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Mgmt 371Chapter Eleven
Basic Elements of Organizing
Much of the slide content was created by Dr, Charlie Cook, Houghton Mifflin, Co.©
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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.
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Designing Jobs
Job Design The determination of an individual’s work-
related responsibilities. Organizing TDR into a productive unit of
work. Reasons for systematic job design: Maximize performance Enhance job satisfaction Reduce adverse affects to physical and
mental health.
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Designing Jobs (Job Specialization )
Job Specialization (Division of Labor) -- The degree to which the overall task of the organization is broken down and divided into smaller component parts
Benefits of Specialization Workers can become proficient at a task. Transfer time between tasks is decreased. Specialized equipment can be more easily
developed. Employee replacement becomes easier.
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Designing Jobs (Job Specialization )
Job Specialization (Division of Labor).
Limitations of Specialization Employee boredom and dissatisfaction
with mundane tasks. Anticipated benefits do not always
occur.
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Adam Smith’s Exampleof 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
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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 (increasing the scope of the job). Job Enrichment
Increasing both the number of tasks the worker does and the control the worker has over the job (increasing the scope and depth of the job).
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Alternatives to Specialization
Job Characteristics Approach: Core Dimensions
Skill variety—the number of tasks a person does in a job.
Task identity—the extent to which the worker does a complete or identifiable portion of the total job.
Task significance —the perceived importance of the task.
Autonomy—the degree of control the worker has over how the work is performed.
Feedback— the extent to which the worker knows how well the job is being performed.
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Alternatives to Specialization
Job Characteristics Approach:Growth-Need Strength
The desire for some people to grow, develop, and expand their capabilities that is their response to the core dimensions.
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Alternatives to Specialization (Work Teams) Work Teams
An alternative to job specialization that allows the entire group to design the work system it will use to perform an interrelated set of tasks.
Self-Directed Work Teams (SDWT) – composed of individuals who are assigned a cluster of TDR to be performed and are empowered to make decisions regarding work assignments within the group.
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Grouping Jobs: Departmentalization Departmentalization
The process of grouping jobs according to some logical arrangement.
Rationale for Departmentalization
Organizational growth exceeds the owner-manager’s capacity to personally supervise all of the organization.
Additional managers are employed and assigned specific employees to supervise.
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Grouping Jobs: Departmentalization (Functional) Functional Departmentalization
Grouping jobs involving the same or similar activities.
Advantages Each department can be staffed by
functional-area experts. Supervision is facilitated in that managers
only need be familiar with a narrow set of skills.
Coordination inside each department is easier.
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Grouping Jobs: Departmentalization (Functional)
Functional DepartmentalizationDisadvantages
Decision making becomes slow and bureaucratic.
Employees narrow their focus to the department and lose sight of organizational goals/ issues.
Accountability and performance are difficult to monitor.
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Product Departmentalization Form
Product Departmentalization Disadvantages Managers may focus on their product to the
exclusion of the rest of the organization. Administrative costs may increase due to
each department having its own functional-area experts.
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Product Departmentalization Form
Product Departmentalization Grouping activities around products or product
groups. Advantages All activities associated with one product can
be integrated and coordinated. Speed and effectiveness of decision making
are enhanced. Performance of individual products or
product groups can be assessed
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Customer Departmentalization
Customer Departmentalization Grouping activities to respond to and interact
with specific customers and customer groups.
Advantage Skilled specialists can deal with unique
customers orcustomer groups.
Disadvantage A large administrative staff is needed to
integrate activities of various departments.
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Location Departmentalization
Location (Geographic) Departmentalization The grouping of jobs on the basis of defined
geographic sites or areas. Advantage
Enables the organization to respond easily to unique customer and environmental characteristics.
Disadvantage Large administrative staff may be needed
to keep track of units in scattered locations.
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Departmentalization
Other Forms of Departmentalization Grouping activities by time
By specific units of time By sequence. By a characteristic of the customer, product, or
service Other Considerations
Departments are often called by other names. Divisions, units, sections, and bureaus
Organizations are likely to employ multiple bases of departmentalization, depending on level.
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Establishing Reporting Relationships Chain of Command (scalar chain)
A clear and distinct line of authority among the positions in an organization.
Scalar Principle (Fayol) A clear and unbroken line of authority must
extend from the bottom to the top of the organization.
