© 2003 mcgraw-hill australia pty ltd. powerpoint slides t/a management: a pacific rim focus...
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© 2003 McGraw-Hill Australia Pty Ltd. PowerPoint Slides t/a Management: A Pacific Rim Focus Enhanced Edition. Slides prepared by David Meacheam & George Sansbury.
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CHAPTER 9
BASIC ELEMENTS OF ORGANISATIONAL STRUCTURE
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© 2003 McGraw-Hill Australia Pty Ltd. PowerPoint Slides t/a Management: A Pacific Rim Focus Enhanced Edition. Slides prepared by David Meacheam & George Sansbury.
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Lecture outline• Nature of organisational structure• Job design• Types of departmentalisation• Methods of vertical co-ordination• Promoting innovation
(methods of horizontal co-ordination)
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© 2003 McGraw-Hill Australia Pty Ltd. PowerPoint Slides t/a Management: A Pacific Rim Focus Enhanced Edition. Slides prepared by David Meacheam & George Sansbury.
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Nature of organisational structure
Formal pattern of interactions and co-ordination designed by management to link the tasks of individuals and groups in achieving organisational goals.
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© 2003 McGraw-Hill Australia Pty Ltd. PowerPoint Slides t/a Management: A Pacific Rim Focus Enhanced Edition. Slides prepared by David Meacheam & George Sansbury.
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Nature of organisational structureFour elements:
1. Assignment of tasks and responsibilities to individuals and units.
2. Clustering these to form a hierarchy.3. Mechanisms for vertical co-ordination.4. Mechanisms for horizontal co-ordination.
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Nature of organisational structure• The organisation chart
– Line diagram depicting broad outlines of an organisation’s structure.
• Principles chart design– As few hierarchical levels as possible.– Charts should show who has authority over who.– Charts should show official lines responsibility &
communication.
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Nature of organisational structure
A B C IN C .
D IR E C TO RH .R .M .
S U B O R D IN A TE
M A N A G E RF IN A N C E
D IR E C TO RF IN A N C E
D IR E C TO RS A L E S
C .E .O .
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Job design• Job design
Specification of task activities associated with a particular job.
• Design jobs to enhance motivationJob simplification: breaking jobs into small elements.Job rotation: moving through sets of tasks in sequence.Job enlargement: wider range of similar tasks.
• Alternative work schedulesManaging work diversity.
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Managing diversity & work schedules
‘… balancing work and personal life’.‘… balancing work and personal life’.
Flexitime: core hours to be worked, others at employee discretion
Flexitime: core hours to be worked, others at employee discretion
Compressed work week: longer hours worked per day, shorter working week
Compressed work week: longer hours worked per day, shorter working week
Job sharing: two or more people sharing a full-time job
Job sharing: two or more people sharing a full-time job
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Types of departmentalisation
Departmentalisation:Clustering of individuals into units and units into departments and larger units to facilitate achievement of organisational goals.
• Functional• Divisional• Hybrid• Matrix.
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Types of departmentalisation
Functional: based on expertise, skill & similarity of work activity.
Functional: based on expertise, skill & similarity of work activity.
Divisional: based on product or market similarities.
Divisional: based on product or market similarities.
Hybrid: some activities grouped by function, some by products or markets.
Hybrid: some activities grouped by function, some by products or markets.
Matrix: Superimpose horizontal divisional over hierarchical functional structure.
Matrix: Superimpose horizontal divisional over hierarchical functional structure.
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Methods of vertical co-ordinationLinking of activities at the top of the organisation with those at the middle and lower levels to achieve organisational goals.• Formalisation• Span of management• Centralisation vs de-centralisation• Delegation• Line & staff positions.
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Methods of vertical co-ordinationFormalisation:• Degree to which written policies, rules,
procedures, job descriptions and other documents specify what actions are(not) to be taken under a given set of circumstances.
• Extent of formalisation tends to grow with age & size.
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Methods of vertical co-ordinationFactors influencing span of management:
– High competence levels.– Low interaction requirements.– Work similarity (between organisational peers).– Low problem frequency and seriousness.– Physical proximity.– Few non-supervisory duties of managers.– Considerable available assistance.– High motivational possibilities of work.
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Methods of vertical co-ordinationCentralisation
Extent to which power & authority are retained at the top organisational levels.
De-centralisationExtent to which power & authority are delegated to lower levels.
Factors favouring centralisation• Large organisational size• Geographic dispersion• Technological complexity• Environmental uncertainty.
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Methods of vertical co-ordination
‘… extent to which power and authority will be retained at upper levels’. Influenced by:
‘… extent to which power and authority will be retained at upper levels’. Influenced by:
Large size: larger organisations likely to be more Decentralised.
Large size: larger organisations likely to be more Decentralised.
Geographic dispersion: more dispersed likely to be decentralised, to enable control at a number of sites.
Geographic dispersion: more dispersed likely to be decentralised, to enable control at a number of sites.
Technological complexity:with more complex technology,need to devolve authority to lower levels.
Technological complexity:with more complex technology,need to devolve authority to lower levels.
Environmental uncertainty:with rapid change, need for moreemployees to be involved in responding to challenges.
Environmental uncertainty:with rapid change, need for moreemployees to be involved in responding to challenges.
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Methods of vertical co-ordinationDelegation
Assignment of part of a manager’s work to others, along with both responsibility & authority necessary to achieve expected results.
Factors restraining delegation• Fear subordinate failure.• Time to train subordinates.• Enjoy doing tasks.• Release of authority.• Concern for task performance.• Fear subordinate competence.
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Methods of vertical co-ordination
Configuration of line and staff positions:• Line authority
Authority following the chain of command established by the formal hierarchy.
• Functional authorityAuthority of staff over others in the organisation in matters related directly to their respective functions e.g. HRM dept.
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Methods of horizontal co-ordination
Horizontal co-ordination:Linking of activities across departments at similar levels.
• Need for information processing across the organisation.
• Promotes innovation through dissemination of ideas & information.
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Methods of horizontal co-ordinationHorizontal co-ordination promoted by:• Slack resources
Cushion of resources that facilitates adaptations to internal/external pressures, as well as initiation of changes.
• Information systemsOne information source for many users.
• Lateral relationsDirect contact, liaison roles, task forces, teams.
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Lecture summary• The nature of organisational structure
– Definition– Organisation chart– Job design.
• Job design– Designing for motivation:
• Job enlargement, rotation, enrichment, simplification.
• Types of departmentalisation– Functional, divisional, hybrid, matrix.
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© 2003 McGraw-Hill Australia Pty Ltd. PowerPoint Slides t/a Management: A Pacific Rim Focus Enhanced Edition. Slides prepared by David Meacheam & George Sansbury.
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Lecture summary• Methods of vertical co-ordination
– Formalisation– Span of management– Centralisation vs de-centralisation– Delegation– Line & staff authority.
• Methods of horizontal co-ordination– Slack resources– Information systems– Lateral relations.