fundamental of management chap 9
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8/18/2019 Fundamental of Management Chap 9
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PowerPoint Presentation
to Accompany
Management, 10/eJohn R. Schermerhorn, Jr .
Prepared by: Jim LoPresti
University of Colorado, Boulder
Published by: John Wiley & Sons, In!
Chapter 9:Fundamentals of Organizing
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Management 10/e - Chapter 9 2
Planning Ahead — Chapter 9 Study Questions
What is organizing as a managementfunction
What are the traditional organizationstructures What are the ne!er t"pes of
organization structures
#o! are organizational designschanging the !or$place
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Management 10/e - Chapter 9 %
Study Question 1 !hat is organi"ing as a
management #unction$
Organizing and organization structure
Organizing
&he process of arranging people and other
resources to !or$ together to accomplish a
goal'
Organization structure
&he s"stem of tas$s( !or$flo!s( reporting
relationships( and communication channels
that lin$ together di)erse indi)iduals and
groups'
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Management 10/e - Chapter 9 *
%igure 9.1 &rgani"ing 'iewed in relationship with the
other management #unctions.
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Management 10/e - Chapter 9 +
Study Question 1 !hat is organi"ing as a
management #unction$
Formal structures … &he structure of the organization in its official
state' ,n organization chart is a diagram descriing
reporting relationships and the formal arrangementof !or$ positions !ithin an organization'
,n organization chart identifies the follo!ingaspects of formal structure: &he di)ision of !or$'
.uper)isor" relationships' Communication channels' Maor suunits' e)els of management'
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Management 10/e - Chapter 9
Study Question 1 !hat is organi"ing as a
management #unction$
nformal structures …
, 3shado!4 organization made up of the
unofficial( ut often critical( !or$ing
relationships et!een organization memers'
5otential ad)antages of informal structures:
#elping people accomplish their !or$'
O)ercoming limits of formal structure' 6aining access to interpersonal net!or$s'
nformal learning'
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Management 10/e - Chapter 9 7
Study Question 1 !hat is organi"ing as a
management #unction$
nformal structures 8cont'
5otential disad)antages of informal structures:
Ma" !or$ against est interests of entire
organization'
.usceptiilit" to rumor'
Ma" carr" inaccurate information'
Ma" reed resistance to change' i)ersion of !or$ efforts from important
oecti)es'
Feeling of alienation " outsiders'
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Management 10/e - Chapter 9 ;
Study Question ( !hat are the traditional types o#
organi"ation structures$
Functional structures 5eople !ith similar s$ills and
performing similar tas$s are grouped
together into formal !or$ units'Memers !or$ in their functional areas
of e<pertise',re not limited to usinesses'
Wor$ !ell for small organizationsproducing fe! products or ser)ices'
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Management 10/e - Chapter 9 9
%igure 9.( %unctional structures in a )usiness, )ranch )an*,
and community hospital.
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Management 10/e - Chapter 9 10
Study Question ( !hat are the traditional types o#
organi"ation structures$
5otential ad)antages of functionalstructures: =conomies of scale'
&as$ assignments consistent !ithe<pertise and training'
#igh->ualit" technical prolem sol)ing(
n-depth training and s$illde)elopment'
Clear career paths !ithin functions'
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Management 10/e - Chapter 9 11
Study Question ( !hat are the traditional types o#
organi"ation structures$
5otential disad)antages offunctional structures:ifficulties in pinpointing
responsiilities'
Functional chimne"s prolem'
.ense of cooperation and common
purpose rea$ do!n'?arro! )ie! of performance oecti)es'
=<cessi)e up!ard referral of decisions'
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Management 10/e - Chapter 9 12
Study Question ( !hat are the traditional types o#
organi"ation structures$
i)isional structures6roup together people !ho !or$ on the
same product or process( ser)e similarcustomers( and/or are located in thesame area or geographical region'
Common in comple< organizations'
,)oid prolems associated !ithfunctional structures'
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Management 10/e - Chapter 9 1%
%igure 9.+ i'isional structures )ased on product,
geography, customer, and process.
