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PRINCIPLE OF Management

Lecturer: Sherman Chui For: 2016-2017-2

POM Syllabus

Week 1 Course Introduction

Week 2 Planning Mission, Vision, Principles

Week 3 Introduction of Management

Week 4 Managing in Global Environment

Week 5 Managing Diversity & Sexual Harassment

Week 6 Managing Change and Innovation

Week 7 No Class (清明)

Week 8 Strategic Management

Tue. 18:30-19:50 / 20:00-21:20 G109

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POM Syllabus

Week 9 Company & Organization

Week 10 Interview Skills

Week 11 Success in Company

Week 12 Organization Structure & Design

Week 13 Quality Management

Week 14 No Class (端午节)

Week 15 Branding

Week 16 Social Media + Course Review

Tue. 18:30-19:50 / 20:00-21:20 G109

Organizational Structure & Design

• How to design organizational structure?• Work Specialization • Departmentalization• Chain of Command• Span of Control etc …

• What are the factors affecting Structural Choice?• Strategy and Structure• Size and Structure• Technology and Structure• Environment Uncertainty and Structure

• Traditional vs. Contemporary Organizational Design• Flexible Work Arrangements

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What is Organizational Structure?

• Organizing

-arranging and structuring work to accomplish an organization’s goals.

• Organizational Structure

-the formal arrangement of jobs within an organization.

6 Elements of Organizational Design

• Organizational Design - a process involving decisions about six key elements:

• Work specialization

• Departmentalization

• Chain of command

• Span of control

• Centralization & decentralization

• Formalization

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Organizational Structure

• Work Specialization

– The degree to which tasks in the organization are divided into separate jobs with each step completed by a different person.

– Overspecialization can result in human diseconomies such as boredom, fatigue, stress, poor quality, increased absenteeism, and higher turnover.

Organizational Structure

• Functional

– Grouping jobs by functions performed

• Product

– Grouping jobs by product line

• Geographical

– Grouping jobs on the basis of territory or geography

• Process

– Grouping jobs on the basis of product or customer flow

• Customer

– Grouping jobs by type of customer and needs

• Departmentalization by Type

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Organizational Structure

• Chain of Command

- the continuous line of authority that extends from upper levels of an organization to the lowest levels of the organization—clarifies who reports to whom.

Chain of Command

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Line vs. Staff Authority

• Line hierarchy • Formal authority to direct control immediate subordinates.• Line managers (CEO, COO)

• Staff hierarchy• Granted to staff specialists in their areas of expertise• Staff managers(HR Manager, Sales Manager etc)

Line & Staff Functions

Line Managers• Achieving the organization's main objectives• Have direct control over staff employees

Staff Managers• Responsible for activities that support line managers

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General ManagerFrank Chen

HR ManagerJohn Li

Sales ManagerVivien Lam

Financial ManagerJacky Hu

SupervisorWendy Guo

SupervisorSam Yang

SupervisorDoris Fu

HR Clerk Amy Chen

HR ClerkLisa Wang

COOChristine Wang

HR VP

HK PRC

CEODavid Chen

Staff

Line

Line & Staff Career Development

General ManagerFrank Chen

HR ManagerJohn Li

Sales ManagerVivien Lam

Financial ManagerJacky Hu

SupervisorWendy Guo

SupervisorSam Yang

SupervisorDoris Fu

HR Clerk Amy Chen

HR ClerkLisa Wang

COOChristine Wang

HR VP

HK PRC

CEODavid Chen

Staff

Line

Span of Control

• Span of Control - the number of employees who can be effectively and efficiently supervised by a manager.

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Width of span is affected by:

• Skills and abilities of the manager

• Employee characteristics

• Characteristics of the work being done

• Similarity of tasks

• Complexity of tasks

• Physical proximity of subordinates

• Standardization of tasks

• Sophistication of the organization’s information system

• Strength of the organization’s culture

• Preferred style of the manager

Centralization & Decentralization

• Centralization - the degree to which decision making is concentrated at upper levels in the organization.

• Decentralization - when an organization relegates decision making to managers who are closest to the action.

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Formalization

• The degree to which jobs within the organization are standardized and the extent to which employee behavior is guided by rules and procedures.

– Highly formalized jobs offer little discretion over what is to be done.

– Low formalization means fewer constraints on how employees do their work.

Factors Affecting Structure Choice

• Structural decisions are influenced by:

– Overall strategy of the organization

– Size of the organization

– Technology use employed by the organization

– Degree of environmental uncertainty

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Traditional Structure Designs

• Simple structure• Low departmentalization, wide spans of control, centralized authority,

little formalization

• Functional structure• Departmentalization by function

• Operations, finance, marketing, human resources, and product research and development

• Divisional structure• Composed of separate business units or divisions with limited

autonomy under the coordination and control of the parent corporation

Contemporary Organizational Designs

• Team Structure - an organizational structure in which the entire organization is made up of work teams

• Matrix Structure - an organizational structure that assigns specialists from different functional departments to work on one or more projects

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Example of a Matrix Organization

Contemporary Organizational Designs

• Project Structure - an organizational structure in which employees continuously work on projects

• Boundaryless Organization - an organization whose design is not defined by, or limited to, the horizontal, vertical, or external boundaries imposed by a predefined structure

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Contemporary Organizational Designs

• Virtual Organization - an organization that consists of a small core of full-time employees and outside specialists temporarily hired as needed to work on projects.

• Network Organization - an organization that uses its own employees to do some work activities and networks of outside suppliers to provide other needed product components or work processes.

Flexible Work Arrangements

• Telecommuting - a work arrangement in which employees work at home and are linked to the workplace by computer.

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Flexible Work Arrangements

• Compressed workweek

- a workweek where employees work longer hours per day but fewer days per week

Contingent Workforce

• Contingent workers -temporary, freelance, or contract workers whose employment is contingent upon demand for their services.

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Conclusion

• How to design organizational structure?

• Work Specialization

• Departmentalization

• Chain of Command

• Span of Control etc …

• What are the factors affecting Structural Choice?

• Traditional vs. Contemporary Organizational Design

• Flexible Work Arrangements