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  1. 1. Principles of Management Designing the Organization Lecture 7
  2. 2. Organizing <ul><li>Deciding how best to group organizational </li></ul><ul><li>activities and resources. To perform this </li></ul><ul><li>effectively it is necessary to set organization </li></ul><ul><li>structure. </li></ul><ul><li>Organization Structure </li></ul><ul><li>The set of elements that can be used to </li></ul><ul><li>configure an organization. </li></ul>
  3. 3. Elements of Organizing <ul><li>Designing Jobs </li></ul><ul><li>Grouping Jobs </li></ul><ul><li>Establishing reporting relationship </li></ul><ul><li>Distributing authority </li></ul><ul><li>Coordinating activities </li></ul><ul><li>Differentiating among positions </li></ul>
  4. 4. Designing Jobs <ul><li>Determination of individual’s job related responsibilities. </li></ul><ul><li>That means </li></ul><ul><li>Identifies and select what are the works an individual is doing or to be done. </li></ul><ul><li>What is the expectation of performance standard. </li></ul><ul><li>By job designing an individual to be perform specific set of </li></ul><ul><li>duties which is prescribed. So he/she to be specialized at </li></ul><ul><li>those duties. So, the basic or starting point of designing job </li></ul><ul><li>is determining the level of desired specialization. </li></ul>
  5. 5. Designing Job ( cont….) <ul><li>Job Specialization </li></ul><ul><li>The degree to which the overall task of the organization is </li></ul><ul><li>broken down and divided into smaller component parts. </li></ul><ul><li>Each part is performed by individual worker who is </li></ul><ul><li>expert/specialized or become specialized on that work. </li></ul><ul><li>Division of labor </li></ul><ul><li>Job specialization evolved from the concept division of </li></ul><ul><li>labor. The overall task is divided into several unit and each </li></ul><ul><li>worker perform each unit of job. </li></ul><ul><li>Example : Production line (Electronics, automobile etc.) </li></ul>
  6. 6. Job Specialization Designing Job (cont….) <ul><li>Benefits </li></ul><ul><li>Performing specific task, become very proficient. </li></ul><ul><li>Transfer time between jobs decrease. </li></ul><ul><li>Easy to develop equipments to assist with the job </li></ul><ul><li>When employee absent or resign, train new one at relatively low cost. </li></ul><ul><li>Limitations </li></ul><ul><li>Same job regularly. Become bored and dissatisfied, absenteeism rises. Quality may suffer. </li></ul><ul><li>Anticipated benefits may do not always occur. </li></ul>
  7. 7. Alternative to Specialization Designing Job (cont….) <ul><li>Job Rotation : Systematically moves employees from one job to another. </li></ul><ul><li>Job Enlargement : Increase the number of tasks workers perform. Giving the employee more task to perform. </li></ul><ul><li>Job Enrichment : Increase the number of tasks as well as give control over the jobs. Delegate more authority which increase sense of responsibility. </li></ul><ul><li>Job Characteristic Approach : Take into account the work system and employee preferences. </li></ul><ul><li>Work Team : Work in a group. The group is responsible for overall tasks. </li></ul>
  8. 8. Alternative to Specialization Designing Job (cont….) <ul><li>Job Characteristic Approach suggest that jobs should be diagnosed and improved along five core dimensions : </li></ul><ul><li>Skill variety : Number of things a person does in a job. </li></ul><ul><li>Task identity : the extent to which worker does a complete or identifiable portion of total job. </li></ul><ul><li>Task significance : The perceived importance of the task. </li></ul><ul><li>Autonomy : The degree of control over how the work is performed. </li></ul><ul><li>Feedback : The extent to which the worker knows how well the job is being performed. </li></ul>
  9. 9. Alternative to Specialization Designing Job (cont….) <ul><li>Job Characteristic Approach </li></ul>Core job dimension Critical Psychological state Personal and Work outcome *Skill variety *task identity *Task significance *Autonomy *Feedback Experienced Meaningfulness of the work Experienced Responsibility For outcomes Of the work Knowledge of the Actual result of Work activities Employee Growth-need strength *High internal Work motivation *High quality work Performance *High satisfaction With the work Low absenteeism and turnover
  10. 10. Grouping Jobs : Departmentalization <ul><li>Functional Departmentalization : Group together same or similar activities. Example : Finance dept., Marketing dept. etc. </li></ul><ul><li>Product Departmentalization : Grouping activities around product or product groups. Example : Unilever – Brand development division- Lux. </li></ul><ul><li>Customer Departmentalization : Grouping activities to respond to and interact with specific customer or customer groups. Example : Sales division –Industrial, Sales division – consumer. </li></ul><ul><li>Location Departmentalization : Grouping jobs on the basis of geographical sites or areas. Example : Square pharma – Chittagong branch, Comilla branch. </li></ul>
