CSC350: Learning Management Systems COMSATS Institute of Information Technology (Virtual Campus)

Lecture # 8 Fundamentals of Organizing

Review of the Previous Lecture Definitions of strategic planning Main aspects of the strategic management process Key components of environmental analysis Role of organizational direction in strategic management Primary aspects of strategy formulation Importance of strategic control Coordination of tactical planning & strategic planning Competitive dynamics & organization’s financial performance

Topics of Discussion An understanding of the organizing function Benefits and costs of bureaucracy Advantages and disadvantages of division of labor Complexities of determining appropriate organizational structure Advantages and disadvantages of departmentalization

DEFINITIONS OF ORGANIZING AND ORGANIZATION SKILL Process of establishing orderly uses for resources within the management system Organizing Skill Creating a network of people throughout the organization who can help solve implementation problems as they occur Organization End result of organizing process

Fayol’s Organizing Guidelines

Organizing Process

CLASSICAL ORGANIZING THEORY Weber’s Bureaucratic Model: Detailed procedures and rules Clearly outlined organizational hierarchy Impersonal relationships among organization members

CLASSICAL ORGANIZING THEORY Division of Labor: Assigning various portions of a task among a number of organization members Advantages: Specialized skills – Only one job to do – Efficiency Disadvantages: Overlooks human variable – Boring – Decreased production

Division of Labor & Coordination Orderly arrangement of group effort Unity of action Synchronized order of tasks Mary Parker Follett Guidelines: Peer discussion resolves problems Planned by managers Maintaining is continuing process

STRUCTURE Designated relationships among organizational resources Two basic types of structure: Formal Represented on organization chart Informal Evolves naturally, spontaneously

Formal Structure Organization Chart Graphic illustration of firm’s organization structure Pyramid form Boxes are jobs/positions Lines designate formal communication lines

Vertical Dimensioning Scalar Relationships Chain of Command Unity of Command Employee reports to only one manager Span of Management Number of employees one manager can effectively manage Height of Organization Chart

Horizontal Dimensioning Lateral subdivisions or specialties Departments Unique group of resources established by management to perform organizational tasks

TYPES OF DEPARTMENTALIZATION

Functional Departmentalization

Product/Service Departmentalization

Geography Departmentalization

Customer Departmentalization

Matrix Departmentalization

Forces Influencing Formal Structure Managerial Forces Task Forces Environmental Forces Subordinate Forces

Fayol’s Chain of Command Rationale

Informal Structure Mechanistic Structures Organic Structures Formal organizational structures Suited for large companies in stable industries Organic Structures Less formal Represent loosely coupled worker networks Suited for smaller companies in volatile industries

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