983896 634395133169998750
DESCRIPTION
Understanding businessTRANSCRIPT
04/13/2023
UNDERSTANDING BUSINESS
Adapting Organizations to Today’s Markets
04/13/2023
EVOLVING BUSINESS ENVIRONMENTS
Global Competition Declining Economy Technological Changes Preserving the Environment Changing Customer Expectations
04/13/2023
CUSTOMER EXPECTATIONS
High quality products
Fast Service Friendly Service Reasonable Cost
04/13/2023
THE DEVELOPMENT OF ORGANIZATION DESIGN
Business Growth leads to economies of scale
The larger the business the more organization is required
04/13/2023
ECONOMIES OF SCALE
Companies Reduce
Production Costs if:
Purchase raw materials in bulk
Average cost of goods goes down as production increases
04/13/2023
1900’S ERA OF MASS PRODUCTION
The 1900’s spawned the Era of Mass Production
Manufacturer’s main
goal was to produce large quantities of goods efficiently
Two organization theorists influenced mass production techniques
04/13/2023
HENRY FAYOL
Published- Administration industriele et
generale, 1919 in France
His Book became popular in the U.S. in 1949 as General and
Industrial Management
04/13/2023
HENRY FAYOL’S PRINCIPLES
Unity of command Hierarchy of
authority Divisions of labor Subordination of
individual interests to the general interest
Authority
Degree of centralization
Clear communication channels
Order Equity Espirit’ de corps
04/13/2023
MAX WEBER
Author of The theory of social and economic organizationsGerman socialogist and economistIntroduced the term bureaucracy by referring to a middle manager as a bureaucrat
04/13/2023
MAX WEBER’S ORGANIZATIONAL THEORY Principles similar to
Fayol’s with additional theories
Believed that organizational rules should be followed precisely
His theories worked well for uneducated and untrained workers
Job descriptions Written rules,
decision guidelines, and detailed records
Consistent procedures, regulations, and policies
Staffing and promotion based on qualifications
04/13/2023
BUREAUCRACY
Layers ofManagers
Set rules
Set regulations
Oversee all decisions
04/13/2023
TURNING PRINCIPLES INTO ORGANIZATION DESIGN
Based on Fayol’s and Weber’s theories managers sought to control
workers
04/13/2023
HEIRARCHY
One person is at the top or in charge
Everyone else is ranked
according to whom they report to
04/13/2023
CHAIN OF COMMAND
Chain of authority that moves from the top of the hierarchy to the bottom going through each level or chain of command
04/13/2023
DECISIONS TO MAKE INSTRUCTURING ORGANIZATIONS
Centralized or decentralized authority
Appropriate span of control
Tall and flat organization structures
Weigh advantages and disadvantages of departmentalization
04/13/2023
CENTRALIZED OR DECENTRALIZED?
CENTRALIZED DECENTRALIZED Top level
management maintains authority for decision making
Top level managers designate authority to lower level managers who are more familiar with operations & employees
04/13/2023
CENTRALIZED
ADVANTAGES DISADVANTAGES
Top level managers have more control
Distribution is basic Brand and corporate
image strengthens
Less empowerment Less responsive to
customers Inter-organizational
conflict Morale is lower away
from headquarters
04/13/2023
DECENTRALIZED
ADVANTAGES DISADVANTAGES
Adapt better to customer wants
More empowerment of workers
Decisions made quicker
Complex distribution system
Less responsive to customer wants
Top level management has less control
04/13/2023
APPROPRIATE SPAN OF CONTROL
Deciding on Appropriate Span of Control
Span of control is the most amount of subordinates that
one manager can oversee and control
04/13/2023
SPAN OF CONTROL
Narrows at higher levels of management
Empowers lower level management & employees
Reduces amount of middle managers
More face-to-face communication
Manager can handle more information
Work becomes standardized
04/13/2023
CHOOSING TALL OR FLAT ORGANIZATION STRUCTURE
TALL ORGANIZATION STRUCTURE
FLAT ORGANIZATION STRUCTURE
Pyramid organization chart shows as tall because of the many levels of management
Smaller span of control
Less people report to each manager
Higher costs More paper work Poor communication
and decision making
Few layers of management/wider span of control
More people report to each manager
Empowering lower level employees to make decisions
Large organizations use flat structures to imitate small firms customer relations
04/13/2023
DEPARTMENTALIZATIONDIVIDES ORGANIZATIONS INTO SEPARATE UNITS
Organizations are divided into separate
unitsTypically divided by
functionsThe flatter the
organization the greater the span of control
FunctionsDesignProductionMarketing Accounting Groups of WorkersSkillsExpertiseResource
04/13/2023
BENEFITS OF DEPARTMENTALIZATION
Specialize tasks Work together more effectively
Save on costs Improves efficiency
Coordinate work within functions Top management has more control
Improves Responsiveness to customers Higher chances for advancement
04/13/2023
ALTERNATE WAYS TO DEPARTMENTALIZE
Nature, Product & Customer’s determine the type of departmentalization that is needed
A combination of different types is called “Hybrid forms”
Customer group Geographical location Activity Processes
04/13/2023
DEPARTMENTALIZATION
ADVANTAGES DISADVANTAGES
Narrow Top Management has more
control Greater advancement
potential Improved specialization Supervision is closer Broad Cost reduction Improved Customer
responsiveness Decision making quicker More empowerment
Narrow Empowerment reduced Costs are higher Decision making delayed Less responsiveness to
customers
Broad Fewer chances for
advancement Overworked managers Loss of control Management expertise
decreased
04/13/2023
ORGANIZATIONAL MODELS
Line Organizations Line & Staff Organizations Matrix Organization Cross-Functional Self-Managed Teams
04/13/2023
LINE ORGANIZATIONS
Direct two-way lines running from the top to the bottom of the
organization Responsibility Authority CommunicationsEveryone reports to one supervisor
04/13/2023
LINE & STAFF ORGANIZATIONS
Line personnel-Employees who are part of the chain of command that is responsible for achieving organizational goals.
