Organizing: Concepts and Structures in Management PDF

ORGANIZING To create structure WHAT IS ORGANIZING? process of arranging people and other resources to work together to accomplish a goal identify who is to do what, who is in charge of whom and how different people and parts of the organization are related to one another WHAT DOES ORG...

ORGANIZING To create structure WHAT IS ORGANIZING? process of arranging people and other resources to work together to accomplish a goal identify who is to do what, who is in charge of whom and how different people and parts of the organization are related to one another WHAT DOES ORGANIZING DO? Divide the work Arrange resources Coordinate activities WHY DO MANGERS ORGANIZE? Organizing creates and maintains relationships between all organizational resources by indicating which resources are to be used for specified activities and when, where and how they are to be used. Purposes of Organizing Divides work to be done into specific jobs and department Assigns tasks and responsibilities associated with individual jobs Coordinates diverse organizational tasks Clusters jobs into units Establishes relationships among individuals, group and departments Establishes formal lines of authority Allocate and deploys organizational resources. HOW DO MANAGERS ORGANIZE? FEEDBACK Step 1 Step 2 Reflect on plans and Establish major tasks objective Step 5 Step 3 Evaluate results of organizing Divide major tasks into strategy subtasks Step 4 Allocate resource and directives for subtasks Concept of the Organization Herd Concept Man-to-Man Concept Social Concept Herd Concept premised on the idea that people, especially the working class, are faceless automatons that could be coaxed and coerced to perform and accomplish a definite goal through the use of authoritarian measures the subordinates follow the leader who wields exclusive power to decide and enforce unquestionable obedience in his subordinates the rule is “obey now, question later” prevalent in the military organizations Man-to-Man Concept the organization sees the individual working in terms of direct personal relation with his superior There is a man-to-man relationship between the subordinate and the superior as a result of direct delegation of authority and definition of the area of responsibility of the superior to the subordinate flow of communication is strictly up and down between the subordinate and the superior There is no horizontal flow of communication among peers on the same level of management Social Concept viewed the company organization as a pattern of group systems the superior and subordinates are members of a team relationship is no longer man-to-man but man-to-his-group Organizational structure formal arrangement of jobs within an organization. organizational design - a process that involves decisions about six key elements: work specialization, departmentalization, chain of command, span of control, centralization and decentralization and formalization Elements of Organizational Design Work Specialization – dividing work activities in an organization into separate job tasks. Departmentalization - process of grouping together people and jobs into work units Types of Organizational Structure Functional Department/Structure – groups together people with similar skills who perform similar tasks. Members of functional structure share technical expertise, interests and responsibilities Functional Departmentalization Plant Manager Engineering Accounting Production Human Resource Purchasing  Divisional Department/Structure - groups together people who work on the same product, work with similar customers or who work in the same area or processes. - They are especially popular among organizations with diverse operations that extend across many products, territories, customers and work processes Geographical Departmentalization Vice President for Sales Sales Director Sales Director Sales Director Sales Director Sales Director Western Region Southern Region Central Region Northern Region Eastern Region  Matrix Department/Structure – combines functional and divisional approaches to emphasize project or program teams. - It’s an organizational structure that assigns specialist from different functional departments to work with one or more projects or organizational activities Human Resources R&D Marketing Customer Service(CS) Finance Information System(IS) (HR) Marketing Product 1 R& D Group CS Group HR Group Finance Group IS Group Group Marketing Product 2 R& D Group CS Group HR Group Finance Group IS Group Group Marketing Product 3 R& D Group CS Group HR Group Finance Group IS Group Group  Chain of Command (a.k.a. scalar relationship) – line of authority extending from upper organizational levels to the lowest levels, which clarifies who report to whom. - It helps employees answer questions such as “Who do I go to if I have problem?” or “To whom am I responsible?”.  Span of Control – the number of employees a manager can efficiently and effectively handled and managed. - It is sometimes called span of management, span of authority, span of supervision and span of responsibility. - The more individuals a manager supervises, the greater the span of management and the fewer individuals a manager supervises, the smaller the span of management  Flat Organization – characterized by few levels and relatively broad span of management. Tall Organization – characterized by many levels and a relatively narrow span of management  Centralization and Decentralization – describes the degree to which decision making is concentrated. - If it is done mostly by the upper levels of management (centralized) or if the lower level employee provides input or could actually make decisions (decentralized) Factors that influence the Amount of Centralization and Decentralization More Centralization More Decentralization  Environment is stable.  Environment is complex, uncertain.  Lower-level managers are not as  Lower-level managers want a voice capable or experienced at making in decisions. decisions as upper-level managers.  Decisions are significant.  Lower-level managers do not want  Corporate culture is open in to have a say in decisions allowing managers to have a say in  Decisions are relatively minor. what happens.  