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Transcript of Chapter 7 Creating a Flexible Organization. Copyright © Cengage Learning. All rights reserved....
![Page 1: Chapter 7 Creating a Flexible Organization. Copyright © Cengage Learning. All rights reserved. Chapter 7 | Slide 2 Learning Objectives 1.Understand what.](https://reader035.fdocuments.in/reader035/viewer/2022062217/56649e4b5503460f94b3f547/html5/thumbnails/1.jpg)
Chapter 7
Creating a Flexible Organization
![Page 2: Chapter 7 Creating a Flexible Organization. Copyright © Cengage Learning. All rights reserved. Chapter 7 | Slide 2 Learning Objectives 1.Understand what.](https://reader035.fdocuments.in/reader035/viewer/2022062217/56649e4b5503460f94b3f547/html5/thumbnails/2.jpg)
Copyright © Cengage Learning. All rights reserved. Chapter 7 | Slide 2
Learning Objectives
1. Understand what an organization is and identify its characteristics.
2. Explain why job specialization is important.
3. Identify the various bases for departmentalization.
4. Explain how decentralization follows from delegation.
5. Understand how the span of management describes an organization.
6. Understand how the chain of command is established by using line and staff management.
7. Describe the four basic forms of organizational structure: bureaucratic, matrix, cluster, and network.
8. Summarize the use of corporate culture, intrapreneurship, committees, coordination techniques, informal groups, and the grapevine.
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Copyright © Cengage Learning. All rights reserved. Chapter 7 | Slide 3
Organization
…a group of two or more people working together to achieve a
common set of goals.
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Copyright © Cengage Learning. All rights reserved. Chapter 7 | Slide 4
Organization Chart
…a diagram that represents the positions and relationships within
an organization.
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Copyright © Cengage Learning. All rights reserved. Chapter 7 | Slide 5
Figure 7.1: A Typical Organization Chart
A company’s organization chart represents the positions and relationships within the organization and shows the managerial chains of command.
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Copyright © Cengage Learning. All rights reserved. Chapter 7 | Slide 6
Chain of Command
…the line of authority that extendsfrom the highest to the lowest levels
of an organization.
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Copyright © Cengage Learning. All rights reserved. Chapter 7 | Slide 7
Reasons to NotMaintain Organizational Chart
Difficult to chart positions Constant change
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Copyright © Cengage Learning. All rights reserved. Chapter 7 | Slide 8
5 Steps forOrganizing a Business
1. Job Design
2. Departmentalization
3. Delegation
4. Span of Management
5. Chain of Command
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Copyright © Cengage Learning. All rights reserved. Chapter 7 | Slide 9
Job Specialization
…the separation of all organizational activities into distinct tasks and the
assignment of different tasks to different people.
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Copyright © Cengage Learning. All rights reserved. Chapter 7 | Slide 10
Rationale for Specialization
Job too large for one person More efficient No lost time changing between operations More-specialized job makes it easier to design
specialized equipment More specialized the job the easier the job
training
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Copyright © Cengage Learning. All rights reserved. Chapter 7 | Slide 11
Combating JobSpecialization Boredom
Job rotation
Job enlargement
Job enrichment
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Copyright © Cengage Learning. All rights reserved. Chapter 7 | Slide 12
Departmentalization
…process of grouping jobs into manageable units.
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Copyright © Cengage Learning. All rights reserved. Chapter 7 | Slide 13
Bases for Departmentalization
Function Product Location Customer
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Copyright © Cengage Learning. All rights reserved. Chapter 7 | Slide 14
Function
…grouping jobs that relate to thesame organizational activity.
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Copyright © Cengage Learning. All rights reserved. Chapter 7 | Slide 15
Product
…grouping activities related toa particular product or service.
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Copyright © Cengage Learning. All rights reserved. Chapter 7 | Slide 16
Location
…grouping activities accordingto the defined geographic area in
which they are performed.
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Copyright © Cengage Learning. All rights reserved. Chapter 7 | Slide 17
Customer
…grouping activities according to theneeds of various customer populations.
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Copyright © Cengage Learning. All rights reserved. Chapter 7 | Slide 18
Figure 7.2: Multibase Departmentalization for New-Wave Fashions, Inc.
Most firms use more than one basis for departmentalization to improve efficiency and to avoid overlapping positions.
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Copyright © Cengage Learning. All rights reserved. Chapter 7 | Slide 19
Delegation
…assigning part of a manager’s workand power to other workers.
