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  1. 1. Reorganization Reorganization is the process by which an existing organization undergoes change in thesize and shape of the organization structure. The change may range from simple to complex.
  2. 2. Division manager Dept. Engineerin Manufacturi Marketin Heads R&D g ng gProjectManagerProject AProject BProject CProject D
  3. 3. In Figure 4.5 the organization is structured along two dimensions. In one dimension, the structure shows basic functional departments such as Research and Development, Engineering, Manufacturing and Marketing. The Department Head in each of these functional areas plans and controls the dimension, a Project Director plans and controls the efforts for all projects currently in that phase of development. In the other dimension, a Project Director plans and controls an entire project currently in that phase development. In the other dimension, a Project Director plans and controls an entire project through all the function areas necessary to its completion by placing personnel from each of the appropriate functional departments. Thus, two hierarchal structures
  4. 4. DepartmentationDepartmentation results from the grouping of work, the desire to obtain organization unitsof manageable size, and to utilize managerial ability An organization structure and design are shaped significantly by the Departmentation followed. It seems quite apparent that if the stated goals and objectives of an organization are to be attained , certain activities have to be performed. And it would also seem that the organizing function of a manager would involve grouping the functions and activities necessary to attain the goals of an enterprise.
  5. 5. Managing DirectorProducti Personn Marketing Finance Legal R & D on el Manager Manager Adviser DirectorManager Manager Figure 4.6 Departmentation by function
  6. 6. After the primary functions are identified, the next step is to identify secondary functions and group them accordingly, At the next step, each of these secondary functions may be further subdivided into narrower work areas. This narrow division of function helps to achieve the advantage of specialization by function. Departmentation by the product involves grouping the activities and functions on the basis of products manufactured by the company.
  7. 7. Managing DirectorRefrigerato Fans Lamps Stoves rs Division Division Division Division Figure 4.7 by product
  8. 8. Each of these divisions may be further divided into departments based on the components of these products or by functions performed. Likewise, a service organization may structure its work by the service it offers. According to Dale, and industrial engineer, grouping by product or service has the advantage of bringing together and coordinating in one place major activities required to make a particular product. In some organization the grouping of activities is done on the basis of the nature of work being done, that is by process.
  9. 9. Managing DirectorRecei Separati Weavin Bleachi Inspe shipin Spining Dyeingving ng g ng ct ing g Figure 4.8 Departmentation by process
  10. 10. Finally, the grouping may be done on the basis of geographical location. In this method, the entire service area of the organization is divided into geographical locations or territories. In many instances, It may be particular geographical location, or any of the other methods discussed. Managing Director MINDANA NCR LUZON VISAYAS O Figure 4.9 Departmentation by geographical location
  11. 11. RESULTS OF GOOD ORGANIZATIONA good organization would result in the following:1.Establishing responsibility and preventing “buck passing”2.Providing for easier communication;3.Eliminating jurisdictional disputes between individuals;4.Helping develop executive ability;5.Aiding in measuring a person’s performance against his charges and responsibilities;6.Aiding in equitable distribution of work, functions, and/or personnel supervision;7. Permitting expansion and contraction without seriously disrupting the structure;8. Pointing out “dead-end” jobs;9. Affording movement in the direction of the “ideal” organization, in times of change;10. Establishing closer cooperation and higher morale;11. Delineating avenues of promotion;12. Preventing duplication of work;13. Making growth possible with adequate control and without literally killing top executives through overwork; and14. Aiding in wage and salary administration through forced job analysis
  12. 12. THE ELEMENTS OF DELEGATION Delegation is the process of entrusting and transferring responsibility and authority by the top management to the lowest level. The elements of delegation are the following:1. Responsibility This is the work or duty assigned to a particular position. Responsibility involves mental and physical activities which must be performed to carry out a task or duty. This can be delegated.
  13. 13. 2.AuthorityIt refers to the power or the right to be obeyed. It is also the sum of the powers and rights entrusted to make possible the performance the work delegated. Authority includes such rights and powers with regard to receipt and disbursement of money, and hiring and dismissing of employees.3. AccountabilityThis is the answerability of the obligation to perform the delegated responsibility and to exercise the authority for the proper performance of the work.
  14. 14. THE ART OF DELEGATION Delegation is considered an art and a science. It is an art because it is a skill that the manager performs effectively if he practice it. Delegation should first and foremost be tackled before the establishment of goals and objectives and a clear definition of responsibility and authority has been made.THE EXCEPTION PRINCIPLE The exception principle (also known as management by exception) is closely related to the parity principle. The exception principle states that managers should concentrate their efforts on matters that deviate significantly from the normal and let
  15. 15. The key concept of Bureaucracy is Hierarchy – the ranking of individuals according to the amount of rational-legal authority they can exercise when they are fulfilling the responsibilities of their positions. When an individual comes into the organization, she is assigned a particular position.FORMAL AND INFORMAL ORGANIZATIONS Every organization structure has two systems of operation: the formal and informal. The formal system is composed of the recognized and formalized lines of communication, authority, and control.
  16. 16. 1 2 4 5 3 51 5231 32 41 4231 31 411 421 511 521 5221 2 321
  17. 17. FORMAL INFORMAL.have planned structure - not formally planned.deliberate attempts to create
  18. 18. Figure 4.11 org. chart PRESIDENT Vice president Vice president in Vice president in 4 in charge of charge of charge of finance production marketing Personnel Purchasin Chief Chief manager g agent engineer inspector Plant 3 manager Foreman Foreman Foreman Foreman assembly plating packing paint dept. dept. dept. dept. w w w w w w w w w w w w w w w w1
  19. 19. CENTRALIZED AND DECENTRALIZEDORGANIZATIONS One of the most important questions that a companymust answer as it whether or not to continuemanagement that is centralized in one person, or todecentralize management by delegating some of itsauthority to subordinates.
  20. 20. Conduct research & AnalysisProvide an Objective Identity Options to Viewpoint Solve Problems Make CommunicateRecommendation THE MANY Management s for Future FUNCTIONS Decisions toCourses of Action OF STAFF Subordinates Submit Regular Monitor Specific Advisory Reports Operations Alert Management to Potential Trouble Sports Figure 4.12 The many functions of staff
  21. 21. In a centralized management organization, major decisions are made by a few top executives, subordinates exercise little (if any) initiate in decision making. Even when there are multiple branches, most decisions are made at the main office rather than at the local branch.CENTRALIZED DECENTRALIZEDControl by few because men Control by many becauseat the top believe they are men at the top believe thatindispensable. Don’t trust participation
  22. 22. As a result of the above As aresult of the above attitude, decisions are made attitude,decisions are made by the top management throughout theorganization The drawback is potential Thedrawback may be paralysis of decision makingcontrolled by many
  23. 23. THE NATURE OF LINE AND STAFF RELATIONSHIP Another way to improve coordination is to distinguish clearly between line and staff positions so that organization members clearly recognize the degree of responsibility associated with each organizational position. As defined Previously, line personnel are those who contribute directly to the accomplishment of organizational objectives.
  24. 24. Fig. 4.13 Tall structure Fig. 4.14 Flat structure
  25. 25. “FLAT” and “TALL” STRUCTURES As the span of supervision or control increases (the number of subordinates being supervised), the organization develops a “flat” structure. See Figure 4.13 and 4.14 In the diagram, both organizational structures have ten subordinates under a top person. END!!!