fundamental of management chap 9

8/18/2019 Fundamental of Management Chap 9

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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



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



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'



Management 10/e - Chapter 9 *

%igure 9.1 &rgani"ing 'iewed in relationship with the

other management #unctions.



Management 10/e - Chapter 9 +



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'



Management 10/e - Chapter 9



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'






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'



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'




%igure 9.( %unctional structures in a )usiness, )ranch )an*,

and community hospital.






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'






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'






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'



Management 10/e - Chapter 9 1%

%igure 9.+ i'isional structures )ased on product,

geography, customer, and process.



Management 10/e - Chapter 9 1*



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'



Management 10/e - Chapter 9 1+



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'






&"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'






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



Management 10/e - Chapter 9 1;

%igure 9.- atri/ structure in a small multi0proect

)usiness #irm.






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'






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'




Study Question + !hat are the newer types o#


&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'




%igure 9.2 3ow a team structure uses cross0#unctional teams

#or impro'ed lateral relations.



Management 10/e - Chapter 9 2%



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'



Management 10/e - Chapter 9 2*



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'



Management 10/e - Chapter 9 2+



?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'




%igure 9.4 A networ* structure #or a !e)0)ased

retail )usiness.






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'



Management 10/e - Chapter 9 2;



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'






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'



Management 10/e - Chapter 9 %0



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'




%igure 9.5 6he )oundaryless organi"ation eliminates

internal and e/ternal )arriers.




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'



Management 10/e - Chapter 9 %%



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"'



Management 10/e - Chapter 9 %*



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'



Management 10/e - Chapter 9 %+



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



Management 10/e - Chapter 9 %

%igure 9.7 A continuum o# organi"ational designalternati'es #rom )ureaucratic to adapti'eorgani"ations.






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'



Management 10/e - Chapter 9 %;



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'






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



Management 10/e - Chapter 9 *0

%igure 9.9 Su)systems di##erentiation among research and

de'elopment, manu#acturing, and sales






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'






Mechanisms for achie)ingsus"stem integration: Bules and procedures

#ierarchical referral 5lanning irect contact iaison role &as$ forces &eams Matri< organizations



Management 10/e - Chapter 9 *%



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'



Management 10/e - Chapter 9 **



.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'



Management 10/e - Chapter 9 *+



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'



Management 10/e - Chapter 9 *



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'






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"'



Management 10/e - Chapter 9 *;



&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






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'



Management 10/e - Chapter 9 +0



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'






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'






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'



Management 10/e - Chapter 9 +%



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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fundamental of management chap 9

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