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Chap008

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Intro bus chapter 8 power point

Intro bus chapter 8 power point

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  • See Learning Goal 1: Outline the basic principles of organization management. Changing economic times require businesses to alter their approach via reorganization. Using organizational principles is an important aspect to this reorganization.
  • See Learning Goal 1: Outline the basic principles of organization management.
  • See Learning Goal 2: Compare the organizational theories of Fayol and Weber.
  • See Learning Goal 2: Compare the organizational theories of Fayol and Weber.
  • See Learning Goal 2: Compare the organizational theories of Fayol and Weber. This slide presents Fayol’s principles of organization. Fayol published General and Industrial Management in 1919. Unity of command and Hierarchy of authority suggest that each employee reports to one and only one boss. Management courses throughout the world teach these principles and organizations are designed accordingly. When these principles become rules, policies, and regulations, they create inflexibility which hampers organizations ability to respond quickly to situations. An example of this inflexibility or a slower response time can be seen in FEMA’s response to Hurricane Katrina.
  • See Learning Goal 2: Compare the organizational theories of Fayol and Weber.
  • See Learning Goal 2: Compare the organizational theories of Fayol and Weber. Weber, a German sociologist and economist, wrote The Theory of Social and Economic Organizations . Weber’s principles were similar to Fayol’s. He emphasized job descriptions, written rules, consistent policies, regulations, and procedures, and staffing and promotions based on qualifications. Weber was in favor of bureaucracy and believed that these principles were necessary for large organizations’ effective functioning. However, in today’s corporate world, these rules and bureaucracy do not necessarily work. Organizations need to respond to customers and other environmental factors quickly which calls for a creative, flexible, and a quick decision making process contrary to a bureaucratic process.
  • See Learning Goal 2: Compare the organizational theories of Fayol and Weber.
  • See Learning Goal 2: Compare the organizational theories of Fayol and Weber.
  • See Learning Goal 2: Compare the organizational theories of Fayol and Weber.
  • See Learning Goal 3: Evaluate the choices managers make in structuring organizations. Centralization can be defined as an organizational structure that focuses on retaining control of authority with higher level managers. One of the disadvantages of this type of management style is slower decisions because of layers of management. Ask the students: What specific problems you see with this type of management? ( Slower decision-making means the company is less responsive to both internal an external customers needs.) Share with the students a simple rule to follow when dealing with centralized authority: Decisions regarding overall company policy and establishment of goals and strategies should be made at the top. Decentralization is an organizational structure that focuses on delegating authority throughout the organization to middle and lower-level managers. The most significant advantage of this form of management style is the empowerment of the employees. Statistics indicate when delegation is practiced in a company, absenteeism, injuries, loyalty and production improve. Share with the students a simple rule to follow when dealing with decentralized authority: The closer an employee interacts with the customer, the more decentralized the decision-making should be. For example, a customer service manager must have the authority to make a decision that will satisfy a customer immediately, not wait until the home office makes a decision.
  • See Learning Goal 3: Evaluate the choices managers make in structuring organizations.
  • See Learning Goal 3: Evaluate the choices managers make in structuring organizations. Many organizations have moved from tall organizations to flat organizations in an effort to increase nimbleness in the marketplace.
  • See Learning Goal 3: Evaluate the choices managers make in structuring organizations.
  • See Learning Goal 3: Evaluate the choices managers make in structuring organizations.
  • See Learning Goal 3: Evaluate the choices managers make in structuring organizations.
  • See Learning Goal 3: Evaluate the choices managers make in structuring organizations.
  • See Learning Goal 4: Contrast the various organizational models. Traditional business models such as line organizations and line-and-staff organizations are giving way to new structures.
  • See Learning Goal 4: Contrast the various organizational models.
  • See Learning Goal 4: Contrast the various organizational models.
  • See Learning Goal 4: Contrast the various organizational models.
  • See Learning Goal 4: Contrast the various organizational models.
  • See Learning Goal 4: Contrast the various organizational models. The creation of matrix organizations was in response to the inflexibility of other more traditional organizational structures. This structure brings specialists from different parts of the organization to work together temporarily on specific projects.
  • See Learning Goal 4: Contrast the various organizational models.
  • See Learning Goal 4: Contrast the various organizational models.
  • See Learning Goal 4: Contrast the various organizational models.
  • See Learning Goal 4: Contrast the various organizational models.
  • See Learning Goal 4: Contrast the various organizational models.
