PRACTICE: Zappos 128
Characteristics, 128 • Strengths and
Weaknesses, 128
Applications of Structural Design 130
Mix and Match, 131 • Structural Alignment,
131 • Symptoms of Structural Deficiency, 132
Chapter 3 Workbook: You and Organization Structure 134
Case for Analysis: Holtzclaw Supermarkets, Inc. 134
Case for Analysis: Aquarius Advertising Agency 137
PART 3 Open System Design Elements 145
Chapter 4: The External Environment 146
Purpose of This Chapter, 147
The Organization’s Environment 148
Task Environment, 148 • General
Environment, 150 • International
Environment, 151
IN PRACTICE: Uber and Didi Chuxing 152
The Changing Environment 153
Complexity, 154 • Dynamism, 154
IN PRACTICE: Gap Inc. 154
Framework, 156
BOOKMARK 4.0: Confronting Reality: Doing What
Matters to Get Things Right 156
Adapting to Complexity and Dynamism 158
Adding Positions and Departments, 159 •
Building Relationships, 159
IN PRACTICE: Seton Hall University and
Dickinson College 160
Differentiation and Integration, 162 •
Organic Versus Mechanistic Management
Processes, 163
HOW DO YOU FIT THE DESIGN? Mind and Environment, 164
Planning, Forecasting, and
Responsiveness, 165
Framework for Adapting to Complexity
and Dynamism 166
Dependence on Financial Resources 167
Influencing Financial Resources 168
Establishing Formal Relationships, 168
IN PRACTICE: Publicis and Omnicom 169
Influencing Key Sectors, 171
IN PRACTICE: Amazon and Walmart 171
Organization–Environment Integrative Framework 174
Chapter 4 Workshop: Organizations You Rely On 176
Case for Analysis: CPI Corporation 176
Case for Analysis: Farrington Medical Devices 177
Chapter 5: Interorganizational
Relationships 184
Purpose of This Chapter, 186
Organizational Ecosystems 186
Is Competition Dead?, 187
IN PRACTICE: Apple and Samsung 189
The Changing Role of Management, 189
Interorganizational Framework, 191
Resource Dependence 192
Types of Resource-Dependence Relationships,
192 • Power Implications, 194
IN PRACTICE: JPMorgan Chase and Amazon 195
Collaborative Networks 195
HOW DO YOU FIT THE DESIGN? Personal Networking 196
Why Collaboration?, 197
IN PRACTICE: Accelerating Medicines Partnership 198
From Adversaries to Partners, 198
BOOKMARK 5.0: Managing Strategic Relationships:
The Key to Business Success 200
Population Ecology 201
IN PRACTICE: Blockbuster 202
What Hinders Adaptation?, 202
IN PRACTICE: LVMH Moët Hennessy Louis Vuitton 202
Organizational Form and Niche, 203 •
Process of Ecological Change, 204 • Strategies
for Survival, 205
Institutionalism 207
The Institutional View and Organization
Design, 207 • Institutional Similarity, 208
Chapter 5 Workshop: The Shamatosi 212
Case for Analysis: Technomagia and AUD 214
Case for Analysis: Bradford Chemicals Company 215
Chapter 6: Designing Organizations for
the International Environment 222
Purpose of This Chapter, 224
Entering the Global Arena 224
Motivations for Global Expansion, 225
BOOKMARK 6.0: The World Is Flat: A Brief History
of the Twenty-First Century 225
IN PRACTICE: Amway 227
Managing the Stages of International
Development, 229
HOW DO YOU FIT THE DESIGN? What Is Your Cultural
Intelligence? 231
Global Expansion Through International
Alliances and Acquisitions, 232
IN PRACTICE: Walmart and Flipkart 233
The Challenges of Global Design 234
Increased Complexity and Differentiation,
235 • Increased Need for Coordination,
236 • Transfer of Knowledge and Reverse
Innovation, 237
Designing Structure to Fit Global Strategy 239
Strategies for Global Versus Local
Opportunities, 239
IN PRACTICE: General Electric 242
International Division, 243 • Global Product
Division Structure, 243 • Global Geographic
Division Structure, 245
IN PRACTICE: Colgate-Palmolive Company 246
