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ORGANIZATION A formal intentional structure of positions, roles and functions
ORGANIZATION STRUCTURE A framework of an organization expressed by its degree of complexity, formalization and centralization
ORGANIZATION DESIGN The development or changing of an organization structure
FORMALIZATION The degree to which an organization relies on rules and procedures to direct the behavior  of its employees
CENTERALIZATIO N The concentration of decision –making authority in upper management
DECENTERALIZATION The handing down of decision – making authority to lower levels in an organization
PURPOSES OF ORGANIZING   Divide work to be done into specific jobs & departments Assign tasks and responsibilities associated with individual jobs Coordinate diverse organizational tasks  Clusters jobs into units Establish relationships among individuals , groups and departments Establish  formal lines of authority  Allocate and deploys organizational resources.
ORGANIZATION DIMENTIONS Vertical horizontal
ASPECTS OF VERTICAL DIMENTION Unity of command Authority & responsibility
ASPECTS OF HORIZONTAL DIMENSION Departmentalization Division of labor
UNITY OF COMMAND The principle that subordinate should have one and only one superior to whom he (or she) is directly responsible.
CHAIN OF COMMAND The flow of authority from the top to the bottom of an organization
DEPARTMENTALIZATION The process of grouping individuals into separate units or departments to accomplish organizational objectives
DEPARTMEN T Department designates a distinct area, division or branch of an organization over which a manager has authority for  the performance of specified activities
DIVISION OF LABOUR The break down of jobs in narrow, respective tasks.
PROCESS OF ORGANIZATION STEPS Establishing objective Formulating supporting plans& policies Identifying activities necessary to accomplish these (1&2 above) Grouping these activities in the light of human and material resources available and to the best way of using them Delegating to the head of each group the authority necessary to perform the activities Tying the groups together vertically and horizontally through chain of command and flow of communication
SPAN OF MANAGEMENT The number of subordinates a manager can supervise effectively and efficiently Narrow (or vertical) Wide (or horizontal)
NARROW SPAN No of subordinates four or less than four
NARROW SPAN Advantages Close supervision Close control Fast communication Disadvantages Many level of management Excessive distance between the top &lowest level Superior tend to get too involved in subordinates work High cost due to many levels
WIDE SPAN No of subordinate six or more than six
WIDE SPAN Advantages Superiors are obliged to delegate Clear  policies are made Subordinates are carefully selected Disadvantages Overloaded superiors become decision bottlenecks Superiors may lose control Require exceptional quality of managers
FACTORS AFFECTING  SPAN Training of subordinates Clarity of delegation of authority Clarity of plans Use of objective standards Rate of change Communication techniques Amount of personal contact needed
DEPARTMENTATION The process of grouping individuals into separate units or departments to accomplish organizational objectives
DEPARTMENTATION By time By function By territory By product By process of manufacturing By customer’s interest
Departmentation by Time Grouping activities on the basis of time, generally at lower levels. Continuous round the clock Shifts
Advantages Service available 24 / 7 Processes work uninterrupted Utilization of equipment Helping people utilize available time Lack of supervision especially at night Problem of coordination & communication Cost of overtime Fatigue factor Disadvantages
DEPARTMENTATION BY FUNCTION MD MARKETING ENGINEERRING PRODUCTION FINANCE MARKETING ` PLANNING SALES ADMIN DESIGN QULITY CONTROL PLANNING PURCHASING GEN PRODUCTION PLANNING BUDGETING ACCOUNTING
Advantages Is Logical reflection of functions Maintains power and prestige of major functions Follows principle of occupational specialization Simplifies training Furnishes means of tight control at top Deemphasis of overall company objective Overspecializes and narrows viewpoint of key personnel Reduces coordination between functions Responsibility for profits is at the top only Slow adaptation to changes in environment Limits development of general managers Disadvantages
DEPARTMENTATION BY TERRITORY (HQ) MD WESTERN REIGON CENTERAL SOUTHERN NORTHERN ESTERN REGION
Advantages Places responsibility at a lower level Places emphasis on local markets and problems Improves coordination in a region Takes advantage of economies of local operations Better face-to-face communication with local interests Furnishes measurable training ground for general managers Requires more persons with general manager abilities Tend to make maintenance of economical central services difficult and may require services such as personnel or purchasing at the regional level Increases problem of top management control Disadvantages
