chp 10 Daft 6 th ed Fundamentals of

chp 10 Daft 6 th ed Fundamentals of Organizing Developed by Cool Pictures & Multi. Media Presentations Copyright © 2003 by South-Western, a division of of Thomson Learning. All rights reserved. Copyright © © 2002 by by South-Western, aa division of Thomson Thompson Learning. All rightsreserved.

Organizing • The deployment of organizational resources to achieve strategic goals • Reflects deployment of resources • Shows division of labor • Formal lines of authority and mechanisms is developed Developed by Cool Pictures & Multi. Media Presentations Copyright © 2003 by South-Western, a division of Thomson Learning. All rights reserved.

Organization Structure F Defines how tasks are divided, resources are deployed, and departments are coordinated F The set of formal tasks assigned F Formal reporting relationships F The design of systems to ensure effective coordination of employees across department Developed by Cool Pictures & Multi. Media Presentations Copyright © 2003 by South-Western, a division of Thomson Learning. All rights reserved.

The Organization Chart Visual representation Set of formal tasks Framework for vertical control “The Home Depot is the world's largest home improvement retailer currently operating 1, 363 stores. Formal reporting relationships Developed by Cool Pictures & Multi. Media Presentations Copyright © 2003 by South-Western, a division of Thomson Learning. All rights reserved.

Work Specialization • Tasks are subdivided into individual jobs • Division of labor concept • Employees perform only the tasks relevant to their specialized function • Jobs tend to be small, but they can be performed efficiently Developed by Cool Pictures & Multi. Media Presentations Copyright © 2003 by South-Western, a division of Thomson Learning. All rights reserved.

Chain of Command • Unbroken line of authority that links all persons in an organization • Shows who reports to whom • Associated with two underlying principles Unity of Command Scalar Principle Developed by Cool Pictures & Multi. Media Presentations Copyright © 2003 by South-Western, a division of Thomson Learning. All rights reserved.

Authority • Formal and legitimate right of a manager to make decisions and issue orders • Allocate resources to achieve organizationally desired outcomes • Authority is distinguished by three characteristics Authority is vested in organizational positions, not people Authority is accepted by subordinates Authority flows down the vertical hierarchy Developed by Cool Pictures & Multi. Media Presentations Copyright © 2003 by South-Western, a division of Thomson Learning. All rights reserved.

Responsibility • The duty to perform the task or activity an employee has been assigned • Managers are assigned authority commensurate with responsibility Developed by Cool Pictures & Multi. Media Presentations Copyright © 2003 by South-Western, a division of Thomson Learning. All rights reserved.

Accountability ÖMechanism through which authority and responsibility are brought into alignment ÖPeople are subject to reporting and justifying task outcomes to those above them in the chain of command ÖCan be built into the organization structure Developed by Cool Pictures & Multi. Media Presentations Copyright © 2003 by South-Western, a division of Thomson Learning. All rights reserved.

Delegation 1 ýProcess managers use to transfer authority and responsibility 2 ýOrganization encourage managers to delegate authority to lowest possible level Developed by Cool Pictures & Multi. Media Presentations Copyright © 2003 by South-Western, a division of Thomson Learning. All rights reserved.

Delegation Give thorough instructions Maintain feedback Evaluate and reward performance Techniques for Delegation Delegate the whole task Developed by Cool Pictures & Multi. Media Presentations Ensure that authority equals responsibility Select the right person Copyright © 2003 by South-Western, a division of Thomson Learning. All rights reserved.

Span of Management/ Span of Control • Number of employees who report to a supervisor • Traditional view, about seven subordinates per manager • Many lean organizations today have 30, 40, or even higher subordinates • When supervisors must be closely involved with subordinates, the span should be small • Supervisors need little involvement with subordinates, it can be large Developed by Cool Pictures & Multi. Media Presentations Copyright © 2003 by South-Western, a division of Thomson Learning. All rights reserved.

Factors Associated With Less Supervisor Involvement • • • Work is stable and routine Subordinates perform similar work tasks Subordinates are concentrated in a single location Subordinates are highly trained Rules and procedure defining task activities are available • Support systems and personnel are available for the manager • Little time is required in nonsupervisory activities • Managers’ preferences and styles favor a large span Developed by Cool Pictures & Multi. Media Presentations Copyright © 2003 by South-Western, a division of Thomson Learning. All rights reserved.

