1. Creating a Flexible Organization
Chapter 7

2. What Is an Organization?
A group of two or more people working together to achieve a common set of goals
Developing organization charts
Organization chart
A diagram that represents the positions and relationships within an organization
Chain of command
The line of authority that extends from the highest to the lowest levels of the organization
Staff (advisory) positions
Jobs that are not part of the direct chain of command in the organization

3. A Typical Corporate Organization Chart

4. Major Considerations for Organizing a Business
Job design-
Specialization
Alternatives to specialization
Departmentalization
Delegation
Span of management
Chain of command

5. Rationale for specialization
Job Design
Job specialization
The separation of activities into distinct tasks and the assignment of different tasks to different people
Rationale for specialization
The “job” of the organization is too large for one person to accomplish.
A worker learning only a specific, highly specialized task should be able to learn to do it efficiently.
Workers do not lose time switching from one operation to another.
Specialization makes it easier to design machinery to assist those who do the job.
Specialization makes it easier to train new workers.

6. Alternatives to job specialization
Job Design (cont.)
Alternatives to job specialization
Job rotation systematically shifts employees from one job to another
Job enlargement-adding more responsibilities
Job enrichment-more variety and
more responsibility
Needs photo credit

7. Departmentalization (Ways of Organizing)
Grouping jobs into manageable units
Common bases for departmentalization
By function
By product
By location
By customer
Combinations

8. Evolution of an Organization Chart

9. Departmentalization by Function
CEO
Finance
Marketing
Operations

10. Departmentalization by Product
CEO
Computers
Printers
Software

11. Departmentalization by Location
CEO
U.S. Region
European Region
Asian Region

12. Departmentalization by Customer
CEO
Home Users
Business Users
Educational Users

13. Multibase Departmentalization for New-Wave Fashions, Inc.

14. Delegation, Decentralization, and Centralization
Delegation—assigning part of a manager’s work and power to other workers
Steps in delegation
Responsibility—the duty to do a job or perform a task
Authority—the power, within an organization, to accomplish an assigned task
Accountability—the obligation to accomplish an assigned job or task
Barriers to delegation
Fear the work will not get done
Fear the work will be done too well
Inability to plan and assign work effectively

15. Steps in the Delegation Process
The manager assigns responsibility.
The subordinate is empowered to do the task.
Ultimate accountability remains with the manager.

16. Decentralization of Authority
Decentralized organization
Spreads the authority widely into the lower levels
Centralized organization
Authority is concentrated at the upper levels

17. The number of workers who report directly to one manager
The Span of Management
The number of workers who report directly to one manager
Wide span
Large number of subordinates to one manager
Narrow span
Only a few subordinates to one manager

18. The Span of Management (cont.)

19. The Span of Management (cont.)
Organizational height—number of layers, or levels, of management in a firm
Flat organizations
Have wider spans of management and fewer levels
Require managers to perform more administrative tasks and to spend more time supervising subordinates
Tall organizations
Have narrow spans of management and many levels
Have higher administrative costs (more managers)
May distort internal communications during passage of the communications through the multiple levels of organization

20. Line and Staff Managers

21. Forms of Organizational Structure (cont.)
Line-and-staff structure (cont.)
Line managers make decisions and give orders to subordinates.
Line authority—line managers can make decisions and issue directives related to organizational goals
Staff managers provide support, advice, and expertise.
Advisory authority—the expectation that line managers will consult with staff managers before making decisions
Example: A manager has concerns that one of his employees may be sexually harassing another so he consults with HR first before taking action.
Functional authority—staff managers’ authority to make decisions and issue directives within their area of expertise
Example: A staff manager in the Finance Dept tells a Line Manager in the Production Dept to bring her payroll figures so that Finance can create a month-end report.

22. Forms of Organizational Structure (cont.)
Line-and-staff structure (cont.)
Reasons for conflict between line and staff managers
Staff managers often have more formal education.
Staff managers are sometimes younger and more ambitious.
Line managers may perceive staff managers as a threat.
Staff managers may become angry if their recommendations are not adopted.
Minimizing conflict between line and staff managers
Integrate line and staff managers into one team.
Ensure that responsibilities are clearly defined.
Hold both line and staff managers accountable for results.

23. The Informal Organization
Pattern of behavior and interaction that stems from personal rather than official relationships
Informal groups
Formed by the members themselves to accomplish goals that may or may not be relevant to the organization
Can be powerful forces in organizations, exerting positive as well as negative influences
The grapevine
Informal communication network within an organization that is completely separate from—and sometimes faster than—the organization’s formal communication channels
May be accurate or distorted; managers should be aware and use appropriately

24. Chapter Quiz Solid vertical lines on an organization chart indicate
staff positions.
employees.
delegated positions.
the chain of command.
line and staff positions.

25. Chapter Quiz
The systematic shifting of employees from one job to another is called job
specialization.
rotation.
sharing.
enlargement.
enrichment.

26. Chapter Quiz
Grouping all activities according to the geographic area in which they are located is departmentalization by
function.
employee.
product.
customer.
location.

27. Chapter Quiz
In a ______ organization, administrative costs are higher because more managers are needed.
long
flat
tall
short
broad

28. Chapter Quiz The power to accomplish an assigned job is called
authority.
accountability.
responsibility.
delegation.
obligation.