unitiii (1)
TRANSCRIPT
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PRINCIPLES OF MANAGEMENT
UNITIII
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ORGANIZING
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After studying this chapter, you should understand:
1. The purpose of an organization structure
2. The meaning of "organizing" and "organization."3. The distinction between formal and informal organization.4. How organization structures and their levels are due to the
limitations of the span of management.
5. The exact number of people a manager can effectivelysupervise depends on a number of underlying variables and
situations.6. The logic of organizing and its relationship to other managerial
functions.7. That organizing requires taking situations into account.
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Organizational Roles
For an organizational role to exist and bemeaningful, it must incorporate
(1) verifiable objectives, which, are a major partof planning
(2) a clear idea of the major duties or activitiesinvolved and
(3) an understood area of discretion or authorityso that the person filling the role knows whathe or she can do to accomplish goals
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Organizing involves:
(1) the identification and classification of requiredactivities,
(2) the grouping of activities necessary to attain
objectives,
(3) the assignment of each grouping to a managerwith the authority (delegation) necessary to
supervise it, and
(4) the provision for coordination horizontally (on the
same or a similar organizational level) andvertically (for example, corporate headquarters,
division, and department) in the organization
structure
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Definition of Organization
Organization implies a formalized
intentional structure of roles or positions
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Formal and Informal Organization
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Formal and Informal Organization
Formal organization pertains to the
intentional structure of roles in a
formally organized enterprise
The informal organization is a network
of interpersonal relationships that arisewhen people associate with each other
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What is a Department?
The department designates a distinct
area, division, or branch of an
organization over which a manager hasauthority for the performance of
specified activities
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Organization with Narrow Spans
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Organization with Wide Spans
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What is the Principle of the
Span of Management? The principle of the span of
management states that there is a limit
to the number of subordinates a
manager can effectively supervise, but
the exact number will depend on the
impact of underlying factors
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What Determines an Effective Span of
Management?
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The Steps in the Organizing Process:
1. Establishing enterprise objectives
2. Formulating supporting objectives, policies, and plans
3. Identifying, analyzing, and classifying the activities
necessary to accomplish these
4. Grouping these activities in light of the human andmaterial resources available and the best way,
under the circumstances, of using them
5. Delegating to the head of each group the authority
necessary to perform the activities
6. Tying the groups together horizontally and vertically,
through authority relationships and information flows
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ORGANIZATIONAL STRUCTURE:
DEPARTMENTATION
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After studying this chapter, you should understand:
1. The basic patterns of traditionaldepartmentation, their advantages anddisadvantages
2. Matrix organizations
3. Strategic business units (SBUs)
4.The virtual organization
5. That there is no single best pattern of
departmentation.
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Departmentation
By Enterprise
Function
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Departmentation by Enterprise
Function There is no generally accepted terminology: A
manufacturing enterprise employs the terms
"production," "sales," and "finance"; a wholesaler is
concerned with such activities as "buying," "selling,"and "finance"; and a railroad is involved with
"operations," "traffic," and "finance"
Functional departmentation is the most widely
employed basis for organizing activities and ispresent in almost every enterprise at some level in
the organization structure
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Departmentation by Territory or Geography
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Departmentation by Territory or
Geography Departmentation based by territory is
rather common in enterprises that
operate over wide geographic areas The advantages and disadvantages of
departmentation by territory
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Departmentation by Customer Group
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Departmentation
by Product
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Matrix Organization
Matrix Organization is the combining
of functional and project or product
patterns of departmentation in the sameorganization structure
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Matrix Organization
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Guidelines for Making Matrix
Management Effective
1. Define the objectives of the project or task
2. Clarify the roles, authority, and responsibilities of managersand team members
3. Ensure that influence is based on knowledge and
information, rather than on rank4. Balance the power of functional and project managers.
5. Select an experienced manager for the project who canprovide leadership
6. Undertake organization and team development
7. Install appropriate cost, time, and quality controls that reportdeviations from standards in a timely manner
8. Reward project managers and team members fairly
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Strategic Business Units (SBUs)
Strategic Business Units are distinct
little businesses set up as units in a
larger company to ensure that a certainproduct or product line is promoted and
handled as though it were an
independent business
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Strategic Business Units (SBUs)
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Choosing The Pattern Of Departmentation
There is no one best way of departmentizingthat is applicable to all organizations and allsituations
Managers must determine what is best by
looking at the situation they face the jobs to be done and the way they should be
done,
the people involved and their personalities,
the technology employed in the department, the users being served, and
other internal and external environmental factorsin the situation
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Line/Staff Authority,
Empowerment, andDecentralization
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After studying this chapter, you should understand:
1. The nature of authority, power, and empowerment.2. The differences between line and staff, realizing
their nature as relationships rather than positions or
people
3. The nature and use of functional authority as amixture of line and staff.
3. Centralization, decentralization, and delegation of
authority.4. The importance of obtaining balance in the
centralization and decentralization of authority.
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Authority and Power
Poweris the ability of individuals or
groups to induce or influence the beliefs
or actions of other persons or groups
Authority is the right in a position to
exercise discretion in making decisionsaffecting others
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Different Bases of Power
Legitimate power normally arises from
position and derives from our cultural system
of rights, obligations, and duties whereby a
"position" is accepted by people as being"legitimate"
Expert power is the power of knowledge
Referent power is influence that people or
groups may exercise because people believe
in them and their ideas
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Different Bases of Power- continued
Reward power is the power to grant or
withhold rewards such as high grades
by a university professorCoercive power is closely related to
reward power and normally arising from
legitimate power, it is the power topunish
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What is Empowerment?
Empowerment means that employees,
managers, or teams at all levels in the
organization have the power to makedecisions without asking their superiors
for permission
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Scalar Principle in Organization
The clearer the line of authority from the
ultimate management position in an
enterprise to every subordinate position,the clearer will be the responsibility for
decision making and the more effective
will be organization communication
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Line, Staff, and Functional Authority
Line authority is the relationship in which a
superior exercises direct supervision over a
subordinate
Staff relationship is advisory Functional authority is the right that is
delegated to an individual or a department to
control specified processes, practices,
policies, or other matters relating to activities
undertaken by persons in other departments
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Decentralization of Authority
Decentralization is the tendency to
disperse decision-making authority in an
organized structure
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Different Kinds of Centralization
The term "centralization" has several meanings:1. Centralization of performance pertains to geographic
concentration; it characterizes, for example, acompany operating in a single location
2 Departmental centralization refers to concentration ofspecialized activities, generally in one department.For example, maintenance for a whole plant may becarried out by a single department
3. Centralization as an aspect of management is the
tendency to restrict delegation of decision making. Ahigh degree of authority is held at or near the top bymanagers in the organizational hierarchy
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The process of delegation involves:
determining the results expected from aposition,
assigning tasks to the position,
delegating authority for accomplishingthese tasks, and
holding the person in that positionresponsible for the accomplishment ofthe tasks
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Guides for Overcoming Weak Delegation
1. Define assignments and delegateauthority in light of results expected
2. Select the person in light of the job tobe done
3. Maintain open lines of communication
4. situations
4. Establish proper controls
5. Reward effective delegation andsuccessful assumption of authority
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Organization chart
Indicates how departments are tied
together along principle lines of
authority Advantages & limitations
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