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Departmentalization by simple numbers Definition: group people who are to perform same duties under the supervision of a manager.

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Presentation on theme: "Departmentalization by simple numbers Definition: group people who are to perform same duties under the supervision of a manager."— Presentation transcript:

1 Departmentalization by simple numbers Definition: group people who are to perform same duties under the supervision of a manager

2 Advantages: useful when it is the number of people that is critical to finish a task Disadvantages: Low specialization Low efficiency

3 Departmentalization by time Group people based on time

4 Advantages Extended services Suitable when certain processes can’t be interrupted or certain expensive equipment can be used more than 8 hours a day Disadvantages: Lacks supervision during the night shift Fatigue Affects coordination and communication among different shifts

5 Organic v Collaboration v Adaptable Duties v Few Rules v Informal Communication v Decentralized Decisions v Flatter Structures Mechanistic v Rigid Hierarchy v Fixed Duties v Many Rules v Formal Communication v Centralized Decisions v Taller Structures Organizational Forms

6 Simple structure Characteristics: –A low degree of departmentalization –Wide span of control –Centralized authority –Little formalization –A flat structure –Inexpensive to maintain the structure –A clear accountability –Popular in small business owned and managed by same person –Risky as the organization grows

7 Bureaucracy Characteristics: –High specialized operating task –Formalized rules and regulations –A clearly defined hierarchy –Level of managers are created to coordinate activities

8 Divisional structure –An organization is made up of self-contained units –Characteristics: Each division is generally autonomous Central headquarters provide financial and legal services to the divisions Central headquarters coordinate and control various divisions Focuses on end results Headquarters concentrate on long-term and strategic issues Duplications of personnel and equipment

9 Alpha project Beta project Gamma project Design engineering ManufacturingAccounting Design group Design group Design group Manufacturing group Manufacturing group Manufacturing group Accounting group Accounting group Accounting group

10 Matrix organization Definition: assign people from functional departments to work on one or more projects led by a project manager

11 Advantages Is oriented toward end results Professional identification is maintained Pinpoints product-profit responsibility Cross-functional coordination Disadvantages: Conflict in organization authority exists Possibility of disunity of command exists Requires managers effective in human relations

12 Team-based structure Definition: the entire organization consists of work groups or team that perform the organization’s work Characteristics: 1.No rigid chain of command 2.Team member has authority to make decisions

13 Advantages: Is flexible Empower workers Encourages cooperation Oriented toward end results Disadvantages: Lack of responsibility Central control may be difficult Requires managers effective in human relations

14 The Boundaryless Organization An organization that is not defined or limited by boundaries or categories imposed by traditional structures Characteristics: –Minimize the chain of command –Replaces departments with empowered team –Participative decision-making –Coordination among occupational specialties

15 Functional structure –An organization in which similar and related occupational specialties are grouped together –Characteristics: Work specialization Minimizes duplication of personnel and equipment Follows principle of occupational specializing Simplifies training Furnishes means of tight control at top

16 Factors that affect structure Organizational factors –Strategy (structure should fit organizational strategy) Growth strategy Stability strategy Retrenchment strategy –Size and age Larger organizations tended to be more specialized and standardized, and formalized but less centralized than smaller organizations –Culture (i.e., a system of shared meaning within an organization that determines, to a large degree, how employees act) Strong culture substitute for the rules and regulations that formally guide employees

17 Environmental factors –Technology (i.e., the sequence of physical techniques, knowledge, and equipment used to turn organization inputs into outputs) Define organizational structure Define new roles (e.g., CIOs) –Economic situation Strong/weak economy Dynamic/static economy –Social/political situation

18 Building an effective organization design Align with organizational goals Make clear individual roles Make clear sub-goals and policies Be flexible Make staff work effective –Make line listen staff –Keep staff informed Recognize the importance of informal organization and grapevine

19 Evaluating effective organizational structure Effective two-way communication Align with organizational goals Clarify authority and responsibility Respond to environmental changes promptly

20 Why do we need organizational design? Achieve goals Make the best use of people’s experiences, knowledge, skills, and expertise, etc. Provide a smooth communication channel Reduce uncertainty Encourage cooperation

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