Organizational Structure The vertical and horizontal configuration of

Departmentalization Functional Customer Product Geographic Matrix 1 Chapter 9 Copyright © 2007 by South-Western,

Functional Departmentalization 1. 1 Chapter 9 Copyright © 2007 by South-Western, a division of

Functional Departmentalization Advantages § § § Work done by highly skilled specialists Lowers costs

Product Departmentalization United Technologies 1. 2 Carrier Chubb Hamilton Sundstrand Otis Pratt & Whitney

Product Departmentalization Advantages § § § Managers specialize, but have broader experiences Easier to

Customer Departmentalization Sprint Corporation Business Solutions 1. 3 Consumer Solutions Local Telecom Division Sprint

Customer Departmentalization Advantages § § Focuses on customer needs Products and services tailored to

Coca-Cola Enterprises Territories of Operation Geographic Departmentalization 1. 4 Chapter 9 Copyright © 2007

Geographic Departmentalization Advantages § § Responsive to the demands of different market areas Unique

Matrix Departmentalization Citi. Group International Global Consumer North America (excluding Mexico) Europe, Middle East,

Matrix Departmentalization Advantages § § Efficiently manage large, complex tasks Pool of available resources

Organizational Authority Chain of Command Line versus Staff Authority Delegation of Authority Degree of

Chain of Command § § § The vertical line of authority in an organization

Line versus Staff Authority § Line authority § the right to command immediate subordinates

Delegation of Authority The assignment of direct authority and responsibility to a subordinate to

Delegation of Authority 2. 3 Chapter 9 Copyright © 2007 by South-Western, a division

How to be a More Effective Delegator 1. 2. 3. 4. 5. 6. 7.

Degree of Centralization § Centralization of authority § primary authority is held by upper

Job Design Specialized Jobs Job Rotation, Enlargement, Enrichment Job Characteristics Model 3 Chapter 9

Job Specialization § § § A job that is a small part of a

Job Rotation, Enlargement, and Enrichment § Job Rotation § periodically moving workers from one

Job Characteristics Model § A job redesign approach that seeks to increase employee motivation

Job Characteristics Model 3. 3 Chapter 9 Copyright © 2007 by South-Western, a division

Job Redesign Techniques Redesigning Jobs Combining Tasks Forming Natural Work Units Establishing Client Relationships

Intraorganizational Processes Reengineering Empowerment Behavioral Informality 4 Chapter 9 Copyright © 2007 by South-Western,

Reengineering § The fundamental rethinking and radical redesign of business processes § Intended to

Reengineering and Task Interdependence 4. 1 Chapter 9 Copyright © 2007 by South-Western, a

Empowerment Empowering Workers § § § Permanently passing decision-making authority and responsibilities from managers

Behavioral Informality § § § Spontaneity Casualness Interpersonal familiarity Behavioral Formality § § §

Behavioral Informality Popular ways to increase behavioral informality Casual Dress and Open Offices Chapter

Do the Right Thing Don’t Scavenge That Office If Somebody Is Still in It

Interorganizational Processes Modular Organizations Virtual Organizations 5 Chapter 9 Copyright © 2007 by South-Western,

Modular Organizations 5. 1 Chapter 9 Copyright © 2007 by South-Western, a division of

Modular Organizations Advantages § § can cost less to run than traditional organizations lets

Virtual Organizations 5. 2 Chapter 9 Copyright © 2007 by South-Western, a division of

Virtual Organizations Advantages § § § 5. 2 let companies share costs fast and

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Organizational Structure The vertical and horizontal configuration of departments, authority, and jobs within a company. Organizational Process The collection of activities that transform inputs into outputs that customers value. Chapter 9 Copyright © 2007 by South-Western, a division of Thomson Learning. All rights reserved 1

