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3.0 ORGANIZING

Chapter outline1. Organizing

– Define– Process– Division of work/labor– Organizational structure

2. Span of mgt– Define– Major factor influence span of mgt

3. Type of org chart– Tall and lean(flat) structure– Scalar relationship– Unity of command

Chapter outline4. Authority

– Line– Staff

5. Delegation– Define– Steps – Barriers– Overcoming barriers– Centralization and decentralization

6. Coordination

Organizing DefinedThe process of determining:

– The tasks to be done.

– Who will do them.

– How those tasks will be managed and coordinated.

The Organizing Process1. Reflect on plan and objectives- organizing involves determining how resourceswill be use to achieve objectives by understandingplanning

2. Establish major tasks- designed major tasks- restaurant - serving customer and cooking food

3. Divide major task into subtasks- major task divided into subtasks to be done- serving customer - taking order and clearing table

4. Allocate resources and directives for subtasks- who take orders/who clear tables- how they are to be set

5. Evaluate the results- gathers feedback on how well the strategy is

working

The Organizing Process

Organizational Structure

Defines the primary reporting relationships that exist within an organization.

The chain of command and hierarchy of responsibility, authority, and accountability are established through organizational structure.

Division of Work/ Work specialization

Is the assignment of various portion of a particular task among a number of organization members.A component of organization structure that involves having each discrete step of a job done by a different individual rather than having one individual do the whole job.

Departmentalization The way in which the activities of an

organization are arranged and coordinated so that its mission can be fulfilled and its goals achieved.

– Structure of organizational members– The flow of information, resources, and

task– The locus of decision making

DepartmentalizationFunctional departmentalization

– The grouping of activities by functions performed

Product departmentalization– The grouping of activities by product produced

Customer departmentalization– The grouping of activities by common customers

Geographic departmentalization– The grouping of activities by territory

Process departmentalization– The grouping of activities by work or customer flow

Network structure– A set of alliances with other organizations that serve a wide

variety of functions.

Functional Structure Members of the organization are grouped

according to the particular function that they perform within the organization.

Appropriate when an organization’s greatest source of complexity comes from the diverse tasks that must be performed rather than from its products, geographic markets, or consumer groups.

Example of a Functional Structure

Advantages

Facilitates specialization

Cohesive work groups

Improved operational efficiency

Functional Structure: Advantages

Functional Structure: Disadvantages

Disadvantages

Focus on departmental vs. organizational issues

Difficult to develop generalists needed for top-level managementOnly top-level management held accountable for profitability

Product divisional Most appropriate for organizations with

relatively diverse product lines that require specialized efforts to achieve high product quality.

Product departmentalization

Product Divisional Advantages

– Enhanced coordination.– Better assessment of manager

performance and responsibility.– Development of generalist managers.

Disadvantages– Managers may lack expertise to operate

in wide geographic areas.– Duplication of resources.

Customer divisional Most appropriate for organizations that

have separate customer groups with very specific and distinct needs.

Customer departmentalization

Geographic divisional Most appropriate for organizations with

limited product lines that either have wide geographic coverage or desire to grow through geographic expansion.

Geographic departmentalization

Geographic Divisional Advantages

– Allows for focus on specific new markets.– Good structure for growth

along geographic lines.– Adaptable to local needs.

Disadvantages– Duplication of product or

product/technology efforts.– Coordination and integration are difficult.– May be difficult to manage diverse

product lines.

Manufacturing Process Departmentalization

A structure in which the activities of the organization are grouped according to the major phases of the process used to manufacture products.

Process departmentalization

Matrix Structure A structure in which the tasks of the

organization are grouped along two organizational dimensions simultaneously.

Examples include:

– Product/function

– Product/geographic region

Matrix Structure: Advantages

Advantages

Can achieve simultaneous objectives

Managers focus on two organizational dimensions, resulting in more specific job skills

Matrix Structure: Disadvantages

Disadvantages

Complex, leading to difficulties in implementation

Behavioral difficulties from “two bosses”

Time consuming from a planning/coordination perspective

A Multinational Matrix Structure

Network Structure A contemporary

organizational structure that is founded on a set of alliances with other organizations that serve a wide variety of functions.

Types of Network Structure

Internal network– A network structure that relies on internally

developed units to provide services to a core organizational unit.

Stable network– A network structure that utilizes external

alliances selectively as a mechanism for gaining strategic flexibility.

Dynamic network– A network structure that makes extensive use of

outsourcing through alliances with outside organizations.

Network Structure: Advantages

Advantages

Maximizes the effectiveness of the core unit

Do more with less resources

Flexibility

Network Structure: Disadvantages

Disadvantages

Fragmentation makes it difficult to develop control systems

Success is dependent on ability to locate sources

Difficult to develop employee loyalty

Sample NetworkStructure

Span of management The number of individuals a manager

supervises.

Job descriptions detail the responsibilities and tasks associated with a given job.

Factors That Influence The Span of ManagementSimilarity of functions

– if similarity of subordinates’ activities increases, the span of management appropriate for the situation widens.