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Management 10/e - Chapter 9 1*
Study Question ( !hat are the traditional types o#
organi"ation structures$
5otential ad)antages of di)isionalstructures:More fle<iilit" in responding to
en)ironmental changes' mpro)ed coordination'Clear points of responsiilit"' =<pertise focused on specific
customers( products( and regions'6reater ease in restructuring'
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Management 10/e - Chapter 9 1+
Study Question ( !hat are the traditional types o#
organi"ation structures$
5otential disad)antages of di)isionalstructures:uplication of resources and efforts
across di)isions'
Competition and poor coordinationacross di)isions'
=mphasis on di)isional goals ate<pense of organizational goals'
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Management 10/e - Chapter 9 1
Study Question ( !hat are the traditional types o#
organi"ation structures$
&"pes of di)isional structures and
ho! the" group o and acti)ities:
5roduct structures focus on a single product orser)ice'
6eographical structures focus on the same
location or geographical region'
Customer structures focus on the samecustomers or clients'
5rocess structures focus on the same processes'
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Management 10/e - Chapter 9 17
Study Question ( !hat are the traditional types o#
organi"ation structures$
Matri< structure Comines functional and di)isional structures
to gain ad)antages and minimize
disad)antages of each' @sed in:
Manufacturing
.er)ice industries
5rofessional fields
?on-profit sector
Multi-national corporations
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Management 10/e - Chapter 9 1;
%igure 9.- atri/ structure in a small multi0proect
)usiness #irm.
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Management 10/e - Chapter 9 19
Study Question ( !hat are the traditional types o#
organi"ation structures$
5otential ad)antages of matri<
structures:
Aetter cooperation across functions' mpro)ed decision ma$ing'
ncreased fle<iilit" in restructuring'
Aetter customer ser)ice'
Aetter performance accountailit"'
mpro)ed strategic management'
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Management 10/e - Chapter 9 20
Study Question ( !hat are the traditional types o#
organi"ation structures$
5otential disad)antages of matri<
structures:
&!o-oss s"stem is susceptile to po!er struggles'
&!o-oss s"stem can create tas$ confusion and
conflict in !or$ priorities'
&eam meetings are time consuming'
&eam ma" de)elop 3groupitis'4
ncreased costs due to adding team leers to
structure'
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Management 10/e - Chapter 9 21
Study Question + !hat are the newer types o#
organi"ation structures$
&eam structures
=<tensi)el" use permanent and temporar" teams
to sol)e prolems( complete special proects( and
accomplish da"-to-da" tas$s' Often use cross-functional teams composed of
memers from different functional departments'
5roect teams are con)ened for a specific tas$ or
proect and disanded once completed'
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Management 10/e - Chapter 9 22
%igure 9.2 3ow a team structure uses cross0#unctional teams
#or impro'ed lateral relations.
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Management 10/e - Chapter 9 2%
Study Question + !hat are the newer types o#
organi"ation structures$
5otential ad)antages of teamstructures: =liminates difficulties !ith communication
and decision ma$ing' =liminates arriers et!een operating
departments' mpro)ed morale'6reater sense of in)ol)ement and
identification' ncreased enthusiasm for !or$' mpro)ed >ualit" and speed of decision
ma$ing'
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Management 10/e - Chapter 9 2*
Study Question + !hat are the newer types o#
organi"ation structures$
5otential disad)antages of team
structures:
Conflicting lo"alties among memers'
=<cessi)e time spent in meetings'
=ffecti)e use of time depends on
>ualit" of interpersonal relations( group
d"namics( and team management'
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Management 10/e - Chapter 9 2+
Study Question + !hat are the newer types o#
organi"ation structures$
?et!or$ structures
, central core that is lin$ed through
net!or$s of relationships !ith outsidecontractors and suppliers of essential
ser)ices'
O!n onl" core components and use
strategic alliances or outsourcing to
pro)ide other components'
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Management 10/e - Chapter 9 2
%igure 9.4 A networ* structure #or a !e)0)ased
retail )usiness.
