Griffin Chap11

CHAPTERCHAPTER

1111

Basic Elements of OrganizingBasic Elements of Organizing

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Learning ObjectivesLearning Objectives

After studying this chapter, you should be able to:– Identify the basic elements of organizations.– Describe alternative approaches to designing jobs.– Discuss the rational and the most common basis for

grouping jobs into departments.– Describe the basic elements involved in establishing

reporting relationships.– Discuss how authority is distributed in organizations.– Discuss the basic coordinating activities undertaken by

organizations.– Describe basic ways in which positions within the

organization can be differentiated.

After studying this chapter, you should be able to:– Identify the basic elements of organizations.– Describe alternative approaches to designing jobs.– Discuss the rational and the most common basis for

grouping jobs into departments.– Describe the basic elements involved in establishing

reporting relationships.– Discuss how authority is distributed in organizations.– Discuss the basic coordinating activities undertaken by

organizations.– Describe basic ways in which positions within the

organization can be differentiated.


Chapter OutlineChapter Outline• The Elements of Organizing

– Designing Jobs

– Job Specialization

– Benefits and Limitations of Specialization

– Alternatives to Specialization

• Grouping Jobs: Departmentalization– Rationale for

Departmentalization

– Common Bases for Departmentalization

– Chain of Command

– Narrow Versus Wide Spans

– Tall Versus Flat Organizations

• The Elements of Organizing– Designing Jobs

– Job Specialization

– Benefits and Limitations of Specialization

– Alternatives to Specialization

• Grouping Jobs: Departmentalization– Rationale for

Departmentalization

– Common Bases for Departmentalization

– Chain of Command

– Narrow Versus Wide Spans

– Tall Versus Flat Organizations

• Establishing Reporting Relationships– Determining the Appropriate

Span

• Distributing Authority– The Delegation Process– Decentralization and

Centralization

• Coordinating Activities– The Need for Coordination– Structural Coordination

Techniques

• Differentiating Between Positions– Differences Between Line and

Staff– Administrative Intensity

• Establishing Reporting Relationships– Determining the Appropriate

Span

• Distributing Authority– The Delegation Process– Decentralization and

Centralization

• Coordinating Activities– The Need for Coordination– Structural Coordination

Techniques

• Differentiating Between Positions– Differences Between Line and

Staff– Administrative Intensity


The Elements OrganizingThe Elements Organizing

• Organizing– Deciding how to best group organizational activities and

resources.

• Organization Structure– The set of building blocks

that can be used to configure an organization.

• Organizing– Deciding how to best group organizational activities and

resources.

• Organization Structure– The set of building blocks

that can be used to configure an organization.


Designing JobsDesigning Jobs

• Job Design– The determination of an individual’s work-related

responsibilities.

• Job Specialization (Division of Labor)– The degree to which the overall task of the organization is

broken down and divided into smaller component parts.– Benefits of Specialization

• Workers can become proficient at a task.• Transfer time between tasks is decreased.• Specialized equipment can be more easily developed.• Employee replacement becomes easier.

– Limitations of Specialization• Employee boredom and dissatisfaction with mundane tasks.• Anticipated benefits do not always occur.

• Job Design– The determination of an individual’s work-related

responsibilities.

• Job Specialization (Division of Labor)– The degree to which the overall task of the organization is

broken down and divided into smaller component parts.– Benefits of Specialization

• Workers can become proficient at a task.• Transfer time between tasks is decreased.• Specialized equipment can be more easily developed.• Employee replacement becomes easier.

– Limitations of Specialization• Employee boredom and dissatisfaction with mundane tasks.• Anticipated benefits do not always occur.


Adam Smith’s ExampleAdam Smith’s Exampleof Job Specializationof Job Specialization

Making a pin (nail) requires 18 tasks

1 worker doing all 18 tasks might make 20 pins (nails) a day.

20 workers = (20 x 20) = 400 pins______________________________

With specialization:

20 workers make 100,000 pins a day.1 worker = 5,000 pins

20 pins vs. 5,000 pins per worker


Alternatives to SpecializationAlternatives to Specialization

• Job Rotation– Systematically moving employees from one job to another in

an attempt to reduce employee boredom. Most frequent use today is as a training device for skills and flexibility.