Global Matrix Structure, 247
IN PRACTICE: ABB Group 248
Additional Global Coordination Mechanisms 250
Global Teams, 250
IN PRACTICE: L’Oréal 251
Headquarters Planning, 252 • Expanded
Coordination Roles, 252 • Benefits of
Coordination, 253
The Transnational Model of Organization 254
Chapter 6 Workshop: Made in the U.S.A.? 259
Case for Analysis: Halogen Analytics 260
Case for Analysis: Rhinebeck Industrial 261
Chapter 7: Designs for Societal Impact:
Dual-Purpose Organizations, Corporate
Sustainability, and Ethics 270
Purpose of This Chapter, 272
Designing the Dual-Purpose Organization 272
Facing the Challenge, 274 • Designs for
Achieving Dual Commercial and Social
Welfare Goals, 276
IN PRACTICE: Grameen Veolia Water 278
Corporate Social Responsibility 281
The Green Movement, 282 • The Triple
Bottom Line, 283
IN PRACTICE: Gravity Payments 284
Conscious Capitalism, 285
BOOKMARK 7.0: Conscious Capitalism: Liberating the
Heroic Spirit of Business 285
Serving Organizational Stakeholders, 286 •
Serving the Bottom of the Pyramid, 288
IN PRACTICE: Godrej & Boyce 289
The Consequences for Doing Good 290
Designing a Structure for Executing a Sustainability
Program 291
A Separate Department or Include Everyone?,
292 • Involve External Stakeholders, 293 •
Set Goals, Measure, and Reward, 294
HOW DO YOU FIT THE DESIGN? How Sustainable
are You? 296
Designs to Uphold Ethical Values 297
Sources of Individual Ethical Principles,
297 • Organizational Ethics, 298 • Formal
Structure and Systems, 299
IN PRACTICE: Google 302
Corporate Ethics in a Global Environment 303
Chapter 7 Workshop: What is Your Level of Ethical
Maturity? 305
Case for Analysis: Solo: Helping a Million People
See Again 305
Case for Analysis: Fiedler, Philips & Wilson Design 307
PART 4 Internal Design Elements 313
Chapter 8: Designs for Manufacturing and
Service Technologies 314
Purpose of This Chapter, 317
Core Manufacturing Technology 318
Manufacturing Firms, 318 • Strategy,
Technology, and Performance, 320 • The
Smart Factory, 321 • Mass Customization, 323
Performance and Structural Implications, 324
Surviving Extremely Complex Technologies 326
Extreme Technology Complexity, 326
IN PRACTICE: Carnival Cruise Lines 327
BOOKMARK 8.0: Meltdown: Why Our Systems Fail and
What We Can Do About It 327
High Reliability Organizing, 328
Core Service Technology 331
Service Firms, 331
HOW DO YOU FIT THE DESIGN?: Manufacturing
Versus Service 333
IN PRACTICE: Panera Bread Company 335
Designing the Service Organization, 335
IN PRACTICE: Home Depot Inc. 336
Noncore Departmental Technology 337
Variety, 338 • Analyzability, 338 •
Framework, 338 • Department Design, 340
IN PRACTICE: Memorial Sloan-Kettering Cancer Center 341
Workflow Interdependence Among Departments 343
Types, 343
IN PRACTICE: Southwest Airlines 346
Structural Priority, 347 • Structural
Implications, 347
IN PRACTICE: Athletic Teams 348
Chapter 8 Workshop: Small Business Workflow Technology 350
Case for Analysis: Acetate Department 351
Case for Analysis: Digitalization in the Manufacturing
Sector: Skills in Transition 354
Chapter 9: Designs for Digital
Organizations and Big Data Analytics 360
Purpose of This Chapter, 362
The Digital Information Explosion 362
Pipes versus Platforms: A New Organization Form 365
Two Types, 367 • Foundational Assumptions, 367
IN PRACTICE: Uber 369
Platform Design Recommendations, 370
Big Data Analytics 372
IN PRACTICE: Siemens Gamesa 373
Big Data Requirements, 373
BOOKMARK 9.0: Astroball: The New Way to Win It All 376
Big Data and Organization Structure, 376
IN PRACTICE: Morgan Stanley 378
Artificial Intelligence 380
Is AI an Objective Decision Maker?, 381 •
Is Nudge Management Going to Be Your