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Management 10/e - Chapter 9 27
Study Question + !hat are the newer types o#
organi"ation structures$
5otential ad)antages of net!or$
structures:
Firms can operate !ith fe!er full-timeemplo"ees and less comple< internal
s"stems'
Beduced o)erhead costs and increased
operating efficienc"'
5ermits operations across great distances'
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Management 10/e - Chapter 9 2;
Study Question + !hat are the newer types o#
organi"ation structures$
5otential disad)antages of net!or$structures:Control and coordination prolems ma"
arise from net!or$ comple<it"' 5otential loss of control o)er outsourced
acti)ities'
5otential lac$ of lo"alt" among
infre>uentl" used contractors' =<cessi)el" aggressi)e outsourcing can e
dangerous'
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Management 10/e - Chapter 9 29
Study Question + !hat are the newer types o#
organi"ation structures$
Aoundar"less organizations =liminate internal oundaries among
sus"stems and e<ternal oundaries !ith the
e<ternal en)ironment' , comination of team and net!or$ structures(
!ith the addition of 3temporariness'4
e" re>uirements: ,sence of hierarch"'
=mpo!erment of team memers'
&echnolog" utilization'
,cceptance of impermanence'
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Management 10/e - Chapter 9 %0
Study Question + !hat are the newer types o#
organi"ation structures$
Aoundar"less organizations 8cont' =ncourage creati)it"( >ualit"( timeliness(
fle<iilit"( and efficienc"'
no!ledge sharing is oth a goal and essential
component'
Dirtual organization'
, special form of oundar"less organization'
Operates in a shifting net!or$ of e<ternal
alliances that are engaged as needed( using &
and the nternet'
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Management 10/e - Chapter 9 %1
%igure 9.5 6he )oundaryless organi"ation eliminates
internal and e/ternal )arriers.
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Management 10/e - Chapter 9 %2
Study Question - 3ow are organi"ational designs
changing the wor*place$
Organizational design
Choosing and implementing structures
that est arrange resources to ser)e theorganizationEs mission and oecti)es'
, prolem-sol)ing acti)it" that should e
approached from a contingenc"perspecti)e'
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Management 10/e - Chapter 9 %%
Study Question - 3ow are organi"ational designs
changing the wor*place$
Aureaucrac"
, form of organization ased on logic( order(
and the legitimate use of formal authorit"'
Aureaucratic designs feature
Clear-cut di)ision of laor'
.trict hierarch" of authorit"'
Formal rules and procedures'
5romotion ased on competenc"'
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Management 10/e - Chapter 9 %*
Study Question - 3ow are organi"ational designs
changing the wor*place$
Contingenc" perspecti)e onureaucrac" as$s the >uestions: When is a ureaucratic form a good choice for an
organization What alternati)es e<ist !hen it is not a good
choice
=n)ironment determines the ans!ersto these >uestions' , mechanistic design !or$s in a stale
en)ironment ,n organic design !or$s in a rapidl" changing and
uncertain en)ironment'
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Management 10/e - Chapter 9 %+
Study Question - 3ow are organi"ational designs
changing the wor*place$
Mechanisticesigns 5redictale goals Centralized authorit" Man" rules and
procedures ?arro! spans of
control .pecialized tas$s Fe! teams and tas$
forces Formal and
impersonal means ofcoordination
Organic esigns ,daptale goals ecentralized
authorit"
Fe! rules andprocedures
Wide spans of control .hared tas$s Man" teams and tas$
forces
nformal andpersonal means ofcoordination
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Management 10/e - Chapter 9 %
%igure 9.7 A continuum o# organi"ational designalternati'es #rom )ureaucratic to adapti'eorgani"ations.
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Management 10/e - Chapter 9 %7
Study Question - 3ow are organi"ational designs
changing the wor*place$
Aasics of sus"stem design
.us"stem
, department or !or$ unit headed " a
manager'
Operates as a smaller part of the larger
organization'
deall"( each sus"stem supports othersus"stems( !or$ing to!ard interests
of entire organization'
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Management 10/e - Chapter 9 %;
Study Question - 3ow are organi"ational designs
changing the wor*place$
a!rence and orschEs findings onsus"stems design &he total s"stem structures of
successful firms match the challengesof their en)ironments'
&he sus"stems structures ofsuccessful firms match the challenges
of their respecti)e suen)ironments'.us"stems in successful firms !or$ed
!ell !ith each other'
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Management 10/e - Chapter 9 %9
Study Question - 3ow are organi"ational designs
changing the wor*place$
Managing sus"stem differentiation:ifferentiation is the degree of
difference that e<ists among the
internal components of an organization'Common sources of sus"stems
differentiation: &ime orientation
Oecti)es nterpersonal orientation Formal structure
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Management 10/e - Chapter 9 *0
%igure 9.9 Su)systems di##erentiation among research and
de'elopment, manu#acturing, and sales
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Management 10/e - Chapter 9 *1
