1. Part 3 Managing for Quality and Competitiveness McGraw-Hill/Irwin Copyright © 2014 by The McGraw-Hill Companies, Inc. All rights reserved.

2. Organizational Culture o Ensures that organizational members: Share values Observe common rules Share problem solving approaches Organizational Culture (Corporate Culture) A firm’s shared values, beliefs, traditions, philosophies, rules, and role models for behavior 7-2

3. Organizational Culture Formal ExpressionInformal Expression Mission statementDress code (or lack of one) Code of ethicsWork habits MemosExtracurricular activities ManualsStories Ceremonies 7-3

4. Impact of Corporate Culture on Business Performance 7-4

5. Organizational Structure o An organization’s structure develops when: 1.Managers assign work tasks to specific individuals or work groups 2.Coordinate the diverse activities required to reach the firm’s objectives Structure The arrangement or relationship of positions within an organization 7-5

6. Organizational Structure Decision making Costs and efficiencies Overall success and sustainability Employee unity Understanding of how to deal with problems Impacts: 7-6

7.  The organizational structure at TOMS Shoes consists of two parts  The for-profit component of the company manages overall operations  Its nonprofit component, Friends of TOMS, is responsible for volunteer activities and shoe donations 7-7

8. Organizational Charts Organizational Chart A visual display of the organizational structure, lines of authority (chain of command), staff relationships, permanent committee arrangements, and lines of communication 7-8

9. The Evolution of a Clothing Store, Phases 1, 2, and 3 7-9

10. Assigning Tasks o Why specialize: Efficiency Ease of training Activities too numerous for one person Specialization The division of labor into small, specific tasks and the assignment of employees to do a single task 7-10

11. Henry Ford, the founder of Ford Motor Company, revolutionized manufacturing by creating assembly lines like this one to specialize the tasks his workers performed 7-11

12. Risks of Overspecialization Employees become bored Job dissatisfaction Poor quality work Increased injuries Increased employee turnover Overspecialization can have negative consequences 7-12

13. Departmentalization The grouping of jobs into working units usually called departments, units, groups, or divisions Functional departmentalization Product departmentalization Geographical departmentalization Customer departmentalization 7-13

14. Functional Departmentalization The grouping of jobs that perform similar functional activities, such as finance, manufacturing, marketing, and human resources 7-14

15. Product Departmentalization The organization of jobs in relation to the products of the firm 7-15

16.  The Campbell Soup Company uses product departmentalization to organize its company  However, the firm also engages in a type of geographic departmentalization for various regions 7-16

17. Geographical Departmentalization The grouping of jobs according to geographic location, such as state, region, country, or continent 7-17

18. Customer Departmentalization The arrangement of jobs around the needs of various types of customers 7-18

19. An Organizational Chart for the City of Corpus Christi 7-19

20. Delegation of Authority  As a business grows, so do the number and complexity of decisions that must be made; no one manager can handle them all  Delegation of authority frees a manager to concentrate on larger issues such as planning or dealing with problems and opportunities Delegation of Authority Giving employees not only tasks, but also the power to make commitments, use resources, and take whatever actions are necessary to carry out those tasks 7-20

21. Responsibility and Accountability Responsibility The obligation, placed on employees through delegation, to perform assigned tasks satisfactorily and be held accountable for the proper execution of work Accountability The principle that employees who accept an assignment and the authority to carry it out are answerable to a superior for the outcome 7-21

22. Degree of Centralization A structure in which authority is concentrated at the top, and very little decision-making authority is delegated to lower levels Overcentralization can cause serious problems for a company, in part because it may take longer for the organization as a whole to implement decisions and to respond to changes and problems on a regional scale Centralized Organizations An organization in which decision-making authority is delegated as far down the chain of command as possible Delegating authority to lower levels of managers may increase the organization’s productivity Decentralized Organizations 7-22

23. Span of Management  A wide span of management exists when a manager directly supervises a very large number of employees  A narrow span of management exists when a manager directly supervises only a few subordinates Span of Management The number of subordinates who report to a particular manager 7-23