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Copyright © Cengage Learning. All rights reserved. Chapter 7 | Slide 20
Figure 7.3: Steps in the Delegation Process
To be successful, a manager must learn how to delegate.
No one can do everything alone.
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Copyright © Cengage Learning. All rights reserved. Chapter 7 | Slide 21
Responsibility
…the duty to do a job or perform a task.
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Copyright © Cengage Learning. All rights reserved. Chapter 7 | Slide 22
Authority
…the power, within an organization, to accomplish an assigned job or task.
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Copyright © Cengage Learning. All rights reserved. Chapter 7 | Slide 23
Accountability
…the obligation of a worker toaccomplish an assigned job or task.
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Copyright © Cengage Learning. All rights reserved. Chapter 7 | Slide 24
Barriers to Delegation
Desire to ensure that the job gets done
Fear that worker will do well and attract notice of higher-level managers
Inability to plan and assign work effectively
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Copyright © Cengage Learning. All rights reserved. Chapter 7 | Slide 25
Decentralized Organization
…an organization in which management consciously attempts to spread authority widely in the lower
levels.
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Copyright © Cengage Learning. All rights reserved. Chapter 7 | Slide 26
Centralized Organization
…an organization that systematically works to concentrate authority at the
upper levels.
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Copyright © Cengage Learning. All rights reserved. Chapter 7 | Slide 27
Factors Influencing Decentralization
Complexity/predictability of external environment
Risk/importance of decision
Abilities of lower-level managers
Past practice
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Copyright © Cengage Learning. All rights reserved. Chapter 7 | Slide 28
Span of Management
…the number of workers who report directly to one manager.
Wide vs. Narrow Flat vs. Tall
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Copyright © Cengage Learning. All rights reserved. Chapter 7 | Slide 29
Figure 7.4: The Span of Management
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Copyright © Cengage Learning. All rights reserved. Chapter 7 | Slide 30
Organizational Height
…the number of layers, or levels, of management in a firm.
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Copyright © Cengage Learning. All rights reserved. Chapter 7 | Slide 31
Tall Organizations
Administrative costs high because of layers of management
Communication among levels distorted
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Copyright © Cengage Learning. All rights reserved. Chapter 7 | Slide 32
Wide Organizations
Managers perform more administrative duties Managers spend more time supervising and
working with subordinates
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Copyright © Cengage Learning. All rights reserved. Chapter 7 | Slide 33
Line Management Position
…a position that is part of the chainof command and that includes direct responsibility for achieving the goals
of the organization.
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Copyright © Cengage Learning. All rights reserved. Chapter 7 | Slide 34
Staff Management Position
…a position created to provide support, advice, and expertise
within an organization.
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Copyright © Cengage Learning. All rights reserved. Chapter 7 | Slide 35
Line vs. Staff
Line managers = line/direct authority Staff managers
• Advisory authority• Functional authority
Conflicts• To line from staff
o More formal educationo Younger
• To staff from line ─ ignored
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Copyright © Cengage Learning. All rights reserved. Chapter 7 | Slide 36
Figure 7.5: Line and Staff Management
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Copyright © Cengage Learning. All rights reserved. Chapter 7 | Slide 37
Table 7.1: Five Characteristics ofOrganizational Structure
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Copyright © Cengage Learning. All rights reserved. Chapter 7 | Slide 38
Bureaucratic Structure
…a management system based on a formal framework of authority that is outlined
carefully and followed precisely.
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Copyright © Cengage Learning. All rights reserved. Chapter 7 | Slide 39
Characteristics of a Bureaucracy
Departmentalization by function
Formal patterns of delegation
High degree of centralization
Narrow span of management = tall organization
Clearly defined line/staff positions with formal relationships between the two
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Copyright © Cengage Learning. All rights reserved. Chapter 7 | Slide 40
Matrix Structure
…an organizational structure that combines vertical and horizontal lines of authority,
usually by superimposing product departmentalization on a functionally
departmentalized organization.
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Copyright © Cengage Learning. All rights reserved. Chapter 7 | Slide 41
Cross-Functional Team
…a group of employees from different departments who work together on a
specific project.
