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  1. 1. Managing Engineering and Technology Third Edition Babcock and Morse <ul><li>Organizing </li></ul><ul><li>Chapter 5 </li></ul>
  2. 2. Chapter Objectives <ul><li>Analyze the different forms of an organization </li></ul><ul><li>Determine different organizational structures </li></ul>
  3. 3. Advanced Organizer
  4. 4. Legal Forms of Organization <ul><li>Sole Proprietorship </li></ul><ul><ul><li>Easy to organize and shutdown </li></ul></ul><ul><ul><li>Few legal restrictions </li></ul></ul><ul><ul><li>Owner forced/free to make all decisions </li></ul></ul><ul><ul><li>Profits taxed once </li></ul></ul><ul><ul><li>Owner faces unlimited liability </li></ul></ul><ul><ul><li>Duration of business is limited by life of proprietor </li></ul></ul>
  5. 5. Legal Forms of Organization <ul><li>Partnership </li></ul><ul><ul><li>Two or more partners </li></ul></ul><ul><ul><li>Easy to organize & relatively few legal restrictions </li></ul></ul><ul><ul><li>Pooling of skills </li></ul></ul><ul><ul><li>Partners do individual taxes </li></ul></ul><ul><ul><li>Unlimited liability for partners, but in limited partnership, at least one unlimited partner and others limited. </li></ul></ul>
  6. 6. Legal Forms of Organization <ul><li>Corporations </li></ul><ul><ul><li>Owned by shareholders </li></ul></ul><ul><ul><li>No liability beyond stocks </li></ul></ul><ul><ul><li>Taxed twice (corp. tax and personal income tax) </li></ul></ul><ul><ul><li>Subject to many state and federal controls </li></ul></ul>
  7. 7. Legal Forms of Organization <ul><li>Cooperatives </li></ul><ul><ul><li>Owned by users and customers </li></ul></ul><ul><ul><li>Usually tax free </li></ul></ul><ul><ul><li>Ex: Mountain Equipment Coop </li></ul></ul>
  8. 8. Organizing defined <ul><li>For organizational role to make sense: </li></ul><ul><li>Verifiable objectives (part of planning) </li></ul><ul><li>Clear idea of major duties </li></ul><ul><li>Understood area of discretion of authority </li></ul><ul><li>Organizing is: </li></ul><ul><li>Identification and classification of required activities </li></ul><ul><li>Grouping of activities </li></ul><ul><li>Assignment of grping to manager </li></ul><ul><li>Horizontal and vertical coordination </li></ul>
  9. 9. Patterns of Departmentation <ul><li>Basic/primitive: hire few people to work under you. </li></ul><ul><li>Functional: hire special mgrs for particular areas like finance, production, sales etc. </li></ul><ul><li>Product: done when functional gets too complicated and chain of command is too long. </li></ul><ul><li>Geographic: say, full set for western and eastern coasts. good communication makes this easy. </li></ul><ul><li>Mixed </li></ul>
  10. 10. Spans of Control (May/Jun ‘06 Q2a, Jan/Feb ‘06 Q2b) <ul><li>Factors determining effective spans </li></ul><ul><li>Subordinate training : better the subordinates are trained, better the span because lesser demand on supervisors. </li></ul><ul><li>Nature of jobs : simpler the tasks supervised, greater the similarity between jobs supervised, the less subordinates work at different locations, easier it is to supervise many people. </li></ul><ul><li>Rate of change of activities and personnel : some orgs have events moving faster than other orgs, and managers have to keep abreast of this. </li></ul><ul><li>Clarity of instruction and delegation : more clearly the work to be done is described, more completely supervisor gives resources to such work, lesser the supervision. </li></ul><ul><li>Staff assistance : have assistants to managers to take care of routine jobs so that managers can concentrate on supervision. </li></ul>
  11. 11. Line and Staff Relationships <ul><li>Line functions : those that accomplish the main mission/objectives of the organization. </li></ul><ul><li>Staff functions : those that help line accomplish these objectives by providing some kind of service/advice. </li></ul><ul><li>Personal staff : `assistant’ to a manager, troubleshoots or does assignments for the manager. </li></ul><ul><li>Specialized staff : they serve the entire organization in an area of special competence. </li></ul>
  12. 12. Line and Staff Relationships <ul><li>Line relationships: Superior/Subordinate relationships typically represented vertically in organizational charts </li></ul>
  13. 13. Line and Staff Relationships <ul><li>Staff relationships: Advisory in nature, degree of influence may vary </li></ul><ul><ul><li>Provide advice on request </li></ul></ul><ul><ul><li>Recommendations when appropriate </li></ul></ul><ul><ul><li>Must be consulted by line but have no direct authority </li></ul></ul><ul><ul><li>Concurring authority - veto authority over line </li></ul></ul>
  14. 14. Line and Staff Relationships <ul><li>Service: Centralized support functions </li></ul><ul><ul><li>Custodial </li></ul></ul><ul><ul><li>Security </li></ul></ul><ul><ul><li>Medical </li></ul></ul>
  15. 15. Line and Staff Relationships <ul><li>Functional authority (Jan/Feb 2006, Q2a): </li></ul><ul><ul><li>Specialized authority over others who are not their line subordinates. </li></ul></ul><ul><ul><li>As binding as line authority, but no right of discipline for violations. </li></ul></ul><ul><ul><li>Responsibility would have been given to staff office, then delegated here because of need for expertise/uniformity. </li></ul></ul><ul><ul><li>Usually procedural </li></ul></ul><ul><ul><ul><li>Budget formats </li></ul></ul></ul><ul><ul><ul><li>Computer systems </li></ul></ul></ul><ul><ul><li>Cafeteria </li></ul></ul>
  16. 16. Friction b/w line & staff personnel <ul><li>Staff specialists: hired from college for degree, little understanding of problems and realities of line organization. </li></ul><ul><li>Line managers: usually older, longer tenure in org., less educated and doesn’t understand expertise of staff specialists and need for org. </li></ul><ul><li>To solve this in military, officers have assignments in both command and staff. </li></ul>
  17. 17. Teams <ul><li>Small group of people </li></ul><ul><li>Serve interests of its members </li></ul><ul><li>Exchange ideas freely and clearly </li></ul><ul><li>Have common goals </li></ul><ul><li>Committed to achieving goals </li></ul><ul><li>Each team member treated equally </li></ul><ul><li>Physical and virtual teams: cross boundaries of time, distance and organization, and communicate using technology. </li></ul>
  18. 18. Impact of Information Revolution <ul><li>Computer </li></ul><ul><li>Internet </li></ul><ul><li>Intranet </li></ul>
  19. 19. Computer Technology’s Impact on the Work Force <ul><li>Workers will monitor rather than be a part of production. </li></ul><ul><li>Factory workers will require a higher level of skills </li></ul><ul><ul><li>Visualization </li></ul></ul><ul><ul><li>Conceptual thinking </li></ul></ul><ul><ul><li>Knowledge of production process </li></ul></ul><ul><ul><li>Statistical inference </li></ul></ul><ul><ul><li>Oral and visual communication </li></ul></ul><ul><ul><li>Attentiveness </li></ul></ul><ul><ul><li>Individual responsibility </li></ul></ul>
  20. 20. Drucker’s list of problems for mgmt wrt info-based org <ul><li>Developing rewards, recognitions and career opportunities for specialists (because promotions decrease the higher one goes up) </li></ul><ul><li>Unified vision in specialists org. </li></ul><ul><li>Devise proper mgmt structure. </li></ul><ul><li>Ensuring supply, preparation and testing of top mgmt people. </li></ul>