Presentation on theme: "BA 351 Managing Organizations"— Presentation transcript:
1 BA 351 Managing Organizations Managing the Structure andDesign of Organizations
2 Organization Structure Formal system of relationships that determine:Lines of authority – who reports to whom.Tasks assigned to individuals and units – who does what tasks and with which department.Dimensions of organization structure:Vertical dimensionHorizontal dimension
3 The Vertical Dimension of Organization Structure Unity of Command – a subordinate should have only one direct supervisor.A decision can be traced back from the subordinates who carry it out to the manager who made it.
4 The Vertical Dimension of Organization Structure (continued) Authority – The formal right of a manager to make decisions, give orders, and expect the orders to be carried out.Line AuthorityStaff AuthorityResponsibility – the manager’s duty to perform an assigned task.Accountability – the manager (or other employee) with authority and responsibility must be able to justify results to a manager at a higher level in the organizational hierarchy.
5 The Vertical Dimension of Organization Structure (continued) Line Authorityentitles a manager to directly control the work of subordinates by hiring, discharging, evaluating, and rewarding themline managers hold positions that contribute directly to the strategic goals of the organizationpart of the chain of commandStaff Authoritythe right to provide advice, recommend, and counsel line managers and others in the organizationstaff managers direct line managers
6 Yes or NoCan a manager hold line authority and staff authority at the same time?
7 The Vertical Dimension of Organization Structure (continued) Organization LevelActivitiesRequired SkillsTalk with insiders and outsiders aboutVisionStrategyOther major issuesConceptualizingCommunicatingunderstanding the perspectives of othersSenior ManagersHelp middle managersDefine and redefine their rolesManage conflictListeningconflict managementNegotiatingMotivatingCreate and maintain the organization’s cultureInterpersonal influence
8 The Vertical Dimension of Organization Structure (continued) Organization LevelActivitiesRequired SkillsChampion’ strategic ideasHelp firm to remain adaptiveNetworkingCommunicatingInfluencingProcess data and information for use by other individualsAnalysisCommunicationMiddleManagersDeliver strategic initiatives to lower-level managersCommunicatingMotivatingUnderstanding valuesManaging stress
9 The Vertical Dimension of Organization Structure (continued) Organization LevelActivitiesRequired SkillsCoaching firm’s associates (workers)TeachingListeningUnderstanding personalitiesManaging stressRemoving obstacles for associatesDeal with personal problems of associatesNegotiatingInfluencing othersCounselingUnderstanding personalitiesLower-levelManagersDesign jobs, teams structures and reward systemsNegotiatingGroup dynamics
10 The Vertical Dimension of Organization Structure (continued) Span of control – the feature of vertical structure that outlines:The number of subordinates who report to a manager.The number of managers.The layers of management within an organization.Smaller span – fewer employees supervised by a manager – creates a tall vertical organizational structureLarger span – greater number of employees supervised – creates a flat organizational structure
11 The Vertical Dimension of Organization Structure (continued) Centralization – the location of decision authority at the top of the organization hierarchy.Decentralization – the location of decision authority at lower levels in the organization.Formalization – the degree of written documentation that is used to direct and control employees.
12 The Horizontal Dimension of Organization Structure The organization structure element that is the basis for:Dividing work into specific jobs and tasks.Assigning jobs into units such as departments or teams.Departmentalization:FunctionalDivisionalMatrix
14 Advantages and Disadvantages of the Functional Approach Decision authority is centralized at the top of the organization hierarchyCareer paths foster professional identity with the business functionHigh degree of efficiencyEconomies of scale help develop specialized expertise in employeesDisadvantagesCommunication barriersConflict between departmentsCoordination of products and services is difficultDiminished responsiveness to customers’ needsEmployees identify with functional department goals and not organization goals or needs of the customer
17 Advantages and Disadvantages of the Divisional Approach Coordination among different business functionsImproved and speedier serviceAccountability for performanceDevelopment of general manager and executive skillsDisadvantagesDuplication of resources by two or more departmentsReduced specialization in occupational skillsCompetition among divisions
19 Video – Destination CEO Jim McCann After Jim McCann started Flora Plenty, what key strategic events triggered a change in the structure and design of the organization?
20 Organization DesignThe selection of an organization structure that best fits the strategic goals of the business.Basic organization designs:MechanisticOrganicBoundarylessThese designs incorporate vertical and horizontal structural elements.
21 Organization Design (continued) As business strategy changes, so do the structural elements of organization design.Strategic factors that affect the choices of organization design:Organization capabilitiesTechnologyOrganization sizeEnvironmental turbulence
22 Mechanistic, Organic, and Boundaryless Designs Emphasis on teams that also may cross organization boundariesEmphasis on teamsEmphasis on individuals working independentlyBroadly defined flexible jobsNarrowly defined specialized jobsDecentralized decision authorityCentralized decision authorityInformal communicationTop-down communicationLow formalizationHigh formalizationCollaboration (vertical, horizontal, customers, suppliers, competitors)Collaboration (both vertical and horizontal)Rigid hierarchical relationshipsBoundarylessOrganicMechanistic
23 Video – One Smooth Stone Demonstrates:Economic importance of innovation.Why innovation is important for business successIllustrates choosing an organizational structure and the reasons behind that choice.
24 This demonstrates the that each individual is accountable for CoordinationResponsibilityCentralizationFormalizationAt One Smooth Stone, there are no real business units, only a group of individuals who each have unique talents to offer the company in pursuit of client goals. Still, these individuals are interdependent and are required to meet deadlines and objectives as agreed upon by the group, to contribute to a common goal.