Organizing Process a course of action, a route, a progression Structure an arrangement, a configuration, a construction
Organizing The process of deploying resources to achieve strategic goals
The process of organizing takes place within a structure reflected by the way in which the organization Divides its labor into departments and jobs Establishes formal lines of authority Establishes mechanisms for coordinating diverse tasks
Organizing process leads to creation of an Organizational Structure Formal tasks assigned Formal reporting relationships Systems design for coordination across departments
Features of Organizational Structure President Vice President
Work Specialization Also called division of Labor Specialists get good at a specific task Efficiency increases Employees are selected based on specific skills Training is geared toward increased efficiency. Based on a mechanistic organization
Chain of Command An unbroken line of authority Unity of Command-Everyone has only one supervisor Scalar Principle-Everyone has at least one boss. Everyone is included
Authority The formal rights of a manager to manage Vested in the organizational position, not the person. Provides the manager with positional power Authority is accepted by the subordinates Authority flow from the top, down.
Responsibility The duty to perform the task the employee has been assigned. Responsibility and Authority are delegated together and make the employee accountable to superiors
Span of Management (Control) The number of employees reporting to a supervisor. Size varies with the type of organization, skill of the subordinates, Geographic dispersion Managerial skill and preference
Factors Affecting Span of Control Job Complexity More complex jobs = more manager Job Similarity Similar jobs = more employees per manager Geographic Proximity of Employees Dispersed locations = more supervision Amount of Coordination to Complete Task High coordination = more supervision
Factors Affecting Span of Control Employee Abilities Knowledgeable, trained staff = less supervision Employee Empowerment Employees who are trusted and empowered to make decisions need less supervision Ability of Management Dispersed locations = more supervision Hierarchy Tall hierarchy = low span of control
Centralization Decision making is done high in the organization Tendency toward decentralization Greater use of employee skills Less mechanistic Relieve burden on manager to do everything Decisions made closer to the action Decisions are make quicker
Factors influencing Decentralization Amount of change and uncertainty in the environment Corporate strategy and culture Size and dispersion of the organization The risk of failure The greater the risk, the higher up the decisions are made.
Matrix Organization Two sets of bosses-functional and divisional. Violates the chain of command, e.g. two bosses, not clear line of authority. Attempts to lower the risks of functional and divisional structures Requires employee to manage two sets of bosses.
Network or Value Chain Management Do what you do well, sub-contract everything else to those who do better than you. Look for the best industry practices Management the value chain rather than the organization Advantages Increased competitiveness Flexibility Reduced costs Disadvantages Requires a different kind of management Need to sell the concept Less control
Product departmentalization: Organizes work units based on the goods and services offered Product departmentalization: Organizes work units based on the goods and services offered Product Departmentalization
Geographic departmentalization: units organized by geographic region within a country Geographic departmentalization: units organized by geographic region within a country For a multinational firm, units organized by regions throughout the world For a multinational firm, units organized by regions throughout the worldProduct Departmentalization Geographic
Customer departmentalization: organization that offers a variety of goods and services targeted to different types of customers might structure itself based on customers served Customer departmentalization: organization that offers a variety of goods and services targeted to different types of customers might structure itself based on customers servedProduct Departmentalization Geographic Customer
Functional departmentalization: work units organized according to business functions such as finance, marketing, human resources, and production Functional departmentalization: work units organized according to business functions such as finance, marketing, human resources, and productionProduct Departmentalization Geographic Customer Functional
Process departmentalization: units organized by work processes required to complete production of goods Process departmentalization: units organized by work processes required to complete production of goodsProduct Departmentalization Geographic Customer Functional Process