* Administrative Office Management, 8/e by Zane Quible ©2005 Pearson Education, Inc. Pearson Prentice Hall Upper Saddle River, NJ 07458 The Organizing Process * * Administrative Office Management, 8/e by Zane Quible ©2005 Pearson Education, Inc. Pearson Prentice Hall Upper Saddle River, NJ 07458 Learning PointsOrganizational principles/Basic guidelines. Organizational structures. Centralization vs. Decentralization. * * Administrative Office Management, 8/e by Zane Quible ©2005 Pearson Education, Inc. Pearson Prentice Hall Upper Saddle River, NJ 07458 “Elements of organizational principles (Assumptions for management)?” * * Administrative Office Management, 8/e by Zane Quible ©2005 Pearson Education, Inc. Pearson Prentice Hall Upper Saddle River, NJ 07458 * * Administrative Office Management, 8/e by Zane Quible ©2005 Pearson Education, Inc. Pearson Prentice Hall Upper Saddle River, NJ 07458 The Organization Chart Identifies lines of authority. Gives employees a better understanding of the formal structure of the organization. Helps identify areas of overlapping responsibility that should be eliminated. Identifies promotional opportunities for job applicants and new employees. Identifies areas suitable for training and orientation. * * Administrative Office Management, 8/e by Zane Quible ©2005 Pearson Education, Inc. Pearson Prentice Hall Upper Saddle River, NJ 07458 Organizing Function is Helpful By: 1. Assuring more efficient use of the organization’s resources (Allocative efficiency). 2. Improving employee understanding of job duties and responsibilities. 3. Improving employee morale (motivated employees). 4. Providing a sense of direction for each of the organization’s functional areas. * * Administrative Office Management, 8/e by Zane Quible ©2005 Pearson Education, Inc. Pearson Prentice Hall Upper Saddle River, NJ 07458 1. Organization’s Objectives Should be written in context of outcomes, understood and accepted by employees, be measurable, contain a time reference, and be challenging but attainable.Unity of directionSubordination of individual interests to the common interest * * Administrative Office Management, 8/e by Zane Quible ©2005 Pearson Education, Inc. Pearson Prentice Hall Upper Saddle River, NJ 07458 2. Span of Control Refers to the number of subordinates an individual is able to supervise. Generally, 6 to 14 (<20) subordinates per manager.Division of Work * * Administrative Office Management, 8/e by Zane Quible ©2005 Pearson Education, Inc. Pearson Prentice Hall Upper Saddle River, NJ 07458 3. Interrelated Functions Organization’s functions have become so interrelated that when a problem arises in one functional area, other related functions are also likely to be affected.Centralization or DecentralizationEsprit de corps (Group harmony) * * Administrative Office Management, 8/e by Zane Quible ©2005 Pearson Education, Inc. Pearson Pren.

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Administrative Office Management, 8/e
by Zane Quible
©2005 Pearson Education, Inc.
Pearson Prentice Hall
Upper Saddle River, NJ 07458
The Organizing Process
*
*
Administrative Office Management, 8/e
by Zane Quible
©2005 Pearson Education, Inc.
Pearson Prentice Hall
Upper Saddle River, NJ 07458
Learning PointsOrganizational principles/Basic guidelines.
Organizational structures.
Centralization vs. Decentralization.
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*

2. Administrative Office Management, 8/e
by Zane Quible
©2005 Pearson Education, Inc.
Pearson Prentice Hall
Upper Saddle River, NJ 07458
“Elements of organizational principles (Assumptions for
management)?”
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*
Administrative Office Management, 8/e
by Zane Quible
©2005 Pearson Education, Inc.
Pearson Prentice Hall
Upper Saddle River, NJ 07458
*
*
Administrative Office Management, 8/e
by Zane Quible
©2005 Pearson Education, Inc.
Pearson Prentice Hall
Upper Saddle River, NJ 07458
The Organization Chart

3. Identifies lines of authority.
Gives employees a better understanding of the
formal structure of the organization.
Helps identify areas of overlapping
responsibility that should be eliminated.
Identifies promotional opportunities for job
applicants and new employees.
Identifies areas suitable for training and
orientation.
*
*
Administrative Office Management, 8/e
by Zane Quible
©2005 Pearson Education, Inc.
Pearson Prentice Hall
Upper Saddle River, NJ 07458
Organizing Function is Helpful By:
1. Assuring more efficient use of the organization’s
resources (Allocative efficiency).
2. Improving employee understanding of job duties
and responsibilities.
3. Improving employee morale (motivated employees).
4. Providing a sense of direction for each of the
organization’s functional areas.