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Copyright © Cengage Learning. All rights reserved. Chapter 7 | Slide 42
Figure 7.6: A Matrix Structure
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Copyright © Cengage Learning. All rights reserved. Chapter 7 | Slide 43
Advantages of Matrix Structure
Flexibility Increased productivity Raises morale Nurtures creativity
and innovation Employees experience
personal development
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Copyright © Cengage Learning. All rights reserved. Chapter 7 | Slide 44
Disadvantages of Matrix Structure
Reporting to 1+ supervisor = confusion Longer to resolve problems Personality clashes Poor communication Undefined individual roles Unclear responsibilities Ways to reward individual/team performance Expense to maintain
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Copyright © Cengage Learning. All rights reserved. Chapter 7 | Slide 45
Cluster Structure
…an organization that consists primarily of teams with no or very few
underlying departments.
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Copyright © Cengage Learning. All rights reserved. Chapter 7 | Slide 46
Team or Collaborative Organization
Team members work together on a project until finished
Team may remain intact when assigned another project
Or Team members may be reassigned to
different teams
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Copyright © Cengage Learning. All rights reserved. Chapter 7 | Slide 47
Cluster Structure
Strengths
FlexibilityTry new techniquesExplore new ideas
Weaknesses
Lack of job security Increased stressRapid changes
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Copyright © Cengage Learning. All rights reserved. Chapter 7 | Slide 48
Network Structure
…an organization in which administration is the primary function, and most other
functions are contracted out to other firms.
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Copyright © Cengage Learning. All rights reserved. Chapter 7 | Slide 49
Network Structure
No manufacturing of product it sells Few permanent employees
• Top management• Hourly clerical
Leased facilities/equipment Temporary workers Limited formal structure
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Copyright © Cengage Learning. All rights reserved. Chapter 7 | Slide 50
Strengths/Challenges of Network Structure
Strength = flexibility
Challenges
• Quality control• Low morale/high turnover• Vulnerability to outside contractors
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Copyright © Cengage Learning. All rights reserved. Chapter 7 | Slide 51
Corporate Culture
…the inner rites, rituals, heroes,and values of a firm.
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Copyright © Cengage Learning. All rights reserved. Chapter 7 | Slide 52
Corporate Culture Indicators
Physical setting
What company says about culture
How guests greeted
How employees spend their time
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Copyright © Cengage Learning. All rights reserved. Chapter 7 | Slide 53
Figure 7.7: Types ofCorporate Cultures
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Copyright © Cengage Learning. All rights reserved. Chapter 7 | Slide 54
Organizations of the Future
Small, task-oriented work groups
Control over own activities
Computer coordinated Strong corporate culture Supports trust and risk
taking
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Copyright © Cengage Learning. All rights reserved. Chapter 7 | Slide 55
Intrapreneur
…an employee who pushes an innovative idea, product, or process
through an organization.
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Copyright © Cengage Learning. All rights reserved. Chapter 7 | Slide 56
Committees
Ad Hoc ─ created for a specific short-term purpose
Standing ─ permanent and charged with performing some recurring task
Task Force ─ created to investigate a major problem/pending decision
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Copyright © Cengage Learning. All rights reserved. Chapter 7 | Slide 57
Coordination Techniques
Managerial Hierarchy ─ provides increased authority at higher levels of management
Informal Organization ─ stems from personal rather than official relationships
• Informal group• Grapevine
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Copyright © Cengage Learning. All rights reserved. Chapter 7 | Slide 58
Chapter Quiz
1. Solid vertical lines on an organization chart indicate relationships among
a) staff positions.b) employees.c) delegated positions.d) the chain of command.e) line and staff positions.
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Copyright © Cengage Learning. All rights reserved. Chapter 7 | Slide 59
Chapter Quiz (cont.)
2. The systematic shifting of employees from one job to another is called job
a) specialization.b) rotation.c) sharing.d) enlargement.e) enrichment.
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Copyright © Cengage Learning. All rights reserved. Chapter 7 | Slide 60
Chapter Quiz (cont.)
3. Grouping all activities according to the geographic area in which they are located is departmentalization by
a) function.b) employee.c) product.d) customer.e) location.
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Copyright © Cengage Learning. All rights reserved. Chapter 7 | Slide 61
Chapter Quiz (cont.)
4. In a __________ organization, administrative costs are higher because more managers are needed.
a) longb) flatc) tall d) shorte) broad
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Copyright © Cengage Learning. All rights reserved. Chapter 7 | Slide 62
Chapter Quiz (cont.)
5. The power to accomplish an assigned job is called
a) authority.b) accountability.c) responsibility.d) delegation.e) obligation.