Staff personnel-Employees who advise and assist line personnel in meeting their goal
04/13/2023
MATRIX ORGANIZATIONS
Specialists from different parts of the organization are brought together to work on specific projects and remain part of the line and staff structure
04/13/2023
MATRIX ORGANIZATION
ADVANTAGES DISADVANTAGES
Managers have flexibility assigning people to projects
Inter-organizational teamwork
Efficient use of organization resources
Costly and complex Confusing to employees
(loyalty to project manager or functional unit)
Good interpersonal skills required
Managers and employees must cooperate (avoid communication problems)
Temporary solution to a long term problem
04/13/2023
CROSS FUNCTIONAL SELF MANAGED TEAMS
Groups of employees from different departments who work together on a long term basis
Temporary solution for Matrix teams
04/13/2023
CROSS FUNCTIONAL TEAMS EMPOWERED
Work closely with: Suppliers
Customers Others
Quick & Efficient High quality products
Great service
04/13/2023
CROSS FUNCTIONAL TEAMSLONG-TERM
Teams who work together long term as self managed teams empowered to make managerial decisions without prior management approval break down barriers in:
Design Engineering Marketing Distribution Other functions
04/13/2023
CROSS FUNCTIONAL TEAMS WORK BEST WHEN:
Sharing Leadership Includes Customers Suppliers Distributors Going beyond organizational boundaries
04/13/2023
MANAGING INTERACTIONS AMONG FIRMS
Networking Transparency & Virtual
Organizations Benchmarking Core Competencies
04/13/2023
NETWORKING
Communication links organizations allowing them to work together on common objectives
04/13/2023
TRANSPARENCY & VIRTUAL ORGANIZATIONS
Real time-Present moment when something takes place
Virtual corporation-organization temporarily networked comprised of
replaceable firms join and leave as needed
04/13/2023
BENCHMARKING
Comparisons of Organizations Against the world’s best Practices
Products Adapting to change
Process
04/13/2023
CORE COMPETENCIES
Functions: Organization can do “as
good” or better than other organizations in the world
04/13/2023
ADAPTING TO CHANGE
Prepare to adapt to structure changes Digital Natives-People who have grown
up using Internet and social networking
Restructuring-Redesigning an organization so it is more effective &
efficient
04/13/2023
RESTRUCTURING FOR EMPOWERMENT
Traditional Organization-Top Management, Middle, Supervisory, Frontline
Inverted Organization-Has contact people at the top and chief executive officer at the bottom of the organization chart-turning the traditional organization structure upside down.
04/13/2023
CREATING A CHANGE
Organizational (Corporate) culture-Shared values within an organization that provide unity and cooperation to achieve common goals
Informal organization-System develops spontaneously as employees meet and form cliques, relationships and lines of authority outside the formal organization
04/13/2023
CREATING A CHANGE
Formal organization Structure detailing lines of
responsibility, authority and position
04/13/2023
CREATING A CHANGE
Informal organization-System develops spontaneously as employees meet and form cliques, relationships and lines of authority outside the formal organization
04/13/2023
REFERENCES
Nickels, William G. McHugh, M. James, McHugh M. Susan. Understanding business.preview edition, 9th edition. McGraw Hill/Irwin. 2010./
Photo. Fayol Henry.http://www.123people.com/ext/frm?ti=person%20finder&search_term=henry%20fayol&search_country=US&st=perso%20finder&target_url=http://s657.photobucket.com/album
Photo. Weber Max. http://www.mta.ca/faculty/socsci/sociology/fleming/weber_album/weberin1918.html