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Mgmt 371Chapter Eleven

Basic Elements of Organizing

Much of the slide content was created by Dr, Charlie Cook, Houghton Mifflin, Co.©

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The Elements Organizing Organizing

Deciding how to best group organizational activities and resources.

Organization Structure The set of building

blocks that can be used to configure an organization.

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Designing Jobs

Job Design The determination of an individual’s work-

related responsibilities. Organizing TDR into a productive unit of

work. Reasons for systematic job design: Maximize performance Enhance job satisfaction Reduce adverse affects to physical and

mental health.

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Designing Jobs (Job Specialization )

Job Specialization (Division of Labor) -- The degree to which the overall task of the organization is broken down and divided into smaller component parts

Benefits of Specialization Workers can become proficient at a task. Transfer time between tasks is decreased. Specialized equipment can be more easily

developed. Employee replacement becomes easier.

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Designing Jobs (Job Specialization )

Job Specialization (Division of Labor).

Limitations of Specialization Employee boredom and dissatisfaction

with mundane tasks. Anticipated benefits do not always

occur.

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Adam Smith’s Exampleof Job Specialization

Making a pin (nail) requires 18 tasks

1 worker doing all 18 tasks might make 20 pins (nails) a day.

20 workers = (20 x 20) = 400 pins______________________________

With specialization:

20 workers make 100,000 pins a day.1 worker = 5,000 pins

20 pins vs. 5,000 pins per worker

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Alternatives to Specialization

Job Rotation Systematically moving employees from one job to

another in an attempt to reduce employee boredom.

Job Enlargement An increase in the total number of tasks workers

perform (increasing the scope of the job). Job Enrichment

Increasing both the number of tasks the worker does and the control the worker has over the job (increasing the scope and depth of the job).

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Alternatives to Specialization

Job Characteristics Approach: Core Dimensions

Skill variety—the number of tasks a person does in a job.

Task identity—the extent to which the worker does a complete or identifiable portion of the total job.

Task significance —the perceived importance of the task.

Autonomy—the degree of control the worker has over how the work is performed.

Feedback— the extent to which the worker knows how well the job is being performed.

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Alternatives to Specialization

Job Characteristics Approach:Growth-Need Strength

The desire for some people to grow, develop, and expand their capabilities that is their response to the core dimensions.

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The Job Characteristics Approach

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Alternatives to Specialization (Work Teams) Work Teams

An alternative to job specialization that allows the entire group to design the work system it will use to perform an interrelated set of tasks.

Self-Directed Work Teams (SDWT) – composed of individuals who are assigned a cluster of TDR to be performed and are empowered to make decisions regarding work assignments within the group.

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Grouping Jobs: Departmentalization Departmentalization

The process of grouping jobs according to some logical arrangement.

Rationale for Departmentalization

Organizational growth exceeds the owner-manager’s capacity to personally supervise all of the organization.

Additional managers are employed and assigned specific employees to supervise.

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Grouping Jobs: Departmentalization (Functional) Functional Departmentalization

Grouping jobs involving the same or similar activities.

Advantages Each department can be staffed by

functional-area experts. Supervision is facilitated in that managers

only need be familiar with a narrow set of skills.

Coordination inside each department is easier.

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Grouping Jobs: Departmentalization (Functional)

Functional DepartmentalizationDisadvantages

Decision making becomes slow and bureaucratic.

Employees narrow their focus to the department and lose sight of organizational goals/ issues.

Accountability and performance are difficult to monitor.

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Product Departmentalization Form

Product Departmentalization Disadvantages Managers may focus on their product to the

exclusion of the rest of the organization. Administrative costs may increase due to

each department having its own functional-area experts.

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Product Departmentalization Form

Product Departmentalization Grouping activities around products or product

groups. Advantages All activities associated with one product can

be integrated and coordinated. Speed and effectiveness of decision making

are enhanced. Performance of individual products or

product groups can be assessed

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Customer Departmentalization

Customer Departmentalization Grouping activities to respond to and interact

with specific customers and customer groups.

Advantage Skilled specialists can deal with unique

customers orcustomer groups.

Disadvantage A large administrative staff is needed to

integrate activities of various departments.

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Location Departmentalization

Location (Geographic) Departmentalization The grouping of jobs on the basis of defined

geographic sites or areas. Advantage

Enables the organization to respond easily to unique customer and environmental characteristics.

Disadvantage Large administrative staff may be needed

to keep track of units in scattered locations.

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Bases for Departmentalization

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Departmentalization

Other Forms of Departmentalization Grouping activities by time

By specific units of time By sequence. By a characteristic of the customer, product, or

service Other Considerations

Departments are often called by other names. Divisions, units, sections, and bureaus

Organizations are likely to employ multiple bases of departmentalization, depending on level.

