MultiMedia by Stephen M. Peters© 2002 South-Western Organizing Principles

MultiMedia by Stephen M. Peters© 2002 South-Western Organizing Management function that establishes relationships between activity and authority. A whole consisting of unified parts (a system) acting in harmony to execute tasks. Helps to achieve goals effectively and efficiently and accomplish the company’s mission.

MultiMedia by Stephen M. Peters© 2002 South-Western Benefits of Organizing  Clarifies the work environment.  Creates a coordinated environment.  Achieves the principle of unity of direction.  Establishes the chain of command.

MultiMedia by Stephen M. Peters© 2002 South-Western Chain of Command Unbroken line of reporting relationships. Defines the formal decision-making structure. Provides for the orderly progression up and down the hierarchy.

MultiMedia by Stephen M. Peters© 2002 South-Western Organizing Five Steps  Reviewing plans and goals.  Determining work activities.  Classifying and grouping activities.  Assigning work and delegating authority.  Designing a hierarchy of relationships.

MultiMedia by Stephen M. Peters© 2002 South-Western Advantages of Work Specialization  Work can be performed more efficiently.  Employees can gain skill and expertise.  Facilitates the process of selecting employees as well as decreasing training requirements.  Allows managers to supervise more employees.

MultiMedia by Stephen M. Peters© 2002 South-Western Disadvantages of Work Specialization  Jobs can become too simplified.  Employees become bored and tired, safety problems and accident rates increase.  Absenteeism rises.  Quality of work may suffer.

MultiMedia by Stephen M. Peters© 2002 South-Western Principle of Functional Similarity -Three Steps-  Identify each activity to determine its general nature.  Group the activities into related areas.  Establish the basic department design for the organizational structure.

MultiMedia by Stephen M. Peters© 2002 South-Western Four Departmental Types 4. Customer Departmentalization 2. Geographical Departmentalization 3. Product Departmentalization 1. Functional Departmentalization

MultiMedia by Stephen M. Peters© 2002 South-Western Geographical Departmentalization

MultiMedia by Stephen M. Peters© 2002 South-Western Product Departmentalization

MultiMedia by Stephen M. Peters© 2002 South-Western Customer Departmentalization

MultiMedia by Stephen M. Peters© 2002 South-Western Horizontal Structuring Two Important Effects  It defines the working relationships between operating departments.  It makes the final decision on the span of control of each manager.

MultiMedia by Stephen M. Peters© 2002 South-Western To Organize Effectively, Leaders/Managers Need to Master  Authority  Power  Delegation  Span of control  Centralization/decentralization

MultiMedia by Stephen M. Peters© 2002 South-Western Authority  Formal and legitimate right of a manager to make decisions.  Legitimate right of a manager to give orders.  Legitimate right of a manager to allocate resources.

MultiMedia by Stephen M. Peters© 2002 South-Western Line Authority

MultiMedia by Stephen M. Peters© 2002 South-Western Staff Authority

MultiMedia by Stephen M. Peters© 2002 South-Western Functional Authority

MultiMedia by Stephen M. Peters© 2002 South-Western Manager’s Power Sources

MultiMedia by Stephen M. Peters© 2002 South-Western Narrow Span of Control

MultiMedia by Stephen M. Peters© 2002 South-Western Narrow and Wide Spans of Control

MultiMedia by Stephen M. Peters© 2002 South-Western Considerations for Proper Span of Control  The complexity and variety of the subordinate’s work.  The ability of the manager.  The ability and training of the subordinates themselves.  The supervisor’s willingness to delegate authority.  The company’s philosophy for centralization or decentralization of decision making.

MultiMedia by Stephen M. Peters© 2002 South-Western Judging Decentralization  The greater the number of decisions made at the lower levels of management.  The more important the decisions made at lower levels.  The more flexible the interpretation of company policy at the lower levels.  The more widely dispersed the operations of the company geographically.  The less a subordinate has to refer to his or her manager prior to making a decision.

MultiMedia by Stephen M. Peters© 2002 South-Western Informal and Formal Organizations Unofficial organization created by relationships. Primary area of emphasis is on people and their relationships. Leverage is provided by power. Source of power: given by group. Functions with power and politics. Behavior guidelines provided by group norms. Sources of control over the individual are positive or negative sanctions. Informal OrganizationFormal Organization Official organization created by management. Primary area of emphasis is official organization positions. Leverage is provided by authority. Sources of authority: delegated by management. Functions with authority and responsibility. Behavior guidelines provided by rules, policies, and procedures. Sources of control over the individual are rewards and penalties.

MultiMedia by Stephen M. Peters© 2002 South-Western Positive Potential of Informal Organizations