MGT160

ORGANIZING

DEFINITION

• The process of determining:

▫ The tasks to be done.

▫ Who will do them.

▫ How those tasks will be managed

and coordinated.

The Organizing Process1. REFLECT ON PLAN AND OBJECTIVES

- organizing involves determining how resources

will be use to achieve objectives by understanding

planning

2. ESTABLISH MAJOR TASKS

- designed major tasks

- restaurant - serving customer and cooking food

3. DIVIDE MAJOR TASK INTO SUBTASKS

- major task divided into subtasks to be done

- serving customer - taking order and clearing table

4. ALLOCATE RESOURCES AND DIRECTIVES

FOR SUBTASKS

- who take orders/who clear tables

- how they are to be set

5. EVALUATE THE RESULTS

- gathers feedback on how well the strategy is

working

Organizational Structure

• Defines the primary reporting relationships

that exist within an organization.

• The chain of command and hierarchy of

responsibility, authority, and accountability

are established through organizational

structure.

Division of Work/ Work specialization

• Is the assignment of various portion of a

particular task among a number of organization

members.

• 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.

Departmentalization

• The way in which the activities of an organization are arranged and coordinated so that its mission can be fulfilled and its goals achieved.▫ Structure of organizational members

▫ The flow of information, resources, and task

▫ The locus of decision making

Departmentalization

• Functional departmentalization

▫ The grouping of activities by functions performed

• Product departmentalization

▫ The grouping of activities by product produced

• Customer departmentalization

▫ The grouping of activities by common customers

• Geographic departmentalization

▫ The grouping of activities by territory

• Process departmentalization

▫ The grouping of activities by work or customer flow

• Network structure

▫ A set of alliances with other organizations that serve a wide variety of

functions.

Functional Structure

• Members of the organization are grouped according to the particular function that they perform within the organization.

• Appropriate when an organization’s greatest source of complexity comes from the diverse tasks that must be performed rather than from its products, geographic markets, or consumer groups.

Example of a Functional Structure

Advantages

Facilitates specialization

Cohesive work groups

Improved operational

efficiency

Functional Structure: Advantages

Functional Structure:

Disadvantages

Disadvantages

Focus on departmental vs.

organizational issues

Difficult to develop generalists

needed for top-level

management

Only top-level management

held accountable for

profitability

Product divisional

• Most appropriate for organizations with relatively

diverse product lines that require specialized

efforts to achieve high product quality.

Product departmentalization

Product Divisional• Advantages

▫ Enhanced coordination.

▫ Better assessment of manager performance

and responsibility.

▫ Development of generalist managers.

• Disadvantages

▫ Managers may lack expertise to operate in

wide geographic areas.

▫ Duplication of resources.

Customer divisional

• Most appropriate for organizations that have separate customer groups with very specific and diverse needs.

Customer departmentalization

Geographic divisional

• Most appropriate for organizations with limited product lines that either have wide geographic coverage or desire to grow through geographic expansion.

Geographic departmentalization

Geographic Divisional

• Advantages▫ Allows for focus on specific new markets.

▫ Good structure for growth along geographic lines.

▫ Adaptable to local needs.

• Disadvantages▫ Duplication of product or product/technology

efforts.

▫ Coordination and integration are difficult.

▫ May be difficult to manage diverse product lines.

Manufacturing Process

Departmentalization

• A structure in which the activities of the

organization are grouped according to the major

phases of the process used to manufacture

products.

Manufacturing Process

Departmentalization

Matrix Structure

• A structure in which the tasks of the organization are grouped along two organizational dimensions simultaneously.

• Examples include:

▫ Product/function

▫ Product/geographic region

A Multinational Matrix Structure

Matrix Structure: Advantages

Advantages

Can achieve simultaneous

objectives

Managers focus on two

organizational dimensions,

resulting in more specific

job skills

Matrix Structure: Disadvantages

Disadvantages

Complex, leading to difficulties in

implementation

Behavioral difficulties from “two

bosses”

Time consuming from a

planning/coordination perspective

Network Structure

• A contemporary

organizational structure

that is founded on a set

of alliances with other

organizations that serve

a wide variety of

functions.

Types of Network Structure• Internal network

▫ A network structure that relies on internally developed units to provide services to a core organizational unit.

• Stable network▫ A network structure that utilizes external

alliances selectively as a mechanism for gaining strategic flexibility.

• Dynamic network▫ A network structure that makes extensive use of

outsourcing through alliances with outside organizations.

Network Structure: Advantages

Advantages

Maximizes the

effectiveness of the core

unit

Do more with less

resources

Flexibility

Network Structure: Disadvantages

Disadvantages

Fragmentation makes it

difficult to develop control

systems

Success is dependent on

ability to locate sources

Difficult to develop

employee loyalty

Sample Network

Structure