  • See Learning Goal 5: Identify the benefits of inter-firm cooperation and coordination.
  • See Learning Goal 5: Identify the benefits of inter-firm cooperation and coordination.
  • See Learning Goal 5: Identify the benefits of inter-firm cooperation and coordination. A Virtual Corporation This slide illustrates the concept of a virtual corporation as an organizational model that could propel American businesses into the next century. The theory behind the virtual corporation can be understood by picturing a company stripped to its core competencies. All other business functions will be accomplished by: Forming joint ventures Forming temporary alliances with other virtual companies with different areas of expertise Hiring consulting services Outsourcing or subcontracting of services Share with the students some other interesting concepts of a virtual corporation: On-demand knowledge workers who operate independently Skill-selling professionals such as engineers, accountants, human resource experts who manage your projects from their homes through worldwide telecommunications Team-building will change as companies hire individuals with expertise in various areas to solve business problems. As a solution is identified, the team will cease to exist.
  • See Learning Goal 5: Identify the benefits of inter-firm cooperation and coordination.
  • See Learning Goal 5: Identify the benefits of inter-firm cooperation and coordination.
  • See Learning Goal 5: Identify the benefits of inter-firm cooperation and coordination.
  • See Learning Goal 5: Identify the benefits of inter-firm cooperation and coordination. The inverted organization structure is an alternate to the traditional management layers. The critical idea behind the inverted organization structure is that the managers’ job is to support and facilitate the job of the frontline people, not boss them around. Ask the students – What type of organization structure would they prefer to work under: traditional or inverted? Why?
  • See Learning Goal 6: Explain how organizational culture can help businesses adapt to change. When you search for a job, make sure the organizational culture is one you can thrive in.
  • See Learning Goal 6: Explain how organizational culture can help businesses adapt to change.
  • See Learning Goal 6: Explain how organizational culture can help businesses adapt to change.
  • See Learning Goal 6: Explain how organizational culture can help businesses adapt to change.
  • Transcript

    • 1. * * Chapter Eight Adapting Organizations to Today’s Markets Copyright © 2010 by the McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin
    • 2. REORGANIZATION is for EVERYONE * * Everyone’s Organizing <ul><li>Many companies are reorganizing, especially those in decline. Including: </li></ul><ul><ul><li>Auto makers </li></ul></ul><ul><ul><li>Homebuilders </li></ul></ul><ul><ul><li>Banks </li></ul></ul><ul><ul><li>Adjusting to changing markets is normal in capitalist economies. </li></ul></ul><ul><ul><li>Companies must go back to basic organizational principles and firm up the foundation. </li></ul></ul>LG1 8-
    • 3. STRUCTURING an ORGANIZATION * * Building an Organization from the Bottom Up <ul><ul><li>Create a division of labor </li></ul></ul><ul><ul><li>Set up teams or departments </li></ul></ul><ul><ul><li>Allocate resources </li></ul></ul><ul><ul><li>Assign tasks </li></ul></ul><ul><ul><li>Establish procedures </li></ul></ul><ul><ul><li>Adjust to new realities </li></ul></ul>LG1 8-
    • 4. THE CHANGING ORGANIZATION * * The Changing Organization <ul><li>Often change in organizations is due to evolving business environments: </li></ul><ul><ul><li>More global competition </li></ul></ul><ul><ul><li>Declining economy </li></ul></ul><ul><ul><li>Faster technological change </li></ul></ul><ul><ul><li>Pressure to protect the environment </li></ul></ul><ul><ul><li>Customer expectations have also changed --Consumers today want high-quality products with fast, friendly service and all at low cost. </li></ul></ul>LG2 8-
    • 5. PRODUCTION CHANGED ORGANZIATION DESIGN * * The Development of Organization Design <ul><li>Mass production of goods led to complexities in organizing businesses. </li></ul>LG2 <ul><li>Economies of Scale -- Companies can reduce their production costs by purchasing raw materials in bulk. </li></ul><ul><ul><li>The average cost of goods decrease as production levels rise. </li></ul></ul>8-
