2OrganizingThe deployment of organizational resources to achieve strategic goals.The deployment of resources is reflected in the division of labor.Formal lines of authority and mechanisms for coordinating diverse organization tasks.
3Fundamental Concepts of Organizing Differentiation means that the organization is composed of units that work on specialized tasks using different work methods and requiring employees with unique competencies.Integration means that the various units must be put back together so that work is coordinated.
4Mechanistic Versus Organic Structures High horizontal differentiationRigid hierarchical relationshipsFixed dutiesHigh formalizationFormalized communication channelsCentralized decision authorityLow horizontal differentiationCollaboration(vertical and horizontal)Adaptable dutiesLow formalizationInformal communicationDecentralized decision authority
6Open System Characteristics Cycle of EventsNegative Entropy (Don’t let the system break down)FeedbackKreitner’s Dynamic Homeostasis (maintaining optimal state)DifferentiationEquifinality
7Span of ManagementThe number of employees reporting to a supervisor.Traditional view, seven or so per manager.Many organizations today, 30 or more per manager.Generally if supervisors must be closely involved with employees, span should be small.
8Factors Determining Span of Control Subordinates’ locationSupport available for the managerAmount of non-supervisory tasksThe competence of both the manager and the employee.The similarity or dissimilarity of tasks being supervised.The incidence of new problems in the manager’s department.The extent of clear operating standards and rules.
9Tall Versus Flat Structure Tall structure has an overall narrow span of management and more levels in the hierarchyFlat structure has a wide span, is horizontally dispersed, and has fewer hierarchical levelsThe trend is toward larger spans of management as a way to facilitate delegation.
14Organization Structure Defined as:1. The set of formal tasks assigned to individuals and departments.2. Formal reporting relationships.3. The design of systems to ensure effective coordination of employees across departments.
15The Elements of Structure Organization designA process in which managers develop or change their organization’s structure.Work specializationA component of organization structure that involves having each discrete step of a job done by a different individual rather than having one individual do the whole job.
16Four Points About the Organization Chart Visual representationSet of formal tasksFormalreporting relationshipsFrameworkfor vertical control
17Economies and Diseconomies of Work Specialization
18Work Specialization Tasks are subdivided into individual jobs. Employees perform only the tasks relevant to their specialized function.Jobs tend to be small, but they can be performed efficiently.There is a concern that employees may become isolated, and do only a single boring job.Many organizations are moving away from this principle.
19Chain of CommandUnbroken line of authority that links all persons in an organization.Underlying principlesUnity of Command.
21DepartmentalizationBasis for grouping job positions into departments and departments into the total organization.Internal Operations OrientedFunctionalNetwork (Virtual)Output OrientedDivisionalProductGeographicCustomerTeam (Cluster)CombinationsHybrid (different types at different places in an org.)Matrix (different types at simultaneous at the same places in an org.)
22Departmentalization The basis on which individuals are grouped into departments Five structural alternativesVertical functional approach. People are grouped together in departments by common skills.Divisional approach. Grouped together based on a common product, customer or geographical region.Matrix approach. Functional and divisional chains of command are implemented. Two chains of command exists.Team-based approach. Created to accomplish specific tasks.Network approach. Small, central hub electronically connected to their other organizations that perform vital functions. Departments are independent, and can be located anywhere.
23Functional DesignFunctional design means grouping managers and employees according to their areas of expertise and the resources they use to perform their jobs.
25Functional Design Potential Pitfalls Potential Benefits Inadequate communicationDifficulties with interunit coordinationFocus on departmental rather than organizational issues and goalsPotential BenefitsSupports skill specializationReduces duplication of resources & increases coordinationEnhances career development & training within functional areaAllows superiors and subordinates to share common expertisePromotes high-quality technicaldecision making
26Product DesignProduct design means that all functions that contribute to a product are organized under one manager.
28Product Design Potential Benefits Potential Pitfalls Permits fast changes in a product lineAllows greater product line visibilityFosters a concern for customer demandClearly defines responsibilities for each product lineDevelops managers who can think across functional linesPotential PitfallsNot allowing efficient utilization of skills and resourcesNot fostering coordination of activities across productEncourages politics and conflicts in resource allocation across product linesLimits career mobility for personnel outside their own product lines
29Geographical DesignGeographical design organizes activities around location.
30Geographical Structure for Apple Computer CEOSteve JobsAppleEuropePacificFranceMiddle EastAsiaJapanAustraliaAmericaCanadaLatinAmerica/CaribbeanUSA
31Geographical Design Potential Benefits Potential Pitfalls Has facilities and the equipment used for production and/or distribution all in one place, saving time and costsAble to develop expertise in solving problems unique to one locationGaining an understanding of customers’ problems and desiresGetting production closer to raw materials and suppliersPotential PitfallsDuplication of functions, to varying degrees, at each regional or individual unit locationConflict between each location's goals and the organization's goalsAdds levels of management and extensive use of rules and regulations to coordinate and ensure uniformity of quality among locations
33Matrix DesignFunctional and divisional chains of command simultaneouslyDual lines of authorityFunctional hierarchy of authority runs verticallyDivisional hierarchy runs laterallyViolates the unity of command concept.
35Matrix Design Potential Benefits Potential Pitfalls More efficient use of resources than single hierarchyAdaptable to changing environmentDevelopment of both general and specialists management skillsExpertise available to all divisionsEnlarged tasks for employees.Potential PitfallsDual chain of commandHigh conflict between two sides of matrixMany meetings to coordinate activitiesNeed for human relations trainingPower domination by one side of matrix.
36Team ApproachCross-functional teams consist of employees from various functional departmentsInterdisciplinary approach to managementPermanent team = to solve ongoing problemsReengineering = radical redesign for improvements in cost, quality, service and speed.
