1. Creating a Flexible Organization
Chapter Seven
Creating a Flexible Organization
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2. What Is an Organization?
A group of two or more people working together to achieve a common set of goals
Developing organization charts
Organization chart
A representation of the positions and relationships in an organization
Chain of command
The line of authority that extends from the highest to the lowest levels of the organization
Staff (advisory) positions
Jobs that are not part of the direct chain of command in the organization
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3. Chain of Command
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4. Organization Chart
What are some things that an organization chart shows?
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5. Five Steps to Organizing a Business
Job design
Divide the work into separate parts and assign those parts to positions
Departmentalization
Group the positions into manageable units
Delegation
Distribute responsibility and authority
Span of management
Determine the number of subordinates who will report to each manager
Chain of command
Designate the positions with direct authority and those that are support positions
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6. Whose job is it?
This is a story about four people: Everybody , Somebody , Anybody and Nobody.
There was an important job to be done and Everybody was asked to do it. Everybody was sure Somebody would do it. Anyone could have done it , but Nobody did it. Somebody got angry about that because it was Everybody's job. Everybody thought Anybody could do it , but Nobody realized that Everybody wouldn't do it. it ended up that Everybody blamed Somebody when actually Nobody asked Anybody.
What problem does this story suggest?
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7. Job Design Job specialization
The separation of activities into distinct tasks and the assignment of different tasks to different people
Why is specialization needed?
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8. Alternatives to job specialization
Job rotation
The systematic shifting of employees from one job to another to reduce boredom and dissatisfaction
Job enlargement
Adding tasks to a job to increase the variety of a worker’s activities
Job enrichment
Increasing the autonomy workers have in deciding how to do their jobs
Why do we have these alternatives to job specialization?
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9. Departmentalization Grouping jobs into manageable units
Common bases for departmentalization
By function
By product
By location
By customer
Combinations
Why do we call them “department” stores?
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10. Evolution of an Organization Chart
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11. Departmentalization by ________
Fill in the blank?
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12. Departmentalization by ________
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13. Departmentalization by _________
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14. Departmentalization by _________
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15. ________
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16. Using the Internet http://www.accenture.com
What is the function of this company?
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17. Copyright © Cengage Learning. All rights reserved.

18. Delegation Delegation
Assigning part of a manager’s work and power to other workers
Responsibility
The duty to do a job or perform a task
Authority
The power within the organization to accomplish an assigned task.
Accountability
The consequences for not accomplishing an assigned job or task
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19. Steps in the Delegation Process
What happens if you give some responsibility without giving them the authority?
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20. Decentralization of Authority
Decentralized organization
Management consciously attempts to spread authority widely in the lower levels of the organization
Centralized organization
Authority is concentrated at the upper levels of the organization
When is it better to have a decentralized organization?
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21. Copyright © Cengage Learning. All rights reserved.