DEPARTMENTATION BY PRODUCT MD HEAVY  ELECTRICAL TELEPHONE /MOBILE KITCHEN APPLIANCE RADIO/TV/VCR
Advantages Places attention and effort on product line Facilitates use of specialized capital, facilities, skills, and knowledge Permits growth and diversity of products and services Improves coordination of functional activities Places responsibility for profits at the division level Furnishes measurable training ground for general managers Requires more persons with general managers abilities Tends to make maintenance of economical central services difficult Presents increased problem of top management control Disadvantages
DEPARTMENTATION BY MANUFACTURING PROCESS MD FOUNDRY NICKLE PLATING PAINTING CASTING/ FORGING
Advantages Achieves economic advantage Uses specialized technology Utilizes special skills Simplifies training Coordination of departments is difficult Responsibility for profit is at the top Is unsuitable for developing general managers Disadvantages
DEPARTMENTATION BY CUSTOMERS MD HIRE-PERCHASE HIGH END  PRODUCTS BOUTIQUE BUDGET ITEM
Advantages Encourages concentration on customer needs Gives customers feeling that they have an understanding supplier Develops expertness in customer area May be difficult to coordinate operations between competing customer demands Requires managers and staff expert in customers problems Customer groups may not always be clearly defined (For Example, large corporate firms vs. other corporate businesses) Disadvantages
TYPES OF ORGANIZATIONS Mechanistic ( or bureaucratic ) Organic ( or adhocracy) Team-based Boundary-less Matrix
MECHANISTIC ORGANIZATION (Bureaucracy) A structure that is high in complexity, formalization and centralization Permanent Shared responsibility Work by the book
ORGANIC ORGANIZATION   (Adhocracy) A structure that is low in complexity , formalization and centralization . Transient Adhocism creative
TEAM-BASED ORGANIZATION An organization made of work groups or teams that perform organization’s work
BOUNDARY – LESS ORGANIZATION An organization whose design is not defined or limited to the boundaries imposed by a pre-defined structure [ Also knows as Network org, modular ,or virtual corporation]
MECHANISTIC Vrs ORGANIC ORGANIZATION Rigid hierarchical relationship Fixed duties High formalization Formalized communication channels  centralized Collaborative/flexible (both vertical horizontal) Adaptable duties low formalization Informal communication decentralized  MECHANISTIC Organic
MATRIX ORGANIZATION An organization that assigns specialists from different functional departments to work on one or more projects that are led by a project manager
MATRIX ORGANIZATION WORKING Define objectives of the project or task Clarify roles , authority and responsibility of managers and team members  based on knowledge &experience rather than rank Balance power of functional and project managers Install appropriate cost , time  and quality control
STRATEGIC BUSINESS UNIT (SBU) A single business that is independent of main organization and formulates its own strategy. It will have its own: Unique mission Competitors Plans Organization/setup recourses

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Principles of Management

  • 1. ORGANIZATION A formal intentional structure of positions, roles and functions
  • 2. ORGANIZATION STRUCTURE A framework of an organization expressed by its degree of complexity, formalization and centralization
  • 3. ORGANIZATION DESIGN The development or changing of an organization structure
  • 4. FORMALIZATION The degree to which an organization relies on rules and procedures to direct the behavior of its employees
  • 5. CENTERALIZATIO N The concentration of decision –making authority in upper management
  • 6. DECENTERALIZATION The handing down of decision – making authority to lower levels in an organization
  • 7. PURPOSES OF ORGANIZING Divide work to be done into specific jobs & departments Assign tasks and responsibilities associated with individual jobs Coordinate diverse organizational tasks Clusters jobs into units Establish relationships among individuals , groups and departments Establish formal lines of authority Allocate and deploys organizational resources.
  • 9. ASPECTS OF VERTICAL DIMENTION Unity of command Authority & responsibility
  • 10. ASPECTS OF HORIZONTAL DIMENSION Departmentalization Division of labor
  • 11. UNITY OF COMMAND The principle that subordinate should have one and only one superior to whom he (or she) is directly responsible.
  • 12. CHAIN OF COMMAND The flow of authority from the top to the bottom of an organization
  • 13. DEPARTMENTALIZATION The process of grouping individuals into separate units or departments to accomplish organizational objectives
  • 14. DEPARTMEN T Department designates a distinct area, division or branch of an organization over which a manager has authority for the performance of specified activities
  • 15. DIVISION OF LABOUR The break down of jobs in narrow, respective tasks.
