Management Presentation Chapter 6 Management Presentation Chapter 6 Management Presentation Chapter 6 Management Presentation Chapter 6Management Presentation Chapter 6 Management Presentation Chapter 6 Management Presentation Chapter 6 Management Presentation Chapter 6 Management Presentation Chapter 6
The Basic Elements of Organizing • Organization Structure and Design –Specify the set of structural elements that can be used to configure the total organization • This chapter will introduce the following elements: job specialization, departmentalization, reporting relationships, distribution of authority, and coordination 6–2 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 Limitations • Workers can become proficient at a task • • Transfer time between tasks is decreased • Specialized equipment can be more easily developed • Employee boredom and dissatisfaction with mundane tasks • Possible higher absenteeism, lower quality of work, and overspecialize Employee replacement becomes easier 6–3 Alternatives to Job Specialization Job Specialization Alternatives Job Job Work rotation enrichment teams Increase both the number of tasks Move from one job to another Work is assigned to a team and the a worker does and the control the team members have control over each worker has over the job Job enlargement worker’s duties Job characteristics approach More tasks to perform Job should be diagnosed and improved alone five core dimensions (see next slide) 6–4 Job Characteristics: 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 Autonomy Feedback Growth Need Strength The perceived importance of the task by the worker The degree of control the worker has over how the work is performed The extent to which the worker knows how well the job is being performed The desire for people to grow, develop, and expand their capabilities that is their response to the core dimensions 6–5 FIGURE 6.1 The Job Characteristics Approach Note: Although the job characteristics approach is one of the most promising alternatives to job specialization it is probably not the final answer because not all the researches support this approach strongly 6–6 The Basic Elements of Organizing Find the best response on the top to describe the condition on the bottom a Job Enlargement b Job Enrichment d Job Specialization e Job Evaluation c Job Rotation f Job Satisfaction I Giving individual workers more control over and responsibility for their jobs II Giving workers more things to in their jobs III Systematically moving workers through a series of jobs IV Breaking the overall task into smaller component parts Answer: B, A, C, & D 6–7 Grouping Jobs: Departmentalization • The second element of organization structure is 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 6–8 Common Bases of Departmentalization Finance Home Users By Function By Product CEO CEO Marketing Operations Computers Printers By Customer By Location CEO CEO Business Users Educational Users Africa Software Europe Asia 6–9 Functional Departmentalization The grouping of jobs involving the same or similar activities • Advantages – Each department can be staffed by functionalarea experts – Supervision is facilitated in that managers only need to be familiar with a narrow set of skills – Coordination inside each department is easier • Disadvantages – 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 6–10 Basic Forms of Organization Design • Functional or U-form (Unitary) Design – Organizational members and units are grouped into functional departments • Requires coordination across all departments • Resembles functional departmentalization in its advantages and disadvantages • Promotes a narrowing functional rather than broader organizational focus • Tends to promoter centralization • Is common in smaller organizations 6–37 FIGURE 6.2 Functional (U form) Design for a Small Manufacturing Company This small firm uses managers at the vice presidential level to coordinate activities within each functional area of the organization Each functional area is dependent on the others 6–38 Organization Design (cont’d) • Conglomerate or H-form (Holding) Design – Organization consists of a set of unrelated businesses with a general manager for each business – Holding-company (conglomerate) design is similar to product departmentalization – Coordination is based on the allocation of resources across companies in the portfolio – Design has produced only average to weak financial performance Thus, many firms have been abandoned it for other approaches 6–39 FIGURE 6.3 Conglomerate (H form) Design at Samsung A design of unrelated diversification Managers sometimes find that comparing and integrating activities among the dissimilar operations are difficult (E.g GE) 6–40 Organization Design (cont’d) • Divisional or M-form (Multidivisional) Design – Is based on multiple businesses in related areas operating within a larger organizational framework; following a strategy of related diversification – Activities are decentralized down to the divisional level; others are centralized at the