Managing for Quality and Competitiveness - … · Describe how specialization and...

Part 3 Managing for Quality and

Competitiveness

manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.

CHAPTER 6 The Nature of Management

CHAPTER 7 Organization, Teamwork, and Communication

CHAPTER 8 Managing Service and Manufacturing Operations

© 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.

Learning Objectives

LO 7-1 Define organizational structure and relate how organizational structures develop. LO 7-2 Describe how specialization and departmentalization

help an organization achieve its goals. LO 7-3 Determine how organizations assign responsibility for

tasks and delegate authority. LO 7-4 Compare and contrast some common forms of

organizational structure. LO 7-5 Distinguish between groups and teams and identify the

types of groups that exist in organizations. LO 7-6 Describe how communication occurs in organizations. LO 7-7 Analyze a business’s use of teams. © 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned,

duplicated, forwarded, distributed, or posted on a website, in whole or part.

Organizational Culture

Organizational Culture (Corporate Culture)

• A firm’s shared values, beliefs, traditions, philosophies, rules, and role models for behavior

Formally • Mission statement • Codes of Ethics • Memos • Manuals • Ceremonies

Informally • Dress code • Work habits • Extracurricular

activities • Stories • Discussion with co-

workers © 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned,

Attitudes and Behaviors Associated with Corporate Culture

o Ensures that organizational members: Share values Observe common rules Share problem solving approaches

TOMS Shoes TOMS Shoes’ organizational culture in determined by the founder’s desire to provide as many shoes as possible to children in developing countries

Consists of two parts: 1. The for-profit component

of the company manages overall operations

2. Its nonprofit component, Friends of TOMS, is responsible for volunteer activities and shoe donations

Organizational Structure

Structure • The arrangement or relationship of positions within an

organization

o Getting people to work together efficiently and coordinating the skills of diverse individuals require careful planning

o An organization’s structure develops when: 1. Managers assign work tasks to specific individuals or

work groups 2. Coordinate the diverse activities required to reach the

firm’s objectives © 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned,

The Evolution of a Clothing Store, Phases 1, 2, and 3

Organizational Chart

• A visual display of the organizational structure, lines of authority (chain of command), staff relationships, permanent committee arrangements, and lines of communication

Specialization Specialization

• The division of labor into small, specific tasks and the assignment of employees to do a single task

o Why specialize: Efficiency Workers do not waste time shifting from 1 job to another Ease of training Activities too numerous for one person

• Employees become bored • Job dissatisfaction • Poor quality work • Increased injuries • Increased employee turnover

Overspecialization can have negative

consequences

Job Specialization

Job specialization is common in automobile manufacturing

By dividing work into smaller specialized tasks Employees

can perform their work more quickly and efficiently

Departmentalization

Departmentalization • The grouping of jobs into working units usually called

departments, units, groups, or divisions • Functional departmentalization • Product departmentalization • Geographical departmentalization • Customer departmentalization

Most companies use more than 1 departmentalization plan to enhance ♦ Many consumer goods manufactures have

departments for specific product lines as well as departments dealing with legal, purchasing, finance, and human resources

Functional Departmentalization Functional Departmentalization

• The grouping of jobs that perform similar functional activities, such as finance, manufacturing, marketing, and human resources

Product Departmentalization

• The organization of jobs in relation to the products of the firm

Geographical Departmentalization

• The grouping of jobs according to geographic location, such as state, region, country, or continent

Customer Departmentalization

• The arrangement of jobs around the needs of various types of customers

PepsiCo Inc. PepsiCo Inc. is organized into business units:

1. PepsiCo Americas Foods, which includes brands such as Frito-Lay North America, Quaker Foods North America, and all of its Latin American food and snack businesses

2. PepsiCo Americas Beverages, which includes the Mountain Dew, Lipton, and Tropicana brands

3. PepsiCo Europe, which includes regional brands like Wimm-Bill-Dann and Marbo as well as all beverage, food, and snack businesses in Europe and South Africa

4. PepsiCo Asia, Middle East and Africa, which includes all beverage, food, and snack businesses in these regions

What type(s) of departmentalization does PepsiCo use for organizing its corporations?