• Job Enlargement– An increase in the total number of tasks workers perform.– Increases training costs, unions contend that workers

deserve more pay for doing more tasks, and the work may still be dull and routine.

• Job Enrichment– Increasing both the number of tasks the worker does and the

control the worker has over the job.

• Job Rotation– Systematically moving employees from one job to another in

an attempt to reduce employee boredom. Most frequent use today is as a training device for skills and flexibility.

• Job Enlargement– An increase in the total number of tasks workers perform.– Increases training costs, unions contend that workers

deserve more pay for doing more tasks, and the work may still be dull and routine.

• Job Enrichment– Increasing both the number of tasks the worker does and the

control the worker has over the job.


Alternatives to Specialization Alternatives to Specialization (cont’d)(cont’d)

• Job Characteristics Approach:– Core Dimensions

• Skill variety—the number of tasks a person does in a job.

• Task identity—the extent to which the worker does a complete or identifiable portion of the total job.

• Task significance—the perceived importance of the task.

• Autonomy—the degree of control the worker has over how the work is performed.

• Feedback— the extent to which the worker knows how well the job is being performed.

– Growth-Need Strength• The desire for some people to grow, develop, and expand their

capabilities that is their response to the core dimensions.

• Job Characteristics Approach:– Core Dimensions

• Skill variety—the number of tasks a person does in a job.

• Task identity—the extent to which the worker does a complete or identifiable portion of the total job.

• Task significance—the perceived importance of the task.

• Autonomy—the degree of control the worker has over how the work is performed.

• Feedback— the extent to which the worker knows how well the job is being performed.

– Growth-Need Strength• The desire for some people to grow, develop, and expand their

capabilities that is their response to the core dimensions.


Job Job Characteristics Characteristics

ApproachApproach

Core jobdimensions

Personal andwork outcomes

Criticalpsychologicalstates

Experiencedresponsibilityfor outcomesof the work

• Skill variety• Task identity• Task significance

• Autonomy

• FeedbackKnowledge of theactual results ofwork activities

Employeegrowth-needstrength

• High internalwork motivation

• High-quality workperformance

• High satisfactionwith the work

• Low absenteeismand turnover

Experiencedmeaningfulnessof the work

Figure 11.1

Source: J. R. Hackman and G. R. Oldham, “Motivation Through the Design of Work: A Test of a Theory,“ Organizational Behavior and Human Performance, Vol. 6 (1976), pp. 250–279. Copyright © Academic Press, Inc. Reprinted by permission of Academic Press and the authors.


Alternatives to Specialization Alternatives to Specialization (cont’d)(cont’d)

• Work Teams– An alternative to job specialization that allows the entire

group to design the work system it will use to perform an interrelated set of tasks.

• Work Teams– An alternative to job specialization that allows the entire

group to design the work system it will use to perform an interrelated set of tasks.


Grouping Jobs: Grouping Jobs: DepartmentalizationDepartmentalization

• Departmentalization– The process of grouping jobs according to some logical

arrangement.

• Rationale for Departmentalization– Organizational growth exceeds

the owner-manager’s capacity to personally supervise all of the organization.

– Additional managers are employed and assigned specific employees to supervise.

• Departmentalization– The process of grouping jobs according to some logical

arrangement.

• Rationale for Departmentalization– Organizational growth exceeds

the owner-manager’s capacity to personally supervise all of the organization.

– Additional managers are employed and assigned specific employees to supervise.


Grouping Jobs: Grouping Jobs: Departmentalization (cont’d)Departmentalization (cont’d)

• Advantages– Each department can be

staffed by functional-area experts.

– Supervision is facilitated in that managers only need be familiar with a narrow set of skills.

– Coordination inside each department is easier.

• Advantages– Each department can be

staffed by functional-area experts.

– Supervision is facilitated in that managers only need be familiar with a narrow set of skills.

– Coordination inside each department is easier.

• Disadvantages– Decision making becomes

slow and bureaucratic.– Employees narrow their

focus to the department and lose sight of organizational goals/ issues.

– Accountability and performance are difficult to monitor.

• Disadvantages– Decision making becomes

slow and bureaucratic.– Employees narrow their

focus to the department and lose sight of organizational goals/ issues.

– Accountability and performance are difficult to monitor.

• Functional Departmentalization– Is the grouping of jobs involving the same or similar

activities.

