Elements of Organizing

Elements of Organizing

• Organizing involves deciding how to best group organizational activities and resources.
• Organization structure refers to the set of elements used to configure an organization.
• Six basic building blocks can be used to construct an organization; designing jobs, grouping jobs, establishing reporting relationships, distributing authority, coordinating activities, and differentiating among positions.

Designing Jobs

• Job design is the process of determining an individual's work-related responsibilities.
• Job specialization refers to the degree to which an organization's overall task is broken down into smaller parts.
• Benefits of specialization include workers becoming proficient, decreased transfer time between tasks, specialized equipment use, and lower training costs.
• Limitations of specialization include worker boredom and dissatisfaction. This can lead to higher absenteeism and lower quality work. The anticipated benefits may not occur, and can cause extreme specialization that should be avoided.

Alternatives to Specialization

• Many firms seek alternatives to job design due to the drawbacks of specialization.
• Job rotation involves systematically moving employees from one job to another.
  • It can increase flexibility and lower costs, but jobs are still boring, and satisfaction wanes quickly.
• Job enlargement increases the total number of tasks workers perform.
  • It has positive consequences, but training costs increase, unions may argue for more pay, and work remains boring.
• Job enrichment increases both the number of tasks and the control the worker has over the job.
  • Needed changes may not be made for successful implementation.
• Work teams allow an entire group to design the work system to perform an interrelated set of tasks.
• The job characteristics approach suggests jobs be diagnosed and improved along five core dimensions:
  • Skill variety: Number of things a person does in a job.
  • Task identity: Extent to which the worker does a complete/identifiable portion of the total job.
  • Task significance: Perceived importance of the task.
  • Autonomy: The degree of control the worker has over how work is performed.
  • Feedback: Extent to which the worker knows how well the job is being performed.
• Growth-need strength affects how the "job characteristics approach" model works.

Grouping Jobs

• Departmentalization is the process of grouping jobs according to some logical arrangement.
• The rationale for departmentalization is linked to size. As growth occurs, one person can no longer oversee everyone
• New managerial positions oversee workers grouped according to some plan.
• The logic in such a plan is the basis for all departmentalization.

Common Bases for Departmentalization

• The four most common bases are function, product, customer, and location.
• Functional departmentalization groups jobs by the same or similar activities. It is most common in smaller organizations.
  • Advantages include staffing each department with experts, easy supervision due to a narrow skill set, and ease of coordinating activities
  • Disadvantages emerge with growth, decision-making slows and becomes bureaucratic, employees lose sight of the organization, and monitoring is difficult.
• Product Departmentalization groups activities by products or product groups. Larger businesses adopt this form.
  • Advantages include integrating and coordinating activities across products, speed and effectiveness of decision-making, and promotes department accountability.
  • Disadvantages include managers losing focus of the organization and raising administrative costs.
• Customer departmentalization groups activities to respond to and interact with specific customer or customer groups.
  • The ability to use skilled specialists to deal with unique customers is the basic advantage.
  • A fairly large administrative staff is required to integrate activities of various departments.
• Location Departmentalization groups jobs based on geography.
  • An organization can easily respond to unique customer/environmental characteristics in various regions
  • A larger administrative staff is required to keep track of units in scattered locations.
• Other forms of departmentalization may include time and sequence.
• Common synonyms for "department" include divisions, units, sections, and bureaus.
• Any organization may employ multiple bases of departmentalization, depending on the organizational level.
• Social media is beginning to impact departmentalization.

Establishing Reporting Relationships

• Establishing reporting relationships involves clarifying the chain of command and the span of management.
• Chain of command refers to a clear and distinct line of authority among positions in the organization.
  • It consists of unity of command (each person has a clear reporting relationship to one boss) and the scalar principle (a clear and unbroken line of authority from the lowest to the highest position).
• Span of management (also span of control) is the number of people who report to a particular manager. - A. V. Graicunas quantified the span of management. Managers deal with direct, cross, and group interactions.

Narrow Versus Wide Span

• Ralph C. Davis described two spans:
  • An operative span has up to 30 subordinates at the lower-level.
  • An executive span is limited to nine for middle and top managers.
• Lyndall F. Urwick and General Ian Hamilton concluded the executive span should never exceed six subordinates.
• Factors influencing span of management include competence of supervisor/subordinates, physical subordinate dispersion, nonsupervisory work, degree of required work, and standardized procedures. Also affected are similarity of tasks supervised, frequency of new problems, and preferences of supervisors and subordinates.

Distributing Authority

• Authority is power legitimized by the organization.
• Delegation is the process by which managers assign work to subordinates.
• The primary reason to delegate is to allow the manager to get more work done.
  • The delegation process involves assigning responsibility/ tasks, granting authority needed, and establishing accountability.
  • Problems arise when managers are unwilling or unable to delegate.
• Decentralization systematically delegates power/authority to lower-level managers
• Centralization systematically retains power/authority in higher-level managers.
• Determinates include the external environment, complexity/uncertainty, history, decision riskiness, and lower-level manager abilities.

Coordinating Activities

• Coordination is the process of linking the activities of the various departments.
• The primary reason for coordination is the interdependence of departments and work groups for information and resources:
  • Pooled Interdependence: Units operate with little interaction; their output is pooled at the corporate level, and is the lowest level.
  • Sequential Interdependence: The output of one unit is the input for another in a sequentialfashion; moderate interdependence.
  • Reciprocal Interdependence: Activities flow both ways between units.
• Structural coordination techniques include the managerial hierarchy for interdependent units, rules/procedures for routine activities, managers in liaison roles, and task forces for complex interdependence. Integrating departments is usually permanent and technology enables coordination.

Differentiating Between Positions

• Line positions are within the direct chain of command and are responsible for achieving organizational goals. Staff positions provide expertise, advice, and support for line positions.
• Line managers work toward organizational goals while staff managers advise and assist. Line authority is formal, and staff authority may be advise, compulsory advice, and functional authority.
• Administrative intensity is the degree to which managerial positions are concentrated in staff positions.
  • High administrative intensity is an organization with many staff positions relative to line positions.
  • Low administrative intensity reflects more line positions.