Unity of Command (Fayol) Each person within an organization must have
a clear reporting relationship to one and only one boss.
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Establishing Reporting Relationships (Span of Control) Narrow Versus Wide Spans
Span of Management (Span of Control) The number of people who report to a particular
manager. A. V. Graicunas
Subordinate interactions Direct—manager’s relationship with each subordinate. Cross—among the subordinates themselves. Group—between groups of subordinates. Formula for the number of interactions of all types:
I = N(2N/2 + N - 1), where I is the total number of interactions and N is number of subordinates.
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Establishing Reporting Relationships (Span of Control) Narrow Versus Wide Spans
Ralph Davis Operative span for lower-level managers of up to
30 workers. Executive span for middle and top managers set
at 3 to 9. Span depends on managers’ jobs, company
growth rate, and similar factors Lyndall Urwick and General Ian Hamilton
Executive span should never exceed six
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Establishing Reporting Relationships: Tall versus Flat Organizations
Tall Organizations Are more expensive because of the
number of managers involved. Foster more communication problems
because of the number of people through whom information must pass
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Establishing Reporting Relationships: Tall versus Flat Organizations
Flat Organizations Lead to higher levels of employee morale
and productivity. Create more administrative responsibility
for the relatively few managers. Create more supervisory responsibility for
managers due to wider spans of control.
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Factors Influencing the Span of Management
Competence of the supervisor. Competence of the subordinates. Physical dispersion. Extent of manager’s nonsupervisory work (the greater the
narrower the span). Degree of required interaction (the greater, the narrower
the span). Extent of SOPs (the greater the wider the span). Frequency of problems (the greater, the narrower the
span). Preferences of supervisors and subordinates.
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Distributing Authority
Authority Power that has been legitimized by the
organization. Delegation
The process by which managers assign a portion of their total workload to others.
Reasons for Delegation To enable the manager to get more work done
by utilizing the skills and talents of subordinates. To foster development of subordinates by having
them participate in decision making and problem.
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Problems in Delegation
Manager Reluctant to delegate. Disorganization prevents planning work in
advance. Subordinate’s success threatens superior’s
advancement. Lack of trust in the subordinate to do well.
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Problems in Delegation
Subordinate Reluctant to accept delegation for fear of
failure. Perceives no rewards for accepting
additional responsibility. Prefers to avoid any risk and responsibility.
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Decentralization and Centralization
Decentralization Systematically delegating power and
authority throughout the organization to middle- and lower-level managers.
Centralization Systematically retaining power and
authority in the hands of higher-level managers.
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Decentralization and Centralization
Factors Determining Choice of Centralization External environment’s complexity and
uncertainty History of the organization Nature (cost and risk) of the decisions to
be made.
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Coordinating Activities
Coordination The process of linking the activities of the
various departments of the organization. The Need for Coordination
Departments and work groups are interdependent; the greater the interdependence, the greater the need for coordination.
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Coordinating Activities: Three Major Forms of Interdependence Pooled interdependence
When units operate with little interaction; their output is simply pooled at the organizational level.
Sequential interdependence When the output of one unit becomes the
input of another unit in sequential fashion. Reciprocal interdependence
When activities flow both ways between units.
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Structural Coordination Techniques The Managerial Hierarchy
Placing one manager in charge of interdependent departments or units.
Rules and Procedures Routine coordination activities can be
handled via rules and procedures that set priorities and guidelines for actions.
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Structural Coordination Techniques Liaison Roles
A manager coordinates interdependent units by acting as a common point of contact, facilitating the flow of information.
Task Forces Used with multiple units when coordination
is complex, requiring more than one individual and the need for coordination is acute.
Disbanded when need for coordination has been met.
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Structural Coordination Techniques (cont’d) Integrating Departments
Permanent organizational units that maintain internal integration and coordination on an ongoing basis.
May have authority and budgetary controls. Electronic Coordination
E-mail, electronic scheduling, PDAs, cell phones.
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Differentiating Between Positions Line Positions
Positions in the direct chain of command responsible for the achievement of an organization’s goals.
Have formal (legitimate) authority. Staff Positions
Positions intended to provide expertise, advice, and support to line positions.
Have advisory authority; can give compulsory advice.
Have functional authority to enforce compliance with organizational policies and procedures.