Introduction to Management Welcome to AB140 Introduction to Management Unit 4 Seminar – Organizing

Agenda General Questions and Announcements Introduction Unit 4 Organizational Structures Differentiation and Integration Span of Control Centralized vs. Decentralized Decision Making Delegation Conclusion of Seminar 2

Mgr.- Mrktg and Cust. Service Key Concepts Organizing is one of the primary functions of management. Organizational structures have vertical and horizontal dimensions CEO V.P. Finance/ Acctg. Accountant Mgr.- Mrktg and Cust. Service Manager Production Manager Research Assist. Manager Supply Chain Organizational structures have vertical and horizontal dimensions, each having unique characteristics. The organization chart depicts the positions in the organization and the way they are arranged. Delegation is a fundamental feature of management at every level of management. This is a very small start up business. What does this organization chart tell you about the business?

Unit 4 Objectives During this unit we will: Identify characteristics of vertical and horizontal organizational structures. Identify levels of authority in an organization. Discuss delegation.

Organizational Structures Mechanistic Structures Formal structure Intended to promote internal efficiency Represented by organizational chart Depends on reporting and authority relationships Organic Structures Informal structure Intended to respond more quickly to change in markets Depends on informal structures of employee networks Encourages working as teammates over boss/employee relationship

Differentiation Differentiation created by Division of Labor and Job Specialization Division of Labor Work of organization subdivided into smaller tasks Job Specialization Smaller tasks performed by individuals and units

Differentiation (cont.) Differentiation High Companies in complex, dynamic environment Many subunits and specialists Differentiation Low Companies in simple, stable environment

Integration Procedures that link various parts of organization to achieve overall mission Requires coordination and communication More highly differentiated firm = Greater need for integration among units

Vertical and Horizontal Structures Vertical Structure Shapes Company’s Reporting relationships Authority Responsibility Accountability Horizontal Structure Shapes Company’s Departments Functions Divisions Networks

Organizational Chart Illustrated (Sandwich Blitz, Inc.)

Vertical Structure: Span of Control Determines authority in firms’ vertical structure Defined as the number of subordinates who report directly to an executive or supervisor Narrow Span of Control Many reporting levels Wide Span of Control Flat organization Fewer reporting levels

Conditions for Wide Span of Control Work clearly defined Subordinates highly trained with access to information Manager highly capable and supportive Jobs are similar and performance measures comparable Subordinates prefer autonomy to close supervisory control

Vertical Structure: Centralized vs. Decentralized Decision-Making Power Important decisions usually made at the top Decentralized More decisions made at lower levels

Vertical Structure: Delegation Delegation: assignment of authority and responsibility to subordinate at lower level Responsibility: a person is assigned task to carry out Authority: person has power and right to make decisions, give orders, draw on resources Accountability: subordinate’s manager has right to expect that job will be performed Ultimate responsibility and accountability still lies with manager that delegates

Horizontal Organizational Structures A firm may be subdivided by: Functions: Like production, human resources, accounting, etc. Divisions: To reflect diverse firm needs. Each division having its own functional subunits. Matrix: A hybrid form combining both functional and divisional characteristics. Involves multiple reporting relationships. Network: A collection of mostly single-function firms that collaborate to produce a good or service.

Any questions ?

Unit 4 Coursework Reading: Chapter 6 in the Bateman and Snell text pp. 122-134 Discussion: Focus on delegation; Reflect on your personal experience with delegating responsibilities or having responsibilities delegated to you Assignment: Focus on authority and span of control relative to organizational chart for Sandwich Blitz, Inc. There are 4 questions in total. Response should include a paragraph of approx. 60-100 words per question. Review: Five multiple choice questions relative to the Bateman and Snell reading on pages 122-134.

Thank You for Attending