Welcome back.
I'm Mike Useem, as you know, I'm on the faculty here at the Wharton School and
our fourth and final module on human and social capital, the managing of people
around you at work, is designing and changing the organization's architecture.
Designing and changing.
So you want to think about design and we going to think about the, in some sense,
even more difficult problem of changing a design once we have it in place.
So we're going to begin with design and really it's nothing more
than thinking about, I like the word architecture for this.
How people are organize divided how they report up to one boss or
maybe several bosses.
And we're not going to touch on more on a few concepts on a particular slide you see
right now,
I have several those in red that will be in our conversation as we go forward.
But I'd put that in front of us, all those concepts just as kind of a reference to
issues you're going to want to think about as you do think about organizational
architecture or changing the design that you have in place.
And to get us going on this, I'm going to have you work here for
a company called Rose Company.
It's a manufacturing firm and it has just used the nomenclature of the field here.
It has a very functional organization.
In a sense that there are a number of production facilities and
the VP for, let's say, finance in a given facility reports
directly up to the executive vice president for finance at headquarters.
The plant manager has some influence on control over that the local VP for
finance but not completely.
And as result to that, in this particular case,
some of this production facilities aren't doing too well.
And the company does decided, looking now, moving from the top diagram to the bottom
diagram to change the organizational design by grouping all those functions.
By which we mean these more technical skill areas like accounting and
finance and marketing and operations, to group them
together under an umbrella at the top of which is the plan manager.
So it's a rather significant and almost radical break from the past.
The plant manager can hire and fire his or her own chief financial officer.
The CFO at headquarters is going to weigh in on that of course but
the plant manager is delegated responsibility for everything and
they have to think, to use a phrase here, like a general manager.
They've gotta manage everything about the people in their setting, and
to make it a bit more challenging, they're also responsible now for results.
So we're going to pinpoint accountability and responsibility.
And a new plant manager, it's called the Jackson Plant there.
And as we make that move, everything else being equal,
you've got motivated employees, you've got a pay system that makes sense.
You're set to make good and timely decisions.
The work is interesting.
How you organize people?
What the reporting relations are separately?
Also, has a profound impact on the willingness of people to give their all,
to get the right job done.