corporate level – The largest advantages of the M-form design are the opportunities for coordination and sharing of resources 6–41 FIGURE 6.4 Multidivisional (M Form) Design at Hilton Hotels Although each unit operates with relative autonomy, all units function in the same general market (E.g Walt Disney) 6–42 Organization Design (cont’d) • Matrix Design – An organizational arrangement based on two overlapping bases of departmentalization • Jobs are grouped according to function, and then a set of product groups are superimposed across the functional groups • Individual reports both to a functional superior and to one or more project managers • Matrix design is useful when: – There is strong environmental pressure – There are large amounts of information to be processed – There is pressure for shared resources 6–43 FIGURE 6.5 A Matrix Organization 6–44 Organization Design (cont’d) • Matrix Design Advantages – Enhances organizational flexibility – Fosters high motivation and increased organizational commitment – Provide opportunity for team members to learn new skills – Makes efficient use of human resources – Allows team members to serve as bridges to their departments – Is a useful vehicle for decentralization • Matrix Design Disadvantages – Employees are uncertain about reporting relationships – Managers may view design as an anarchy in which they have unlimited freedom – The dynamics of group behavior may lead to slower decision making, one-person domination, compromise decisions, or a loss of focus – More time may be required for coordinating task-related activities © 2014 Cengage Learning All rights reserved May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a passwordprotected website for classroom use 6–45 Organization Design (cont’d) • Hybrid Design – Is based on two or more organization design forms such as a mixture of related divisions and a single unrelated division – Most organizations use a modified form of organization design that permits them to have the flexibility to make strategic adjustments • For example: An organization may have five related divisions and one unrelated division (A cross design between an M form and an H form) 6–46 Organization Design (cont’d) • U Form: Is best for organization using functional departmentalization, such as small firms or firms that produce a single product • H Form: Is best for firms pursuing unrelated diversification (low coordination btw the units) • M Form: Is best for firms pursuing related diversification (high coordination btw the units) • Matrix designs: Work well for organizations that work on discrete projects, such as engineering, consulting, or accounting firms • Hybrid Design: Is based on two or more organization design forms such as a mixture of related divisions and a single unrelated division 6–47 Organization Design (cont’d) • Find the best organizational design for the condition described on the bottom a M form b H form c Hybrid form d Matrix form e X form f U form • _1 An organization has five related divisions and one unrelated division • _2 This form of design is based on functional departmentalization No functional area could survive without the others • _3 All the businesses under this organization are unrelated This demonstrates a strategy of unrelated diversification • Company ABC owns many product lines and each product lines is related to each other Answer: C, F, B, & A 6–48 The Future of Organization Design Emerging Organization Design Issues Team-based organizations Virtual organizations Learning organizations 6–49 The Future of Organization Design (cont’d) • The Team Organization – The team organization is an approach to organization design that relies almost exclusively on project-type teams, with little or no underlying functional hierarchy This approach maximizes flexibility and learning • The Virtual Organization – The virtual organization is one that has little or no formal structure Flexibility is high and costs can be lower, while the organization benefits from specialized skills On the other hand, virtual organizations have low employee loyalty and may have less control 6–50 The Future of Organization Design (cont’d) • The Learning Organization – The learning organization works to facilitate the lifelong learning and personal development of all its employees while continually transforming itself to respond to changing demands and needs As environments become more complex and dynamic, this approach becomes more important 6–51 ... Span of management: Determines how many people will report to each manager 6 14 Establishing Reporting Relationships Establishing the Reporting relationship Chain of Command Span of management. .. same number of employees in the tall and flat organization, which one has a bigger span of management? 6 16 Establishing Reporting Relationships: Tall Versus Flat Organizations • Tall Organizations... is probably not the final answer because not all the researches support this approach strongly 6 6 The Basic Elements of Organizing Find the best response on the top to describe the condition