  11. 11. Establishing Reporting Relationship <ul><li>Develop the system of reporting relationship – who reports to whom. </li></ul><ul><li>Chain of Command </li></ul><ul><li>Clear and distinct lines of authority need to be established among all </li></ul><ul><li>position in an organization. Consists of two components - </li></ul><ul><li>Unity of Command : Each person in an organization must have a </li></ul><ul><li>clear reporting relationship to one and only one boss. </li></ul><ul><li>Scalar principle : Clear and unbroken line of authority that extends </li></ul><ul><li>From the lower to the highest position in the organization. </li></ul>
  12. 12. Establishing Reporting Relationship <ul><li>Span of Control </li></ul><ul><li>Determining how many people report to each manager. Also known as </li></ul><ul><li>Span of management. </li></ul><ul><li>Narrow spans : Few subordinates per manager. </li></ul><ul><li>Wide spans : Many subordinates per manager. </li></ul><ul><li>According to Graicunas – Manager must deal with three kinds of </li></ul><ul><li>interactions with and among subordinates. </li></ul><ul><li>Direct : Manager’s one to one relationship with each subordinate. </li></ul><ul><li>Cross : Relationship among the subordinates themselves. </li></ul><ul><li>Group : Relationship between groups of subordinates. </li></ul>
  13. 13. Establishing Reporting Relationship <ul><li>Graicunas formula of interaction : </li></ul><ul><li>Number of possible interactions between a </li></ul><ul><li>manager and subordinates can be </li></ul><ul><li>determine by : </li></ul><ul><li>I = N(2 N /2 + N - 1) </li></ul><ul><li>I = Total number of interactions </li></ul><ul><li>N = Number of subordinates </li></ul>
  14. 14. Distributing Authority <ul><li>Delegation Process </li></ul><ul><li>Managers assign a portion of their workload </li></ul><ul><li>to others. </li></ul><ul><li>Manager gives the subordinate a job to do. </li></ul><ul><li>Manager also gives the authority to the subordinate to do the job. </li></ul><ul><li>Manager establishes the subordinate’s accountability. </li></ul>
  15. 15. Distributing Authority <ul><li>Delegation Process </li></ul><ul><li>Step 1 Step 2 Step 3 </li></ul><ul><li>Assigning responsibility Granting authority Creating accountability </li></ul>Manager Subordinate Manager Subordinate Manager Subordinate
  16. 16. Distributing Authority <ul><li>Delegation Process </li></ul><ul><li>Problems in Delegation : </li></ul><ul><li>Managers may be reluctant to delegate. </li></ul><ul><li>Manager may disorganized, unable to plan work in advance. </li></ul><ul><li>Manager may worry that subordinates will do well. </li></ul><ul><li>Manager not trust subordinates. </li></ul><ul><li>Subordinates may be afraid of failure. </li></ul><ul><li>No reward for additional responsibility. </li></ul><ul><li>Prefer to avoid risk, want their boss to take responsibility. </li></ul>
  17. 17. Distributing Authority <ul><li>Decentralization : Systematically </li></ul><ul><li>Delegating power and authority throughout </li></ul><ul><li>the organization to middle and lower level </li></ul><ul><li>managers. </li></ul><ul><li>Centralization : Systematically retain power </li></ul><ul><li>and authority in the hands of higher level </li></ul><ul><li>managers. </li></ul>
  18. 18. Coordinating Activities <ul><li>The process of linking the activities of the various departments of the </li></ul><ul><li>organization. Departments are interdependent to each other for </li></ul><ul><li>information and resources To perform their respective activities. </li></ul><ul><li>Three major forms of interdependence : </li></ul><ul><li>Pooled interdependence : Units operate with little interactions. </li></ul><ul><li>Example : Stores of ‘Cats Eye’ in Dhaka city. </li></ul><ul><li>Sequential interdependence : Output of one unit becomes the input </li></ul><ul><li>for another unit. Example – production assembly line. </li></ul><ul><li>Reciprocal interdependence : Activities flow both way between units. </li></ul><ul><li>Example – Reservation dept., Check in desk, house keeping of a hotel. </li></ul>
  19. 19. Differentiating between Position <ul><li>Line position : Position in the direct chain of </li></ul><ul><li>command that is responsible for the achievement </li></ul><ul><li>of an organizational goals. Line managers work </li></ul><ul><li>directly towards organizational goals. </li></ul><ul><li>Staff position : Position intended to provide </li></ul><ul><li>expertise, advice and support for the line </li></ul><ul><li>position. </li></ul><ul><li>End </li></ul>