Coach?, 383 • Algorithmic Control May Be
Your New Boss, 383 • AI Implications for
Organization Design, 385
HOW DO YOU FIT THE DESIGN? How Will You Handle
Decentralization and Autonomy? 386
Other Digital Applications in Organizations 387
Social Network Analysis, 387
IN PRACTICE: Exploration and Production Division 387
Knowledge Management, 389
IN PRACTICE: BAE Systems 390
Digital Impact on Organization Design 392
Chapter 9 Workshop: Manufacturing and Big Data:
Organize the Project 394
Case for Analysis: Hermitage Escalator Company 395
Chapter 10: Organization Size, Life Cycle,
and Decline 402
Purpose of This Chapter, 404
Organization Size: Is Bigger Better? 404
Pressures for Growth, 404 • Dilemmas of
Large Size, 405
HOW DO YOU FIT THE DESIGN? What Size
Organization For You? 407
IN PRACTICE: Dell Inc. 409
Organizational Life Cycle 410
Stages of Life-Cycle Development, 410
IN PRACTICE: Airbnb 413
Organizational Characteristics During the
Life Cycle, 414
Organizational Size, Bureaucracy, and Control 415
What Is Bureaucracy?, 415
IN PRACTICE: United Parcel Service (UPS) 417
Size and Structural Control, 418
Bureaucracy in a Changing World 420
BOOKMARK 10.0: The Conversational Firm:
Rethinking Bureaucracy in the Age of Social Media 420
Organizing Temporary Systems, 421
IN PRACTICE: Salvation Army 422
Other Approaches to Busting Bureaucracy,
423
Bureaucracy and Other Forms of Control 424
Bureaucratic Control, 425
IN PRACTICE: East Resources Inc. and Royal Dutch
Shell PLC 426
Market Control, 427 • Clan Control, 427
IN PRACTICE: Valve Corporation and FAVI 428
Organizational Decline 429
Definition and Causes, 430
IN PRACTICE: Eastman Kodak 431
A Model of Decline Stages, 431
Chapter 10 Workshop: Classroom Control 434
Case for Analysis: Yahoo!: “Get to Work!” 434
Case for Analysis: Bachmeyer Foods, Inc. 435
PART 5 Managing Dynamic Processes 441
Chapter 11: Organizational Culture
and Control 442
Purpose of This Chapter, 444
Organizational Culture 444
What Is Culture?, 445 • Emergence and
Purpose of Culture, 446
IN PRACTICE: Google 446
Interpreting/Shaping Culture, 447
Culture and Organization Design 451
The Adaptability Culture, 453 • The
Achievement Culture, 453
IN PRACTICE: Huawei 453
The Clan Culture, 454 • The Bureaucratic
Culture, 454
HOW DO YOU FIT THE DESIGN? Corporate Culture
Preference 455
Culture Strength and Organizational Subcultures 456
IN PRACTICE: Pitney Bowes Credit Corporation 457
BOOKMARK 11.0: Rule Makers, Rule Breakers: How
Tight and Loose Cultures Wire Our World 458
Culture and Performance 459
The Cultural Focus of Control Systems 461
The Changing Philosophy of Control, 461 •
Feedback Control Model, 463 • Organization
Level: The Balanced Scorecard, 465 •
Department Level: Behavior Versus Outcome
Control, 468
Chapter 11 Workshop: Balanced Scorecard Exercise 471
Case for Analysis: Midwest Controls, Inc. 472
Case for Analysis: NASCAR 473
Chapter 12: Innovation and Change 478
Purpose of This Chapter, 480
The Strategic Role of Innovation 480
Innovate or Be Disrupted, 480
IN PRACTICE: Netflix 481
Strategic Types of Innovation, 482
Elements for Successful Change 484
Technology Innovation 487
HOW DO YOU FIT THE DESIGN? Are You Innovative? 488
The Ambidextrous Approach, 488 • The
Bottom-Up Approach, 489 • Techniques for
Encouraging Technology Change, 490
BOOKMARK 12.0: Creativity, Inc.: Overcoming the
Unseen Forces That Stand in the Way of True Inspiration 492
New Products and Services 494
IN PRACTICE: Elkay Manufacturing
494
New Product Success Rate, 495 • Reasons
for New Product Success, 496 • Horizontal
Coordination Model, 497
IN PRACTICE: Corning, Inc. 498
Open Innovation and Crowdsourcing, 499 •
The Need for Speed, 500