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Administrative Office Management, 8/e
by Zane Quible
©2005 Pearson Education, Inc.
Pearson Prentice Hall
Upper Saddle River, NJ 07458
1. Organization’s Objectives
Should be written in context of outcomes,
understood and accepted by employees, be
measurable, contain a time reference, and
be challenging but attainable.Unity of directionSubordination of
individual interests to
the common interest
*
*
Administrative Office Management, 8/e
by Zane Quible
©2005 Pearson Education, Inc.
Pearson Prentice Hall
Upper Saddle River, NJ 07458
2. Span of Control
Refers to the number of subordinates
an individual is able to supervise.
Generally, 6 to 14 (<20) subordinates per manager.Division of
Work

5. *
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Administrative Office Management, 8/e
by Zane Quible
©2005 Pearson Education, Inc.
Pearson Prentice Hall
Upper Saddle River, NJ 07458
3. Interrelated Functions
Organization’s functions have become so
interrelated that when a problem arises in one
functional area, other related functions are also
likely to be affected.Centralization or DecentralizationEsprit de
corps (Group harmony)
*
*
Administrative Office Management, 8/e
by Zane Quible
©2005 Pearson Education, Inc.
Pearson Prentice Hall
Upper Saddle River, NJ 07458
4. Chain of Command
Identifies who reports to whom within
an organization.
Two types: Vertical chain (Top-down, Bottom-up)Horizontal

6. chain.Scalar Chain
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*
Administrative Office Management, 8/e
by Zane Quible
©2005 Pearson Education, Inc.
Pearson Prentice Hall
Upper Saddle River, NJ 07458
5. Unity of Command
States that each employee should be
directly responsible to one supervisor.
One-boss system vs. Two-boss system.
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*
Administrative Office Management, 8/e
by Zane Quible
©2005 Pearson Education, Inc.
Pearson Prentice Hall
Upper Saddle River, NJ 07458
6. Authority and Responsibility
States that individuals who are given the
responsibility to undertake a task must also
be given an appropriate amount of authority to
ensure task completion.

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Administrative Office Management, 8/e
by Zane Quible
©2005 Pearson Education, Inc.
Pearson Prentice Hall
Upper Saddle River, NJ 07458
7. Work Assignment
States that each employee’s work assignments
should be based on his/her special
strengths and talents.Remuneration of personnel (Fair
compensation)Stability of personnel tenure (Job Security)Order
(Right person for right place)
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*
Administrative Office Management, 8/e
by Zane Quible
©2005 Pearson Education, Inc.
Pearson Prentice Hall
Upper Saddle River, NJ 07458
8. Employee Empowerment
States that empowered employees are
encouraged to participate as much as possible in
making decisions that affect all aspects of

8. their job tasks.InitiativeDiscipline (Mutual agreement) ====
MBOs
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*
Administrative Office Management, 8/e
by Zane Quible
©2005 Pearson Education, Inc.
Pearson Prentice Hall
Upper Saddle River, NJ 07458
Line
Line and Staff
Functional
Product division
Committee
Matrix
Organizational
Structures
Start working on Ch2 worksheet!
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*
Administrative Office Management, 8/e
by Zane Quible
©2005 Pearson Education, Inc.
Pearson Prentice Hall

9. Upper Saddle River, NJ 07458
Line Structure
Is the oldest and simplest of structures.
Has direct authority flowing vertically
from the top.
Is generally found in small organizations
because support staff is needed once they
begin to grow.
*
*
Administrative Office Management, 8/e
by Zane Quible
©2005 Pearson Education, Inc.
Pearson Prentice Hall
Upper Saddle River, NJ 07458
Board
President
VP Marketing
VP Production
VP Service
Promotion
Sales
Purchase
Foreman

10. Supervisor
Purchase
*
*
Administrative Office Management, 8/e
by Zane Quible
©2005 Pearson Education, Inc.
Pearson Prentice Hall
Upper Saddle River, NJ 07458
Advantages of Line Structure
2. Decision making is expedited.
3. Is a simple structure to understand.
1. Employees are fully aware of the boundaries of
their jobs.
4. Employees can be held directly accountable
when they fail to perform as expected.
*
*
Administrative Office Management, 8/e
by Zane Quible
©2005 Pearson Education, Inc.
Pearson Prentice Hall
Upper Saddle River, NJ 07458

11. Disadvantages of Line Structure
2. Line managers need to begin to perform
specialized activities.
1. Fails to provide specialization needed when
organization begins to grow.
*
*
Administrative Office Management, 8/e
by Zane Quible
©2005 Pearson Education, Inc.
Pearson Prentice Hall
Upper Saddle River, NJ 07458
Line and Staff Structure
Has line authority similar to line structure.
Staff employees assist the line function.
Specialized staff activities are added that
support line activities.
*

