Leadership: Organizing Authority & Problem Solving

• Module 6 deals with organizing authority and problem-solving in leadership

Organizing

• It is a management function that involves setting up groups of employees.
• Resources are allocated and work is assigned to achieve organizational goals.
• Effective organizing ensures efficient use of organizational resources.

Organizational Charts

• Boxes represent positions or departments.
• Lines connecting boxes show reporting relationships.
• Organizational charts help supervisors understand their place and future opportunities within the company.

Organization Chart: An International Company

• Illustrates a sample hierarchy starting from Chairman/CEO to various departments (Corporate, Operations, etc.)

Organization Charts Characteristics

• Height refers to the number of management levels from top to operative employees.
• Tall organizations have many levels.
• Flat organizations have few levels.
• In flat organizations, more people report to each manager and employees have more autonomy.
• Alphabet (Google) is cited as an example of a company that uses a flat chart structure.

Organizational Structures

• Functional Structure: Groups employees based on their work type
  • It is suited for centralized decision-making, economy of scale and efficiency.
  • Not ideal for dynamic environments requiring quick decisions and customized products.
• Product Structure: Assigns work and resources to departments responsible for a specific good or service
• Geographic Structure: Organizes according to customer locations, or where goods/services are produced.
• Organic Structure: Job boundaries shift, people contribute where needed.
• Network Organization: Maintains flexibility by staying small and contracting for projects.
• Learning Organization: excels in creating, acquiring, transferring knowledge, and modifying behavior based on new knowledge.

Job Descriptions

• Allow employees to know what is expected of them.
• Elements include:
  • Job title and objective.
  • Summary of the job's nature and level.
  • Description of function and scope.
  • List of critical duties/tasks.
  • Key responsibilities in order of significance.
  • Relationships/roles in the company (supervisory, subordinate, etc.).

Authority

• Authority is the right to perform a task or give orders
• Line Authority: Right to give orders related to the organization's primary purpose.
• Staff Authority: Right to advise or assist those with line authority.
• Functional Authority: The right given by higher management to specific staff with expertise, to give orders.

Centralized vs Decentralized Authority

• Centralized organizations share little authority.
• Decentralized organizations share a lot of authority.
• No organization is completely one or the other

Power, Responsibility, and Accountability

• Power: Ability to influence others actions.
• Responsibility: Obligation to perform assigned tasks.
• Accountability: Accepting consequences of responsibilities.

Principles of Organizing

• Parity Principle: Authority should match responsibility.
• Unity of Command: Each employee should have one supervisor.
• Chain of Command: Authority flow through the organization.
• Span of Control: Number of people a manager supervises.

Delegating

• Delegation provides the authority and responsibility to another person to carry out a task.
• Benefits include:
  • Supervisor performance evaluation includes the department's achievements.
  • Management of time is enhanced for the supervisor.
  • Skill development and value to the organization for the employee.

Empowerment

• Empowerment is the delegation of broad decision-making authority and responsibility.
• Assumes employees will provide more insight than managers alone.
• Increased participation in decision-making leads to increased commitment.

The Process of Delegating

• Decide what work to delegate
• Assign the work.
• Create an obligation.
• Grant authority.
• Follow up.

Reluctance to Delegate

• Supervisors might believe they must closely monitor to avoid departmental performance decline.
• Supervisors may think they can perform the job better than their employees.

Decision-Making

• The decision making process should cover all functions of management
• Supervisors sometimes make decisions without considering the whole process.

Process of Decision Making

• Identify the problem.
• Identify alternative solutions.
• Gather and organize facts.
• Evaluate alternatives.
• Choose and implement the best alternative.
• Get feedback and take corrective action.

Compromises That May Affect Rational Decision Making

• Simplicity: Using past experiences to handle similar problems.
• Bounded Rationality: Selecting an alternative that meets minimum standards.
• Utility: Considering alternatives until one meets minimum criteria.
• Subjective Rationality: Analyzing based on intuition instead of data.

General Guidelines for Decision Making

• Consider the consequences.
• Respond quickly in crisis.
• Inform the manager
• Be decisive yet flexible.
• Avoid decision-making traps

Decision-Making Traps

• Treating every decision like a crisis.
• Responding inappropriately to failure.
• Overlooking precedent.
• Promising too much.
• Assuming only one choice is right.

Tools for Decision Making

• Probability Theory compares consequences of decisions in risk situations.
  • Supervisors need to know/estimate the outcome value and its probability.
• Decision Tree: It is a graph showing expected values to help decision makers use probability theory.
  • The decision maker needs to estimate the probability of each event.
• To find the expected value, the decision maker multiplies the outcome value by its likelyhood.

Group Decision Making

• Advantages: More ideas and alternatives than an individual.
• People involved tend to support implementation
• Disadvantages: Slower than individual decisions.
• There is a cost to holding/attending meetings.
• Possible Domination by a subgroup can lead to inferior decisions.
• Groupthink is a danger.

Groupthink

• It is a failure to think independently due to the desire for consensus and closeness.
• Symptoms include:
  • Defending the group's position against objections.
  • Stereotyped views of opponents.
  • Pressure against dissenting opinions.
  • Illusion of unanimous agreement.

Creativity

• Creativity is the ability to bring about something imaginative or new.
• When problems are unsolvable, supervisors need a fresh approach.

Establishing and Maintaining a Creative Work Climate

• Supervisors should:
  • Establish a work climate that encourages thinking outside the box
  • Implement employee ideas and give them credit.
  • Acknowledge failure as a sign of effort.
  • Help employees learn from failures.