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Understanding Management First Canadian Edition Slides prepared by Janice Edwards College of the Rockies Copyright © 2009 Nelson Education Ltd.

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Presentation on theme: "Understanding Management First Canadian Edition Slides prepared by Janice Edwards College of the Rockies Copyright © 2009 Nelson Education Ltd."— Presentation transcript:

1 Understanding Management First Canadian Edition Slides prepared by Janice Edwards College of the Rockies Copyright © 2009 Nelson Education Ltd.

2 Chapter Structure and Fundamentals of Organizing Copyright © 2009 Nelson Education Ltd.

3 Learning Objectives 1. Discuss the fundamental characteristics of organizing, including such concepts as work specialization, chain of command, span of management, and centralization versus decentralization. 2. Describe functional and divisional approaches to structure. 3. Explain the matrix approach to structure and its application to domestic and international organizations. 4. Describe the contemporary team and virtual network structures and why they are being adopted by organizations. Copyright © 2009 Nelson Education Ltd. 7-3

4 Learning Objectives (Cont’d) 5. Explain why organizations need coordination across departments and hierarchical levels, and describe mechanisms for achieving coordination. 6. Identify how structure can be used to achieve an organization’s strategic goals. 7. Illustrate how organization structure can be designed to fit environmental uncertainty. 8. Define production technology (manufacturing, service, and digital) and explain how it influences organization structure. Copyright © 2009 Nelson Education Ltd. 7-4

5 Organizing Copyright © 2009 Nelson Education Ltd. 7-5 The deployment of organizational resources to achieve strategic goals. The deployment of organization resources is reflected in the division of labour into: Specific departments and jobs Normal lines of authority Mechanisms for coordinating diverse organization tasks

6 Organization Structure The framework in which the organization defines how tasks are divided, resources are deployed, and departments are coordinated. An Organization Chart is the visual representation of an organization’s structure. Copyright © 2009 Nelson Education Ltd 7-6

7 Work 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. 7-7 Copyright © 2009 Nelson Education Ltd.

8 Chain of Command Unbroken line of authority that links all persons in the organization and shows who reports to whom. Associated with two underlying principles: Unity of command. Scalar principle. Copyright © 2009 Nelson Education Ltd. 7-8

9 Authority Formal and legitimate right of a manager to make decisions, issue orders, and to allocate resources to achieve organizationally desired outcomes. Copyright (c) 2009 Nelson Education Ltd. 7-9

10 Characteristics of Authority Authority is vested in organizational positions, not people. Authority is accepted by subordinates. Authority flows down the vertical hierarchy. Copyright (c) 2009 Nelson Education Ltd. 7-10

11 Accountability Mechanism 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. Copyright (c) 2009 Nelson Education Ltd. 7-11

12 Delegation Process managers use to transfer authority and responsibility to positions below them in the organization. Organizations encourage managers to delegate authority to lowest possible level. Copyright (c) 2009 Nelson Education Ltd. 7-12

13 Line and Staff Authority Line authority means that people in management positions have formal authority to direct and control immediate subordinates. Staff authority includes the right to advise, recommend, and counsel in the staff specialist’s area of expertise. Copyright (c) 2009 Nelson Education Ltd. 7-13

14 Span of Management The number of employees reporting to a supervisor. Traditional view, seven or so per manager. Many organizations today, 30 or more per manager. Generally, when supervisors must be closely involved with employees, span should be small. Copyright (c) 2009 Nelson Education Ltd. 7-14

15 Factors Associated with Large Spans of Control Work is stable or routine. Similar task is performed by everyone. A single location. Employees are highly trained. Rules and procedures are available. Support systems and personnel are available for supervisor. Little time is required in nonsupervisory activities. Personal preferences and styles of management favour a large span. Copyright (c) 2009 Nelson Education Ltd. 7-15

16 Tall versus Flat Structure Span of control used in an organization determines whether the structure is tall or flat. Tall structure has a narrow span and more hierarchical levels. Flat structure has a wide span, is horizontally dispersed and fewer hierarchical levels. The trend has been toward wider spans of control. Copyright (c) 2009 Nelson Education Ltd. 7-16

17 Ex. 7.2 Reorganization to Increase Span of Management for President of an International Metals Company Copyright (c) 2009 Nelson Education Ltd. 7-17

18 Centralization versus Decentralization Centralization: decision authority is located near the top of the organization. Decentralization: authority is pushed downward to lower organizational levels. Copyright (c) 2009 Nelson Education Ltd. 7-18

19 Figure 7.3 Five Approaches to Structural Design Copyright (c) 2009 Nelson Education Ltd. 7-19

20 Figure 7.3 Five Approaches to Structural Design (Cont’d) Copyright (c) 2009 Nelson Education Ltd. 7-20

21 Figure 7.3 Five Approaches to Structural Design (Cont’d) Copyright (c) 2009 Nelson Education Ltd. 7-21

22 Team Approach Cross-functional teams consist of employees from various functional departments who meet as a team to solve problems. Permanent teams solve ongoing problems; employees come from several functional areas. Copyright (c) 2009 Nelson Education Ltd. 7-22

23 Virtual Network Structure The firm subcontracts most of its major functions to separate companies and coordinates their activities from a small headquarters organization. Copyright (c) 2009 Nelson Education Ltd. 7-23

24 Figure 7.6 Evolution of Organizational Structures Copyright (c) 2009 Nelson Education Ltd. 7-24

25 Structural Design Copyright (c) 2009 Nelson Education Ltd Task Force: a temporary team or committee formed to solve a specific short-term problem. Project Manager: a person responsible for coordinating the activities of several departments.

26 Copyright (c) 2009 Nelson Education Ltd Ex. 7.9 Relationship of Strategic Goals to Structural Approach

27 Structure Reflects the Environment Copyright (c) 2009 Nelson Education Ltd Increased differences occur among departments. Organizations need increased coordination among departments. Organizations must adapt to change.


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