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DIP – 5. Organizing Function. Lim Sei Kee @ cK. Organizing. Process of arranging people and resources to work toward a common goal. Organizing decisions divide up the work that needs to be done, allocate people and resources to do it, and coordinate results to achieve productivity. - PowerPoint PPT Presentation
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DIP – 5. ORGANIZING
FUNCTIONLim Sei Kee @ cK
ORGANIZING Process of arranging people and
resources to work toward a common goal.
Organizing decisions divide up the work that needs to be done, allocate people and resources to do it, and coordinate results to achieve productivity.
IMPORTANCE OF ORGANIZING Divide up the work Arrange resources Coordinate activities
4
FUNDAMENTALS OF ORGANIZING The organization chart is a diagram that
illustrates the reporting lines between units and people within the organization.
The organization chart conveys four kinds of information: The boxes represent different units. The titles in each box show the work
performed by that person. Reporting relationships are shown by the lines
connecting superiors and subordinates. Levels of the organization are indicated by the
number of vertical layers in the chartCopyright © 2005 by South-Western, a division of Thomson LearningAll rights reserved
5
ORGANIZATION CHART FOR HOME DEPOT(ADAPTED FROM FIGURE 11.1)
Copyright © 2005 by South-Western, a division of Thomson LearningAll rights reserved
ExecutiveVice President,Chief Financial
Officer
ExecutiveVice President,
Marketing
ExecutiveVice President,
Legal
ExecutiveVice President,
HumanResources
ExecutiveVice President,Merchandising
ExecutiveVice President,
Operations
ExecutiveVice President,InternationalTechnology
Vice President,InvestorRelations
SeniorVice President,
CustomerService
SeniorVice President,
Operations
President,Western
President,Atlantic
President,Mexico
SeniorVice President,
Real Estate
Chairman ofBoard and CEO
6
FUNDAMENTAL CONCEPTS OF ORGANIZING Differentiation means that the organization
is composed of units that work on specialized task using different work methods and requiring employees with unique competencies. Division of labor means that the work of the
organization is divided into smaller tasks. Specialization is the process of identifying
particular tasks and assigning them to departments, teams, or divisions.
Integration means that the various units must be put back together so that work is coordinated. Copyright © 2005 by South-
Western, a division of Thomson LearningAll rights reserved
7
FIVE ELEMENTS OF VERTICAL DESIGN
Hierarchy is a pyramid showing relationships among levels.
Span of control refers to the number of employees directly reporting to a person.
Factors influencing span of control include:1. The competence of both the
manager and the employee.2. The similarity or dissimilarity of
tasks being supervised.3. The incidence of new problems in
the manager’s department.4. The extent of clear operating
standards and rules.Copyright © 2005 by South-Western, a division of Thomson LearningAll rights reserved
8
FIVE ELEMENTS OF VERTICAL DESIGN (CONT.) Authority, Responsibility, and
Accountability Authority is the right to make a decision. Responsibility is an employee’s duty to
perform the assigned task. Accountability is the manager’s
expectation that the employee will accept credit or blame for his work.
Copyright © 2005 by South-Western, a division of Thomson LearningAll rights reserved
9
FIVE ELEMENTS OF VERTICAL DESIGN (CONT.) Delegation is the process of giving
authority to a person (or group or team) to make decisions and act in certain situations.
Practices useful in effective delegation include: Establish goals and standard Ensure clarity Involvement Expect completed work Provide training Timely feedback Copyright © 2005 by South-
Western, a division of Thomson LearningAll rights reserved
10
FIVE ELEMENTS OF VERTICAL DESIGN (CONT.) Centralization and Decentralization
Centralization is the concentration of authority at the top of an organization or department.
Decentralization is the delegation of authority to lower level employees or departments.
Key factors affecting decision to centralization or decentralization.Cost of decisionsUniformity of policyCompetency levelsControl mechanismsEnvironmental influencesCopyright © 2005 by South-
Western, a division of Thomson LearningAll rights reserved
11
HORIZONTAL ORGANIZATIONAL DESIGN Functional Design Product Design Geographical Design Network Design
Copyright © 2005 by South-Western, a division of Thomson LearningAll rights reserved
12
FUNCTIONAL DESIGN Function design means grouping
managers and employees according to their areas of expertise and the resources they use to perform their jobs.
Copyright © 2005 by South-Western, a division of Thomson LearningAll rights reserved
13
FUNCTIONAL DESIGN (CONT.)
