Organizational Management

Chapter 4

I. What is an Organization?

Is a group of two or more people working together in a predetermined fashion to achieve a common goal(s).

Lets define some terms:

Organizing The process of grouping resources and

activities to accomplish some end result in an efficient and effective manner.

Organizational Structure A fixed pattern of

Positions within the organization Relationship among those positions

More terms

Organizational Chart A diagram that represents the positions and

relationships within an organization. Chain of command

Is the line of authority that extends from the highest to the lowest levels of the organization

Organizational Chart

II. Dimensions of organizational Structure

5 steps to the organizational process1. Job design

Divide the work into separate parts and assign those parts to positions within the organization. This determines the degree of specialization

within the organization

2. Group the various positions in to manageable units.

This creates the nature and Degree of departmentalization

3. Distribute responsibility and authority This creates the nature and degree of

centralization

Dimensions of organizational structure

4. Determine the number of subordinates who will report to each manager.

This is called the span of management.

5. Distinguish between positions that have direct authority and positions that re used for support.

Establishes the chain of command

I. Job Design

Job Specialization Is the separation of all organizational activities

into distinct tasks and the assignment of different tasks to different people.

Possible Solutions of Job Specialization.

Three Solutions Job Rotation

Is the systematic shifting of employees from one job to another.

Example: Many car companies do this now…. Job Enlargement

The worker is given more things to do within the same job.

Possible Solutions of Job Specialization

3. Job Enrichment is perhaps the most advanced alternative to job specialization.

1. Provides workers with both more tasks to do and more control over how they do their work.1. Work is assigned in complete units

2. Builds more depth and complexity to jobs

3. Works best when employees seek more challenging work.

Downside of Specialization

People get bored with the Job.

Why use specialization?

Usually the job is to large for one person to handle by themselves. So we give responsibility to others to help the process.

If the person learns one task that person should become very productive with that task.

Time is not lost moving from one job to another. Easier to design specialized equipment for those who

do the job. Easier to train new employees for a very specialized

job.

II. DEPARTMENTALIZATION

Is the process of grouping jobs into manageable units according o some reasonable scheme.

Departmental Basis – is how the jobs are grouped.

1. By function Groups all jobs together that relate to the same

organizational activity

IV DEPARTMENTALIZATION

2. By Product

1. Is the groping together of all activities related to a particular product or product group.

3. By Location

1. Grouped together because of geographic location

4. By Customer

1. Grouped together by needs of various customer groups

5. By Process

1. Grouped by what the organization and the workers do for the product

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III. Delegation, Decentralization, Centralization Step three in the organizing process to

distribute power in the organization Delegation of Authority

Is the assigning of part of a managers work and power to a subordinate.

Steps to delegating authority Manger must assign responsibility. Manager must grant authority. manager must create accountability

Barriers to Delegation of AuthorityWhy would I not want to delegate authority to someone?1. One reason is that the persons who

delegates remains accountable for work.

2. A manager may fear that a subordinate will do to good of a job and top management will notice.

3. Some managers are so disorganized that they can not simply plan and assign work in an effective way.

Decentralization of Authority

The general pattern of delegation throughout an organization determines the extent to which that organization is decentralized or centralized.

Decentralized or Centralized Organization Decentralized -

An organization in which management consciously attempts to spread authority to the lower management levels.

Centralized An organization that systematically works to

concentrate authority at the upper levels of management

A few things about a decentralized organization. The external environment of where the

organization operates1. The more complex and unpredictable the

environment, the more likely it is that top management will make most of the decisions.

2. The riskier the decision the more chance the organization will be centralized

3. How capable is the lower management at making decisions.

IV. Span of Management

Span of management or span of control. It is the number of subordinates that directly

report to one manager. Wide and Narrow spans of control.

Wide Span of Control (flat span of control)

President

North Region South Region East Region West Region European Region Asian Region

When a manager has a large number of subordinates

Narrow Span of management. (Tall span of management control)

President

North Region South Region

Organizational Height

Is the number of layers, or levels of management in a firm. The span of management plays a direct role in

determining the height of the organization Is spans are narrow- more levels are needed.

Resulting in a tall organization If spans are wider – fewer levels are needed

IN a tall organization Administrative costs are higher, more mangers

needed. Communication is distorted

Flat organization Costs are less, administrative duties are more,

more pressure on the managers to perform.

V. Line and Staff management

Last major organizational dimension is the chain of command (lines of authority) Line management positions

Is part of the chain of command, and a person in this type of position makes decisions and gives orders to subordinates to achieve the goals of the organization.