• Functional Departmentalization– Is the grouping of jobs involving the same or similar

activities.


Bases for Departmentalization: Apex Bases for Departmentalization: Apex ComputersComputers

DesignMarketingMarketing

Computers

President

Software

Manufacturing FinanceFinance

PhoenixDallas

Consumer salesIndustrial sales

St. LouisChicago

Southwest U.S. Southeast U.S. Northeast U.S.Northwest U.S. Central U.S.

Figure 11.2


Product Departmentalization Product Departmentalization FormForm

• Advantages– All activities associated

with one product can be integrated and coordinated.

– Speed and effectiveness of decision making are enhanced.

– Performance of individual products or product groups can be assessed.

• Advantages– All activities associated

with one product can be integrated and coordinated.

– Speed and effectiveness of decision making are enhanced.

– Performance of individual products or product groups can be assessed.

• Disadvantages– Managers may focus on

their product to the exclusion of the rest of the organization.

– Administrative costs may increase due to each department having its own functional-area experts.

• Disadvantages– Managers may focus on

their product to the exclusion of the rest of the organization.

– Administrative costs may increase due to each department having its own functional-area experts.

• Product Departmentalization– The grouping of activities around products or product

groups.

• Product Departmentalization– The grouping of activities around products or product

groups.


Customer DepartmentalizationCustomer Departmentalization

• Customer Departmentalization– Grouping activities to respond to and interact with specific

customers and customer groups.

• Advantage– Skilled specialists can deal

with unique customers orcustomer groups.

• Disadvantage– A large administrative staff

is needed to integrate activities of various departments.

• Customer Departmentalization– Grouping activities to respond to and interact with specific

customers and customer groups.

• Advantage– Skilled specialists can deal

with unique customers orcustomer groups.

• Disadvantage– A large administrative staff

is needed to integrate activities of various departments.


Location DepartmentalizationLocation Departmentalization

• Location Departmentalization– The grouping of jobs on the basis of defined geographic

sites or areas.

• Advantage– Enables the organization to

respond easily to unique customer and environmental characteristics.

• Disadvantage– Large administrative staff may

be needed to keep track of units in scattered locations.

• Location Departmentalization– The grouping of jobs on the basis of defined geographic

sites or areas.

• Advantage– Enables the organization to

respond easily to unique customer and environmental characteristics.

• Disadvantage– Large administrative staff may

be needed to keep track of units in scattered locations.


DepartmentalizationDepartmentalization

• Other Forms of Departmentalization– Grouping activities by time

• Dividing daily activities into specific units of time (e.g., day, evening, and night shifts).

• Grouping activities by sequence.

• Assigning responsibilities by a characteristic of the customer, product, or service (e.g., telemarketing calls from business listings).

• Other Considerations– Departments are often called by other names (e.g., divisions,

units, sections, and bureaus).– Organizations are likely to employ multiple bases of

departmentalization, depending on level.

• Other Forms of Departmentalization– Grouping activities by time

• Dividing daily activities into specific units of time (e.g., day, evening, and night shifts).

• Grouping activities by sequence.

• Assigning responsibilities by a characteristic of the customer, product, or service (e.g., telemarketing calls from business listings).

• Other Considerations– Departments are often called by other names (e.g., divisions,

units, sections, and bureaus).– Organizations are likely to employ multiple bases of

departmentalization, depending on level.


Establishing Reporting Establishing Reporting RelationshipsRelationships

• Chain of Command– A clear and distinct line of authority among the positions in

an organization.– Unity of Command

• Each person within an organization must have a clear reporting relationship to one and only one boss.

– Scalar Principle• A clear and unbroken line of authority

must extend from the bottom to the top of the organization.

• Chain of Command– A clear and distinct line of authority among the positions in

an organization.– Unity of Command

• Each person within an organization must have a clear reporting relationship to one and only one boss.

– Scalar Principle• A clear and unbroken line of authority

must extend from the bottom to the top of the organization.


Establishing Reporting Relationships Establishing Reporting Relationships (cont’d)(cont’d)

• Narrow Versus Wide Spans– Span of Management

• The number of people who report to a particular manager.• Sometimes called the span of control.