Geographic continuity– the closer subordinates are physically, the more of them

managers can supervise effectively.Complexity of functions

– the more difficult and involved the activities are, the more difficult it is to manage a large number of individuals effectively.

Coordination– the greater the amount of time that must be spent on such

coordination, the smaller span of management should be.Planning

– the more time managers must spend on planning activities, the fewer individuals they can manage effectively.

Major Factors that Influence the Span of Management

Height of Organization Chart

There is a definite relationship between span of management and the height of an organization chart

↑Height of the chart, Span of management <

↓Height of the chart, Span of management >

Height of Organization Chart

Flat structure Tall structureis an organization chart

characterized by many levels and a relatively narrow span of

management.

is and organization chart characterized by few levels and a

relatively wide span of management.

Scalar Relationship

Refer to the chain-of-command positioning of individuals on an organization chart.

Chain of Command– The line of authority and responsibility that flows

throughout the organization.

Unity of Command– A principle that each employee in the

organization is accountable to one, and only one, supervisor.

AuthorityAuthority is the right to perform a command. It

allows its holder to act in certain designated ways and to directly influence the actions of others through orders

The rights inherent in a managerial position to give orders and expect them to be obeyed.

The formal right of an employee to marshal resources and make decisions to fulfill work responsibilities.

Types of Organizational Authority

Line authority– The position authority (given and defined by the

organization) that entitles a manager to direct the work of operative employees.

Staff authority– Positions that have some authority (e.g.,

organization policy enforcement) but that are created to support, assist, and advise the holders of line authority.

Authority

Delegation The process of transforming the

responsibility for a specific activity or task to another member of the organization, and…

Empowering that individual to accomplish the task effectively.

Scalar Principle The scalar principle of management

suggests that a clear line of authority should run throughout the organization such that all persons in the organization:

– Understand to who they can delegate, and

– From whom they should accept delegated tasks.

The Process of Delegation

Assigning responsibility– Responsibility refers to the employee’s

obligation to complete the activities that he or she has been assigned.

Granting authority– Authority is the formal right of an

employee to marshal resources and make decisions necessary to fulfill work responsibilities.

The Process of Delegation

Establishing accountability– Where there is accountability for

performance, employees understand that they must justify their decisions and actions with regard to the tasks for which they have assumed responsibility.

The Delegation Triangle

Responsibility

AuthorityAccountability

Benefits of Delegation & Empowerment

Leads to a more involved and empowered workforce.

Improved response time as a result of decisions and information not needing to be passed up and down the organization.

Leads to better decision making. Provides opportunity for employee to develop

analytical and problem solving skills. Provides managers the opportunity to accomplish

more complicated, difficult, or important tasks.

Degrees of Delegation

Reasons for Failing to Delegate

The “time crunch.”

Lack of confidence in the abilities of subordinates.

Managers try to avoid the potential pitfalls of dual accountability.

Managers may be insecure about their own value to the organization.

Learning to Delegate Effectively

Principle 1:

Match the employee to the task.

Principle 2:

Be organized and communicate clearly.

Principle 3:

Transfer authority and accountability with the task.

Principle 4:

Choose the level of delegation carefully.

Centralized Decision Making

Advantage

– Gives top-level management maximum control.

Disadvantage

– Limits the organization’s ability to respond quickly and effectively to changes in the environment.

Decentralized Decision Making

Advantage

– Organizations can respond to environmental change more rapidly and effectively because the decision makers are the people closest to the situation.

Disadvantage

– Top-level managers lose some control.

Managing Complexity Through Integration

Interdependence is the degree to which work groups are interrelated.

Three primary levels of work group integration:

– Pooled interdependence

– Sequential interdependence

– Reciprocal interdependence

B

C

D

A

F

E

Occurs when organizational units have a common resource but no interrelationship with one another.

Pooled Interdependence

Head-quarters

Sequential Interdependence

Occurs when organizational units must coordinate the flow of information, resources, and tasks from one unit to another.

A B C

Occurs when information, resources, and tasks must be passed back and forth between work groups.

Reciprocal Interdependence

A

C

E F

D

B

Integrating Mechanisms

Methods for managing the flow of information, resources, and tasks within the organization.

Three major categories of integrating mechanisms are:– General management systems.– Methods of increasing coordination

potential.– Methods of reducing the need for

coordination.

General Management Systems

Some coordination of work units may be achieved through the development of general management systems such as:

– The managerial hierarchy

– Rules and procedures

– Plans and goals

Such mechanisms form the foundation of an organization’s integration system.

Increasing Coordination Potential Two popular mechanisms for increasing

coordination potential both vertically and horizontally in the organization are information systems and lateral relationships.– Information systems facilitate the flow of

information up and down the traditional chain of command and across organizational units.

– Lateral relationships exist across work units and serve as mechanisms for exchanging decision-making information.

Boundary Spanning Coordination

Lateral relationships that help to integrate and coordinate the activities of the organization.

Examples include:– Liaisons

– Committees

– Task forces

– Integrating positions

– Interfunctional work teams

Reducing the Need for Coordination

In essence, the organization creates “slack resources” that reduce the interdependence of the work groups.

As a result, the need for integrating mechanisms is reduced.