© 2003 McGraw-Hill Australia Pty Ltd. PowerPoint Slides t/a Management: A Pacific Rim Focus Enhanced Edition. Slides prepared by David Meacheam & George Sansbury. 1 CHAPTER 9 BASIC ELEMENTS OF ORGANISATIONAL STRUCTURE

© 2003 McGraw-Hill Australia Pty Ltd. PowerPoint Slides t/a Management: A Pacific Rim Focus Enhanced Edition. Slides prepared by David Meacheam & George Sansbury. 2 Lecture outline Nature of organisational structure Job design Types of departmentalisation Methods of vertical co-ordination Promoting innovation (methods of horizontal co-ordination)

© 2003 McGraw-Hill Australia Pty Ltd. PowerPoint Slides t/a Management: A Pacific Rim Focus Enhanced Edition. Slides prepared by David Meacheam & George Sansbury. 3 Nature of organisational structure Formal pattern of interactions and co-ordination designed by management to link the tasks of individuals and groups in achieving organisational goals.

© 2003 McGraw-Hill Australia Pty Ltd. PowerPoint Slides t/a Management: A Pacific Rim Focus Enhanced Edition. Slides prepared by David Meacheam & George Sansbury. 4 Nature of organisational structure Four elements: 1.Assignment of tasks and responsibilities to individuals and units. 2.Clustering these to form a hierarchy. 3.Mechanisms for vertical co-ordination. 4.Mechanisms for horizontal co-ordination.

© 2003 McGraw-Hill Australia Pty Ltd. PowerPoint Slides t/a Management: A Pacific Rim Focus Enhanced Edition. Slides prepared by David Meacheam & George Sansbury. 5 Nature of organisational structure The organisation chart –Line diagram depicting broad outlines of an organisations structure. Principles chart design –As few hierarchical levels as possible. –Charts should show who has authority over who. –Charts should show official lines responsibility & communication.

© 2003 McGraw-Hill Australia Pty Ltd. PowerPoint Slides t/a Management: A Pacific Rim Focus Enhanced Edition. Slides prepared by David Meacheam & George Sansbury. 6 Nature of organisational structure

© 2003 McGraw-Hill Australia Pty Ltd. PowerPoint Slides t/a Management: A Pacific Rim Focus Enhanced Edition. Slides prepared by David Meacheam & George Sansbury. 7 Job design Specification of task activities associated with a particular job. Design jobs to enhance motivation Job simplification : breaking jobs into small elements. Job rotation : moving through sets of tasks in sequence. Job enlargement : wider range of similar tasks. Alternative work schedules Managing work diversity.

© 2003 McGraw-Hill Australia Pty Ltd. PowerPoint Slides t/a Management: A Pacific Rim Focus Enhanced Edition. Slides prepared by David Meacheam & George Sansbury. 8 Managing diversity & work schedules … balancing work and personal life. Flexitime: core hours to be worked, others at employee discretion Flexitime: core hours to be worked, others at employee discretion Compressed work week: longer hours worked per day, shorter working week Compressed work week: longer hours worked per day, shorter working week Job sharing: two or more people sharing a full-time job Job sharing: two or more people sharing a full-time job

© 2003 McGraw-Hill Australia Pty Ltd. PowerPoint Slides t/a Management: A Pacific Rim Focus Enhanced Edition. Slides prepared by David Meacheam & George Sansbury. 9 Types of departmentalisation Departmentalisation : Clustering of individuals into units and units into departments and larger units to facilitate achievement of organisational goals. Functional Divisional Hybrid Matrix.

© 2003 McGraw-Hill Australia Pty Ltd. PowerPoint Slides t/a Management: A Pacific Rim Focus Enhanced Edition. Slides prepared by David Meacheam & George Sansbury. 10 Types of departmentalisation Functional: based on expertise, skill & similarity of work activity. Functional: based on expertise, skill & similarity of work activity. Divisional: based on product or market similarities. Divisional: based on product or market similarities. Hybrid: some activities grouped by function, some by products or markets. Hybrid: some activities grouped by function, some by products or markets. Matrix: Superimpose horizontal divisional over hierarchical functional structure. Matrix: Superimpose horizontal divisional over hierarchical functional structure.

© 2003 McGraw-Hill Australia Pty Ltd. PowerPoint Slides t/a Management: A Pacific Rim Focus Enhanced Edition. Slides prepared by David Meacheam & George Sansbury. 11 Methods of vertical co-ordination Linking of activities at the top of the organisation with those at the middle and lower levels to achieve organisational goals. Formalisation Span of management Centralisation vs de-centralisation Delegation Line & staff positions.