  • 16. PROCESS OF ORGANIZATION STEPS Establishing objective Formulating supporting plans& policies Identifying activities necessary to accomplish these (1&2 above) Grouping these activities in the light of human and material resources available and to the best way of using them Delegating to the head of each group the authority necessary to perform the activities Tying the groups together vertically and horizontally through chain of command and flow of communication
  • 17. SPAN OF MANAGEMENT The number of subordinates a manager can supervise effectively and efficiently Narrow (or vertical) Wide (or horizontal)
  • 18. NARROW SPAN No of subordinates four or less than four
  • 19. NARROW SPAN Advantages Close supervision Close control Fast communication Disadvantages Many level of management Excessive distance between the top &lowest level Superior tend to get too involved in subordinates work High cost due to many levels
  • 20. WIDE SPAN No of subordinate six or more than six
  • 21. WIDE SPAN Advantages Superiors are obliged to delegate Clear policies are made Subordinates are carefully selected Disadvantages Overloaded superiors become decision bottlenecks Superiors may lose control Require exceptional quality of managers
  • 22. FACTORS AFFECTING SPAN Training of subordinates Clarity of delegation of authority Clarity of plans Use of objective standards Rate of change Communication techniques Amount of personal contact needed
  • 23. DEPARTMENTATION The process of grouping individuals into separate units or departments to accomplish organizational objectives
  • 24. DEPARTMENTATION By time By function By territory By product By process of manufacturing By customer’s interest
  • 25. Departmentation by Time Grouping activities on the basis of time, generally at lower levels. Continuous round the clock Shifts
  • 26. Advantages Service available 24 / 7 Processes work uninterrupted Utilization of equipment Helping people utilize available time Lack of supervision especially at night Problem of coordination & communication Cost of overtime Fatigue factor Disadvantages
  • 27. DEPARTMENTATION BY FUNCTION MD MARKETING ENGINEERRING PRODUCTION FINANCE MARKETING ` PLANNING SALES ADMIN DESIGN QULITY CONTROL PLANNING PURCHASING GEN PRODUCTION PLANNING BUDGETING ACCOUNTING
  • 28. Advantages Is Logical reflection of functions Maintains power and prestige of major functions Follows principle of occupational specialization Simplifies training Furnishes means of tight control at top Deemphasis of overall company objective Overspecializes and narrows viewpoint of key personnel Reduces coordination between functions Responsibility for profits is at the top only Slow adaptation to changes in environment Limits development of general managers Disadvantages
  • 29. DEPARTMENTATION BY TERRITORY (HQ) MD WESTERN REIGON CENTERAL SOUTHERN NORTHERN ESTERN REGION
  • 30. Advantages Places responsibility at a lower level Places emphasis on local markets and problems Improves coordination in a region Takes advantage of economies of local operations Better face-to-face communication with local interests Furnishes measurable training ground for general managers Requires more persons with general manager abilities Tend to make maintenance of economical central services difficult and may require services such as personnel or purchasing at the regional level Increases problem of top management control Disadvantages
  • 31. DEPARTMENTATION BY PRODUCT MD HEAVY ELECTRICAL TELEPHONE /MOBILE KITCHEN APPLIANCE RADIO/TV/VCR
  • 32. Advantages Places attention and effort on product line Facilitates use of specialized capital, facilities, skills, and knowledge Permits growth and diversity of products and services Improves coordination of functional activities Places responsibility for profits at the division level Furnishes measurable training ground for general managers Requires more persons with general managers abilities Tends to make maintenance of economical central services difficult Presents increased problem of top management control Disadvantages
  • 33. DEPARTMENTATION BY MANUFACTURING PROCESS MD FOUNDRY NICKLE PLATING PAINTING CASTING/ FORGING
  • 34. Advantages Achieves economic advantage Uses specialized technology Utilizes special skills Simplifies training Coordination of departments is difficult Responsibility for profit is at the top Is unsuitable for developing general managers Disadvantages
  • 35. DEPARTMENTATION BY CUSTOMERS MD HIRE-PERCHASE HIGH END PRODUCTS BOUTIQUE BUDGET ITEM
  • 36. Advantages Encourages concentration on customer needs Gives customers feeling that they have an understanding supplier Develops expertness in customer area May be difficult to coordinate operations between competing customer demands Requires managers and staff expert in customers problems Customer groups may not always be clearly defined (For Example, large corporate firms vs. other corporate businesses) Disadvantages
  • 37. TYPES OF ORGANIZATIONS Mechanistic ( or bureaucratic ) Organic ( or adhocracy) Team-based Boundary-less Matrix
  • 38. MECHANISTIC ORGANIZATION (Bureaucracy) A structure that is high in complexity, formalization and centralization Permanent Shared responsibility Work by the book
  • 39. ORGANIC ORGANIZATION (Adhocracy) A structure that is low in complexity , formalization and centralization . Transient Adhocism creative
  • 40. TEAM-BASED ORGANIZATION An organization made of work groups or teams that perform organization’s work
  • 41. BOUNDARY – LESS ORGANIZATION An organization whose design is not defined or limited to the boundaries imposed by a pre-defined structure [ Also knows as Network org, modular ,or virtual corporation]
  • 42. MECHANISTIC Vrs ORGANIC ORGANIZATION Rigid hierarchical relationship Fixed duties High formalization Formalized communication channels centralized Collaborative/flexible (both vertical horizontal) Adaptable duties low formalization Informal communication decentralized MECHANISTIC Organic
  • 43. MATRIX ORGANIZATION An organization that assigns specialists from different functional departments to work on one or more projects that are led by a project manager
  • 44. MATRIX ORGANIZATION WORKING Define objectives of the project or task Clarify roles , authority and responsibility of managers and team members based on knowledge &experience rather than rank Balance power of functional and project managers Install appropriate cost , time and quality control
  • 45. STRATEGIC BUSINESS UNIT (SBU) A single business that is independent of main organization and formulates its own strategy. It will have its own: Unique mission Competitors Plans Organization/setup recourses