They can make decisions and issue directives that relate to the organizations goals

Example: Department Heads

Staff management positions Is a position created to provide support, advice and expertise to

someone in the chain of command. Usually have either advisory authority or functional authority. Example: Principals or Assistant Principals.

Advisory authority Simply the expectation that line mangers will consult the

appropriate staff manager when making decisions. Functional authority

Stronger authority. Is the authority of staff mangers to make decisions and issue

directives, but only about their own area of expertise Ex. A legal advisor can decide whether to retain a particular

clause in a contract, but not what price to charge for a new product.

Conflict for line-staff mangers

1. Staff mangers often have more formal education and are sometimes younger (perhaps more ambitious) than line mangers

2. Line mangers -May perceive staff mangers as a threat to their own authority

3. Line managers- may resent depending on the expertise of the staff mangers

4. Staff managers may become resentful if their expert recommendations are not adopted by line management

Elements of Organizational Structure

We discussed the 5 dimensions of organizational structure. Job Design Departmentalization Delegation Span of management Line and staff management

SWOT ANALYSIS……..

Please look at the handout that I gave you….

SWOT ANALYSIS explanation.htm

This is in your shared drive.Today along with finishing the market analysis you should read the article on SWOT analysis and do both a personal analysis and a business analysis.

3 newer elements that effect your companies organizational structure Work Schedules

Different types of work schedules1. Compressed work schedule

An arrangement whereby a employee works a full forty hours per week, but in fewer than standard 5 days. Usually work 4 – 10 hour days, and have a three day

weekend.2. Flexible work week

Employee chooses the hours during which he or she will work, subject to certain limitations Core time – when all employees must be at work Flexible time – when employees may choose

whether to be at work. All employees must work 8 hours per day… Ex. Real estate agent

Work week scheduling

Job Sharing Is an arrangement where two people share

one full-time job Secretaries do this a lot

Scheduling Sim…..

Please begin to work on Work Schedule Will need two of them. One for your business One for the simulation

committees

Types of committees used within an organization Ad hoc committee

Committee created for a specific short-term purpose.

Ex. Used to reviewing the firm’s employee benefits plan.

Standing committee Is a relatively permanent committee charged with

performing some recurring task. Budget review committee

Task Force Is a committee established to investigate a

major problem or pending decision

Advantages/disadvantages of committees Advantages

Members bring more information, and knowledge to task at hand

Tend to make more accurate decisions and to transmit their results through the organization mare effectively.

Disadvantages Deliberation may take to long Unnecessary compromise may take place

Some people of the committee may feel obligated to listen to one person or another. I'll scratch your back you scratch mine?

Coordination Techniques of committees

The coordination of organizational resources so that there is minimize in duplication and maximize effectiveness. There has to be a managerial hierarchy

Who is in charge? Resources have to be coordinated Complex situations

Create a liaison – person who is the “go between” two departments.

A task force or committee may be established.

Forms of Organizational Structure

We have been spending the last couple of classes discussing the parts of the puzzle and now we will put them all together to create a actual structure.

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1. Bureaucratic Structure

Is a management system based on a formal framework of authority that is carefully outline and precisely followed.

Major Characteristics High level of job specialization Departmentalized by function Precise and formal patterns of delegation High degree of centralization’ Narrow spans of management (tall organization) Clearly defined line and staff positions, with formal

relationships between the two.

II. Organic Structure

Is a management system founded on cooperation's and knowledge-based authority. An organic structure is likely to have the following dimensions: Low level of job specialization Departmentalization by product, location, or customer General and informal patterns of delegation A high degree of decentralization Wide spans of management Less clearly defined line and staff positions, with less

formal relationships between the two

Matrix Structure

Is an organizational structure that combines vertical and horizontal lines of authority.

Matrix structure occurs when product departmentalization is superimposed on a functionally departmentalized organization

Authority flows both down and across

week10-11-organizational_structure.ppt

4 stages of the matrix structure

1. The firms is organized as a functional structure

2. A smaller number of interdepartmental groups are created to work on important projects

3. More groups are created, and they become an integral and important part of the organization

4. The firm becomes what is called a natural matrix.

Advantages of matrix’s

Very flexible People become deeply committed to their

special projects – improves motivation Staff development from doing a number of

jobs People communicate more as they become

liaisons between their project groups and their functional departments

Disadvantages of matrix’s

Can cause confusions about who ahs authority in various situations

These groups may take longer to resolving issues than working alone.

May be more expensive because more mangers and support staff are needed.

Informal Organizations

Describes the pattern of behavior and interaction that stems from personal rather than official relationships.

Informal groups Is one that is created by the member of the

group themselves to accomplish goals that may or may not be relevant to the organization.

Company softball team Union

How do informal organizations communicate. Through the grapevine…….. Informal form of communication.