Delegation of Authority

As a business grows, so do the number and complexity of decisions that must be made No one manager can handle them all Delegation of authority frees a manager to concentrate

on larger issues such as planning or dealing with problems and opportunities

Delegation of Authority • Giving employees not only tasks, but also the

power to make commitments, use resources, and take whatever actions are necessary to carry out those tasks

Responsibility and Accountability

Responsibility • The obligation, placed on employees through

delegation, to perform assigned tasks satisfactorily and be held accountable for the proper execution of work

Accountability • The principle that employees who accept an

assignment and the authority to carry it out are answerable to a superior for the outcome

Degree of Centralization

• A structure in which authority is concentrated at the top, and very little decision-making authority is delegated to lower levels

• Overcentralization can cause serious problems for a company • May take longer for the organization as a whole to

implement decisions and to respond to changes and problems on a regional scale

Centralized Organizations

• An organization in which decision-making authority is delegated as far down the chain of command as possible

• Delegating authority to lower levels of managers may increase the organization’s productivity

Decentralized Organizations

Span of Management

• The number of subordinates who report to a particular manager

A wide span of management exists when a manager directly supervises a very large number of employees

A narrow span of management exists when a manager directly supervises only a few subordinates

Organizational Layers

• The levels of management in an organization

Complements the concept of span of management A company with many layers of managers is

considered tall; in a tall organization, the span of management is narrow

Organizations with few layers are flat and have wide spans of management

Many of the firms that have decentralized also flattened their structures and widened their spans of management

Learning Organization A learning organization is one that opens communication between departments in order to increase the level of learning among employees within the organization The manager creating and sustaining this kind of organization

invests in employees through extensive training and minimal restrictions so that creativity is emphasized

Through the knowledge that is created and captured, employees are encouraged to experiment with the ideas that have the most value for customers o Managers encourage a healthy level of risk taking and learning

from mistakes o Failure is valued as a learning experience and success, while

celebrated, is seen as a fleeting experience that should not be the focus of the future because there is not much to learn from success

Forms of Organizational Structures

• Line structure • Line-and-staff structure • Multidivisional structure • Matrix structure

Forms of Organizational

Structures

Managers must consider how to structure their authority relationships ♦ What structure the organization itself will have ♦ How it will appear on the organizational chart

Line Structure

Line Structure • The simplest organizational structure in which direct

lines of authority extend from the top manager to the lowest level of the organization

Has a clear chain of command, which enables managers to make decisions quickly

Structure requires that managers possess a wide range of knowledge and skills

Most common in small businesses © 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned,

Line-and-Staff Structure

• A structure having a traditional line relationship between superiors and subordinates and also specialized managers – called staff managers – who are available to assist line managers

Focus on their area of expertise in the operation of the business ♦ Staff managers provide advice and support to line departments

on specialized matters

May experience problems with overstaffing and ambiguous lines of communication ♦ Employees may become frustrated with lack of authority to

carry out certain decisions © 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned,

Line-and-Staff Structure (cont.)

Multidivisional Structure

• A structure that organizes departments into larger groups called divisions

Occurs as organizations grow larger and more diversified

Divisions can be formed on the same bases as departments (customer, product, and/or geography)

Delegation of authority and divisionalized work Inevitably creates work duplication

♦ Makes it more difficult to realize the economies of scale that result from grouping functions together

Matrix Structure Matrix Structure

• A structure that sets up teams from different departments, thereby creating two or more intersecting lines of authority; also called a project-management structure

Matrix structures provide: Flexibility Enhanced cooperation Creativity Enable company to respond quickly to changes in the

environment They are generally expensive and quite complex

Employees may be confused as to whose authority has priority (project manager’s or immediate supervisor’s)

Matrix Structure (cont.)