Potential Benefits Supports skill
specialization Reduces duplication of
resources & increases coordination
Enhances career development & training within functional area
Allows superiors and subordinates to share common expertise
Promotes high-quality technicaldecision making
Potential Pitfalls Inadequate
communication Conflicts over product
priorities Difficulties with interunit
coordination Focus on departmental
rather than organizational issues and goals
Develops managers who are experts in a narrow field
Copyright © 2005 by South-Western, a division of Thomson LearningAll rights reserved
14
HARLEY-DAVIDSON ORGANIZATION CHART(ADAPTED FROM FIGURE 11.2)
Copyright © 2005 by South-Western, a division of Thomson LearningAll rights reserved
GeneralCounsel
CEO
Controller Manufacturing
Owners Groups(HOGS)
StrategicPlanning Engineering Human
Resources
Merchandise
15
PRODUCT DESIGN Product design means that all
functions that contribute to a product are organized under one manager.
Copyright © 2005 by South-Western, a division of Thomson LearningAll rights reserved
16
PRODUCT DESIGN (CONT.)Potential Benefits Permits fast changes in
a product line Allows greater product
line visibility Fosters a concern for
customer demand Clearly defines
responsibilities for each product line
Develops managers who can think across functional lines
Potential Pitfalls Not allowing efficient
utilization of skills and resources
Not fostering coordination of activities across product
Encourages politics and conflicts in resource allocation across product lines
Limits career mobility for personnel outside their own product lines
Copyright © 2005 by South-Western, a division of Thomson LearningAll rights reserved
17
GENERAL DYNAMICS ORGANIZATION CHART(ADAPTED FROM FIGURE 11.3)
Copyright © 2005 by South-Western, a division of Thomson LearningAll rights reserved
InformationSystems &Technology
LandSystems
Chairman & ChiefExecutive Officer
ArmamentSystems
Ordnance &TacticalSystems
BathIron
WorksElectric
Boat
CombatSystems
MarineSystems Aerospace
AviationServices
18
GEOGRAPHICAL DESIGN Geographical design organizes
activities around location.
Copyright © 2005 by South-Western, a division of Thomson LearningAll rights reserved
19
GEOGRAPHICAL DESIGN (CONT.)
Potential Benefits Has facilities and the
equipment used for production and/or distribution all in one place, saving time and costs
Able to develop expertise in solving problems unique to one location
Gaining an understanding of customers’ problems and desires
Getting production closer to raw materials and suppliers
Potential Pitfalls Duplication of functions,
to varying degrees, at each regional or individual unit location
Conflict between each location's goals and the organization's goals
Adds levels of management and extensive use of rules and regulations to coordinate and ensure uniformity of quality among locations
Copyright © 2005 by South-Western, a division of Thomson LearningAll rights reserved
20
STARBUCKS ORGANIZATION CHART(ADAPTED FROM FIGURE 11.4)
Copyright © 2005 by South-Western, a division of Thomson LearningAll rights reserved
President,International
President
CEO
Thailand
VP,Northwest
VP,South Central
VP,Southwest
President,North America
President, Europe,Middle East, Africa
President,Japan
Senior VP,Coffee
Executive VP,Chief Financial Officer
Executive VP,Partner Resources
Executive VP,Supply Chain & Coffee
Executive VP,Legal
Australia
United Kingdom
21
NETWORK DESIGN Network design subcontracts
some or many of its operations to other firms and coordinates them to accomplish specific goals.
Copyright © 2005 by South-Western, a division of Thomson LearningAll rights reserved
22
NETWORK DESIGN (CONT.)Potential Benefits Ability to gain special
knowledge and skills of others without having to hire employees
Brings together people with different insights
Allows managers the flexibility to work with a wide variety of different suppliers, customers, and other organizations
Potential Pitfalls Other organizations may fail
to live up to established deadlines
Managers must constantly monitor the quality of work provided by other organizations
Employees in the outsourced organization may not commit to the same values and sense of time urgency to which employees in the networked organization are committed
Copyright © 2005 by South-Western, a division of Thomson LearningAll rights reserved
23
DREAMWORKS SKG NETWORK DESIGN(ADAPTED FROM FIGURE 11.5)
Copyright © 2005 by South-Western, a division of Thomson LearningAll rights reserved
Spielberg Katzenberg Geffen (Films) (Animation) (Music)
ComputerHardware/Software
Agents
MakeupArtists
MediaRelationsTalent
ScoutsActors
Legal
FutureGames
Marketing
Technicians
CostumeDesigners
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