Transcript Document 7134900

Organizational
Management
Chapter 4
I. What is an Organization?
 Is a group of two or more people working
together in a predetermined fashion to
achieve a common goal(s).
Lets define some terms:
 Organizing

The process of grouping resources and
activities to accomplish some end result in an
efficient and effective manner.
 Organizational Structure

A fixed pattern of
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Positions within the organization
Relationship among those positions
More terms
 Organizational Chart

A diagram that represents the positions and
relationships within an organization.
 Chain of command

Is the line of authority that extends from the
highest to the lowest levels of the organization
Organizational Chart
II. Dimensions of organizational
Structure
 5 steps to the organizational process
1. Job design
 Divide the work into separate parts and assign
those parts to positions within the organization.

This determines the degree of specialization within
the organization
2. Group the various positions in to
manageable units.

This creates the nature and Degree of
departmentalization
3. Distribute responsibility and authority

This creates the nature and degree of
centralization
Dimensions of organizational structure
4.
Determine the number of subordinates who
will report to each manager.
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5.
This is called the span of management.
Distinguish between positions that have
direct authority and positions that re used for
support.
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Establishes the chain of command
I. Job Design
 Job Specialization

Is the separation of all organizational activities
into distinct tasks and the assignment of
different tasks to different people.
Possible Solutions of Job
Specialization.
 Three Solutions
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Job Rotation
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Is the systematic shifting of employees from one
job to another.
Example: Many car companies do this now….
Job Enlargement

The worker is given more things to do within the
same job.
Possible Solutions of Job
Specialization
3. Job Enrichment is perhaps the most
advanced alternative to job specialization.
1.
Provides workers with both more tasks to do
and more control over how they do their
work.
1.
2.
3.
Work is assigned in complete units
Builds more depth and complexity to jobs
Works best when employees seek more
challenging work.
Downside of Specialization
 People get bored with the Job.
Why use specialization?
 Usually the job is to large for one person to handle by
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themselves. So we give responsibility to others to
help the process.
If the person learns one task that person should
become very productive with that task.
Time is not lost moving from one job to another.
Easier to design specialized equipment for those who
do the job.
Easier to train new employees for a very specialized
job.
II. DEPARTMENTALIZATION
 Is the process of grouping jobs into
manageable units according o some
reasonable scheme.
 Departmental Basis – is how the jobs are
grouped.
1.
By function

Groups all jobs together that relate to the same
organizational activity
IV DEPARTMENTALIZATION
2.
By Product
1.
Is the groping together of all activities related to a
particular product or product group.
3.
By Location
1.
Grouped together because of geographic location
4.
By Customer
1.
Grouped together by needs of various customer groups
5.
By Process
1.
Grouped by what the organization and the workers do for
the product
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III. Delegation, Decentralization,
Centralization
 Step three in the organizing process to
distribute power in the organization

Delegation of Authority


Is the assigning of part of a managers work and
power to a subordinate.
Steps to delegating authority
 Manger must assign responsibility.
 Manager must grant authority.
 manager must create accountability
Barriers to Delegation of Authority
Why would I not want to delegate authority to
someone?
1. One reason is that the persons who
delegates remains accountable for work.
2. A manager may fear that a subordinate will
do to good of a job and top management will
notice.
3. Some managers are so disorganized that
they can not simply plan and assign work in
an effective way.
Decentralization of Authority
 The general pattern of delegation throughout
an organization determines the extent to
which that organization is decentralized or
centralized.
Decentralized or Centralized
Organization
 Decentralized 
An organization in which management
consciously attempts to spread authority to the
lower management levels.
 Centralized

An organization that systematically works to
concentrate authority at the upper levels of
management
A few things about a decentralized
organization.
 The external environment of where the
organization operates
1.
2.
3.
The more complex and unpredictable the
environment, the more likely it is that top
management will make most of the
decisions.
The riskier the decision the more chance the
organization will be centralized
How capable is the lower management at
making decisions.
IV. Span of Management
 Span of management or span of control.

It is the number of subordinates that directly
report to one manager.
 Wide and Narrow spans of control.
Wide Span of Control (flat span of
control)
When a manager has a large number of subordinates
President
North Region
South Region
East Region
West Region
European Region
Asian Region
Narrow Span of management. (Tall
span of management control)
President
North Region
South Region
Organizational Height
 Is the number of layers, or levels of
management in a firm.
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The span of management plays a direct role in
determining the height of the organization
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Is spans are narrow- more levels are needed.
Resulting in a tall organization
If spans are wider – fewer levels are needed
 IN a tall organization
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Administrative costs are higher, more mangers
needed.
Communication is distorted
 Flat organization

