Chapter 4 organizing complete

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Chapter 4 organizing complete

  1. 1. ORGANIZINGChapter Four
  2. 2. PART ONE: INTRODUCTION 1/23/2012 1.1 Meaning of organization POM/Chapter 4 - Organizing 1.2 Process of Organization 1.3 Principles of Organization 2
  3. 3. DEFINITION OF ORGANIZING 1/23/2012 Activities:  Resources:  Identification of  Determining the POM/Chapter 4 - Organizing activities  Grouping of Activities specific need of  Assignment of jobs to resources formal groups  Allocation of  Establishing a network resources into of authority and responsibility specific groups  Providing framework for  Evaluation and measurement, control of use of evaluation and control the resources 3
  4. 4. ORGANIZING 1/23/2012Organizing is the process of arranging and allocating work, POM/Chapter 4 - Organizing authority, and resources among an organization’s members so that they can achieve organizational goal.  Stoner, Freeman and Gilbert 4
  5. 5. PROCESS OF ORGANIZING 1/23/2012 Division of Work Grouping of Work POM/Chapter 4 - Organizing Delegation of Authority Coordination of Work 5
  6. 6. 1/23/2012 POM/Chapter 4 - Organizing 6PROCESS OF ORGANIZING SIMPLIFIED
  7. 7. PRINCIPLES OF ORGANIZING 1/23/20121. Unity of Objective 8.Exception2. Specialization 9.Efficiency POM/Chapter 4 - Organizing3. Coordination4. Authority and 10.BalanceResponsibility 11.Homogeneity5. Unity of Command6. Scalar Chain 12.Continuity7. Span of Control 13.Simplicity 7
  8. 8. PART TWO: ORGANIZATIONAL ARCHITECTURE 1/23/2012  2.1 Vertical differentiation  Tall versus Flat Structure POM/Chapter 4 - Organizing  2.2 Horizontal differentiation Functional Structure Multidivisional Structure Geographic Structure Matrix Structure 8
  9. 9. TALL VERSUS FLAT ORGANIZATIONSTall Organization President All rights reserved. Copyright © by Houghton Mifflin Company.Flat Organization President 6–9
  10. 10. ORGANIZATIONAL ARCHITECTURE -VERTICAL INTEGRATION 1/23/2012 Tall Organization:  Flat organization: This type of This type of POM/Chapter 4 - Organizing organizational organizational architecture has architecture many layers and has few layers narrow span of control. and wide span of control. 10
  11. 11. ESTABLISHING REPORTING RELATIONSHIPS: TALL VERSUS FLAT ORGANIZATIONS Tall Organizations  Flat Organizations  Are more expensive  Lead to higher levels of employee morale and All rights reserved. Copyright © by Houghton Mifflin Company. because of the number of managers involved. productivity.  Foster more  Create more administrative communication responsibility for the problems because of relatively few managers. the number of people  Create more supervisory through whom responsibility for managers information must pass. due to wider spans of control. 6–11
  12. 12. ORGANIZATIONAL ARCHITECTURE – HORIZONTAL DIFFERENTIATION 1/23/20121. FUNCTIONAL STRUCTURE: General Manager POM/Chapter 4 - Organizing Production Finance Marketing HR Dept Dept Dept Deprtment Structure is created based on the various functions of an organization. 12
  13. 13. ORGANIZATIONAL ARCHITECTURE – HORIZONTAL DIFFERENTIATION2. MULTI-DIVISION STRUCTURE 1/23/2012 General Manager POM/Chapter 4 - Organizing Division I Division II Division III  Multiple divisions are created in a related industry. 13
  14. 14. ORGANIZATIONAL ARCHITECTURE – HORIZONTALDIFFERENTIATION Divisional or M-form (Multidivisional) Design  An organizational arrangement based on multiple businesses in related areas operating within a larger organizational framework; following a strategy of related diversification.  Activities are decentralized down to the divisional level; others are centralized at the corporate level.  The largest advantages of the M-form design are the opportunities for coordination and sharing of resources.
  15. 15. ORGANIZATIONAL ARCHITECTURE – HORIZONTALDIFFERENTIATION 3. GEOGRAPHIC STRUCTURE: 1/23/2012 General POM/Chapter 4 - Organizing Manager  Departments are created based on geographic regions.  All the activities in one Eastern Central Western geographic region is Region Region Region categorized into one unit. 15
  16. 16. ORGANIZATIONAL ARCHITECTURE – HORIZONTALDIFFERENTIATION4. MATRIX ORGANIZATION CEO Vice president, Vice president, Vice president, Vice president, engineering production finance marketing Employees Project manager A Project manager B Project manager C 6–16
  17. 17. MATRIX STRUCTURE: 1/23/2012 Advantages:  Disadvantages: Enhances organizational  Employees are uncertain POM/Chapter 4 - Organizing flexibility. about reporting Team members have the relationships. opportunity to learn new  The dynamics of group skills. behavior may lead to Provides an efficient way for slower decision making, the organization to use its one-person domination, human resources. compromise decisions, or Team members serve as a loss of focus. bridges to their departments  More time may be required for the team. for coordinating task- related activities. 17
  18. 18. PART THREE: RESPONSIBILITY 1/23/20123.1 Meaning of Responsibility POM/Chapter 4 - Organizing3.2Establishing Task and Reporting Relationships3.3 Creating Accountability 18
  19. 19. RESPONSIBILITY: 1/23/2012Responsibility is the POM/Chapter 4 - Organizing obligation to perform or duty to carryout certain activities 19