37Team Approach Same advantages as functional structure Potential BenefitsSame advantages as functional structureReduced barriers among departmentsQuicker response timeBetter moralePotential PitfallsDual loyalties and conflictTime and resources spent on meetingsUnplanned decentralization.
38Network ApproachOrganization divides major functions into separate companies brokered by a small headquarters organizationEspecially appropriate for international operationsHeld together with phones, faxes, and other electronic technology.
39Network Approach Global competitiveness Work force flexibility Potential BenefitsGlobal competitivenessWork force flexibilityReduced administrative overhead.Potential PitfallsNo hands-on controlLoss of part of the organization severely impacts remainder of organizationEmployee loyalty weakened.
40Hybrid Structure Functional Structure Product Structure President ChiefCounselHumanResourcesDirectorTechnologyVicePresidentFinancialServicesVice Pres.ProductStructureFuelsVicePresidentLubricantsVicePresidentChemicalsVicePresident
41Other Forms of Departmentalization Simple NumberTimeProcessVirtual Organization
42Determinants of Organizational Structure The environmentThe size of the organizationTechnologyThe organization’s strategy
43individual differences Organization Structure Determinants and OutcomesPerformanceandSatisfactionCausesStrategySizeTechnologyEnvironmentStructuresDeterminesMechanisticOrganicModerated byindividual differencesand cultural norms
48AuthorityFormal and legitimate right of a manager to make decisions, issue orders, and to allocate resources to achieve organizationally desired outcomes.Authority is distinguished by three characteristics:Authority is vested in organizational positions, not people.Authority is accepted by subordinates.Authority flows down the vertical hierarchy.
49ResponsibilityThe duty to perform the task or activity an employee has been assigned.Managers need authority commensurate with responsibility.
50AccountabilityMechanism through which authority and responsibility are brought into alignment.People are subject to reporting and justifying task outcomes to those above them in the chain of command.Can be built into the organization structure.
51PowerAn individual’s capacity to influence decisions.
53Types of Power Coercive power Power based on fear. Reward power Power based on the ability to distribute something that others value.Legitimate power Power based on one’s position in the formal hierarchy.Expert power Power based on one’s expertise, special skill, or knowledge.Referent power Power based on identification with a person who has desirable resources or personal traits.
55LineLine departments perform tasks that reflect the organization's primary goal and missionLine authority means that managers have formal authority to direct and control immediate subordinates.
56StaffStaff departments include all those who provide specialized skills in support of line departmentsStaff authority is generally more narrow than line authorityStaff authority includes the right to advise, recommend, and counsel in the staff specialists' area of expertise.
57Types of Organizational Authority Line authorityThe position authority (given and defined by the organization) that entitles a manager to direct the work of operative employees.Staff authorityPositions that have some authority (e.g., organization policy enforcement) but that are created to support, assist, and advise the holders of line authority.Functional Authority
58Line & Staff Conflict Line Theory Bias Dilution of Authority Lack of AccountabilityStaffLack of AuthoritySidelined
60CentralizationDecision authority is located near the top of the organization.
61DecentralizationDecision authority is pushed down the chain of command to lower levels.
62Decentralization Tends To Make greater use of human resourcesReduce burdens of top managersCause decisions to be made close to the actionPermit rapid response to changes.
63Centralization versus Decentralization Greater change and uncertainty in the environment are usually associated with decentralization.The amount of centralization or decentralization should fit the firm’s strategy.In times of crisis or risk of company failure, authority may be centralized at the top.
64Factors That Influence Centralization/Decentralization Amount of change and uncertaintyAvailability of competent managersCorporate cultureGeographical dispersionSize of organizationEfficiency of communication and control systems.Cost and risk of failure
66Delegation Process managers use to transfer authority. Organization encourage managersto delegate authority to lowest possible level.
67Factor Affecting Delegation Love for Authority (Boss)Fear of losing position (Boss)Lack of Trust (Boss)Fear of Criticisms (Both)Low Self confidence (Subordinate)Absence of rewards (Subordinate)
68Effective Delegation Techniques Give thorough instructionsMaintain feedbackEvaluate and reward performanceEffective Delegation TechniquesDelegate the whole taskEnsure that authority equals responsibilitySelect the right person
69Effective Organizing Spotting Inflexibility Missing Opportunity Obsolete ProductsDelay in decision makingReorganizingNew Product technologiesConsolidationNew government policiesDomino EffectBringing ClarificationOrganization ChartsPosition DescriptionsUnderstanding Importance of grapevine
71Organizational Culture A system of shared values, assumptions, beliefs, and norms that unite the members of an organization.Reflects employees’ views about “the way things are done”The culture specific to each firm affects how employees feel and act and the type of employee hired and retained by the company.
72Characteristics of Organization Culture It is distinctiveIt is based on certain NormsIt promotes Stable valuesIt leads to common behavioral aspectsIt shapes philosophy and rulesIts strength varies
73Layers of Organizational Culture Cultural SymbolsShared BehaviorsCultural ValuesShared Assumptions
74Functions Performed By Organizational Culture Employee Self-ManagementSense of shared identityFacilitates commitmentStabilitySense of continuitySatisfies need for predictability, security, and comfortSocializationInternalizing or taking organizational values as one’s ownImplementation SupportIf strategy and culture reinforce each other, employees find it natural to be committed to the strategy
75Steps in Socialization 7. Role model to sustain culture6. Rituals, taboos, rites, and stories to reinforce culture5. Adoption of cultural value policiesRemoval of Employees who deviate from culture4. Rewards that sustain the culture3. Training to develop capabilities consistent with culture2. Challenging early work assignmentsRemoval of candidates who do not “fit” culture1. Careful selection