Costs are less, administrative duties are more,
more pressure on the managers to perform.
V. Line and Staff management
 Last major organizational dimension is the
chain of command (lines of authority)
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Line management positions
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Is part of the chain of command, and a person in
this type of position makes decisions and gives
orders to subordinates to achieve the goals of the
organization.
They can make decisions and issue directives
that relate to the organizations goals
Example: Department Heads
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Staff management positions
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Is a position created to provide support, advice and expertise to
someone in the chain of command.
Usually have either advisory authority or functional authority.
Example: Principals or Assistant Principals.
 Advisory authority
 Simply the expectation that line mangers will consult the
appropriate staff manager when making decisions.
 Functional authority
 Stronger authority.
 Is the authority of staff mangers to make decisions and issue
directives, but only about their own area of expertise
 Ex. A legal advisor can decide whether to retain a particular
clause in a contract, but not what price to charge for a new
product.
Conflict for line-staff mangers
1. Staff mangers often have more formal
education and are sometimes younger
(perhaps more ambitious) than line mangers
2. Line mangers -May perceive staff mangers
as a threat to their own authority
3. Line managers- may resent depending on
the expertise of the staff mangers
4. Staff managers may become resentful if
their expert recommendations are not
adopted by line management
Elements of Organizational Structure
 We discussed the 5 dimensions of
organizational structure.
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Job Design
Departmentalization
Delegation
Span of management
Line and staff management
SWOT ANALYSIS……..
 Please look at the handout that I gave you….
SWOT ANALYSIS explanation.htm
This is in your shared drive.
Today along with finishing the market analysis you should read the article on
SWOT analysis and do both a personal analysis and a business analysis.
3 newer elements that effect your
companies organizational structure
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Work Schedules

Different types of work schedules
1.
Compressed work schedule
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2.
An arrangement whereby a employee works a full forty
hours per week, but in fewer than standard 5 days.
 Usually work 4 – 10 hour days, and have a three day
weekend.
Flexible work week
 Employee chooses the hours during which he or she will
work, subject to certain limitations
 Core time – when all employees must be at work
 Flexible time – when employees may choose
whether to be at work.
 All employees must work 8 hours per day…
 Ex. Real estate agent
Work week scheduling
 Job Sharing
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Is an arrangement where two people share
one full-time job
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Secretaries do this a lot
Scheduling Sim…..
 Please begin to work on Work Schedule
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Will need two of them.
One for your business
One for the simulation
committees
 Types of committees used within an
organization
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Ad hoc committee
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Committee created for a specific short-term
purpose.
Ex. Used to reviewing the firm’s employee
benefits plan.
Standing committee
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Is a relatively permanent committee charged with
performing some recurring task.
 Budget review committee
 Task Force
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Is a committee established to investigate a
major problem or pending decision
Advantages/disadvantages of
committees
 Advantages
 Members bring more information, and knowledge to
task at hand
 Tend to make more accurate decisions and to transmit
their results through the organization mare effectively.
 Disadvantages
 Deliberation may take to long
 Unnecessary compromise may take place
 Some people of the committee may feel obligated to
listen to one person or another. I'll scratch your back
you scratch mine?
Coordination Techniques of
committees
 The coordination of organizational resources
so that there is minimize in duplication and
maximize effectiveness.
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There has to be a managerial hierarchy
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Who is in charge?
Resources have to be coordinated
Complex situations
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Create a liaison – person who is the “go between”
two departments.
A task force or committee may be established.
Forms of Organizational Structure
 We have been spending the last couple of
classes discussing the parts of the puzzle and
now we will put them all together to create a
actual structure.
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1. Bureaucratic Structure
 Is a management system based on a formal
framework of authority that is carefully outline and
precisely followed.
 Major Characteristics
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High level of job specialization
Departmentalized by function
Precise and formal patterns of delegation
High degree of centralization’
Narrow spans of management (tall organization)
Clearly defined line and staff positions, with formal
relationships between the two.
II.
Organic Structure
 Is a management system founded on cooperation's
and knowledge-based authority. An organic structure
is likely to have the following dimensions:
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Low level of job specialization
Departmentalization by product, location, or customer
General and informal patterns of delegation
A high degree of decentralization
Wide spans of management
Less clearly defined line and staff positions, with less
formal relationships between the two
Matrix Structure
 Is an organizational structure that combines
vertical and horizontal lines of authority.
 Matrix structure occurs when product
departmentalization is superimposed on a
functionally departmentalized organization
 Authority flows both down and across
week10-11-organizational_structure.ppt
4 stages of the matrix structure
1. The firms is organized as a functional
structure
2. A smaller number of interdepartmental
groups are created to work on important
projects
3. More groups are created, and they become
an integral and important part of the
organization
4. The firm becomes what is called a natural
matrix.
Advantages of matrix’s
 Very flexible
 People become deeply committed to their
special projects – improves motivation
 Staff development from doing a number of
jobs
 People communicate more as they become
liaisons between their project groups and
their functional departments
Disadvantages of matrix’s
 Can cause confusions about who ahs
authority in various situations
 These groups may take longer to resolving
issues than working alone.
 May be more expensive because more
mangers and support staff are needed.
Informal Organizations
 Describes the pattern of behavior and
interaction that stems from personal rather
than official relationships.
 Informal groups
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Is one that is created by the member of the
group themselves to accomplish goals that
may or may not be relevant to the
organization.
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Company softball team
Union
How do informal organizations
communicate.
 Through the grapevine……..
 Informal form of communication.