Organization is facing a crisis or risk  Company is geographically of company failure. dispersed.  Company is large.  Effective implementation of  Effective implementation of company strategies depends on company strategies depends on having involvement and flexibility how managers retaining say over to make decisions. what happens.  Formalization – refers to how standardized an organization’s jobs are and the extent to which employee behavior is guided by rules and procedures. - If the job is highly formalized, then the person doing that job has little discretion over what is to be done, when it’s to be done and how he or she does it. The Concept of Delegation and Empowerment WHAT IS DELEGATION? Delegation is the actual process of assigning job activities and corresponding authority to specific individuals within the organization. The process of delegation is the core of any organization Aspects of Delegation Responsibility – refers to the mental and physical activities which must be performed to carry out a task. Authority – the sum of powers and rights entrusted to make possible the performance of the work delegated. Accountability – the answerability and the obligation to carry on the delegated responsibility and to exercise the authority granted to the subordinate for the proper performance of the mission.  WHAT IS EMPOWERMENT? - reinforcing subordinates’ sense of confidence Reason for Empowering Subordinates: To avoid low self-efficacy – the conviction among people that they cannot successfully perform their jobs or make meaningful contributions. Five Broad Approaches to Empowerment: Helping employees achieve job mastery (giving proper training, coaching and guided experience that will result in initial success) Allowing more control (giving them discretion over job performance and then holding them accountable for outcomes) Providing successful role models (allowing them to observe peers who already perform successfully on the job) Using social reinforcement and persuasion (giving praise, encouragement, and verbal feedback designed to boost self-confidence) Giving emotional support (providing reduction of stress and anxiety through better role definition, task assistance and honest caring) Organizational Design Decision Organizations don’t and won’t, have identical structures. A company with 50 employees isn’t going to look like one with 50,000 employees. But even organizations of comparable size don’t necessarily have similar structures. What works for one organization may not work for another GENERIC MODELS OF ORGANIZATIONAL DESIGN Mechanistic Organization - rigid and tightly controlled structure. - It is characterized by high specialization, rigid departmentalization, narrow spans of control, high formalization, a limited information network (mostly downward communication) and little participation in decision making by lower-level employees. Organic Organization - highly adaptive and flexible where jobs can change rapidly as needs require. - It may have specialized jobs, but those jobs are not standardized. - Employees are highly trained and empowered to handle diverse jobs activities and problems and these organizations frequently use employee teams.  Woodward’s Findings on Technology, Structures and Effectiveness Unit production Mass Production Process Production Structural Low vertical Moderate vertical High vertical Characteristics differentiation differentiation differentiation Low horizontal High horizontal Low horizontal differentiation differentiation differentiation Low formalization High formalization Low formalization Most effective Organic Mechanistic Organic structures TRADITIONAL ORGANIZATIONAL DESIGNS Simple Structure – organizational design with low departmentalization, wide spans of control, authority centralized in a single person and little formalization that is commonly used by small businesses in which the owner and manager are one and the same Functional Structure - groups similar or related occupational specialties together. It’s a functional departmentalization applied to the entire organization. Divisional Structure – made up of separate business units or divisions. In this structural design, each unit or division has limited autonomy, with a division manager responsible for performance and who has strategic and operational authority over his or her unit  CONTEMPORARY ORGANIZATIONAL DESIGNS Team Structure – the entire organization is made of work groups or teams. Matrix Structure – assigns specialist s from different functional departments to work on one or more projects Project Structure – employees continuously work on projects. It has no formal departments that employees return to at the completion of a project. Instead, employees take their specific skills, abilities and experiences to other projects.  Boundary less Organization – this design is not defined by or limited to, the horizontal, vertical and horizontal boundaries imposed by a predefined structure. – Internal Boundaries – horizontal boundaries imposed by work specialization and departmentalization and vertical boundaries that separate employees into organizational levels and hierarchies. – External Boundaries – boundaries that separate the organization from its customers, suppliers and other stakeholders. Types of Organizational Boundary Virtual Organization – an organization that consists of a small core of full-time employees and that hires outside specialists temporarily as needed to work on projects. Network Organization (a.k.a. modular organization) – an organization that uses its own employees to do some work activities and networks of outside suppliers to provide other needed products component or work processes. Organizational Design Challenges Keeping employees connected Building learning organization Managing global structural issues Organizing Trends in the Modern Workplace Shorter Chains of Command Less Unity of Command Wider Span of Control More Delegation and Empowerment Decentralization with Centralization A Final Thought: No matter what structural design managers choose for their organizations, the design should help employees do their work in the best – most efficient and effective way they can. The structure should aid and facilitate organizational members as they carry out the organization’s work. After all, the structure is simply a means to an end.