Functional Departmentalization Advantages § § § Work done by highly skilled specialists Lowers costs through reduced duplication Communication and coordination problems are lessened Disadvantages § § § Cross-department coordination can be difficult May lead to slower decision making Produces managers with narrow experiences 1. 1 Chapter 9 Copyright © 2007 by South-Western, a division of Thomson Learning. All rights reserved 4

Product Departmentalization United Technologies 1. 2 Carrier Chubb Hamilton Sundstrand Otis Pratt & Whitney Sikorsky --Administrative services --Communication & public relations --Customer service & support --E-Business --Engineering --etc… Chapter 9 Copyright © 2007 by South-Western, a division of Thomson Learning. All rights reserved UTC Power Adapted from Exhibit 9. 4 5

Product Departmentalization Advantages § § § Managers specialize, but have broader experiences Easier to assess workunit performance Decision-making is faster Disadvantages § § Duplication of activities Difficult to coordinate across departments 1. 2 Chapter 9 Copyright © 2007 by South-Western, a division of Thomson Learning. All rights reserved 6

Customer Departmentalization Sprint Corporation Business Solutions 1. 3 Consumer Solutions Local Telecom Division Sprint North Supply U. S. Businesses Local Service Supply Chain Integration International Businesses Long. Distance Service Logistics Network Solutions Wireless Services Wireline & Wireless Services Distribution Centers (Partial Listing) Chapter 9 Copyright © 2007 by South-Western, a division of Thomson Learning. All rights reserved Adapted from Exhibit 9. 5 7

Customer Departmentalization Advantages § § Focuses on customer needs Products and services tailored to customer needs Disadvantages § § § Duplication of resources Difficult to coordinate across departments Efforts to please customers may hurt the company 1. 3 Chapter 9 Copyright © 2007 by South-Western, a division of Thomson Learning. All rights reserved 8

Geographic Departmentalization Advantages § § Responsive to the demands of different market areas Unique resources located close to the customer Disadvantages § § Duplication of resources Difficult to coordinate across departments 1. 4 Chapter 9 Copyright © 2007 by South-Western, a division of Thomson Learning. All rights reserved 10

Matrix Departmentalization Citi. Group International Global Consumer North America (excluding Mexico) Europe, Middle East, Africa Global Corporate & Investment Bank Global Investment Management 1. 5 Smith Barney Asia Pacific Country Managers in Spain, UAE, Kenya, etc. Country Managers in China, Australia, etc. Chapter 9 Copyright © 2007 by South-Western, a division of Thomson Learning. All rights reserved Adapted from Exhibit 9. 7 11

Matrix Departmentalization Advantages § § Efficiently manage large, complex tasks Pool of available resources Disadvantages § § § Requires high levels of coordination Conflict between bosses Requires high levels of management skills 1. 5 Chapter 9 Copyright © 2007 by South-Western, a division of Thomson Learning. All rights reserved 12

Organizational Authority Chain of Command Line versus Staff Authority Delegation of Authority Degree of Centralization 2 Chapter 9 Copyright © 2007 by South-Western, a division of Thomson Learning. All rights reserved 13

Chain of Command § § § The vertical line of authority in an organization Clarifies who reports to whom Unity of command § workers report to only one boss § matrix organizations violate this principle 2. 1 Chapter 9 Copyright © 2007 by South-Western, a division of Thomson Learning. All rights reserved 14

Line versus Staff Authority § Line authority § the right to command immediate subordinates in the chain of command § Staff authority § the right to advise but not command others 2. 2 Chapter 9 Copyright © 2007 by South-Western, a division of Thomson Learning. All rights reserved 15

Delegation of Authority The assignment of direct authority and responsibility to a subordinate to complete tasks for which the manager is normally responsible. 2. 3 Chapter 9 Copyright © 2007 by South-Western, a division of Thomson Learning. All rights reserved 16

