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Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 11-1
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Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 11-2
Definitions of Organizing And Organizing SkillsDefinitions of Organizing And Organizing SkillsDefinitions of Organizing And Organizing SkillsDefinitions of Organizing And Organizing SkillsOrganizing: is the process of establishing orderly uses for
resources within the management system
Organizing skill: is the ability to establish orderly uses for resources within the management system
A primary focus of organizing is determining:What individual employees will do in an organizationHow their individual efforts should best be combined
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Definitions of Organizing And Organizing SkillsDefinitions of Organizing And Organizing SkillsDefinitions of Organizing And Organizing SkillsDefinitions of Organizing And Organizing Skills
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The Importance of OrganizingThe Importance of OrganizingThe Importance of OrganizingThe Importance of OrganizingThe organizing function is very important to the management
system because: It is used to activate plans It creates and maintains relationships between all
organizational resources by indicating which resources are to be used for specific activities and when, where, how to use them.
It minimizes costly weaknesses (e.g. duplication of efforts, idle organizational resources)
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The Importance of OrganizingThe Importance of OrganizingThe Importance of OrganizingThe Importance of OrganizingResponsibilities of an “Organizing Department” would include:
1. Reorganization plans to make management system more effective and efficient2. Plans to improve managerial skills to fit current management system needs3. An advantageous organizational climate within the management system
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The Organizing ProcessThe Organizing ProcessThe Organizing ProcessThe Organizing ProcessThe Organizing Process: (see figure 11.2)
1. Reflect2. Establish3. Divide4. Allocate5. Evaluate
As shown in the figure, managers should continually repeat these steps, to obtain feedback that will help them improve the existing organization.
(see page 272 for the restaurant example to understand the steps)
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The Organizing ProcessThe Organizing ProcessThe Organizing ProcessThe Organizing Process
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Classical Organizing Theory - StructureClassical Organizing Theory - StructureClassical Organizing Theory - StructureClassical Organizing Theory - StructureStructure: is the designated relationships among resources of the
management systemPurpose: to facilitate the use of each resources, individually or
collectively, while attaining objectives
Two basic types of structures:1. Formal structure: the relationships among organizational
resources as outlined by management (represented by the Organizational Chart)
2. Informal structure: the patterns of relationships that develop because of the informal activities of organization members. (it is the system or network of organizational relationships that exists within, but not usually identical to, the organization’s formal structure).(molded by individual norms and values).
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Classical Organizing Theory - StructureClassical Organizing Theory - StructureClassical Organizing Theory - StructureClassical Organizing Theory - StructureOrganizational Chart: a graphic illustration that represents
organization structure.
It is constructed in pyramid form. Individuals on top have more authority and responsibility than those on the bottom.
Advantage: it helps individuals from inside and outside the organization to understand the complexity and professionalism of the company.
Structure involves two primary dimensions:1. Vertical Dimension2. Horizontal Dimension
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Vertical DimensioningVertical DimensioningVertical DimensioningVertical DimensioningVertical Dimensioning: the extent to which an organization uses
vertical levels to separate job responsibilities.
Scalar relationships: the chain of command (people on top have the most authority, and those on the bottom have the least authority)
Unity of Command: is the management principle that recommends that an individual have only one boss.
Too many bosses give orders → confusion, contradiction, frustration, ineffectiveness, inefficiency
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Vertical DimensioningVertical DimensioningVertical DimensioningVertical DimensioningSpan of Management: the number of individuals a manager
supervises.
= Span of Control = Span of Authority = Span of Supervision = Span of Responsibility
More individuals a manager supervises → greater span of management
Fewer individuals a manager supervises → smaller span of management
How many individuals a manager can supervise effectively?Too few? → waste of capacity!Too many? → not effective!
