An organization is a group of individuals working together toward common goals. As an organization increases in size, the need for a well-defined structure also increases. Organizing involves deciding how to best group activities and resources, while organizational structure refers to the patterns and groups of jobs. There are various elements that make up organizational structure, including division of labor, chain of command, and span of control. Managers make design decisions around how to divide tasks, group jobs, set reporting relationships, and distribute authority.

1. What Is An Organization?
An organization is a group of individuals
who work together toward common goals.

2. Organizational Complexity
Simple Complex
(1 person) (1,000’s of persons)
How does the need for a well-defined
structure change as the size of the
organization increases?

3. The Elements Organizing
• Organizing
– Deciding how to best
group organizational
activities and
resources.
• Organization
Structure
– The set of building
blocks that can be
used to configure an
organization.

4. Organization Structure & Design
• Organization structure – the pattern and
groups of jobs in an organization
• Organizational Design - individuals and
groups are arranged in an organization
with respect to the tasks they perform. It
is the management decisions and actions
that result in a specific organization
structure

5. The Elements of Org Structure
• Organization design
– A process in which managers develop or
change their organization’s structure.
• Work specialization
– A component of organization structure that
involves having each discrete step of a job
done by a different individual rather than
having one individual do the whole job.

6. Organizational Structure:
Control
• Chain of command
– The continuous line of authority that extends
from upper organizational levels to the lowest
levels and clarifies who reports to whom.
• Unity of Command
– The management principle that no person
should report to more than one boss.
• Span of control
– The number of subordinates a manager can
direct efficiently and effectively.

7. Organizational Structure:
Control (cont’d)
• Authority
– The rights inherent in a managerial position to
give orders and expect them to be obeyed.
• Power
– An individual’s capacity to influence decisions.
• Responsibility
– An obligation to perform assigned activities.

8. Organizational Design Decisions
1. Managers decide how to divide the overall task
into successively smaller jobs
2. Managers decide the bases by which to group the
jobs
3. Managers decide the appropriate size of the group
reporting to each superior
4. Managers distribute authority among the jobs

9. Simple
• Few employees reporting directly to one
person (owner)
Owner
Employee Employee Employee

10. Functional Organizational
Structure
•Organizes employees around skills or
other resources (marketing, production)
•Create subordinate goals
President
Finance Production Marketing

11. Divisionalized Structure
Organizes employees around outputs,
clients, or geographic areas
President
Enterprise Laserjet Consumer
Systems Solutions Products

12. Project-Based Matrix Structure
Employees are temporarily assigned to a specific
project team and have a permanent functional unit
President
Engineering Marketing Software
Manager Manager Manager
Project A
Manager
Project B
Manager
Project C
Manager

13. Flat Organizations

14. Tall Organizations
Figure 7.10
7-14

15. Tall Versus Flat Organizations

16. Organizational Structure
There is no permanent organization chart for
the world. . . . It is of supreme importance
to be ready at all times to take advantage
of new opportunities.
—Robert C. Goizueta, (Former) Chairman and Ceo, Coca-Cola
Company © 2006 Prentice Hall
8-16

17. Simple, International Division
CEO
International
Production Marketing Finance
Division
Example: Levi Strauss, Inc.

18. Extension of Geographical
Departmentalization
CEO
North
European Asian
American
operations operations
operations
Example: Ford Motor Company, Coca Cola

19. Extension of Product
Departmentalization
CEO
Product Product Product
Manager A Manager B Manager C
North
Europe Asia
America
Example: Unilever, NV, FedEx, H.J. Heinz

20. Extension of Multi-Divisional
(SBU) Departmentalization
CEO
SBU A SBU B SBU C SBU D SBU E
US Germany Japan France Taiwan
Examples: General Electric, BOC, Ltd.

21. Global Matrix Design
Example: N.V. Phillips

22. Global Geographic Structure
Return
© 2006 Prentice Hall 8-22

23. Organizational Change and Design
© 2006 Prentice Hall 8-23

24. Scope of Authority
Responsibility
and Authority

25. Adam Smith’s Example
of Job Specialization
Making a pin (nail) requires 18
tasks
1 worker doing all 18 tasks might make
20 pins (nails) a day.
20 workers = (20 x 20) = 400 pins
______________________________
With specialization:
20 workers make 100,000 pins a day.
1 worker = 5,000 pins
20 pins vs. 5,000 pins per worker

26. Alternatives to Specialization
• Job Rotation
– Systematically moving employees from one job to
another in an attempt to reduce employee boredom.
• Job Enlargement
– An increase in the total number of tasks workers
perform.
• Job Enrichment
– Increasing both the number of tasks the worker does
and the control the worker has over the job.