How to be a More Effective Delegator 1. 2. 3. 4. 5. 6. 7. 8. 9. 2. 3 Trust your staff to be a good job Avoid seeing perfection Give effective job instructions Know your true interests Follow up on progress. Praise the efforts of your staff. Don’t wait to the last minute to delegate. Ask questions, expect answers, assist employees. Provide the resources you would provide if doing the assignment yourself. 10. Delegate to the lowest possible level. Chapter 9 Copyright © 2007 by South-Western, a division of Thomson Learning. All rights reserved Adapted from Exhibit 9. 9 18

Degree of Centralization § Centralization of authority § primary authority is held by upper management § Decentralization § significant authority is found in lower levels of the organization § Standardization § solving problems by applying rules, procedures, and processes 2. 4 Chapter 9 Copyright © 2007 by South-Western, a division of Thomson Learning. All rights reserved 19

Job Specialization § § § A job that is a small part of a larger task or process Jobs are simple, easy to learn, and economical Can lead to low satisfaction, high absenteeism, & employee turnover 3. 1 Chapter 9 Copyright © 2007 by South-Western, a division of Thomson Learning. All rights reserved 21

Job Rotation, Enlargement, and Enrichment § Job Rotation § periodically moving workers from one specialized job to another § Job Enlargement § increasing the number of tasks performed by a worker § Job Enrichment § adding more tasks and authority to an employee’s job 3. 2 Chapter 9 Copyright © 2007 by South-Western, a division of Thomson Learning. All rights reserved 22

Job Characteristics Model § A job redesign approach that seeks to increase employee motivation § Emphasizes internal motivation § experience work as meaningful § experience responsibility for work outcomes § knowledge of results 3. 3 Chapter 9 Copyright © 2007 by South-Western, a division of Thomson Learning. All rights reserved 23

Job Redesign Techniques Redesigning Jobs Combining Tasks Forming Natural Work Units Establishing Client Relationships Vertically Loading the Job 3. 3 Opening Feedback Channels Chapter 9 Copyright © 2007 by South-Western, a division of Thomson Learning. All rights reserved Adapted from Exhibit 9. 10 25

Reengineering § The fundamental rethinking and radical redesign of business processes § Intended to achieve dramatic improvements in performance § Change the orientation from vertical to horizontal § Changes task interdependence 4. 1 Chapter 9 Copyright © 2007 by South-Western, a division of Thomson Learning. All rights reserved 27

Empowerment Empowering Workers § § § Permanently passing decision-making authority and responsibilities from managers to workers by giving them the information and resources they need to make good decisions A feeling of intrinsic motivation Workers perceive meaning in their work Employees are capable of self-determination 4. 2 Chapter 9 Copyright © 2007 by South-Western, a division of Thomson Learning. All rights reserved 29

Behavioral Informality § § § Spontaneity Casualness Interpersonal familiarity Behavioral Formality § § § Routine & regimen Specific behavior rules Impersonal detachment 4. 3 Chapter 9 Copyright © 2007 by South-Western, a division of Thomson Learning. All rights reserved 30

Do the Right Thing Don’t Scavenge That Office If Somebody Is Still in It § It’s roadkill in the animal kingdom: coworkers scavenge for office leftovers… often before an employee leaves § Do the right thing by maintaining the dignity of departing coworkers: wait until the office is empty 4. 3 Chapter 9 Copyright © 2007 by South-Western, a division of Thomson Learning. All rights reserved 32

Modular Organizations Advantages § § can cost less to run than traditional organizations lets organizations focus on core competencies Disadvantages § § loss of control from outsourcing may reduce their competitive advantage 5. 1 Chapter 9 Copyright © 2007 by South-Western, a division of Thomson Learning. All rights reserved 35

Virtual Organizations Advantages § § § 5. 2 let companies share costs fast and flexible being the “best” should provide better products Web Link Disadvantages § § difficult to control the quality of partners requires tremendous management skills http: //www. agileweb. com Chapter 9 Copyright © 2007 by South-Western, a division of Thomson Learning. All rights reserved 37