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Developed by Stephen M.PetersHarcourt, Inc. items and derived items copyright © 2001 by Harcourt, Inc. hapter Structure and Fundamentals of Organizing.

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Presentation on theme: "Developed by Stephen M.PetersHarcourt, Inc. items and derived items copyright © 2001 by Harcourt, Inc. hapter Structure and Fundamentals of Organizing."— Presentation transcript:

1 Developed by Stephen M.PetersHarcourt, Inc. items and derived items copyright © 2001 by Harcourt, Inc. hapter Structure and Fundamentals of Organizing Harcourt, Inc. items and derived items copyright © 2001 by Harcourt, Inc. All rights reserved. Requests for permission to make copies of any part of the work should be mailed to the following address: Permissions Department, Harcourt, Inc., 6277 Sea Harbor Drive, Orlando, Florida

2 Developed by Stephen M.PetersHarcourt, Inc. items and derived items copyright © 2001 by Harcourt, Inc. Organizing The 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. The 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.

3 Developed by Stephen M.PetersHarcourt, Inc. items and derived items copyright © 2001 by Harcourt, Inc. Organization Structure Defines how tasks are divided, resources are deployed, and departments are coordinated. The set of formal tasks. Formal reporting relationships. The design of systems to ensure effective coordination of employees across departments. Defines how tasks are divided, resources are deployed, and departments are coordinated. The set of formal tasks. Formal reporting relationships. The design of systems to ensure effective coordination of employees across departments.

4 Developed by Stephen M.PetersHarcourt, Inc. items and derived items copyright © 2001 by Harcourt, Inc. Four Points About the Organization Chart Visual representation Set of formal tasks Formal reporting relationships Formal reporting relationships Framework for vertical control Framework for vertical control The Home Depot

5 Developed by Stephen M.PetersHarcourt, Inc. items and derived items copyright © 2001 by Harcourt, Inc. Work Specialization Tasks are subdivided into individual jobs. Division of labor concept. Employees perform only the tasks relevant to their specialized function. Jobs tend to be small, but they can be performed efficiently. Many organizations are moving away from this principle. Tasks are subdivided into individual jobs. Division of labor concept. Employees perform only the tasks relevant to their specialized function. Jobs tend to be small, but they can be performed efficiently. Many organizations are moving away from this principle.

6 Developed by Stephen M.PetersHarcourt, Inc. items and derived items copyright © 2001 by Harcourt, Inc. Chain of Command Unbroken line of authority that links all persons in an organization. Shows who reports to whom. Associated with two underlying principles.  Unity of Command.  Scalar Principle. Unbroken line of authority that links all persons in an organization. Shows who reports to whom. Associated with two underlying principles.  Unity of Command.  Scalar Principle.

7 Developed by Stephen M.PetersHarcourt, Inc. items and derived items copyright © 2001 by Harcourt, Inc. Authority Formal 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. Formal 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.

8 Developed by Stephen M.PetersHarcourt, Inc. items and derived items copyright © 2001 by Harcourt, Inc. Responsibility The duty to perform the task or activity an employee has been assigned. Managers need authority commensurate with responsibility. The duty to perform the task or activity an employee has been assigned. Managers need authority commensurate with responsibility.

9 Developed by Stephen M.PetersHarcourt, Inc. items and derived items copyright © 2001 by Harcourt, Inc. 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.

10 Developed by Stephen M.PetersHarcourt, Inc. items and derived items copyright © 2001 by Harcourt, Inc. Delegation  Process managers use to transfer authority and responsibility.  Organization encourage managers to delegate authority to lowest possible level. 1 2

11 Developed by Stephen M.PetersHarcourt, Inc. items and derived items copyright © 2001 by Harcourt, Inc. Techniques for Delegation Give thorough instructions Maintain feedback Evaluate and reward performance Delegate the whole task Select the right person Delegation Ensure that authority equals responsibility

12 Developed by Stephen M.PetersHarcourt, Inc. items and derived items copyright © 2001 by Harcourt, Inc. 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 if supervisors must be closely involved with employees span should be small. The 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.

13 Developed by Stephen M.PetersHarcourt, Inc. items and derived items copyright © 2001 by Harcourt, Inc. 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 favor a large span. 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 favor a large span.

14 Developed by Stephen M.PetersHarcourt, Inc. items and derived items copyright © 2001 by Harcourt, Inc. 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. 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.

15 Developed by Stephen M.PetersHarcourt, Inc. items and derived items copyright © 2001 by Harcourt, Inc. Tall vs. Flat Structure

16 Developed by Stephen M.PetersHarcourt, Inc. items and derived items copyright © 2001 by Harcourt, Inc. Centralization and Decentralization The hierarchical level at which decisions are made. NASA

17 Developed by Stephen M.PetersHarcourt, Inc. items and derived items copyright © 2001 by Harcourt, Inc. Decentralization Facilities at different locations. Decision authority is pushed down the chain of command to lower levels. Facilities at different locations. Decision authority is pushed down the chain of command to lower levels.

18 Developed by Stephen M.PetersHarcourt, Inc. items and derived items copyright © 2001 by Harcourt, Inc. Decentralization Tends to--- Make greater use of human resources. Reduce burdens of top managers. Cause decisions to be made close to the action. Permit rapid response to changes. Make greater use of human resources. Reduce burdens of top managers. Cause decisions to be made close to the action. Permit rapid response to changes.

