1. Developed by Cool Pictures & MultiMedia PresentationsCopyright © 2004 by South-Western, a division of Thomson Learning. All rights reserved. Fundamentals of Organizing Developed by Cool Pictures & MultiMedia PresentationsCopyright © 2004 by South-Western, a division of Thomson Learning. All rights reserved.

2. Developed by Cool Pictures & MultiMedia PresentationsCopyright © 2004 by South-Western, a division of Thomson Learning. All rights reserved. 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.

3. Developed by Cool Pictures & MultiMedia PresentationsCopyright © 2004 by South-Western, a division of Thomson Learning. All rights reserved. Organization Structure 1. The set of formal tasks assigned to individuals and departments. 2. Formal reporting relationships. 3. The design of systems to ensure effective coordination of employees across departments. Defined as:

4. Developed by Cool Pictures & MultiMedia PresentationsCopyright © 2004 by South-Western, a division of Thomson Learning. All rights reserved. Four Points About the Organization Chart Visual representation Set of formal tasks Formal reporting relationships Framework for vertical control

5. Developed by Cool Pictures & MultiMedia PresentationsCopyright © 2004 by South-Western, a division of Thomson Learning. All rights reserved. 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.

6. Developed by Cool Pictures & MultiMedia PresentationsCopyright © 2004 by South-Western, a division of Thomson Learning. All rights reserved. Chain of Command Unbroken line of authority that links all persons in an organization. Associated with two underlying principles.  Unity of Command.  Scalar Principle.

7. Developed by Cool Pictures & MultiMedia PresentationsCopyright © 2004 by South-Western, a division of Thomson Learning. All rights reserved. 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.

8. Developed by Cool Pictures & MultiMedia PresentationsCopyright © 2004 by South-Western, a division of Thomson Learning. All rights reserved. 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.

9. Developed by Cool Pictures & MultiMedia PresentationsCopyright © 2004 by South-Western, a division of Thomson Learning. All rights reserved. Delegation  Process managers use to transfer authority and responsibility.  Organization encourage managers to delegate authority to lowest possible level.

10. Developed by Cool Pictures & MultiMedia PresentationsCopyright © 2004 by South-Western, a division of Thomson Learning. All rights reserved. Effective Delegation Techniques Give thorough instructions Maintain feedback Evaluate and reward performance Delegate the whole task Select the right person Ensure that authority equals responsibility

11. Developed by Cool Pictures & MultiMedia PresentationsCopyright © 2004 by South-Western, a division of Thomson Learning. All rights reserved. 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.

12. Developed by Cool Pictures & MultiMedia PresentationsCopyright © 2004 by South-Western, a division of Thomson Learning. All rights reserved. Large Spans of Control Factors 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.

13. Developed by Cool Pictures & MultiMedia PresentationsCopyright © 2004 by South-Western, a division of Thomson Learning. All rights reserved. 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.

14. Developed by Cool Pictures & MultiMedia PresentationsCopyright © 2004 by South-Western, a division of Thomson Learning. All rights reserved. Tall verses Flat Structure

15. Developed by Cool Pictures & MultiMedia PresentationsCopyright © 2004 by South-Western, a division of Thomson Learning. All rights reserved. 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.

16. Developed by Cool Pictures & MultiMedia PresentationsCopyright © 2004 by South-Western, a division of Thomson Learning. All rights reserved. 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.  Matrix approach. Functional and divisional chains of command are implemented. Two chains of command exists.  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.

17. Developed by Cool Pictures & MultiMedia PresentationsCopyright © 2004 by South-Western, a division of Thomson Learning. All rights reserved. Approaches To Structural Design Slide 2 of 2

18. Developed by Cool Pictures & MultiMedia PresentationsCopyright © 2004 by South-Western, a division of Thomson Learning. All rights reserved. Team Approach Cross-functional teams consist of employees from various functional departments. Permanent team solve ongoing problems. Employees come from all functional areas.

19. Developed by Cool Pictures & MultiMedia PresentationsCopyright © 2004 by South-Western, a division of Thomson Learning. All rights reserved. Network Approach May be viewed as a central hub surrounded by a network of outside specialist. "Where is the organization?” A difficult question to answer. Especially appropriate for international operations. Connected electronically to the central office.

20. Developed by Cool Pictures & MultiMedia PresentationsCopyright © 2004 by South-Western, a division of Thomson Learning. All rights reserved. Virtual Organizations An organization that has few on-site employees and does most if its interactions online.

21. Developed by Cool Pictures & MultiMedia PresentationsCopyright © 2004 by South-Western, a division of Thomson Learning. All rights reserved. Evolution of Organization Structures

22. Developed by Cool Pictures & MultiMedia PresentationsCopyright © 2004 by South-Western, a division of Thomson Learning. All rights reserved. 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.

23. Developed by Cool Pictures & MultiMedia PresentationsCopyright © 2004 by South-Western, a division of Thomson Learning. All rights reserved. Traditional vs. Learning Organizations New Workplace Learning Organization Traditional Vertical Organization

24. Developed by Cool Pictures & MultiMedia PresentationsCopyright © 2004 by South-Western, a division of Thomson Learning. All rights reserved. Contingency Factors that Influence Organization Structure Strategy Environment Technology Interdependence Traditional Vertical Structure or New Horizontal Structure Company Performance

25. Developed by Cool Pictures & MultiMedia PresentationsCopyright © 2004 by South-Western, a division of Thomson Learning. All rights reserved. Uncertain Environment Creates Increased differences occur among departments. Organizations that need increased coordination. Organizations must adapt to change.

26. Developed by Cool Pictures & MultiMedia PresentationsCopyright © 2004 by South-Western, a division of Thomson Learning. All rights reserved. Service Technology Defined Intangible output Direct Contact with Customers