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Vertical DimensioningVertical DimensioningVertical DimensioningVertical DimensioningDesigning Span of Management:The following are situational factors that influence appropriateness of the size of an individual’s span of management:
Similarity of functions: the degree to… Geographic continuity: … Complexity of functions: … Coordination: … Planning: …
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Vertical DimensioningVertical DimensioningVertical DimensioningVertical Dimensioning
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Vertical DimensioningVertical DimensioningVertical DimensioningVertical DimensioningHeight of Organization Chart:
The greater the height of organization chart “Tall”, the smaller the span of management
The lower the height of organization chart “Flat”, the greater the span of management
(see figure 11.3, Chart A is flatter than Chart B, and Chart B is taller than Chart A)
↑Span → ↓positions, ↓salary expenses, ↑speed of decisions, ↑flexible, ↑employees satisfaction
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Vertical DimensioningVertical DimensioningVertical DimensioningVertical Dimensioning
Span=6 Span=3
Span=2
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Horizontal DimensioningHorizontal DimensioningHorizontal DimensioningHorizontal DimensioningHorizontal Dimensioning: the extent to which firms use lateral
subdivisions or specialties within an organization
Department: a unique group of resources established by management to perform some organizational task
Departmentalization: is the process of establishing departments within the management system.
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Horizontal DimensioningHorizontal DimensioningHorizontal DimensioningHorizontal DimensioningDepartmentalization can be by:
1. Functional2. Product or Service 3. Geographic4. Customer5. Matrix
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DepartmentalizationDepartmentalizationDepartmentalizationDepartmentalization1. Functional Departmentalization:
By type of work functions or activitiesMost widely usedMajor categories: marketing, production, finance…etc.Advantages & disadvantages: (see the table 11.2)
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DepartmentalizationDepartmentalizationDepartmentalizationDepartmentalization
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DepartmentalizationDepartmentalizationDepartmentalizationDepartmentalization2. Product or Service Departmentalization:
Based on products or services being offeredAdvantages & disadvantages: (see the table 11.2)
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DepartmentalizationDepartmentalizationDepartmentalizationDepartmentalization
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DepartmentalizationDepartmentalizationDepartmentalizationDepartmentalization3. Geographic Departmentalization:
Based on territory or places where the work is being done or the geographic markets on which the management system is focusing
Advantages & disadvantages: (see the table 11.2)
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DepartmentalizationDepartmentalizationDepartmentalizationDepartmentalization
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DepartmentalizationDepartmentalizationDepartmentalizationDepartmentalization4. Customer Departmentalization:
Based on the organization’s major customers, that can be identified and divided into logical categories.
Advantages & disadvantages: (see the table 11.2)
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DepartmentalizationDepartmentalizationDepartmentalizationDepartmentalization
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DepartmentalizationDepartmentalizationDepartmentalizationDepartmentalization5. Matrix Departmentalization:
Designed by first a more traditional form of organization (e.g. functional), then add a series of projects and a project manager for each, to form a matrix.
It is created to overcome disadvantages of other formsA project manager borrows workers from various parts of the
organization to complete some specific project (long term or short term projects). Once the project is finished, the borrowed employees are returned to their original jobs.(employees here are responsible for their original activities + project activities)
Matrix Organizations = Project OrganizationsAdvantages & disadvantages: (see the table 11.2)
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DepartmentalizationDepartmentalizationDepartmentalizationDepartmentalization
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DepartmentalizationDepartmentalizationDepartmentalizationDepartmentalization
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Classical Organizing TheoryClassical Organizing TheoryClassical Organizing TheoryClassical Organizing TheoryForces Influencing Formal Structure:
(why to choose a specific structure over the other)1. Manager: (e.g. background, knowledge, experience, values)
2. Task: (e.g. degree of technology)
3. Environment: (e.g. customers, suppliers, political, social)
4. Subordinates: (e.g. needs, skill levels)
Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 11-30
Classical Organizing TheoryClassical Organizing TheoryClassical Organizing TheoryClassical Organizing TheoryFayol’s Advice on Using Formal Structure:
Strict adherence to a particular chain of command is not always advisable/not recommended/not always good (→long process, time consuming, expensive).
In some situation, a bridge or “Gangplank” is used to allow direct communication (e.g. allow F to go directly to G for information in Figure 11.9)
This bridge should be used carefully and all the time.
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Classical Organizing TheoryClassical Organizing TheoryClassical Organizing TheoryClassical Organizing Theory
Gangplank
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