22. How are these organizations different?
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23. Management Spans Flat organizations Tall organizations
Have wider spans of management and fewer levels
Require managers to perform more administrative tasks and to spend more time supervising subordinates
Tall organizations
Have narrow spans of management and many levels
Have higher administrative costs (more managers)
May distort internal communications during passage of the communications through the multiple levels of organization
Give an example of each…
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24. Debate Issue: Should Firms Use Downsizing When Employees Are No Longer Needed?
YES NO
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25. Debate Issue: Should Firms Use Downsizing When Employees Are No Longer Needed?
YES
Downsizing can lead to quicker decision making, precise accountability, and harder-working employees.
Downsizing can significantly reduce a firm’s salary expense when unneeded employees are terminated. NO
Employees are needed to perform their jobs or they wouldn’t have been hired in the first place.
Downsizing is expensive because most companies must make severance payments and fund retirement plans.
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26. Line & Staff Management
What does this diagram show?
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27. Line & Staff Line management position Staff management position
A position that is part of the chain of command;
includes direct responsibility for achieving the goals of the organization
Staff management position
A position created to provide support, advice, and expertise within an organization
Give examples of line and staff positions with a school or within a business
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28. Line-Staff Conflict Reasons for conflict Minimizing conflict
Why do these people often conflict with each other?
How do you stop the conflict from happening
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29. Organizational Structure
Bureaucratic structure
A management system based on a formal framework of authority that is carefully outlined and precisely followed
Characteristics
A high level of job specialization
Departmentalization by function
Formal patterns of delegation
A high degree of centralization
Narrow spans of management, resulting in a tall organization
Clearly defined line and staff positions
Advantages
Inflexibility helps ensure fair and equitable treatment
Disadvantages
Inflexibility creates problems in adapting to dynamic business environments
Why is a government agency very bureaucratic?
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30. Forms of Organizational Structure (cont’d)
Matrix structure
A structure that combines vertical and horizontal lines of authority, usually by superimposing product departmentalization on functional departmentalization
Authority flows both down and across
Employees on cross-functional teams report to both the project manager in charge of the team and to their superiors in their home-base functional department
What are schools? A good example of a matrix organization?
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31. __________ Fill in the blank. What are we looking at here?
Source: Ricky W. Griffin, Management, 9th ed. Copyright © 2008 by Houghton Mifflin Company. Adapted with permission.
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32. The Matrix Structure Disadvantages Advantages What are they?
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33. The Matrix Structure Disadvantages Advantages
Added flexibility
Increased productivity
Higher morale
Increases in creativity and innovation
Personal development of team members
Disadvantages
Chain of command conflicts
May take longer to resolve problems and reach solutions
Personality clashes
Poor communications
Undefined individual roles
Unclear responsibilities
Difficulty in determining how to reward individual and team performance
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34. Factors That Influence Organizational Structure
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35. Factors That Influence Organizational Structure
Corporate culture
Committees
Coordination Techniques
Informal communication channels
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36. Types of Corporate Cultures
Networked culture
Trust and friendship among employees
Strong commitment and loyalty to the organization
Relaxed, informal environment
Mercenary culture
Passion, energy, sense of purpose, excitement for work
Intense, focused, determined to win
Fragmented culture
Employees not friends; work “at” (not “for”) organization
Employees have autonomy, flexibility, equality
Communal culture
Friendship, commitment, focus on performance, high energy
Lives revolve around the product; success is celebrated by all
Which type of an organizational culture would you like to work at and why?
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37. THE CLUSTER STRUCTURE
A TYPE OF BUSINESS THAT CONSISTS PRIMARILY OF TEAMS
TEAM MEMBERS WORK TOGETHER UNTILL THE PROJECT IS FINISHED
THEY CAN STAY TOGETHER OR RESIGN DEPENDING ON THE ORGANIZATIONAL SITUATION
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38. THE NETWORK STRUCTURE ALSO KNOWN AS THE VIRTUAL ORGANIZATION
ADMINISTRATION IS THE PRIMARY FUNCTION
USAGE OF LEASED EQUIPMENT AND TEMPORARY FACILITIES
LOW MORALE AND HIGH TURNOVER ARE CHALLENGES FOR THIS PARTICULAR STRUCTURE
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39. COMMITTEES AD HOC COMMITTEE: CREATED FOR A SPECIFIC SHORT-TERM PURPOSE
STANDING COMMITTEE:
A PERMANENT COMMITTEE CHARGED WITH PERFORMING RECRURRING TASKS
TASK FORCE:
COMMITTEE ESTABLISHED TO INVESTIGATE A MAJOR PROBLEM OR PENDING DECISION
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40. THE INFORMAL ORGANIZATION
INFORMAL GROUP:
CREATED BY THE GROUP MEMBERS THEMSELVES TO ACCOMPLISH GOALS THAT MAY NOT BE RELEVANT TO THE ORGANIZATION
GRAPEVINE:
THE INFORMAL COMMUNICATIONS NETWORK WITHIN AN ORGANIZATION.
EMPLOYEES JOIN THESE GROUPS BECAUSE:
THEY DESIRE TO BE WITH OTHERS LIKE THEMSELVES (INTERESTS & HOBBIES)
THE GOALS OF THE GROUP APPEAL TO THE PEOPLE
PEOPLE LIKE TO BE WANTED AND ACCEPTED
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41. Intrapreneurship
Intrapreneur—an employee who pushes an innovative idea, product, or process through the organization while using the organization’s resources for idea development
What are some characteristics of these people? Are they Younger?
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42. Elements Needed to Develop Successful Intrapreneurs
Encouragement by management and organization
Individual motivation
Transparency, openness and communality
Individual competence
Enabling working environment
Encouragement to innovations
Development
Source: J. Heinonen and K. Korvela, “How About Measuring Intrapreneurship,” Turku School of Economics and Business Administration, 2003,
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43. Chapter Quiz
Solid vertical lines on an organization chart indicate relationships among
staff positions.
employees.
delegated positions.
the chain of command.
line and staff positions.
The systematic shifting of employees from one job to another is called job
specialization.
rotation.
sharing.
enlargement.
enrichment.
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44. Chapter Quiz (cont’d)
Grouping all activities according to the geographic area in which they are located is departmentalization by
function.
employee.
product.
customer.
location.
In a ______ organization, administrative costs are higher because more managers are needed.
long
flat
tall
short
broad
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45. Chapter Quiz (cont’d)
The power to accomplish an assigned job is called
authority.
accountability.
responsibility.
delegation.
obligation.
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46. Answers to Chapter Quiz
Solid vertical lines on an organization chart indicate relationships among
staff positions.
employees.
delegated positions.
the chain of command.(Correct)
line and staff positions.
The systematic shifting of employees from one job to another is called job
specialization.
rotation. (Correct)
sharing.
enlargement.
enrichment.
Copyright © Cengage Learning. All rights reserved.

47. Answers to Chapter Quiz (cont’d)
Grouping all activities according to the geographic area in which they are located is departmentalization by
function.
employee.
product.
customer.
location. (Correct)
In a __________ organization, administrative costs are higher because more managers are needed.
long
flat
tall (Correct)
short
broad
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48. Answers to Chapter Quiz (cont’d)
The power to accomplish an assigned job is called
authority. (Correct)
accountability.
responsibility.
delegation.
obligation.
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