27. Job Designing
• Job Design
– The determination of an individual’s work-
related responsibilities.
• Job Specialization (Division of Labor)
– The degree to which the overall task of the
organization is broken down and divided into
smaller component parts.

28. Job Design
Job design refers to how organizations define and structure jobs
Job Design is the function of specifying the work activities of an individual
or group in an organizational setting.
The objective of job design is to develop jobs that meet the requirements of
the organization and its technology and that satisfy the jobholder’s
personal and individual requirements.

29. 6A-29
Job Design Decisions
Who What Where When Why How
Organizational
Mental and Geographic
Time of day; rationale for Method of
physical locale of the
Tasks to be time of the job; object- performance
characteristics organization;
performed occurrence in ives and mot- and
of the location of
the work flow ivation of the motivation
work force work areas
worker
Ultimate
Job
Structure

30. Job Design Strategies
• Job simplification - breaks work down into its
simplest form and standardizes each task.
• Job enlargement (horizontal job loading) -
adds more tasks to a job to broaden its
scope.
• Job rotation - cross-trains workers so they
can move from one job in a company to
others, giving them a greater number and
variety of tasks to perform. Often used with a
skill-based pay system.

31. Job Design Strategies
(continued)
• Job enrichment (vertical job loading) - builds
motivators into a job by increasing the planning,
decision making, organizing and controlling functions
(which traditionally were managerial tasks).
• Five core characteristics:
– Skill variety
– Task identity
– Task significance
– Autonomy
– Feedback
Enriched
Job

32. Job Design Strategies
(continued)
• Flextime - an arrangement under which
employees build their work schedules around a
set of “core hours” – such as 11 a.m. to 2 p.m. –
but have flexibility about when they start and stop
work.
• Job sharing - a work arrangement in which two or
more people share a single full-time job.

33. Job Design Strategies
(concluded)
• Flexplace - a work arrangement in
which employees work at a place
other than the traditional office, such
as a satellite branch closer to their
homes or, in some cases, at home.
• Telecommuting - an arrangement in
which employers have employees
working from their homes use
modern communications equipment
to hook up to their workplaces.

34. Important Hiring Decisions
• Look inside the company first
• Encourage employee referrals
• Make employment ads stand out
• Use the Internet as a recruiting tool
• Recruit on campus

35. How To Avoid Hiring Mistakes
(continued)
• Forge relationships with schools and other
sources of workers
• Consider using offbeat recruiting
techniques
• Offer what workers want

36. Hiring the Right Employees
• Conduct a job analysis and create
practical job descriptions and job
specifications
• Plan an effective interview
• Conduct the interview
• Check references

37. Conducting a Job Analysis
• Create a job description - a written statement
of the duties, responsibilities, reporting
relationships, working conditions, and
materials and equipment used in a job.
• Create a job specification - written statement
of the qualifications and characteristics
needed for a job, stated in such terms as
education, skills, and experience.
• See sample job description from the
Dictionary of Occupational Titles for a worm
picker.

38. Advantages to the Organization
Job - Person Fit
Increased Performance
Maximise Internal Resources
Greater Job Satisfaction
Reduced Absenteeism & Turnover

39. Employees are allocated job activities based on individual competencies and
realistic job requirements.
Performance increases as employees and jobs are match to maximize the
resources of the organization.
Internal resources are allocated in the most efficient and effective manner to
generate the maximum return for capital investment for the organization.
Leads to increased job satisfaction and thereby results in low employee turnover
and high productivity.

40. Job Design Challenge -
Motivate Workers
• Empowerment
• Job design
• Rewards and compensation
• Feedback

41. Four Vital Tasks of a Leader
1. Hire the right employees and
constantly improve their skills.
2. Build an organizational culture and
structure that enable the company to
reach its potential.
3. Motivate workers to higher levels of
performance.
4. Plan for “passing the torch” to the next
generation of leadership.

