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Organizing..
1. Copyright Š 2003 by South-Western, a division of Thomson Learning. All rights reserved.Developed by Cool Pictures & MultiMedia Presentations
Organizing
⢠The deployment of organizational resources to
achieve strategic goals
⢠Reflects deployment of resources
⢠Shows division of labor
⢠Formal lines of authority and mechanisms is
developed
2. Copyright Š 2003 by South-Western, a division of Thomson Learning. All rights reserved.Developed by Cool Pictures & MultiMedia Presentations
Organization Structure
ď Defines how tasks are divided, resources are
deployed, and departments are coordinated
ď The set of formal tasks assigned
ď Formal reporting relationships
ď The design of systems to ensure effective
coordination of employees across department
3. Copyright Š 2003 by South-Western, a division of Thomson Learning. All rights reserved.Developed by Cool Pictures & MultiMedia Presentations
The Organization Chart
âThe Home Depot is the world's largest home
improvement retailer currently operating 1,363
stores.
Visual representation
Set of formal tasks
Formal reporting relationships
Framework for vertical control
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Work Specialization
⢠Tasks are subdivided into individual jobs
⢠Division of labor concept
⢠Employees perform only the tasks relevant to their
specialized function
⢠Jobs tend to be small, but they can be performed
efficiently
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Chain of Command
⢠Unbroken line of authority that links all persons in
an organization
⢠Shows who reports to whom
⢠Associated with two underlying principles
ďUnity of Command
ďScalar Principle
⢠Unbroken line of authority that links all persons in
an organization
⢠Shows who reports to whom
⢠Associated with two underlying principles
ďUnity of Command
ďScalar Principle
6. Copyright Š 2003 by South-Western, a division of Thomson Learning. All rights reserved.Developed by Cool Pictures & MultiMedia Presentations
Authority
⢠Formal and legitimate right of a manager to make
decisions and issue orders
⢠Allocate resources to achieve organizationally desired
outcomes
⢠Authority is distinguished by three characteristics
ďAuthority is vested in organizational positions, not
people
ďAuthority is accepted by subordinates
ďAuthority flows down the vertical hierarchy
⢠Formal and legitimate right of a manager to make
decisions and issue orders
⢠Allocate resources to achieve organizationally desired
outcomes
⢠Authority is distinguished by three characteristics
ďAuthority is vested in organizational positions, not
people
ďAuthority is accepted by subordinates
ďAuthority flows down the vertical hierarchy
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Responsibility
⢠The duty to perform the task or activity an
employee has been assigned
⢠Managers are assigned authority commensurate
with responsibility
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Accountability
ď Mechanism through which authority and
responsibility are brought into alignment
ď People are subject to reporting and justifying task
outcomes to those above them in the chain of
command
ď Can be built into the organization structure
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Delegation
ď˝Process managers use to transfer authority and responsibility
ď˝Organization encourage managers to delegate authority to lowest possible level
1
2
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Techniques for Delegation
Give thorough
instructions
Maintain feedback Evaluate and reward
performance
Delegate the whole task Select the right
person
Delegation
Ensure that authority
equals responsibility
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Span of Management/
Span of Control
⢠Number of employees who report to a supervisor
⢠Traditional view, about seven subordinates per manager
⢠Many lean organizations today have 30, 40, or even
higher subordinates
⢠When supervisors must be closely involved with
subordinates, the span should be small
⢠Supervisors need little involvement with subordinates, it
can be large
⢠Number of employees who report to a supervisor
⢠Traditional view, about seven subordinates per manager
⢠Many lean organizations today have 30, 40, or even
higher subordinates
⢠When supervisors must be closely involved with
subordinates, the span should be small
⢠Supervisors need little involvement with subordinates, it
can be large
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Factors Associated With Less Supervisor
Involvement
⢠Work is stable and routine
⢠Subordinates perform similar work tasks
⢠Subordinates are concentrated in a single location
⢠Subordinates are highly trained
⢠Rules and procedure defining task activities are
available
⢠Support systems and personnel are available for the
manager
⢠Little time is required in nonsupervisory activities
⢠Managersâ preferences and styles favor a large span
⢠Work is stable and routine
⢠Subordinates perform similar work tasks
⢠Subordinates are concentrated in a single location
⢠Subordinates are highly trained
⢠Rules and procedure defining task activities are
available
⢠Support systems and personnel are available for the
manager
⢠Little time is required in nonsupervisory activities
⢠Managersâ preferences and styles favor a large span
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Tall versus Flat Structure
⢠Span of Control used in an organization determines
whether the structure is tall or flat
⢠Tall structure has a narrow span and more hierarchical
levels
⢠Flat structure has a wide span, is horizontally dispersed
and fewer hierarchical levels
⢠The trend has been toward wider spans of control
⢠Span of Control used in an organization determines
whether the structure is tall or flat
⢠Tall structure has a narrow span and more hierarchical
levels
⢠Flat structure has a wide span, is horizontally dispersed
and fewer hierarchical levels
⢠The trend has been toward wider spans of control
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Centralization versus Decentralization
⢠Greater change and uncertainty in the environment
are usually associated with decentralization
⢠The amount of centralization or decentralization
should fit the firmâs strategy
⢠In times of crisis or risk of company failure,
authority may be centralized at the top
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Departmentalization
The basis on which individuals are grouped into departments
ď Vertical functional approach. People are grouped together in
departments by common skills.
ď Divisional approach. Grouped together based on a common
product, program, or geographical region.
ď Horizontal matrix approach. Functional and divisional chains
of command. Some employees report to two bosses
ď Team-based approach. Created to accomplish specific tasks
ď Network approach. Small, central hub electronically
connected to their other organizations that perform vital
functions. Departments are independent, and can be located
anywhere.
ď Virtual approach. Brings people together temporarily to
exploit specific opportunities then disbands
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Five Approaches to Structural Design
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Five Approaches to Structural Design
Slide 2
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Divisional Structure Advantages
⢠Efficient use of resources
⢠Skill specialization development
⢠Top management control
⢠Excellent coordination
⢠Quality technical problem solving
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Divisional Structure Disadvantages
⢠Poor communications
⢠Slow response to external changes
⢠Decisions concentrated at top
⢠Pin pointing responsibility is difficult
⢠Limited view of organizational goals by employees
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Horizontal Matrix Advantages
⢠More efficient use of resources than single hierarchy
⢠Adaptable to changing environment
⢠Development of both general and specialists
management skills
⢠Expertise available to all divisions
⢠Enlarged tasks for employees
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Dual Authority Structure in a Matrix
Organization
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Horizontal Matrix Disadvantages
⢠Dual chain of command
⢠High conflict between two sides of matrix
⢠Many meetings to coordinate activities
⢠Need for human relations training
⢠Power domination by one side of matrix
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Team Advantages
⢠Same advantages as functional structure
⢠Reduced barriers among departments
⢠Quicker response time
⢠Better morale
⢠Reduced administrative overhead
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Team Disadvantages
⢠Dual loyalties and conflict
⢠Time and resources spent on meetings
⢠Unplanned decentralization
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Network Approach Advantages
⢠Global competitiveness
⢠Work force flexibility
⢠Reduced administrative overhead
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Network Approach Disadvantages
⢠No hands-on control
⢠Loss of part of the organization severely impacts
remainder of organization
⢠Employee loyalty weakened