– A. V. Graicunas• Subordinate interactions

–Direct—the manager’s relationship with each subordinate.–Cross—among the subordinates themselves.–Group—between groups of subordinates.–Formula for the number of interactions of all types:

» I = N(2N/2 + N - 1), where I is the total number of interactions and N is number of subordinates.

– Ralph Davis• Operative span for lower-level managers up to 30 workers.• Executive span for middle and top managers at 3 to 9.

• Narrow Versus Wide Spans– Span of Management

• The number of people who report to a particular manager.• Sometimes called the span of control.

– A. V. Graicunas• Subordinate interactions

–Direct—the manager’s relationship with each subordinate.–Cross—among the subordinates themselves.–Group—between groups of subordinates.–Formula for the number of interactions of all types:

» I = N(2N/2 + N - 1), where I is the total number of interactions and N is number of subordinates.

– Ralph Davis• Operative span for lower-level managers up to 30 workers.• Executive span for middle and top managers at 3 to 9.


Establishing Reporting Establishing Reporting Relationships:Relationships:

Tall versus Flat OrganizationsTall versus Flat Organizations• Tall Organizations

– Are more expensive because of the number of managers involved.

– Foster more communication problems because of the number of people through whom information must pass.

• Tall Organizations– Are more expensive

because of the number of managers involved.

– Foster more communication problems because of the number of people through whom information must pass.

• Flat Organizations– Lead to higher levels of

employee morale and productivity.

– Create more administrative responsibility for the relatively few managers.

– Create more supervisory responsibility for managers due to wider spans of control.

• Flat Organizations– Lead to higher levels of

employee morale and productivity.

– Create more administrative responsibility for the relatively few managers.

– Create more supervisory responsibility for managers due to wider spans of control.


Tall Versus Flat OrganizationsTall Versus Flat Organizations

President

President

Tall Organization

Flat Organization

Figure 11.3


Determining the Appropriate Span:Determining the Appropriate Span:Factors Influencing the Span of Factors Influencing the Span of

ManagementManagement1. Competence of supervisor and subordinates (the greater the

competence, the wider the potential span).

2. Physical dispersion of subordinates (the greater the dispersion, the narrower the potential span).

3. Extent of nonsupervisory work in a manager’s job (the more nonsupervisory work, the narrower the potential span).

4. Degree of required interaction (the less required interaction, the wider the potential span).

5. Extent of standardized procedures (the more procedures, the wider the potential span).

6. Similarity of tasks being supervised (the more similar the tasks, the wider the potential span).

7. Frequency of new problems (the higher the frequency, the nar-rower the potential span).

8. Preferences of supervisors and subordinates.

Table 11.1


Distributing AuthorityDistributing Authority

• Authority– Power that has been legitimized by the organization.

• Delegation– The process by which managers assign a portion of their

total workload to others.

• Reasons for Delegation– To enable the manager to get more work done by utilizing the

skills and talents of subordinates.– To foster the development of subordinates by having them

participate in decision making and problem solving that allows them to learn about overall operations and improve their managerial skills.

• Authority– Power that has been legitimized by the organization.

• Delegation– The process by which managers assign a portion of their

total workload to others.

• Reasons for Delegation– To enable the manager to get more work done by utilizing the

skills and talents of subordinates.– To foster the development of subordinates by having them

participate in decision making and problem solving that allows them to learn about overall operations and improve their managerial skills.


Steps in the Delegation ProcessSteps in the Delegation Process

Manager

Step 1Assigning

responsibility

Step 3Creating

accountability

Step 2Grantingauthority

Manager

Subordinate

Manager

Subordinate

ManagerManager

Subordinate

Figure 11.4


Problems in DelegationProblems in Delegation

• Manager– Reluctant to delegate.– Disorganization

prevents planning work in advance.

– Subordinate’s success threatens superior’s advancement.

– Lack of trust in the subordinate to do well.

• Manager– Reluctant to delegate.– Disorganization

prevents planning work in advance.

– Subordinate’s success threatens superior’s advancement.

– Lack of trust in the subordinate to do well.

• Subordinate– Reluctant to accept

delegation for fear of failure.

– Perceives no rewards for accepting additional responsibility.

– Prefers to avoid any risk and responsibility.

• Subordinate– Reluctant to accept

delegation for fear of failure.

– Perceives no rewards for accepting additional responsibility.

– Prefers to avoid any risk and responsibility.