  20. 20. ESTABLISHING TASK AND REPORTINGRELATIONSHIP: 1/23/2012 Task Relationship:  How activities related to each other in an POM/Chapter 4 - Organizing organization.  How the basic units of an organization are formed.  Establishment of job description and job specification  Job Specification: Prerequisites of job. Various skills and experiences needed to perform certain job.  Job Description: The activities that have to be carried out at certain position in a job. It describes the job. 20
  21. 21. ESTABLISHING TASK AND REPORTINGRELATIONSHIP: 1/23/2012 Establishing Reporting Relationship:  It is finding out POM/Chapter 4 - Organizing  Chain of command  Span of control or span of management 1. Who reports to whom? 2. How many subordinates will a supervisor have? (Relate it to tall vs flat organizational architecture.) 21
  22. 22. ACCOUNTABILITY: 1/23/2012Accountability: POM/Chapter 4 - Organizing  the state of being accountable, l iable, or answerable  Requirement to report It creates a mechanism of control. 22
  23. 23. PART FOUR: AUTHORITY 1/23/2012 POM/Chapter 4 - Organizing4.1 Line and Staff Authority4.2 Delegation of Authority 23
  24. 24. AUTHORITY: 1/23/2012 Right to take decisions that arises due to position in organizational structure. POM/Chapter 4 - Organizing Authority is the right to perform or command. It allows its holder to act in certain designated ways and to directly influence the actions of others through orders. Types of Authority:  Line Authority  Staff Authority 24
  25. 25. LINE AUTHORITY 1/23/2012The chain of command in the organizational structure that flows POM/Chapter 4 - Organizing major decision making power.The officially sanctioned ability to issue orders t o subordinate employees within an organization. 25
  26. 26. STAFF AUTHORITY 1/23/2012 Staff authority consists of the right to advise or assist those who possess POM/Chapter 4 - Organizing line authority as well as other staff personnel. The Advisory or Counseling Role : The Service Role 26 The Control Role
  27. 27. DELEGATION OF AUTHORITY 1/23/2012Assigning work to subordinates and giving them necessary POM/Chapter 4 - Organizing authority to do the assigned work effectively.Simple terms,GRANTING AUTHORITY TO SUBORDINATES 27
  28. 28. FEATURES OF DELEGATION OFAUTHORITY: 1/23/2012 No delegation of total authority Delegation of only that authority a POM/Chapter 4 - Organizing manager has Representation of the superior Delegation for organizational purpose Restoration of delegated authority Balance of authority and responsibility No delegation of responsibility 28
  29. 29. CONFLICT BETWEEN LINE – STAFF EMPLOYEES 1/23/2012Assume Line Authority POM/Chapter 4 - OrganizingDo not give Sound AdviceSteal Credit for SuccessFail to Keep line personnel informed of their activitiesDo not see the whole picture. 29
  30. 30. PART FIVE:CENTRALIZATION AND DECENTRALIZATION 1/23/2012 Meaning : Centralization and Decentralization POM/Chapter 4 - Organizing Reasons: In which case which is needed Advantages and Disadvantages: of both 30
  31. 31. CENTRALIZATION 1/23/2012Systematically retaining power and authority in the hands of POM/Chapter 4 - Organizing higher level managers.Not dividing authority to lower level employees. 31
  32. 32. ADVANTAGES V/S DISADVANTAGES: 1/23/2012Advantages: POM/Chapter 4 - OrganizingFacilitates unified decision.Simplifies structureFacilitates quicker decisionEconomy in operationIntegrate operationSuitable for small firms 32
  33. 33. ADVANTAGES V/S DISADVANTAGES: 1/23/2012Disadvantages: POM/Chapter 4 - Organizing Unsuitable for large organization Manager is overburdened Possibility of power misuse Low morale and motivation Lack of environmental adaptation In appropriate for routine decisions. 33
  34. 34. DECENTRALIZATION: 1/23/2012 Delegation of authority to the lower levels. POM/Chapter 4 - Organizing Decentralization is tendency to disperse decision making authority in an organized structure. • Koontz and Weihrich 34
  35. 35. ADVANTAGES V/S DISADVANTAGES 1/23/2012Advantages: Relief to top management POM/Chapter 4 - Organizing Facilitates managers’ development Possibility if better decisions Effective control High morale and motivation Facilitates diversification Environment adaptation 35
  36. 36. ADVANTAGES V/S DISADVANTAGES 1/23/2012Disadvantages: Increase in expenditure POM/Chapter 4 - Organizing Conflict Unsuitable for emergency situations Maximizes risk Difficulty in communication Unsuitable for specialized services 36
  37. 37. EMERGING ISSUES IN ORGANIZATION DESIGN 1/23/2012Re-engineering process POM/Chapter 4 - OrganizingTeam workNetwork organization structureDownsizing organizationBoundary-less organization 37
  38. 38. STAFFING:CONCEPT AND IMPORTANCE 1/23/2012 It is the process of obtaining and maintaining competent employees to fill all positions. POM/Chapter 4 - Organizing Recruitment: Encouraging people to apply Selection: Finding the right person for the job Training: Teaching the employees certain skill Development: Progress/advancement of career Motivation: Encouraging the employees to work harder. 38
  39. 39. IMPORTANCE OF STAFFING: 1/23/2012Managing effective staffUtilization of physical resources POM/Chapter 4 - OrganizingIncrease in productivityFocus on goal achievementHelps to solve problemsJob satisfactionSelf-development of workers 39
  40. 40. 1/23/2012 POM/Chapter 4 - Organizing 40 THANK YOU

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