Study Question - 3ow are organi"ational designs
changing the wor*place$
Managing sus"stem integration:
ntegration is the le)el of coordination
achie)ed among an organizationEs
internal components'
Organization design parado< G
ncreased differentiation creates the need
for greater integration' ntegration is more difficult to achie)e as
differentiation increases'
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Management 10/e - Chapter 9 *2
Study Question - 3ow are organi"ational designs
changing the wor*place$
Mechanisms for achie)ingsus"stem integration: Bules and procedures
#ierarchical referral 5lanning irect contact iaison role &as$ forces &eams Matri< organizations
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Management 10/e - Chapter 9 *%
Study Question - 3ow are organi"ational designs
changing the wor*place$
Contemporar" organizing trends
include: Fe!er le)els of management
.horter chains of command'
ess unit" of command'
Wider spans of control'
More delegation and empo!erment'
ecentralization !ith centralization'
Beduced use of staff'
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Management 10/e - Chapter 9 **
Study Question - 3ow are organi"ational designs
changing the wor*place$
.horter chains of command &he line of authorit" that )erticall" lin$s
all persons !ith successi)el" higher
le)els of management'Organizing trend:
Organizations are eing 3streamlined4 "cutting unnecessar" le)els of
management' Flatter structures are )ie!ed as a
competiti)e ad)antage'
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Management 10/e - Chapter 9 *+
Study Question - 3ow are organi"ational designs
changing the wor*place$
ess unit" of command =ach person in an organization should
report to one and onl" one super)isor'
Organizing trend:Organizations are using more cross-
functional teams( tas$ forces( andhorizontal structures'
Organizations are ecoming morecustomer conscious'
=mplo"ees often find themsel)es !or$ingfor more than one oss'
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Management 10/e - Chapter 9 *
Study Question - 3ow are organi"ational designs
changing the wor*place$
Wider spans of control &he numer of persons directl"
reporting to a manager'
Organizing trend:Man" organizations are shifting to !ider
spans of control as le)els of managementare eliminated'
Managers ha)e responsiilit" for a largernumer of suordinates !ho operate !ithless direct super)ision'
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Management 10/e - Chapter 9 *7
Study Question - 3ow are organi"ational designs
changing the wor*place$
More delegation and empo!ermentelegation is the process of entrusting
!or$ to others " gi)ing them the right
to ma$e decisions and ta$e action' &he manager assigns responsiilit"(
grants authorit" to act( and createsaccountailit"'
,uthorit" should e commensurate !ithresponsiilit"'
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Management 10/e - Chapter 9 *;
Study Question - 3ow are organi"ational designs
changing the wor*place$
&hree .teps in elegation:
H ,ssign responsiilit" I e<plain tas$
and e<pectations
H 6rant authorit" I allo! others to
ma$e decisions and act
H Create accountailit" I re>uire
others to report ac$ on results
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Management 10/e - Chapter 9 *9
Study Question - 3ow are organi"ational designs
changing the wor*place$
More delegation and empo!erment
, common management failure is
un!illingness to delegate'
elegation leads to empo!erment'
Organizing trend:
Managers are delegating more and finding
more !a"s to empo!er people at allle)els'
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Management 10/e - Chapter 9 +0
Study Question - 3ow are organi"ational designs
changing the wor*place$
ecentralization !ith centralization
Centralization is the concentration of
authorit" for ma$ing most decisions atthe top le)els of the organization'
ecentralization is the dispersion of
authorit" to ma$e decisions throughout
all le)els of the organization'
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Management 10/e - Chapter 9 +1
Study Question - 3ow are organi"ational designs
changing the wor*place$
ecentralization !ith centralizationCentralization and decentralization not an 3either/or4 choice'
Organizing trend:elegation( empo!erment( andhorizontal structures contriute tomore decentralization in organizations'
,d)ances in information technolog"allo! for the retention of centralizedcontrol'
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Management 10/e - Chapter 9 +2
Study Question - 3ow are organi"ational designs
changing the wor*place$
Beduced use of staff
.pecialized staff
5eople !ho perform a technical ser)ice or
pro)ide special prolem-sol)ing e<pertise
to other parts of the organization'
5ersonal staff
5eople !or$ing in 3assistant-to4 positionsthat pro)ide special support to higher-
le)el managers'
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Management 10/e - Chapter 9 +%
Study Question - 3ow are organi"ational designs
changing the wor*place$
Beduced use of staff 8cont' ine and staff managers ma" disagree o)er
staff authorit"'
,d)isor" ,uthorit"'
Functional authorit"'
?o one est solution for di)iding line-staffresponsiilities'
Organizing trend:
Organizations are reducing staff size' Organizations are see$ing increased
operating efficienc" " emplo"ing fe!erstaff personnel and smaller staff units'
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