Transcript Chapter 8
Chapter Eight Organizing a CustomerDriven Business Workers in Large* Companies During the Last 5 Years Have Undergone... Declining Sales or Profits *500+ Employees Downsizing or Layoffs Merger or Acquisition Reengineering or Reorganization 0% 10% 20% 30% Source: Gallup for Carlson Marketing Group 40% 50% 60% 70% Organizational Charts CEO, Top Comptroller, Vice Pres. Sales Mgrs Plant Mgrs. Mid-Level Front Line/Supervisory Supervisors Foremen 1. Purpose Show the activities of the organization Highlight subdivisions of the organization Identify different types of work performed Provide information about different management levels Show the lines of authority in the organization and the flow of organizational communications 2. Design Organization CEO Division V.P. Department A Group 1 Subordinate I Department B Group 2 Subordinate II Division V.P. Division Department Group Individual Fayol’s Principles One Boss Hierarchy of Authority Division of Labor Subordination of Individual Interest Authority Degree of Centralization Communication Channels Order Equity Esprit de Corps Weber’s additions Job Descriptions Written Rules Procedures, Regulations, Policies Staffing/Promotions based on Qualifications Organizational Issues: 1. Structures Tall Organizations - Many Layers of Mgmt. - Cost of Mgmt.=High Flat Organizations - Current Trend - Creation of Teams 2. Span of Control Optimum number of subordinates Capabilities of Subordinates & Manager Complexity of Job Geographically Boss Subordinate Subordinate Closer + Functional Similarity + More Need for Coordination Greater Planning Demands More Functional Complexity - Subordinate Organization Types: 1. Bureaucracy Chain of Command from top down Rules & Regulations Boss Vice President Set Up by Function Supervisor Communication = Minimal Employee Not responsive to customers Advantages Skill Development Economies of Scale Good Coordination College President Business Education Comm., Humanities, Social Sciences Developmental Studies Math, Sciences, Health Sciences Technical, Industrial Service Occupations Disadvantages Lack of Communication Employees Identify with Department Slow Response to External Demands Narrow Specialists Different ways to Departmentalize Product type Function in company Customer group Geographic Location Production Process 2. Centralization (No Delegation to Managers) Advantages Increased Uniformity Less Duplication Maximum Control Disadvantages Lots of Policies & Procedures Many Layers/Slower 3. Decentralization (Delegating Authority) Advantages Disadvantages Informed Loss of Decisions Control Worker Possible Responsibility Duplication Few Layers/Faster Organizational Models: a. Line Organizations Line Personnel Perform Functions Contribute Directly to Organizational Goals Staff Personnel Advise Assist Line Personnel Advantages Clear Authority & Responsibility Easy to Understand One Supervisor per Employee Disadvantages Inflexible Few Specialists for Advice Long Line of Communication Difficult to Handle Complex Decisions b. Matrix Organizations Specialist from different parts of the organization for specific projects Advantages Flexibility Cooperation & Teamwork Creativity More Efficient Use of Resources Disadvantages Costly/Complex Confusion in Loyalty Requires Good Interpersonal Skills & Cooperation Not Permanent c. Networking & ‘Nets like Matrix Networking Real Time Transparency ‘Nets Extranet Intranet Teleconference d. Virtual Corporation (Figure 8.7) Accounting Firm Production Firm Distribution Firm Core Firm Legal Firm Design Firm Advertising Agency No permanent ties to core firm How to Improve Organizational Structure Break business into smaller units Build teamwork Impose autonomy Create meaningful incentives Outsource non-operating activities Share business capabilities across units Outsourcing Benefits Time to focus on company’s primary function + Increased level of expertise + Cost effectiveness + Decreased overhead + Risk reduction + Flexibility + Technology + Downside - - Less personal approach Less control by owner in planning, implementing & carrying out company’s future Potential for competing for the outsourcing firm’s time Assigning various functions to outside organizations – legal, accounting Informal Groups Relationships that form spontaneously within groups with similar goals Learn who the important people are. Work with the group. Examples of Informal Group Norms Do your job but don’t produce more than the rest of the group. Don’t tell off-color jokes or use profane language among group members. Listen to the boss and use his/her expertise but don’t trust him/her. Everyone is to be clean/organized at the workstation. Examples of Informal Group Norms(cont’d) Never side with managers in a dispute involving group members. Respect/help your fellow group members on the job. Criticize the organization only among group members- never among strangers. Drinking is done off-the-job. Never at work!