Groups and Teams Group

• Two or more individuals who communicate with one another, share a common identity, and have a common goal

Team • A small group whose members have complementary

skills; have a common purpose, goals, and approach; and hold themselves mutually accountable

All teams are groups but not all groups are teams Virtual teams are employees in different locations who rely

on e-mail, audio conferencing, fax, Internet, videoconferencing, or other technological tools to accomplish their goals are a part of everyday business

Differences Between Groups and Teams

Committees and Task Forces

Committee • A permanent, formal group that performs a specific

Task Force • A temporary group of employees responsible for

bringing about a particular change Typically come from across all departments and levels of an

organization Membership is usually based on expertise rather than

organizational position Occasionally, a task force may be formed from individuals

outside a company © 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned,

Teams Project Teams

• Groups similar to task forces which normally run their operation and have total control of a specific work project

Product-Development Teams • A specific type of project team formed to devise, design, and

implement a new product

Quality-Assurance Teams (or Quality Circles) • Small groups of workers brought together from throughout the

organization to solve specific quality, productivity, or service problems

Self-Directed Work Teams (SDWT) • A group of employees responsible for an entire work process or

segment that delivers a product to an internal or external customer

Meetings and Teams DID YOU KNOW?

A survey of managers and executives found that they feel 28 percent of meetings are a waste of time and that information could be communicated more effectively using other methods

At Google, small teams work on research and

engineering projects that often last 6-12

months

The Flow of Communication in an Organizational Hierarchy

Yammer and the Intranet Many companies use internal networks called

intranets to share information with employees Intranets increase communication across different

departments and levels of management and help with the flow of everyday business activities

Yammer is a social network that

companies can use to connect

employees with one another

Upward/Downward Communication Flow of communication within the formal organizational structure as depicted on organizational charts

Upward Communication

• Flows from lower to higher levels of the organization • Includes information such as progress reports, suggestions

for improvement, inquiries, and grievances

Downward Communication • Refers to the traditional flow of information from upper

organizational levels to lower levels • Typically involves directions, the assignment of tasks and

responsibilities, performance feedback, and certain details about the organization’s strategies and goals

Horizontal/Diagonal Communication Horizontal Communication

• Involves the exchange of information among colleagues and peers on the same organizational level, such as across or within departments

• Information informs, supports, and coordinates activities both within the department and with other departments

Diagonal Communication • When individuals from different units and organizational levels

communicate • With firms downsizing and increasing the use of work teams,

workers are being required to communicate with others in different departments and on different levels to solve problems and coordinate work

Informal Communication Channels

Grapevine

• An informal channel of communication, separate from management’s formal, official communication channels

Friendships and nonwork social relationships comprise the informal organization of a firm

Managers can utilize informal communications as a sounding device ♦ Can obtain valuable information from the grapevine

that could improve decision making ♦ Use the grapevine to their advantage by floating

ideas, soliciting feedback, and reacting accordingly © 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned,

Non-Verbal Communication

Non verbal communication is embedded in most forms of communication and send messages out through hand movements, head nodding, and tone of voice or written word

These indirect forms of communication can be more informative than the direct message being transmitted

It is important to be aware of one’s own non verbal communication style in order to ensure sending the intended message

Improving Communication Effectiveness Encourage employees to provide feedback Managers should always encourage feedback,

including concerns and challenges about issues Helps identify strengths and weaknesses Strong feedback mechanisms help to empower

employees as they feel that their voices are being heard

Avoid interruptions Develop strong and effective communication

channels through training Important for companies to communicate their e-

mail policies throughout the organization

Quest Star (QS), manufactures quality stereo loudspeakers, wants to improve its ability to compete against Japanese firms ► QS Intracommunication Leadership Initiative (ILI) has

flattened the layers of management ♦ Uses teams and peer pressure to accomplish the plant’s

goals instead of multiple management layers ♦ Employees make all decisions within the boundaries of

their responsibilities ♦ They elect team representatives to coordinate with other

teams ♦ Teams are assigned tasks ranging from establishing

policies to evaluating on-the-job safety

Solve the Dilemma Quest Star in Transition

Solve the Dilemma Quest Star in Transition (cont.)

ILI (cont.)

• Employees who are not self-motivated team players are having difficulty getting used to their peers’ authority within the system

• Upper-level managers face stress and frustration because they must train workers to supervise themselves

Discussion Questions • What techniques or skills

should an employee have to assume a leadership role within a work group?

• If each work group has a team representative, what problems will be faced in supervising these representatives

• Evaluate the pros and cons of the system developed by QS.

? Indentify four types of departmentalization and give an example of each type.

? Discuss the different forms of organizational structure. What are the primary advantages and disadvantages of each form?

? Distinguish between centralization and decentralization. Under what circumstances is each appropriate?

? Define span of management. Why do some organizations have narrow spans and others wide spans?

Discussion

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