Tall versus Flat Structure • Span of Control used in an organization determines whether the structure is tall or flat • Tall structure has a narrow span and more hierarchical levels • Flat structure has a wide span, is horizontally dispersed and fewer hierarchical levels • The trend has been toward wider spans of control Developed by Cool Pictures & Multi. Media Presentations Copyright © 2003 by South-Western, a division of Thomson Learning. All rights reserved.

Centralization versus Decentralization • Greater change and uncertainty in the environment are usually associated with decentralization • The amount of centralization or decentralization should fit the firm’s strategy • In times of crisis or risk of company failure, authority may be centralized at the top Developed by Cool Pictures & Multi. Media Presentations Copyright © 2003 by South-Western, a division of Thomson Learning. All rights reserved.

Departmentalization The basis on which individuals are grouped into departments Vertical functional approach. People are grouped together in departments by common skills. Divisional approach. Grouped together based on a common product, program, or geographical region. Horizontal matrix approach. Functional and divisional chains of command. Some employees report to two bosses Team-based approach. Created to accomplish specific tasks Network approach. Small, central hub electronically connected to their other organizations that perform vital functions. Departments are independent, and can be located anywhere. Virtual approach. Brings people together temporarily to exploit specific opportunities then disbands Developed by Cool Pictures & Multi. Media Presentations Copyright © 2003 by South-Western, a division of Thomson Learning. All rights reserved.

Five Approaches to Structural Design Developed by Cool Pictures & Multi. Media Presentations Copyright © 2003 by South-Western, a division of Thomson Learning. All rights reserved.

Five Approaches to Structural Design Slide 2 Developed by Cool Pictures & Multi. Media Presentations Copyright © 2003 by South-Western, a division of Thomson Learning. All rights reserved.

Divisional Structure Advantages • • • Efficient use of resources Skill specialization development Top management control Excellent coordination Quality technical problem solving Developed by Cool Pictures & Multi. Media Presentations Copyright © 2003 by South-Western, a division of Thomson Learning. All rights reserved.

Divisional Structure Disadvantages • • • Poor communications Slow response to external changes Decisions concentrated at top Pin pointing responsibility is difficult Limited view of organizational goals by employees Developed by Cool Pictures & Multi. Media Presentations Copyright © 2003 by South-Western, a division of Thomson Learning. All rights reserved.

Horizontal Matrix Advantages • More efficient use of resources than single hierarchy • Adaptable to changing environment • Development of both general and specialists management skills • Expertise available to all divisions • Enlarged tasks for employees Developed by Cool Pictures & Multi. Media Presentations Copyright © 2003 by South-Western, a division of Thomson Learning. All rights reserved.

Dual Authority Structure in a Matrix Organization Developed by Cool Pictures & Multi. Media Presentations Copyright © 2003 by South-Western, a division of Thomson Learning. All rights reserved.

Horizontal Matrix Disadvantages • • • Dual chain of command High conflict between two sides of matrix Many meetings to coordinate activities Need for human relations training Power domination by one side of matrix Developed by Cool Pictures & Multi. Media Presentations Copyright © 2003 by South-Western, a division of Thomson Learning. All rights reserved.

Team Advantages • • • Same advantages as functional structure Reduced barriers among departments Quicker response time Better morale Reduced administrative overhead Developed by Cool Pictures & Multi. Media Presentations Copyright © 2003 by South-Western, a division of Thomson Learning. All rights reserved.

Team Disadvantages • Dual loyalties and conflict • Time and resources spent on meetings • Unplanned decentralization Developed by Cool Pictures & Multi. Media Presentations Copyright © 2003 by South-Western, a division of Thomson Learning. All rights reserved.

Network Approach Advantages • Global competitiveness • Work force flexibility • Reduced administrative overhead Developed by Cool Pictures & Multi. Media Presentations Copyright © 2003 by South-Western, a division of Thomson Learning. All rights reserved.

Network Approach Disadvantages • No hands-on control • Loss of part of the organization severely impacts remainder of organization • Employee loyalty weakened Developed by Cool Pictures & Multi. Media Presentations Copyright © 2003 by South-Western, a division of Thomson Learning. All rights reserved.