Organising Management PDF

Management ORGANIZING Designing Organizational Structure Copyright © 2021 Pearson Education Ltd.  Learning Objectives 11.1 Describe six key elements in organizational design. 11.2 Contrast mechanistic and organic structures. 11.3 Discuss the contingency factors that fav...

Management ORGANIZING Designing Organizational Structure Copyright © 2021 Pearson Education Ltd.  Learning Objectives 11.1 Describe six key elements in organizational design. 11.2 Contrast mechanistic and organic structures. 11.3 Discuss the contingency factors that favor either the mechanistic model or the organic model of organizational design. 11.4 Describe traditional organizational design options. 11.5 Discuss organizing for flexibility in the twenty-first century.  Elements of Organizational Design Organizing: management function that involves arranging and structuring work to accomplish the organization’s goals Organizational structure: the formal arrangement of jobs within an organization Organizational chart: the visual representation of an organization’s structure Organizational design: creating or changing an organization’s structure  Exhibit 11.1 Purposes of Organizing Purposes Divides work to be done into specific jobs and departments. Assigns tasks and responsibilities associated with individual jobs. Coordinates diverse organizational tasks. Clusters jobs into units. Establishes relationships among individuals, groups, and departments. Establishes formal lines of authority. Allocates and deploys organizational resources.  Work Specialization Work specialization: dividing work activities into separate job tasks  Exhibit 11.2 Economies and Diseconomies of Work Specialization Exhibit 11.2 shows the economies and diseconomies of work specialization. Copyright © 2021 Pearson Education Ltd.  Departmentalization Departmentalization: the basis by which jobs are grouped together  Exhibit 11.3 The Five Common Forms of Departmentalization (1 of 3) Exhibit 11.3 illustrates each type of departmentalization as well as the advantages and disadvantages of each. Copyright © 2021 Pearson Education Ltd.  Exhibit 11.3 The Five Common Forms of Departmentalization (2 of 3) Exhibit 11.3 illustrates each type of departmentalization as well as the advantages and disadvantages of each. Copyright © 2021 Pearson Education Ltd.  Exhibit 11.3 The Five Common Forms of Departmentalization (3 of 3) Exhibit 11.3 illustrates each type of departmentalization as well as the advantages and disadvantages of each. Copyright © 2021 Pearson Education Ltd.  Today’s View on Departmentalization Two trends are: – Cross-functional teams: a work team composed of individuals from various functional specialties. This has become more popular as tasks become more complex. – Customer departmentalization: emphasizes monitoring and responding to customers’ needs  Chain of Command Chain of command: the line of authority extending from upper organizational levels to the lowest levels, which clarifies who reports to whom  Authority Authority: the line of authority extending from upper organizational levels to the lowest levels, which clarifies who reports to whom Line authority: authority that entitles a manager to direct the work of an employee Staff authority: positions with some authority that have been created to  Responsibility Responsibility: the obligation or expectation to perform any assigned duties Unity of command: the management principle that each person should report to only one manager  Span of Control Span of control: the number of employees a manager can efficiently and effectively manage  Exhibit 11.4 Contrasting Spans of Controls As Exhibit 11.4 shows, if one organization has a span of four and the other a span of eight, the organization with the wider span will have two fewer levels and approximately 800 fewer managers. Copyright © 2021 Pearson Education Ltd.  Centralization and Decentralization Centralization: the degree to which decision-making is concentrated at upper levels of the organization Decentralization: the degree to which lower-level employees provide input or actually make decisions  Exhibit 11.5 Centralization or Decentralization More Centralization More Decentralization Environment is stable. Environment is complex, uncertain. Lower-level managers are not as Lower-level managers are capable capable or experienced at making and experienced at making decisions. decisions as upper-level managers. Lower-level managers do not want a Lower-level managers want a voice in say in decisions. decisions. Decisions are relatively minor. Decisions are significant. Organization is facing a crisis or the Corporate culture is open to allowing risk of company failure. managers a say in what happens. Company is large. Company is geographically dispersed. Effective implementation of company Effective implementation of company strategies depends on managers strategies depends on managers retaining say over what happens. having involvement and flexibility to make decisions. Copyright © 2021 Pearson Education Ltd.  