    • 6. FAYOL’S PRINCIPLES * * Fayol’s Principles of Organization <ul><ul><li>Unity of command </li></ul></ul><ul><ul><li>Hierarchy of authority </li></ul></ul><ul><ul><li>Division of labor </li></ul></ul><ul><ul><li>Subordination of individual interests to the general interest </li></ul></ul><ul><ul><li>Authority </li></ul></ul>LG2 <ul><ul><li>Degree of centralization </li></ul></ul><ul><ul><li>Clear communication channels </li></ul></ul><ul><ul><li>Order </li></ul></ul><ul><ul><li>Equity </li></ul></ul><ul><ul><li>Esprit de corps </li></ul></ul>8-
    • 7. ORGANIZATIONS BASED on FAYOL’S PRINCIPLES * * Fayol’s Principles of Organization <ul><li>Organizations in which employees have no more than one boss; lines of authority are clear. </li></ul>LG2 <ul><li>Rigid organizations that often don’t respond to customers quickly. </li></ul>8-
    • 8. WEBER’S PRINCIPLES * * Max Weber and Organizational Theory <ul><li>Employees just need to do what they’re told. </li></ul><ul><li>In addition to Fayol’s principles, Weber emphasized: </li></ul><ul><ul><li>Job descriptions. </li></ul></ul><ul><ul><li>Written rules, decision guidelines and detailed records. </li></ul></ul><ul><ul><li>Consistent procedures, regulations and policies. </li></ul></ul><ul><ul><li>Staffing and promotion based on qualifications. </li></ul></ul>LG2 8-
    • 9. HIERARCHIES and COMMAND * * Turning Principles into Organization Design <ul><li>When following Fayol and Weber, managers control workers. </li></ul><ul><li>Hierarchy -- A system in which one person is at the top of an organization and there is a ranked or sequential ordering from the top down. </li></ul><ul><li>Chain of Command -- The line of authority that moves from the top of the hierarchy to the lowest level. </li></ul>LG2 8-
    • 10. TYPICAL ORGANIZATION CHART * * Turning Principles into Organization Design LG2 8-
    • 11. BUREAUCRATIC ORGANIZATIONS * * Turning Principles into Organization Design <ul><li>Bureaucracy -- An organization with many layers of managers who set rules and regulations and oversee all decisions. </li></ul><ul><li>It can take weeks or months to have information passed down to lower-level employees. </li></ul><ul><li>Bureaucracies can annoy customers. </li></ul>LG2 8-
    • 12. Decisions required in structuring an organization <ul><li>I. Centralization verses decentralization </li></ul><ul><li>II. Span of control </li></ul><ul><li>III. Tall verses flat </li></ul><ul><li>IV. departmentalization </li></ul>
    • 13. CENTRALIZATION or DECENTRALIZATION? * * Choosing Centralized or Decentralized Authority <ul><li>Centralized Authority -- When decision-making is concentrated at the top level of management. </li></ul>LG3 <ul><li>Decentralized Authority -- When decision-making is delegated to lower-level managers and employees more familiar with local conditions than headquarters. </li></ul>8-
    • 14. SPAN of CONTROL * * Choosing the Appropriate Span of Control <ul><li>Span of Control -- The optimal number of subordinates a manager supervises or should supervise. </li></ul><ul><ul><li>When work is standardized, broad spans of control are possible. </li></ul></ul><ul><ul><li>Appropriate span narrows at higher levels of the organization. </li></ul></ul><ul><ul><li>The trend today is to reduce middle managers and hire better low-level employees. </li></ul></ul>LG3 8-
    • 15. ORGANIZATIONAL STRUCTURES * * Choosing Tall versus Flat Organization Structures <ul><li>Structures determine the way the company responds to employee and customer needs. </li></ul><ul><li>Tall Organization Structures -- An organizational structure in which the organization chart would be tall because of the various levels of management. </li></ul><ul><li>Flat Organization Structures -- An organizational structure that has few layers of management and a broad span of control. </li></ul>LG3 8-
    • 16. FLAT ORGANIZATIONAL STRUCTURE * * Choosing Tall versus Flat Organization Structures LG3 8-
    • 17. DEPARTMENTALIZATION * * Weighing the Advantages and Disadvantages of Departmentalization <ul><ul><li>Departmentalization -- Divides organizations into separate units. </li></ul></ul><ul><ul><ul><li>Workers are grouped by skills and expertise to specialize their skills. </li></ul></ul></ul>LG3 8-
