Chapter 16 Organizing

After Reading and Studying This Chapter, You Should Be Able to: Describe organizational structure and organizational design Explain why structure and design are important to an organization Identify the key elements of organizational structure Differentiate between mechanistic and organic organizational designs Explain team-based structures and why organizations use them Describe matrix structures, project structures, independent business units, and boundaryless organizations

Purpose of Organizing Dividing work Assigning tasks Coordinating diverse organizational tasks Clustering jobs into units Establishing relationships Establishing formal lines of authority Allocating and deploying organizational resources

Figure 16-1 The New “Upside-Down” Organizational Chart

Work Specialization/Division of Labor Each worker has a specific task Each task is standardized Work is repetitive Work is broken into manageable steps

Departmentalization Coordination of tasks Methods of departmentalizing: By function By product By guest need By territory Or any combination of the above

Figure 16-2 Organizational Chart for a Theme Park

Authority Comes with title and position Two-way obligation Expectations Empowerment

Responsibility “Rights” Obligation to perform Performance and outcome

Chain of Command Outlines those with authority from the top down: BOD CEO Vice-president Clearly defined line of authority Everyone knows to whom they are to report

Span of Control Number of employees a supervisor can efficiently manage Factors: Type of work Skill level of employee Level of training Technology available Leadership style Management experience

Empowerment Giving employees a degree of decision-making authority Allows employees to be flexible when dealing with difficult situations that do not necessarily require management attention Increase in guest satisfaction

Centralization vs. Decentralization Decision-making authority lies with top management in a centralized structure Lower management and line authority employees play a role in the decision-making process in a decentralized structure Today’s companies are moving toward centralized structures for cost reasons

Figure 16-4 Centralization versus Decentralization in an Organization

Mechanistic Organizations High specialization Rigid departmentalization Narrow spans of control High formalization Limited information network Centralized

Organic Organization Low in complexity Low in formalization Decentralized Division of labor of non-standardized jobs Require few rules Require little supervision

Contingency Factors Organizational structure Size Technology Degree of environmental uncertainty

Team-Based Structure TQM model Front-line associates participate Team makeup Coordination of effort Productivity issues

Figure 16-6 The Four Types of Contemporary Organizational Designs

Matrix Structure Assigns specialists from different departments to work on projects: Pool knowledge Communication is key Decision-making tends to move quicker

Project Structure Employee continuously works on projects Move to another project once completed Members have specific knowledge

Independent Business Units (IBUs) Small, independent businesses within a larger corporate structure Approval to implement strategies Assists with exposing employees to revenue and expense issues

Boundaryless Organizations No pre-defined structure Breakdown of external barriers Eliminates the chain of command Appropriate span of control Replace departments with empowered teams

Encouraging Employee Involvement Teams: Self-managed Productive Job rotation Job enlargement Job enrichment

Building Productive Teams Job rotation Job enlargement Job enrichment

Trends in Organizing Use of computerized scheduling programs Use of the Internet for recipe access Multitasking More decentralization of organization after September 11, 2001 Reduced occupancies at hotels has led to a reduction in staff and managerial positions