Strategy and Structure Change 501
The Dual-Core Approach, 502 •
Organization Design for Implementing New
Management Processes, 502
IN PRACTICE: GlaxoSmithKline 504
Culture Change 504
Forces for Culture Change, 505
IN PRACTICE: Taco Bell 506
Culture Change Interventions, 507
IN PRACTICE: UnitedHealth
Group 508
Tactics for Implementing Change 509
Leadership for Change, 509 • Techniques
for Implementation, 510 • Techniques for
Overcoming Resistance, 511
Chapter 12 Workshop: Innovation Climate 514
Case for Analysis: Fabulous Footwear 515
Case for Analysis: Lamprey, Inc. 519
Chapter 13: Decision-Making Processes 526
Purpose of This Chapter, 528
Types of Decisions 528
IN PRACTICE: Twitter 529
Individual Decision Making 531
Rational Approach, 531
IN PRACTICE: Veracruz Consulting 534
Bounded Rationality Perspective, 535
HOW DO YOU FIT THE DESIGN? Making Important
Decisions 537
BOOKMARK 13.0: Blink: The Power of Thinking
Without Thinking 539
Cognitive Biases 540
Specific Biases That May Influence Decision
Making, 542 • Overcoming Cognitive Biases, 543
Organizational Decision Making 545
Management Science Approach, 545 •
Carnegie Model, 547
IN PRACTICE: The New York Times 548
Incremental Decision Model, 550
IN PRACTICE: The Los Angeles Rams 550
Organizational Decisions and Change 554
Combining the Incremental and Carnegie
Models, 554 • Garbage Can Model, 555
IN PRACTICE: Volkswagen 558
Contingency Decision-Making Framework 560
Problem Consensus, 560 • Technical
Knowledge about Solutions, 561 •
Contingency Framework, 561
Special Decision Circumstances 564
High-Velocity Environments, 564 • Decision
Mistakes and Learning, 565
Chapter 13 Workshop: Style of Decision Making 568
Case for Analysis: Government DTS 568
Case for Analysis: Dubois French Eatery 570
Chapter 14: Conflict, Power, and Politics 576
Purpose of This Chapter, 578
Interdepartmental Conflict in Organizations 578
Sources of Conflict, 580
IN PRACTICE: National Rifle Association (NRA) 582
Rational Versus Political Model, 582 • Tactics
for Enhancing Collaboration, 584
IN PRACTICE: The Freaky Friday Management Technique 586
Power and Organizations 588
Individual Versus Organizational Power, 588
Power Versus Authority, 589 • Vertical Sources of Power, 590
IN PRACTICE: Jay Bower, Crossbow Group 593
The Power of Empowerment, 594 •
Horizontal Sources of Power, 594
IN PRACTICE: International Alliance of Theatrical Stage Employees 597
Political Processes in Organizations 600
Definition, 601 • When to Use Political Activity, 602
IN PRACTICE: Nissan and Renault 602
Using Soft Power and Politics 603
HOW DO YOU FIT THE DESIGN? Political Skills 604
Tactics for Increasing Power, 605 • Political
Tactics for Using Power, 606
IN PRACTICE: The Vatican 607
BOOKMARK 14.0: Influence: Science and Practice 608
IN PRACTICE: World Bank 609
Chapter 14 Workshop: How Do You Handle Conflict? 611
Case for Analysis: East Tennessee News 613
Case for Analysis: The Burlington Plant 614
Integrative Cases 621
1.0 Disorganization at Semco: Human Resource Practices as a Strategic Advantage 623
2.0 Walmart’s Failures in Entering Three Developed Markets 633
3.0 IKEA: Scandinavian Style 639
4.0 Engro Chemical Pakistan Limited—Restructuring
the Marketing Division 644
5.0 The New York Times Versus Amazon 656
6.0 Lean Initiatives and Growth at Orlando Metering Company 661
7.0 SCG Lampang: Overcoming Community Resistance to
a Sustainability Project (A) 670
8.0 Costco: Join the Club 675
9.0 The Donor Services Department 679
10.0 Cisco Systems: Evolution of Structure 683
11.0 ToolTopia.com 689
12.0 Sometimes a Simple Change Isn’t So Simple 693
Glossary 698
Name Index 709
Corporate Name Index 719
Subject Index 723