24. Organizational Layers  Complements the concept of span of management  A company with many layers of managers is considered tall; in a tall organization, the span of management is narrow  Organizations with few layers are flat and have wide spans of management Organizational Layers The levels of management in an organization 7-24

25. Forms of Organizational Structures Line structure Line-and-staff structure Multidivisional structure Matrix structure Forms of Organizational Structures 7-25

26. Line Structure The simplest organizational structure in which direct lines of authority extend from the top manager to the lowest level of the organization 7-26

27. Line-and-Staff Structure A structure having a traditional line relationship between superiors and subordinates and also specialized managers – called staff managers – who are available to assist line managers 7-27

28. Line-and-Staff Structure 7-28

29. Multidivisional Structure  Occurs as organizations grow larger and more diversified  Divisions can be formed on the same bases as departments (customer, product, and/or geography)  Delegation of authority and divisionalized work Multidivisional Structure A structure that organizes departments into larger groups called divisions 7-29

30. Matrix Structure A structure that sets up teams from different departments, thereby creating two or more intersecting lines of authority; also called a project- management structure 7-30

31. Matrix Structure 7-31

32. Groups and Teams Group Two or more individuals who communicate with one another, share a common identity, and have a common goal Team A small group whose members have complementary skills; have a common purpose, goals, and approach; and hold themselves mutually accountable 7-32

33. Differences between Groups and Teams 7-33

34. Committees and Task Forces  Typically come from across all departments and levels of an organization  Membership is usually based on expertise rather than organizational position  Occasionally, a task force may be formed from individuals outside a company Committee A permanent, formal group that performs a specific task Task Force A temporary group of employees responsible for bringing about a particular change 7-34

35. Teams Project Teams Groups similar to task forces which normally run their operation and have total control of a specific work project Product-Development Teams A specific type of project team formed to devise, design, and implement a new product 7-35

36. Teams Quality-Assurance Teams (or Quality Circles) Small groups of workers brought together from throughout the organization to solve specific quality, productivity, or service problems Self-Directed Work Teams (SDWT) A group of employees responsible for an entire work process or segment that delivers a product to an internal or external customer 7-36

37. The Flow of Communication in an Organizational Hierarchy 7-37

38. Technology and Communication  Technology has generated many alternatives to face- to-face communications:  Many companies use internal networks called intranets to share information with employees  A survey of managers and executives found that they feel 28% of meetings are a waste of time and that information could be communicated more effectively using other methods Voice-mailE-mail Social mediaOnline newsletters VideoconferencingOnline meeting services 7-38

39. Formal Communication Flow of communication within the formal organizational structure as depicted on organizational charts Downward Communication Refers to the traditional flow of information from upper organizational levels to lower levels Typically involves directions, the assignment of tasks and responsibilities, performance feedback, and certain details about the organization’s strategies and goals Upward Communication Flows from lower to higher levels of the organization Includes information such as progress reports, suggestions for improvement, inquiries, and grievances 7-39

40. Formal Communication Horizontal Communication Involves the exchange of information among colleagues and peers on the same organizational level, such as across or within departments Information informs, supports, and coordinates activities both within the department and with other departments Diagonal Communication When individuals from different units and organizational levels communicate With firms downsizing and increasing the use of work teams, workers are being required to communicate with others in different departments and on different levels to solve problems and coordinate work 7-40

41. Informal Communication  Managers can utilize informal communications as a sounding device  Can obtain valuable information from the grapevine that could improve decision making  Some organizations use the grapevine to their advantage by floating ideas, soliciting feedback, and reacting accordingly Grapevine An informal channel of communication, separate from management’s formal, official communication channels 7-41

42. Monitoring Communications  Technological advances and the increased use of electronic communication in the workplace have made monitoring its use necessary for most companies  Managers must monitor communications: Without invading employee privacy While generating respect and mindfulness amongst employees  Model Electronic Privacy Act on the American Civil Liberties Union site Model Electronic Privacy Act on the American Civil Liberties Union site 7-42

43. Improving Communication Effectiveness  Encourage employees to provide feedback  Helps identify strengths and weaknesses  Avoid interruptions  Develop strong and effective communication channels through training  Important for companies to communicate their e-mail policies throughout the organization 7-43