42. Human Resource Management
For exhaustive reading
Job Design, Org Structure, etc

43. Strategy Quotations
However beautiful the strategy, you should occasionally look at the results.
Winston Churchill
If GE's strategy of investment in China is wrong, it represents a loss of a billion dollars, perhaps a couple of billion dollars. If it is right, it
is the future of this company for the next century.
Jack Welch
Strategy without tactics is the slowest route to victory. Tactics without strategy is the noise before defeat.
Sun Tzu
All men can see these tactics whereby I conquer, but what none can see is the strategy out of which victory is evolved.
Sun Tzu
Thus, what is of supreme importance in war is to attack the enemy's strategy.
Sun Tzu
You have to be fast on your feet and adaptive or else a strategy is useless.
Charles de Gaulle
My whole career strategy has been to build a base so that I could take the roles I want to play. I'd hate to think that a shorter part might not
be available because I was worried about my billing.
Jack Nicholson
I think we have to notice that the business processes we use right now for thinking and planning and budgeting and strategy are all
delivered on very tight agendas.
Margaret J. Wheatley
Leadership is a potent combination of strategy and character. But if you must be without one, be without the strategy.
Norman Schwarzkopf
You may not be interested in strategy, but strategy is interested in you.
Leon Trotsky

44. Questions
• CSR of a company of your choice
• Managerial decision making – how
leaders take decision – example of
leaders
• Bangalore:
Divyasree Greens,
Intermediate Ring Road,
Next to Embassy Golf Links, Domlur,
Ph: 9980020224

45. Bill Gates foundation, Michael Dell
Foundation = CSR

46. Sunlight Electric – Clean Power
http://www.sunlightelectric.com/index.htm

47. http://www.bellaenergy.com/

48. Capture the Sun
A PV system includes panels, racking, inverters, wiring, and conduit. Batteries
and charge controllers are required only if you will require back up power

49. HBS case study
Assignment Questions:
1. Should Wollen recommend Lewis for the U.K. position? Is Abbott correct
in saying that Wollen has made this too much of a personal issue?
2. If she does recommend him, are there other steps she should take to
ensure his success?
3. If she does not recommend him, are there other steps she should take on
his behalf or within the firm more generally?

50. Managerial Decision
Managerial decisions in today's turbulent business environment are
characterised by uncertainty, multiple objectives and complexity.
If there is one quality that distinguishes a good manager from a poor one, it is
decisiveness and strong communication. A person in managerial position who
is poor in decision making is fit to be called only an administrator and not a
manager.
The theory about the decision making process is an interesting subject. Every
manager is in fact some kind of decision maker and usually the performance is
formed by (the results of) the choices made (Vroom, 1973).
Decisions are made all the time, although sometimes unconsciously. It is a
subject that is relevant for many business areas and, in this situation, it can be
used to define the optimal way of defining new policies concerning forecasting,
cost and price management.

51. The decision making process normally involves the following stages:
1) Defining the problem /issues / situations / challenges which calls for a
decision making
2) Collecting relevant facts (through effective communicating), figures and
statistics to facilitate and support decision making process
3) Identifying the various alternatives of choice
4) seeking opinions and alternative view points from "people who know" and
"people who matter".
5) Pondering over the issues peacefully (where time permits) and
6) Deciding on the best choice or a couple of best courses of action.

52. a. Identifying Potential Problems and Opportunities
In some cases, it is difficult to identify the problems and opportunities. For example, what is
causing the different projects within the organization to go consistently over budget in relation
to the different specific corrective actions that were undertaken?
b. Assessing Business Situation
Before attempting to make a decision, it is important to assess the business environment and
define the constraints related to the problem. The assessment may also include an analysis of
markets, competition, prices, or anything that can be related to the problem or opportunity.
c. Determining Success Criteria
Very often project managers have to make decisions based on multiple criteria.
d. Identifying Uncertainties
Understanding of uncertainties is the key to the decision analysis process.
.
e. Generating Alternatives
It is vital to identify what cannot be changed, or project constraints for making the particular
decision analysis.

54. Making Decisions in
Organizations
Managerial Employee
High High
Control Empowerment
Centralized Decentralized
Decision Decision
Making Making
Employee Managerial
Low Low
Empowerment Control

55. Problem solving approach
• Information is key to managerial decision
making. Therefore collect information
through effective communication.
• Optimizing decision making process
• Quantitative techniques for decision
making
• Decision tree
• Consistency in decision making, problem
solving skills