8-1 Chapter 88 Adapting Organizations to Today’s Markets 8-1

8-2 Workers in Large* Companies in the Last 5 Years Have Undergone... *500+ Employees Source: Source: Gallup for Carlson Marketing Group

8-3 Fayol’s Principles of Organization Unity of CommandUnity of Command Hierarchy of AuthorityHierarchy of Authority Division of LaborDivision of Labor Subordination of Individual InterestSubordination of Individual Interest AuthorityAuthority Degree of Centralization Communication Channels Order Equity Esprit de Corps 241

8-4 Weber’s Organizational Principles Job DescriptionsJob Descriptions Written RulesWritten Rules Procedures, Regulations, PoliciesProcedures, Regulations, Policies Staffing/Promotions based on QualificationsStaffing/Promotions based on Qualifications 242

8-5 Fundamentals of Bureaucracy  Chain of Command  Rules & Regulations  Set Up by Function  Communication is Minimal 243

8-6 Centralization (No Delegation) Advantages Increased UniformityIncreased Uniformity –Less Duplication –Maximum Control Disadvantages –Lots of Policies & Procedures –Many Layers/Slower 245

8-7 Decentralization (Delegate Authority) Advantages –Informed Decisions –Worker Responsibility –Few Layers/Faster Disadvantages –Loss of Control –Possible Duplication 245

8-8 Span of Control Capabilities of Subordinates & ManagerCapabilities of Subordinates & Manager Complexity of JobComplexity of Job –Geographically Close –Functional Similarity –Need for Coordination –Planning Demands –Functional Complexity 246

8-9 Organizational Structures Tall Organizations -Many Layers of Management -High Cost of Management Flat Organizations -Current Trend -Creation of Teams 247

8-10 Departmentalization ProductProduct FunctionFunction Customer Location Process 248

8-11 Departmentalization by Function Disadvantages –Lack of Communication –Employees Identify with Department –Slow Response to External Demands –Narrow Specialists 248

8-12 Line Organizations Advantages –Clear Authority & Responsibility –Easy to Understand –One Supervisor per Employee Disadvantages –Inflexible –Few Specialists for Advice –Long Line of Communication –Difficult to Handle Complex Decisions 251

8-13 Line/Staff Organizations Line Personnel –Perform Functions –Contribute Directly to Organizational Goals Staff Personnel –Advise –Assist Line Personnel 251

8-14 Matrix Organizations Advantages –Flexibility –Cooperation & Teamwork –Creativity –More Efficient Use of Resources Disadvantages –Costly/Complex –Confusion in Loyalty –Requires Good Interpersonal Skills & Cooperation –Not Permanent 253

8-15 Reasons to Outsource Source: CIO, “2003 Outsourcing Trends” 257

8-16 Top Five Outsourced Business Categories Source: BusinessWeek, July 8,

8-17 Outsourcing Possibilities CountryPossibilities China Hardware, Software, Call Centers Philippines Accounting, Graphic Artists, Architects, Telemarketers Mexico Car & Electronic Manufacturing Costa Rica Call Centers, IT Support, Bookkeeping South Africa French, English, German Speaking Call Centers Russia R & D Centers in Sciences, IT, Math India IT, Chip Design, Call Centers Source: BusinessWeek, February 3,

8-18 Inverted Organization Structure Empowered front- line workers Support Personnel Top Mgmt. 258

8-19 Examples of Informal Group Norms  Do your job but don’t produce more than the rest of the group.  Don’t tell off-color jokes or use profane language among group members.  Listen to the boss and use his/her expertise but don’t trust him/her.  Everyone is to be clean/organized at the workstation. 260

8-20  Never side with managers in a dispute involving group members.  Respect/help your fellow group members on the job.  Criticize the organization only among group members- never among strangers.  Drinking is done off-the-job- Never at work! Examples of Informal Group Norms (cont’d) 260