    • 18. ADVANTAGES of DEPARTMENTALIZATION * * Weighing the Advantages and Disadvantages of Departmentalization <ul><ul><ul><li>Employees develop skills and progress within a department as they master skills. </li></ul></ul></ul><ul><ul><ul><li>The company can achieve economies of scale. </li></ul></ul></ul><ul><ul><ul><li>Employees can coordinate work within the function and top management can easily direct activities. </li></ul></ul></ul>LG3 8-
    • 19. DISADVANTAGES of DEPARTMENTALIZATION * * Weighing the Advantages and Disadvantages of Departmentalization <ul><ul><ul><li>Departments may not communicate well. </li></ul></ul></ul><ul><ul><ul><li>Employees may identify with their department’s goals rather than the organization’s. </li></ul></ul></ul><ul><ul><ul><li>The company’s response to external changes may be slow. </li></ul></ul></ul><ul><ul><ul><li>People may not be trained to take different managerial responsibilities, instead they become specialists. </li></ul></ul></ul><ul><ul><ul><li>Department members may engage in groupthink and may need outside input. </li></ul></ul></ul>LG3 8-
    • 20. FOUR WAYS to STRUCTURE an ORGANIZATION * * Organization Models <ul><ul><li>Line Organizations </li></ul></ul><ul><ul><li>Line-and-Staff Organizations </li></ul></ul><ul><ul><li>Matrix-Style Organizations </li></ul></ul><ul><ul><li>Cross-Functional Self-Managed Teams </li></ul></ul>LG4 8-
    • 21. LINE ORGANIZATIONS * * Line Organizations <ul><ul><ul><li>Line Organization -- Has direct two-way lines of responsibility, authority and communication running from the top to the bottom. Everyone reports to one supervisor. </li></ul></ul></ul><ul><ul><ul><li>There are no specialists, legal, accounting, human resources or information technology departments. </li></ul></ul></ul><ul><ul><ul><li>Line managers issue orders, enforce discipline and adjust the organization to changes. </li></ul></ul></ul>LG4 8-
    • 22. LINE PERSONNEL * * Line-and-Staff Organizations <ul><ul><ul><li>Line Personnel -- Workers responsible for directly achieving organizational goals, and include production, distribution and marketing employees. </li></ul></ul></ul><ul><ul><ul><li>Line personnel have authority to make policy decisions. </li></ul></ul></ul>LG4 8-
    • 23. Line and staff organizations <ul><li>Goal is to minimize disadv of simple line organizations </li></ul><ul><li>They have both line and staff personnel </li></ul><ul><li>**the line personnel in this model respon for achieving organ goals (incl production labor, distribution people, and marketing people) </li></ul>
    • 24. STAFF PERSONNEL * * Line-and-Staff Organizations <ul><ul><ul><li>Staff Personnel -- Employees who advise and assist line personnel in meeting their goals, and include marketing research, legal advising, IT and human resource employees. </li></ul></ul></ul>LG4 8-
    • 25. SAMPLE LINE-and-STAFF ORGANIZATION * * Line-and-Staff Organizations LG4 8-
    • 26. MATRIX ORGANIZATIONS * * Matrix-Style Organizations <ul><ul><ul><li>Matrix Organization -- Specialists from different parts of the organization work together temporarily on specific projects, but still remain part of a line-and-staff structure. </li></ul></ul></ul>LG4 <ul><ul><ul><li>Emphasis is on product development, creativity, special projects, communication and teamwork. </li></ul></ul></ul>8-
    • 27. SAMPLE MATRIX ORGANIZATION * * Matrix-Style Organizations LG4 8-
    • 28. ADVANTAGES of the MATRIX STYLE * * Matrix-Style Organizations <ul><ul><ul><li>Managers have flexibility in assigning people to projects. </li></ul></ul></ul><ul><ul><ul><li>Interorganizational cooperation and teamwork is encouraged. </li></ul></ul></ul><ul><ul><ul><li>Creative solutions to product development problems are produced. </li></ul></ul></ul><ul><ul><ul><li>Efficient use of organizational resources. </li></ul></ul></ul>LG4 8-
    • 29. DISADVANTAGES of the MATRIX STYLE * * Matrix-Style Organizations <ul><ul><ul><li>It’s costly and complex. </li></ul></ul></ul><ul><ul><ul><li>Employees may be confused about where their loyalty belongs. </li></ul></ul></ul><ul><ul><ul><li>Good interpersonal skills and cooperative employees are a must. </li></ul></ul></ul><ul><ul><ul><li>It’s a temporary solution to a possible long-term problem. </li></ul></ul></ul><ul><ul><ul><li>Teams are not permanent. </li></ul></ul></ul>LG4 8-