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Establishing Reporting Relationships Chain of Command (scalar chain)

A clear and distinct line of authority among the positions in an organization.

Scalar Principle (Fayol) A clear and unbroken line of authority must

extend from the bottom to the top of the organization.

Unity of Command (Fayol) Each person within an organization must have

a clear reporting relationship to one and only one boss.

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Establishing Reporting Relationships (Span of Control) Narrow Versus Wide Spans

Span of Management (Span of Control) The number of people who report to a particular

manager. A. V. Graicunas

Subordinate interactions Direct—manager’s relationship with each subordinate. Cross—among the subordinates themselves. Group—between groups of subordinates. Formula for the number of interactions of all types:

I = N(2N/2 + N - 1), where I is the total number of interactions and N is number of subordinates.

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Establishing Reporting Relationships (Span of Control) Narrow Versus Wide Spans

Ralph Davis Operative span for lower-level managers of up to

30 workers. Executive span for middle and top managers set

at 3 to 9. Span depends on managers’ jobs, company

growth rate, and similar factors Lyndall Urwick and General Ian Hamilton

Executive span should never exceed six

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Establishing Reporting Relationships: Tall versus Flat Organizations

Tall Organizations Are more expensive because of the

number of managers involved. Foster more communication problems

because of the number of people through whom information must pass

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Establishing Reporting Relationships: Tall versus Flat Organizations

Flat Organizations Lead to higher levels of employee morale

and productivity. Create more administrative responsibility

for the relatively few managers. Create more supervisory responsibility for

managers due to wider spans of control.

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Figure 11.3: Tall Versus Flat Organizations

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Factors Influencing the Span of Management

Competence of the supervisor. Competence of the subordinates. Physical dispersion. Extent of manager’s nonsupervisory work (the greater the

narrower the span). Degree of required interaction (the greater, the narrower

the span). Extent of SOPs (the greater the wider the span). Frequency of problems (the greater, the narrower the

span). Preferences of supervisors and subordinates.

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Distributing Authority

Authority Power that has been legitimized by the

organization. Delegation

The process by which managers assign a portion of their total workload to others.

Reasons for Delegation To enable the manager to get more work done

by utilizing the skills and talents of subordinates. To foster development of subordinates by having

them participate in decision making and problem.

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Steps in the Delegation Process

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Problems in Delegation

Manager Reluctant to delegate. Disorganization prevents planning work in

advance. Subordinate’s success threatens superior’s

advancement. Lack of trust in the subordinate to do well.

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Problems in Delegation

Subordinate Reluctant to accept delegation for fear of

failure. Perceives no rewards for accepting

additional responsibility. Prefers to avoid any risk and responsibility.

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Decentralization and Centralization

Decentralization Systematically delegating power and

authority throughout the organization to middle- and lower-level managers.

Centralization Systematically retaining power and

authority in the hands of higher-level managers.

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Decentralization and Centralization

Factors Determining Choice of Centralization External environment’s complexity and

uncertainty History of the organization Nature (cost and risk) of the decisions to

be made.

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Coordinating Activities

Coordination The process of linking the activities of the

various departments of the organization. The Need for Coordination

Departments and work groups are interdependent; the greater the interdependence, the greater the need for coordination.

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Coordinating Activities: Three Major Forms of Interdependence Pooled interdependence

When units operate with little interaction; their output is simply pooled at the organizational level.

Sequential interdependence When the output of one unit becomes the

input of another unit in sequential fashion. Reciprocal interdependence

When activities flow both ways between units.

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Structural Coordination Techniques The Managerial Hierarchy

Placing one manager in charge of interdependent departments or units.

Rules and Procedures Routine coordination activities can be

handled via rules and procedures that set priorities and guidelines for actions.

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Structural Coordination Techniques Liaison Roles

A manager coordinates interdependent units by acting as a common point of contact, facilitating the flow of information.

Task Forces Used with multiple units when coordination

is complex, requiring more than one individual and the need for coordination is acute.

Disbanded when need for coordination has been met.

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Structural Coordination Techniques (cont’d) Integrating Departments

Permanent organizational units that maintain internal integration and coordination on an ongoing basis.

May have authority and budgetary controls. Electronic Coordination

E-mail, electronic scheduling, PDAs, cell phones.

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Differentiating Between Positions Line Positions

Positions in the direct chain of command responsible for the achievement of an organization’s goals.

Have formal (legitimate) authority. Staff Positions

Positions intended to provide expertise, advice, and support to line positions.

Have advisory authority; can give compulsory advice.

Have functional authority to enforce compliance with organizational policies and procedures.

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Differentiating Between Positions

Administrative Intensity The degree to which managerial positions

are concentrated in staff positions.