7-1 Structure and Fundamentals of Organizing Copyright © 2006 by South-Western, a division of Thomson Learning. All rights reserved. Chapter 7

© 2006 by South-Western, a division of Thomson Learning. All rights reserved. 7-2 Definitions  Authority The rights inherent in a managerial position to make decisions, give orders and utilize resources

© 2006 by South-Western, a division of Thomson Learning. All rights reserved. 7-3 Definitions  Authority The rights inherent in a managerial position to make decisions, give orders and utilize resources  Delegation The process of assigning managerial authority and responsibility to managers and employees lower in the hierarchy

© 2006 by South-Western, a division of Thomson Learning. All rights reserved. 7-4 Definitions  Mechanistic Organization (Bureaucratic) Authority is centralized Tasks and rules are clearly specified Employees are closely supervised

© 2006 by South-Western, a division of Thomson Learning. All rights reserved. 7-5 Definitions  Mechanistic Organization (Bureaucratic) Authority is centralized Tasks and rules are clearly specified Employees are closely supervised  Organic Organization (Non-Bureaucratic) Authority is decentralized Fewer rules and procedures Encouraged to respond to unexpected tasks

© 2006 by South-Western, a division of Thomson Learning. All rights reserved. 7-6 Organic vs. Mechanistic  Influencing Factors: Size Technology Life Cycle

© 2006 by South-Western, a division of Thomson Learning. All rights reserved. 7-7 Organic vs. Mechanistic  Influencing Factors: Size  As an organization grows so does the need for rules, regulations and procedures

© 2006 by South-Western, a division of Thomson Learning. All rights reserved. 7-8 Organic vs. Mechanistic  Influencing Factors: Size Technology  Small Batch Technology Individual Job-Shops (Most Organic)

© 2006 by South-Western, a division of Thomson Learning. All rights reserved. 7-9 Organic vs. Mechanistic  Influencing Factors: Size Technology  Small Batch Technology Individual Job-Shops (Most Organic)  Large Batch Technology Assembly Line (Mechanistic)

© 2006 by South-Western, a division of Thomson Learning. All rights reserved Organic vs. Mechanistic  Influencing Factors: Size Technology  Small Batch Technology Individual Job-Shops (Most Organic)  Large Batch Technology Assembly Line (Mechanistic)  Continuous Process Technology (Organic) Machine Based Factories

© 2006 by South-Western, a division of Thomson Learning. All rights reserved Organic vs. Mechanistic  Influencing Factors: Size Technology Life Cycle  Birth Stage – Non-Bureaucratic  Youth (Growth) Stage – Pre-Bureaucratic  Midlife Stage – Bureaucratic  Maturity Stage – Very Bereaucratic

© 2006 by South-Western, a division of Thomson Learning. All rights reserved Learning Organizations  An organization that actively creates, acquires, and transfers knowledge within itself and is able to modify its behavior to reflect new knowledge

© 2006 by South-Western, a division of Thomson Learning. All rights reserved Learning Organizations  Reasons Organizations Resist Learning Competition Within an Organization Fragmentation and Specialization Fear of Risks

© 2006 by South-Western, a division of Thomson Learning. All rights reserved Learning Organizations Quiz

© 2006 by South-Western, a division of Thomson Learning. All rights reserved Span of Management  The number of employees reporting to a supervisor.  Traditional view, seven or so per manager.  Many organizations today, 30 or more per manager.  Generally if supervisors must be closely involved with employees span should be small.

© 2006 by South-Western, a division of Thomson Learning. All rights reserved Large Spans of Control Factors Work is stable or routine. Similar task is performed by everyone. A single location. Employees are highly trained. Rules and procedures are available. Support systems and personnel are available for supervisor. Little time is required in nonsupervisory activities. Personal preferences and styles of management favor a large span.

© 2006 by South-Western, a division of Thomson Learning. All rights reserved Tall versus Flat Structure Span of control used in an organization determines whether the structure is tall or flat. Tall structure has a narrow span and more hierarchical levels. Flat structure has a wide span, is horizontally dispersed and fewer hierarchical levels. The trend has been toward wider spans of control.

© 2006 by South-Western, a division of Thomson Learning. All rights reserved Ex. 7.2 Reorganization to Increase Span of Management for President of an International Metals Company

© 2006 by South-Western, a division of Thomson Learning. All rights reserved Centralization versus Decentralization Centralization – decision authority is located near the top of the organization. Decentralization – authority is pushed downward to lower organizational levels.

© 2006 by South-Western, a division of Thomson Learning. All rights reserved Figure 7.3 Five Approaches to Structural Design

© 2006 by South-Western, a division of Thomson Learning. All rights reserved Figure 7.3 (contd.)

© 2006 by South-Western, a division of Thomson Learning. All rights reserved Figure 7.3 (contd.)

© 2006 by South-Western, a division of Thomson Learning. All rights reserved Working in Teams Task Force... A temporary team or committee formed to solve a specific short-term problem. Team... Participants from several departments who meet to solve ongoing problems. Project Manager... A person responsible for coordinating the activities of several departments.

© 2006 by South-Western, a division of Thomson Learning. All rights reserved Team Approach  Cross-functional teams consist of employees from various functional departments.  Permanent teams solve ongoing problems. Employees come from all functional areas.