    • 30. CROSS-FUNCTIONAL SELF-MANAGED TEAMS * * Cross-Functional Self-Managed Teams <ul><li>A way to fix the problem of matrix-style teams is to establish long-term teams. </li></ul><ul><li>Empower teams to work closely with suppliers, customers and others to figure out how to create better products. </li></ul><ul><li>Cross-Functional Self-Managed Teams -- Groups of employees from different departments who work together on a long-term basis. </li></ul>LG4 8-
    • 31. GOING BEYOND ORGANIZATIONAL BOUNDARIES * * Going Beyond Organizational Boundaries <ul><li>Cross-functional teams work best when the voice of the customer is heard. </li></ul><ul><li>Teams that include customers, suppliers and distributors goes beyond organizational boundaries. </li></ul><ul><li>Government coordinators may assist in sharing market information beyond national boundaries. </li></ul>LG4 8-
    • 32. REAL TIME BUSINESS * * Transparency and Virtual Organizations <ul><li>Most companies are no longer self-sufficient; they’re part of a global business network. </li></ul><ul><li>Real Time -- The present moment or actual time in which something takes place. </li></ul>LG5 8-
    • 33. TRANSPARENCY and VIRTUAL CORPORATIONS * * Transparency and Virtual Organizations <ul><li>Transparency -- When a company is so open to other companies that electronic information is shared as if the companies were one. </li></ul><ul><li>Virtual Corporation -- A temporary networked organization made up of replaceable firms that join and leave as needed. </li></ul>LG5 8-
    • 34. A VIRTUAL CORPORATION * * Transparency and Virtual Organizations LG5 8-
    • 35. BENCHMARKING and CORE COMPETENCIES * * Benchmarking and Core Competencies <ul><li>Benchmarking -- Compares an organization’s practices, processes and products against the world’s best. </li></ul><ul><li>Core Competencies -- The functions an organization can do as well as or better than any other organization in the world. </li></ul><ul><li>If a company can’t match a competitor, they may try to outsource . </li></ul>LG5 8-
    • 36. Prime ex of core competency <ul><li>Nike – designs and markets some of best athletic shoes….but they do not make them in house. They outsource to someone who can do it faster and cheaper </li></ul>
    • 37. ADAPTING to MARKET CHANGES * * Adapting to Change <ul><li>Change isn’t easy. Employees like to do things the way they always have. </li></ul><ul><li>Get rid of old, inefficient facilities and equipment. </li></ul><ul><li>Use the Internet to get to know your customers and sell directly to them. </li></ul>LG5 8-
    • 38. RESTRUCTURING * * Restructuring for Empowerment <ul><li>Restructuring -- Redesigning an organization so it can more effectively and efficiently serve its customers. </li></ul><ul><li>Inverted Organization -- An organization that has contact people at the top and the CEO at the bottom of the organizational chart. </li></ul>LG5 <ul><li>The manager’s job is to assist and support frontline workers, not boss them. </li></ul>8-
    • 39. TRADITIONAL and INVERTED ORGANIZATIONS * * Restructuring for Empowerment LG5 8-
    • 40. ORGANIZATIONAL CULTURE * * Creating a Change-Oriented Organizational Culture <ul><li>Organizational or Corporate Culture -- The widely shared values within an organization that foster unity and cooperation to achieve common goals </li></ul><ul><li>Some of the best organizational cultures emphasize service. </li></ul><ul><li>Culture is shown in stories, traditions and myths. </li></ul>LG6 8-
    • 41. FORMAL ORGANIZATION * * Managing the Informal Organization <ul><li>Formal Organization -- Details lines of responsibility, authority and position. </li></ul><ul><li>The formal system is often slow and bureaucratic but it helps guide the lines of authority. </li></ul><ul><li>No organization can be effective without formal and informal organization. </li></ul>LG6 8-
    • 42. INFORMAL ORGANIZATION * * Managing the Informal Organization <ul><li>Informal Organization -- The system of relationships that develop spontaneously as employees meet and form relationships. </li></ul>LG6 <ul><li>Informal organization helps foster camaraderie and teamwork among employees. </li></ul>8-
    • 43. LIMITATIONS of INFORMAL ORGANIZATIONS * * Managing the Informal Organization <ul><li>The informal system is too unstructured and emotional on its own. </li></ul><ul><li>Informal organization may also be powerful in resisting management directives. </li></ul>LG6 8-

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