The document discusses different forms of business organization including sole proprietorships, partnerships, corporations, and cooperatives. It also covers organizational structures like departmentalization and functional, product, geographic, and mixed forms. Additional topics covered include spans of control, line and staff relationships, teams, and the impact of information technology on organizations and the workforce.

1. Managing Engineering and Technology Third Edition Babcock and Morse Organizing Chapter 5

2. Chapter Objectives Analyze the different forms of an organization Determine different organizational structures

3. Advanced Organizer

4. Legal Forms of Organization Sole Proprietorship Easy to organize and shutdown Few legal restrictions Owner forced/free to make all decisions Profits taxed once Owner faces unlimited liability Duration of business is limited by life of proprietor

5. Legal Forms of Organization Partnership Two or more partners Easy to organize & relatively few legal restrictions Pooling of skills Partners do individual taxes Unlimited liability for partners, but in limited partnership, at least one unlimited partner and others limited.

6. Legal Forms of Organization Corporations Owned by shareholders No liability beyond stocks Taxed twice (corp. tax and personal income tax) Subject to many state and federal controls

7. Legal Forms of Organization Cooperatives Owned by users and customers Usually tax free Ex: Mountain Equipment Coop

8. Organizing defined For organizational role to make sense: Verifiable objectives (part of planning) Clear idea of major duties Understood area of discretion of authority Organizing is: Identification and classification of required activities Grouping of activities Assignment of grping to manager Horizontal and vertical coordination

9. Patterns of Departmentation Basic/primitive: hire few people to work under you. Functional: hire special mgrs for particular areas like finance, production, sales etc. Product: done when functional gets too complicated and chain of command is too long. Geographic: say, full set for western and eastern coasts. good communication makes this easy. Mixed

10. Spans of Control (May/Jun ‘06 Q2a, Jan/Feb ‘06 Q2b) Factors determining effective spans Subordinate training : better the subordinates are trained, better the span because lesser demand on supervisors. 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. Rate of change of activities and personnel : some orgs have events moving faster than other orgs, and managers have to keep abreast of this. 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. Staff assistance : have assistants to managers to take care of routine jobs so that managers can concentrate on supervision.

11. Line and Staff Relationships Line functions : those that accomplish the main mission/objectives of the organization. Staff functions : those that help line accomplish these objectives by providing some kind of service/advice. Personal staff : `assistant’ to a manager, troubleshoots or does assignments for the manager. Specialized staff : they serve the entire organization in an area of special competence.

12. Line and Staff Relationships Line relationships: Superior/Subordinate relationships typically represented vertically in organizational charts

13. Line and Staff Relationships Staff relationships: Advisory in nature, degree of influence may vary Provide advice on request Recommendations when appropriate Must be consulted by line but have no direct authority Concurring authority - veto authority over line

14. Line and Staff Relationships Service: Centralized support functions Custodial Security Medical

15. Line and Staff Relationships Functional authority (Jan/Feb 2006, Q2a): Specialized authority over others who are not their line subordinates. As binding as line authority, but no right of discipline for violations. Responsibility would have been given to staff office, then delegated here because of need for expertise/uniformity. Usually procedural Budget formats Computer systems Cafeteria

16. Friction b/w line & staff personnel Staff specialists: hired from college for degree, little understanding of problems and realities of line organization. Line managers: usually older, longer tenure in org., less educated and doesn’t understand expertise of staff specialists and need for org. To solve this in military, officers have assignments in both command and staff.

17. Teams Small group of people Serve interests of its members Exchange ideas freely and clearly Have common goals Committed to achieving goals Each team member treated equally Physical and virtual teams: cross boundaries of time, distance and organization, and communicate using technology.

18. Impact of Information Revolution Computer Internet Intranet

19. Computer Technology’s Impact on the Work Force Workers will monitor rather than be a part of production. Factory workers will require a higher level of skills Visualization Conceptual thinking Knowledge of production process Statistical inference Oral and visual communication Attentiveness Individual responsibility

20. Drucker’s list of problems for mgmt wrt info-based org Developing rewards, recognitions and career opportunities for specialists (because promotions decrease the higher one goes up) Unified vision in specialists org. Devise proper mgmt structure. Ensuring supply, preparation and testing of top mgmt people.