© 2003 McGraw-Hill Australia Pty Ltd. PowerPoint Slides t/a Management: A Pacific Rim Focus Enhanced Edition. Slides prepared by David Meacheam & George Sansbury. 12 Methods of vertical co-ordination Formalisation : Degree to which written policies, rules, procedures, job descriptions and other documents specify what actions are(not) to be taken under a given set of circumstances. Extent of formalisation tends to grow with age & size.

© 2003 McGraw-Hill Australia Pty Ltd. PowerPoint Slides t/a Management: A Pacific Rim Focus Enhanced Edition. Slides prepared by David Meacheam & George Sansbury. 13 Methods of vertical co-ordination Factors influencing span of management: –High competence levels. –Low interaction requirements. –Work similarity (between organisational peers). –Low problem frequency and seriousness. –Physical proximity. –Few non-supervisory duties of managers. –Considerable available assistance. –High motivational possibilities of work.

© 2003 McGraw-Hill Australia Pty Ltd. PowerPoint Slides t/a Management: A Pacific Rim Focus Enhanced Edition. Slides prepared by David Meacheam & George Sansbury. 14 Methods of vertical co-ordination Centralisation Extent to which power & authority are retained at the top organisational levels. De-centralisation Extent to which power & authority are delegated to lower levels. Factors favouring centralisation Large organisational size Geographic dispersion Technological complexity Environmental uncertainty.

© 2003 McGraw-Hill Australia Pty Ltd. PowerPoint Slides t/a Management: A Pacific Rim Focus Enhanced Edition. Slides prepared by David Meacheam & George Sansbury. 15 Methods of vertical co-ordination … extent to which power and authority will be retained at upper levels. Influenced by: Large size: larger organisations likely to be more Decentralised. Large size: larger organisations likely to be more Decentralised. Geographic dispersion: more dispersed likely to be decentralised, to enable control at a number of sites. Geographic dispersion: more dispersed likely to be decentralised, to enable control at a number of sites. Technological complexity: with more complex technology,need to devolve authority to lower levels. Technological complexity: with more complex technology,need to devolve authority to lower levels. Environmental uncertainty: with rapid change, need for more employees to be involved in responding to challenges. Environmental uncertainty: with rapid change, need for more employees to be involved in responding to challenges.

© 2003 McGraw-Hill Australia Pty Ltd. PowerPoint Slides t/a Management: A Pacific Rim Focus Enhanced Edition. Slides prepared by David Meacheam & George Sansbury. 16 Methods of vertical co-ordination Delegation Assignment of part of a managers work to others, along with both responsibility & authority necessary to achieve expected results. Factors restraining delegation Fear subordinate failure. Time to train subordinates. Enjoy doing tasks. Release of authority. Concern for task performance. Fear subordinate competence.

© 2003 McGraw-Hill Australia Pty Ltd. PowerPoint Slides t/a Management: A Pacific Rim Focus Enhanced Edition. Slides prepared by David Meacheam & George Sansbury. 17 Methods of vertical co-ordination Configuration of line and staff positions: Line authority Authority following the chain of command established by the formal hierarchy. Functional authority Authority of staff over others in the organisation in matters related directly to their respective functions e.g. HRM dept.

© 2003 McGraw-Hill Australia Pty Ltd. PowerPoint Slides t/a Management: A Pacific Rim Focus Enhanced Edition. Slides prepared by David Meacheam & George Sansbury. 18 Methods of horizontal co-ordination Horizontal co-ordination: Linking of activities across departments at similar levels. Need for information processing across the organisation. Promotes innovation through dissemination of ideas & information.

© 2003 McGraw-Hill Australia Pty Ltd. PowerPoint Slides t/a Management: A Pacific Rim Focus Enhanced Edition. Slides prepared by David Meacheam & George Sansbury. 19 Methods of horizontal co-ordination Horizontal co-ordination promoted by: Slack resources Cushion of resources that facilitates adaptations to internal/external pressures, as well as initiation of changes. Information systems One information source for many users. Lateral relations Direct contact, liaison roles, task forces, teams.

© 2003 McGraw-Hill Australia Pty Ltd. PowerPoint Slides t/a Management: A Pacific Rim Focus Enhanced Edition. Slides prepared by David Meacheam & George Sansbury. 20 Lecture summary The nature of organisational structure –Definition –Organisation chart –Job design. Job design –Designing for motivation: Job enlargement, rotation, enrichment, simplification. Types of departmentalisation –Functional, divisional, hybrid, matrix.

© 2003 McGraw-Hill Australia Pty Ltd. PowerPoint Slides t/a Management: A Pacific Rim Focus Enhanced Edition. Slides prepared by David Meacheam & George Sansbury. 21 Lecture summary Methods of vertical co-ordination – Formalisation –Span of management –Centralisation vs de-centralisation –Delegation –Line & staff authority. Methods of horizontal co-ordination – Slack resources –Information systems –Lateral relations.