12. *
Administrative Office Management, 8/e
by Zane Quible
©2005 Pearson Education, Inc.
Pearson Prentice Hall
Upper Saddle River, NJ 07458
Board
President
VP Marketing
VP Production
VP Finance
Promotion
Auditing
Foreman
Comptroller
Purchase
VP Corp. Affairs
Sales
Office Service
HR
*
*
Administrative Office Management, 8/e
by Zane Quible
©2005 Pearson Education, Inc.
Pearson Prentice Hall
Upper Saddle River, NJ 07458
Line Employees
Staff Employees

13. Line employees are directly
concerned with the organization’s
primary objectives.
Staff employees support the
line employees.
*
*
Administrative Office Management, 8/e
by Zane Quible
©2005 Pearson Education, Inc.
Pearson Prentice Hall
Upper Saddle River, NJ 07458
Advantages of Line and Staff Structure
2. Staff employees can lend their specialized
support.
1. Line employees have time to focus on those
activities directly related to the organization’s
primary objectives.
3. Flexibility of staff units facilitates undertaking
new projects.
*
*
Administrative Office Management, 8/e

14. by Zane Quible
©2005 Pearson Education, Inc.
Pearson Prentice Hall
Upper Saddle River, NJ 07458
Disadvantages of Line and Staff Structure
1. Line and staff employees sometimes are
in conflict with one another.
2. Line employees sometimes suppress the
talents of staff employees.
*
*
Administrative Office Management, 8/e
by Zane Quible
©2005 Pearson Education, Inc.
Pearson Prentice Hall
Upper Saddle River, NJ 07458
Exercise
Wilcox company (Equipment manufacturing) Founded and
owned by Sean and David Cox)Market expansion (Increased
sales volume) --- Marginal profits for years 6 employees are
taking general management responsibilities 6 employees are
involved in either marketing or production. Try to hire new
managers.
You are consultant for Wilcox company.

15. You have to know the following issues.
Current org. structure and recommended org. structure(s)
Problems for current org. structures and management. Possible
problems for new org. structures and management.
*
*
Administrative Office Management, 8/e
by Zane Quible
©2005 Pearson Education, Inc.
Pearson Prentice Hall
Upper Saddle River, NJ 07458
Exercise
Current org. structure and recommended org. structure(s)
Current: Poorly designed line structure. Recommendations: (1)
Current structure with several temporary
workers.
(2)Well defined line structure
(3) Line and Staff structure Problems
for current org. structures and management.Poor definitions of
authority and responsibilityPoor structural designPoor
operational design (Efficiency and Effectiveness)“Owner-
Manager” issues in the stage of growth.Demand projections.
Possible problems for new org. structures and
management.Confusions (Efficiency and Effectiveness) of new
structureResistance to the new system and structure“Owner-
Manager” issues as barriers for transformation and growth“Old
boys” vs. “New comers”

16. *
*
Administrative Office Management, 8/e
by Zane Quible
©2005 Pearson Education, Inc.
Pearson Prentice Hall
Upper Saddle River, NJ 07458
Division Structure
Each major product is given division
status.
Incorporates line and staff structure into
these divisions.
Each product tends to operate independently
of other divisions.
Company’s products provide a basis for
its structure.
*
*
Administrative Office Management, 8/e
by Zane Quible
©2005 Pearson Education, Inc.

17. Pearson Prentice Hall
Upper Saddle River, NJ 07458
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*
Administrative Office Management, 8/e
by Zane Quible
©2005 Pearson Education, Inc.
Pearson Prentice Hall
Upper Saddle River, NJ 07458
*
*
Administrative Office Management, 8/e
by Zane Quible
©2005 Pearson Education, Inc.
Pearson Prentice Hall
Upper Saddle River, NJ 07458
Advantages of Division Structure
2. Divisions can coordinate their own
activities without constraint from main
unit.
1. Enables divisions to develop processes that

18. best meet their needs.
*
*
Administrative Office Management, 8/e
by Zane Quible
©2005 Pearson Education, Inc.
Pearson Prentice Hall
Upper Saddle River, NJ 07458
Disadvantages of Division Structure
2. Problems of some divisions may eventually
be felt throughout the entire organization.
1. Divisions can “go their own way” to the
extent that they don’t work toward common
goals.
*
*
Administrative Office Management, 8/e
by Zane Quible
©2005 Pearson Education, Inc.
Pearson Prentice Hall
Upper Saddle River, NJ 07458
Matrix Structure