Decentralization and Decentralization and CentralizationCentralization

• Decentralization– The process of systematically delegating power and

authority throughout the organization to middle- and lower-level managers.

• Centralization– The process of systematically retaining power and authority

in the hands of higher-level managers.

• Factors Determining the Choice of Centralization– The complexity and uncertainty of the external environment.– The history of the organization.– The nature (cost and risk) of the decisions to be made.

• Decentralization– The process of systematically delegating power and

authority throughout the organization to middle- and lower-level managers.

• Centralization– The process of systematically retaining power and authority

in the hands of higher-level managers.

• Factors Determining the Choice of Centralization– The complexity and uncertainty of the external environment.– The history of the organization.– The nature (cost and risk) of the decisions to be made.


Coordinating ActivitiesCoordinating Activities

• Coordination– The process of linking the activities of the various

departments of the organization.

• The Need for Coordination– Departments and work groups are interdependent; the

greater the interdependence, the greater the need for coordination.

• Coordination– The process of linking the activities of the various

departments of the organization.

• The Need for Coordination– Departments and work groups are interdependent; the

greater the interdependence, the greater the need for coordination.


Coordinating Activities:Coordinating Activities:Three Major Forms of Three Major Forms of

InterdependenceInterdependence• Pooled interdependence

– When units operate with little interaction; their output is simply pooled at the organizational level.

• Sequential interdependence– When the output of one unit becomes the input of another

unit in sequential fashion.

• Reciprocal interdependence– When activities flow both ways

between units.

• Pooled interdependence– When units operate with little interaction; their output is

simply pooled at the organizational level.

• Sequential interdependence– When the output of one unit becomes the input of another

unit in sequential fashion.

• Reciprocal interdependence– When activities flow both ways

between units.


InputInput OutputOutput

SequentialSequential

Three Major Forms of Three Major Forms of InterdependenceInterdependence

PooledPooled

InputInput

InputInput

InputInput

OutputOutput

OutputOutputInputInput

OutputOutputInputInputOutputOutputInputInput

ReciprocalReciprocal


Structural Coordination Structural Coordination TechniquesTechniques

• The Managerial Hierarchy– Placing one manager in charge of interdependent

departments or units.

• Rules and Procedures– Routine coordination activities can be handled via rules and

procedures that set priorities and guidelines for actions.

• Liaison Roles– A manager coordinates

interdependent units by acting as a common point of contact, facilitating the flow of information.

• The Managerial Hierarchy– Placing one manager in charge of interdependent

departments or units.

• Rules and Procedures– Routine coordination activities can be handled via rules and

procedures that set priorities and guidelines for actions.

• Liaison Roles– A manager coordinates

interdependent units by acting as a common point of contact, facilitating the flow of information.


Structural Coordination Structural Coordination Techniques (cont’d)Techniques (cont’d)

• Task Forces– Used with multiple units when coordination

is complex requiring more than one individual and the need for coordination is acute.

– Disbanded when the need for coordination has been met.

• Integrating Departments– Permanent organizational units that maintain internal

integration and coordination on an ongoing basis.– May have authority and budgetary controls.

• Task Forces– Used with multiple units when coordination

is complex requiring more than one individual and the need for coordination is acute.

– Disbanded when the need for coordination has been met.

• Integrating Departments– Permanent organizational units that maintain internal

integration and coordination on an ongoing basis.– May have authority and budgetary controls.


Differentiating Between PositionsDifferentiating Between Positions

• Line Positions– Positions in the direct chain of command that are

responsible for the achievement of an organization’s goals.– Have formal (legitimate) authority to direct the workforce.

• Staff Positions– Positions intended to provide expertise, advice, and support

to line positions.– Have advisory authority; can give compulsory advice.– Have functional authority to enforce compliance with

organizational policies and procedures.

• Administrative Intensity– The degree to which managerial positions are concentrated

in staff positions.

• Line Positions– Positions in the direct chain of command that are

responsible for the achievement of an organization’s goals.– Have formal (legitimate) authority to direct the workforce.

• Staff Positions– Positions intended to provide expertise, advice, and support

to line positions.– Have advisory authority; can give compulsory advice.– Have functional authority to enforce compliance with

organizational policies and procedures.

• Administrative Intensity– The degree to which managerial positions are concentrated

in staff positions.

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