Employee Empowerment Employee empowerment: giving employees more authority (power) to make decisions  Formalization Formalization: how standardized an organization’s jobs are and the extent to which employee behavior is guided by rules and procedures  Mechanistic and Organic Structures Mechanistic organization: an organizational design that’s rigid and tightly controlled Organic organization: an organizational design that’s highly adaptive and flexible Exhibit 11.6 Mechanistic Versus Organic Organizations Copyright © 2021 Pearson Education Ltd.  Strategy and Structure An organization’s structure should facilitate goal achievement. Because goals are an important part of the organization’s strategies, it’s only logical that strategy and structure are closely linked.  Size and Structure There’s considerable evidence that an organization’s size affects its structure, but once an organization grows past a certain size, size has less influence on structure.  Technology and Structure Unit production: the production of items in units or small batches Mass production: the production of items in large batches Process production: the production of items in continuous processes  Exhibit 11.7 Woodward’s Findings on Technology and Structure blank Unit Mass Process Production Production Production Structural Low vertical Moderate vertical High vertical characteristics differentiation differentiation differentiation : blank Low horizontal High horizontal Low differentiation differentiation horizontal differentiation blank Low High formalization Low formalization formalization Most effective Organic Mechanistic Organic structure: Copyright © 2021 Pearson Education Ltd.  Environmental Uncertainty and Structure In stable and simple environments, mechanistic designs can be more effective. The greater the uncertainty, the more an organization needs the flexibility of an organic design.  Traditional Organizational Design Options Simple structure: an organizational design with little departmentalization, wide spans of control, centralized authority, and little formalization Functional structure: an organizational design that groups together similar or related occupational specialties Divisional structure: an  Exhibit 11.8 Traditional Organizational Designs A summary of the strengths and weaknesses of each type of organizational design can be found in Exhibit 11.8. Copyright © 2021 Pearson Education Ltd.  Team Structures Team structure: an organizational structure in which the entire organization is made up of work teams  Matrix and Project Structures Matrix structure: an organizational structure that assigns specialists from different functional departments to work on one or more projects Project structure: an organizational structure in which employees continuously work on projects  Exhibit 11.9 Example of a Matrix Organization Exhibit 11.9 shows an example of a matrix organization. Copyright © 2021 Pearson Education Ltd.  The Virtual Organization Virtual organization: an organization that consists of a small core of full-time employees and outside specialists temporarily hired as needed to work on projects Sometimes called “Network” or “Modular” organization  Telecommuting Telecommuting: a work arrangement in which employees work at home and are linked to the workplace by computer  Compressed Workweeks, Flextime, and Job Sharing Compressed workweek: a workweek where employees work longer hours per day but fewer days per week Flextime (or flexible work hours): a scheduling system in which employees are required to work a specific number of hours a week but are free to vary those hours within certain limits Job sharing: the practice of having two or more people split a full-time job  The Contingent Workforce Contingent workers: temporary, freelance, or contract workers whose employment is contingent on demand for their services  Review Learning Objective 11.1 Describe six key elements in organizational design. 1. Work specialization 2. Departmentalization 3. Chain of command 4. Span of control 5. Centralization/decentralization 6. Formalization  Review Learning Objective 11.2 Contrast mechanistic and organic structures. – Mechanistic structure: rigid, tightly controlled – Organic structure: highly adaptable, flexible  Review Learning Objective 11.3 Discuss the contingency factors that favor either the mechanistic model or the organic model of organizational design. – An organization’s structure should support the strategy. – Structure can be affected by size and technology. – Organic structure is most effective with unit production and process production technology. – Mechanistic structure is most effective with mass production technology.  Review Learning Objective 11.4 Describe traditional organizational design options. – Simple structure: little departmentalization, wide spans of control, authority centralized in one person, and little formalization – Functional structure – Divisional structure  Review Learning Objective 11.5 Discuss organizing for flexibility in the twenty-first century. – Structures: Team Matrix Project – Virtual organization – Compressed workweeks, flextime, job sharing – Contingent workforce