19. Is often used by organizations undertaking
complex projects.
Results in the formation of temporary new units to
accommodate the undertaking of a new project.
Involves temporarily borrowing employees
from other areas of the organization and
assigning them to the new temporary unit.
*
*
Administrative Office Management, 8/e
by Zane Quible
©2005 Pearson Education, Inc.
Pearson Prentice Hall
Upper Saddle River, NJ 07458
*
*
Administrative Office Management, 8/e
by Zane Quible
©2005 Pearson Education, Inc.
Pearson Prentice Hall

20. Upper Saddle River, NJ 07458
Advantages of Matrix Structure
2. Helps companies avoid having to hire new
employees for a project.
1. Allows companies to assign employees on the
basis of their expertise.
3. Enables companies to adapt quickly to new
situations.
*
*
Administrative Office Management, 8/e
by Zane Quible
©2005 Pearson Education, Inc.
Pearson Prentice Hall
Upper Saddle River, NJ 07458
Disadvantages of Matrix Structure
2. Employees may experience job-related
pressures.
1. Employees often have two supervisors.
3. Managers may have difficulties coordinating
employee activities.
*

21. *
Administrative Office Management, 8/e
by Zane Quible
©2005 Pearson Education, Inc.
Pearson Prentice Hall
Upper Saddle River, NJ 07458
Centralization
Decentralization
Places related activities under
jurisdiction of one individual.
Places related activities under
jurisdiction of several
individuals throughout the
organization.
Efficiency and Effectiveness
(Cost-pressure and Local responsiveness)
*
*
Administrative Office Management, 8/e
by Zane Quible
©2005 Pearson Education, Inc.
Pearson Prentice Hall
Upper Saddle River, NJ 07458
Factors That Determine Feasibility of
Centralization
1. Nature of the organization.
2. Size of the organization.

22. 3. Diversification of the organization.
4. Conformity to standardized processes.
5. Quality of personnel.
6. Distribution of operations.
7. Attitude of personnel.
*
Worksheet 2
FULL NAME:
CWU Corporation:
CWU Corporation (thereafter CWU) is a specialized bicycle
manufacturer. CWU’s headquarters is located in Ellensburg.
Its product categories are (1) bicycles for professional athletes,
(2) luxury bicycles, (3) sports bicycles, and (4) bicycle
accessories.
CWU has used the franchising system. Each franchisee will sell
products in the four product categories while the president of
CWU is thinking that CWU will promote luxury bicycle
category to the luxury bicycle division in the US market. The
luxury bicycle division will directly control its retail stores in
premier shopping malls in order to sell the luxury bicycles.
CWU has two regional headquarters in order to control US
operations. The regional headquarters are (1) East coast
headquarters and (2) West coast headquarters. The CWU
headquarters must supervise the following items closely in
order to maintain organizational efficiency. The items are
respectively (1) human resources, (2) research and development,
(3) design, (4) finance, and (5) corporate affairs*. It is CWU’s
strategic policy to delegate sales and marketing functions to
each regional headquarters so that each regional headquarters

23. can make its best supporting effort for its franchisees.
CWU has exported their products to Europe from the East coast;
therefore, the East Coast Headquarters has been in charge of the
European sales. However, the president of CWU is thinking
that CWU will control European operations separately since
sales in the European markets has become very large and CWU
will need to deal with specific requests in the European market
in order to keep expanding the market. The possible location
for the European Headquarters is Slovak Republic. The
European Headquarters will take care of sales and marketing
functions to make its best supporting effort for its European
franchisees. While the US regional headquarters will not
control luxury bicycles very soon, the European Headquarters
will control all of four product categories.
CWU has assembled its own bicycles at their assembly
factories. In order to take advantage of mass production, CWU
built a large assembly factory in Yakima and all types of
products are assembled in the factory and distributed to all
franchisees. The Yakima factory is directly controlled by the
CWU Headquarters. The factory controls purchasing, logistics,
and factory supervisions. The president of CWU start thinking
CWU may want to assemble bicycles in Slovakia so that
European franchisees can receive their products from Slovak
factory. This is a good idea to reduce transportation costs,
therefore, strengthen its price competitiveness in the European
market. The Slovak factory will be directly controlled by the
European Headquarters. While the factory will control factory
supervisions, logistics of assembled products and purchasing
parts will be directly controlled by the European headquarters.
*Corporate affairs department is one of staff functions.
Your idea about the current organizational chart of CWU
Corporation (Your home work)

24. Your team’s idea about the new organizational chart of CWU

25. Corporation (Class activity)
See what will be different for the current organizational chart of
CWU Corporation.