19 Developed by Stephen M.PetersHarcourt, Inc. items and derived items copyright © 2001 by Harcourt, Inc. Centralization 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. 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.

20 Developed by Stephen M.PetersHarcourt, Inc. items and derived items copyright © 2001 by Harcourt, Inc. Factors that Influence Centralization/Decentralization Amount of change and uncertainty. Corporate culture. Size of organization. Cost and risk of failure. Efficiency of communication and control systems. Amount of change and uncertainty. Corporate culture. Size of organization. Cost and risk of failure. Efficiency of communication and control systems.

21 Developed by Stephen M.PetersHarcourt, Inc. items and derived items copyright © 2001 by Harcourt, Inc. Departmentalization The basis on which individuals are grouped into departments Five structural alternatives  Vertical functional approach. People are grouped together in departments by common skills.  Divisional approach. Grouped together based on a common product, program, or geographical region.  Horizontal matrix approach. Functional and divisional chains of command. Some employees report to two bosses.  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.

22 Developed by Stephen M.PetersHarcourt, Inc. items and derived items copyright © 2001 by Harcourt, Inc. Approaches To Structural Design Slide 1 of 2

23 Developed by Stephen M.PetersHarcourt, Inc. items and derived items copyright © 2001 by Harcourt, Inc. Approaches To Structural Design Slide 2 of 2

24 Developed by Stephen M.PetersHarcourt, Inc. items and derived items copyright © 2001 by Harcourt, Inc. Matrix Approach Functional and divisional chains of command simultaneously. Dual lines of authority. Functional hierarchy of authority runs vertically. Divisional hierarchy runs laterally. Violates the unity of command concept. General Electric

25 Developed by Stephen M.PetersHarcourt, Inc. items and derived items copyright © 2001 by Harcourt, Inc. Team Approach Cross-functional teams consist of employees from various functional departments. Interdisciplinary approach to management. Permanent team solve ongoing problems. Reengineering radical redesign for improvements in cost, quality, service and speed. American Express

26 Developed by Stephen M.PetersHarcourt, Inc. items and derived items copyright © 2001 by Harcourt, Inc. Network Approach Organization divides major functions into separate companies brokered by a small headquarters organization. "Where is the organization?" Especially appropriate for international operations. Held together with phones, faxes, and other electronic technology.

27 Developed by Stephen M.PetersHarcourt, Inc. items and derived items copyright © 2001 by Harcourt, Inc. Organization Growth  As organizations grow and evolve two things happen:  New positions and departments are added.  Senior managers have to find a way to tie all departments together.  As organizations grow and evolve two things happen:  New positions and departments are added.  Senior managers have to find a way to tie all departments together.

28 Developed by Stephen M.PetersHarcourt, Inc. items and derived items copyright © 2001 by Harcourt, Inc. Evolution of Organization Structures

29 Developed by Stephen M.PetersHarcourt, Inc. items and derived items copyright © 2001 by Harcourt, Inc. Structural Design Teams Project Management Task Forces Task Force... A temporary team or committee formed to solve a specific short-term problem. Team... Participants from several departments who meet to solve ongoing problems. Project Manager... A person responsible for coordinating the activities of several departments.

30 Developed by Stephen M.PetersHarcourt, Inc. items and derived items copyright © 2001 by Harcourt, Inc. Traditional vs. Learning Organizations

31 Developed by Stephen M.PetersHarcourt, Inc. items and derived items copyright © 2001 by Harcourt, Inc. Learning--Culture Values The whole is more important than the part. The culture is egalitarian. The culture values improvement and adaptation. The whole is more important than the part. The culture is egalitarian. The culture values improvement and adaptation. Chaparral Steel

32 Developed by Stephen M.PetersHarcourt, Inc. items and derived items copyright © 2001 by Harcourt, Inc. Contingency Factors that Influence Organization Structure Strategy Environment Technology Interdependence Organizational Structure The right mix of vertical/horizontal structure fits the contingency factors. Company Performance

33 Developed by Stephen M.PetersHarcourt, Inc. items and derived items copyright © 2001 by Harcourt, Inc. Contingency Factor: Strategic Goals  Differentiation Strategy…attempt to develop innovative products unique to the market.  Cost Leadership Strategy…organization strives for internal efficiency.  Differentiation Strategy…attempt to develop innovative products unique to the market.  Cost Leadership Strategy…organization strives for internal efficiency. Polaroid

34 Developed by Stephen M.PetersHarcourt, Inc. items and derived items copyright © 2001 by Harcourt, Inc. Environmental Uncertainty Causes three things to happen 1. Increased differences occur among departments. 2. The organization needs increased coordination to keep departments working together. 3. The organization must adapt to change.

35 Developed by Stephen M.PetersHarcourt, Inc. items and derived items copyright © 2001 by Harcourt, Inc. Woodward’s Manufacturing Work Flow Technology Small batch and unit production Large batch and mass production Continuous process production Small batch and unit production Large batch and mass production Continuous process production Technical Complexity... represents the differences among the three work flow technologies.

36 Developed by Stephen M.PetersHarcourt, Inc. items and derived items copyright © 2001 by Harcourt, Inc. Service Technology Defined Intangible output Direct contact with customers Intangible output Direct contact with customers


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