1. Adapting Organizations to Today’s Markets* * *
Adapting Organizations to Today’s Markets
CHAPTER 8
Nickels McHugh McHugh * *
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2. Building an Organization from the Bottom Up
Organizing or Structuring: Determine what work needs to be done.
Division of Labor: Divide the tasks among others.
Job Specialization: Dividing the tasks into smaller jobs.
Departmentalization: The process of setting up individual departments to do specialized tasks.
Assign Authority & Responsibility:
Organization Chart/Organogram
Allocating Resources:
Assigning Specific Tasks:
Establishing Procedures:

3. Centralization (No Delegation)
Advantages
Greater Top-Management Control
More Efficiency
Simpler Distribution System
Stronger Brand/Corporate Image
Disadvantages
Less Responsiveness to Customers
Less Empowerment
Inter organizational Conflict
Lower Morale Away from Headquarters
Also available on a Transparency Acetate
See Learning Goal 2: Explain the various issues involved in structuring organizations.
See Text Pages:
Centralization (No Delegation)
This slide identifies the advantages and disadvantages associated with centralization of management decisions.
Centralization can be defined as a philosophy of an organization and management that focuses on retaining control of authority with higher level managers.
One of the disadvantages of this type of management style is slower decisions because of layers of management. Ask the students: What specific problems you see with this type of management? (Slower decision-making means the company is less responsive to both internal an external customers needs.)
Share with the students a simple rule to follow when dealing with centralized authority: Decisions regarding overall company policy and establishment of goals and strategies should be made at the top.

4. Decentralization (Delegate Authority)
Advantages
Better Adaptation to Customer Wants
More Empowerment of Workers
Faster Decision Making
Higher Morale
Disadvantages
Less Efficiency
Complex Distribution System
Less Top-Management Control
Weakened Corporate Image
Also available on a Transparency Acetate
See Learning Goal 2: Explain the various issues involved in structuring organizations.
See Text Pages:
Decentralization (Delegate Authority)
This acetate gives the student an alternate look at decision-making other than centralization in a company.
Decentralization is a philosophy of an organization and management that focuses on delegating authority throughout the organization to middle and lower managers.
The most significant advantage to this form of management style is the empowerment of the employees. Statistics indicate when delegation is practiced in a company; absenteeism, injuries, loyalty and production improve.
Share with the students a simple rule to follow when dealing with decentralized authority: The closer an issue is that directly affects the customer, the more decentralized the decision-making should be. A customer service manager must have the authority to make a decision that will satisfy a customer immediately, not wait until the home office makes a decision.

5. Organization Structures
Tall organization: An organizational structure in which the pyramidal organization chart would be quite tall because of the various levels of management.
Flat organization: An organization structure that has few layers of management and a broad span of control.

6. Organizational Structures
Tall Organizations
Many Layers of Management
High Cost of Management
Narrow Span of Control
Flat Organizations
Current Trend
Creation of Teams
Broad Span of Control
See Learning Goal 2: Explain the various issues involved in structuring organizations.
See Text Pages:

7. Disadvantages Advantages Departmentalization Lack of Communication
Departmentalization: The dividing of organizational functions into separate units.
Disadvantages
Lack of Communication
Employees Identify with Department
Slow Response to External Demands
Narrow Specialists
Groupthink
Advantages
Skill Development
Economies of Scale
Good Coordination

8. Ways of Departmentalization
By Product
By Function
By Customer Group
By Geographic Location
By Process
See Learning Goal 2: Explain the various issues involved in structuring organizations.
See Text Pages: 216

9. Cross Functional Self-Managed Teams
Groups of employees from different departments who work together on a long-term basis.
Self-managed means they are empowered to make decisions without management approval.
Cross functional team works better when it includes customers, suppliers, and distributors too.

10. Creating a Change-Oriented Organizational Culture
Organizational (Corporate) Culture: Widely shared values within an organization that provide unity and cooperation to achieve common goals.
Myths, stories, traditions, values etc are part of corporate culture

11. Production process Land Labor Capital Entrepreneur Knowledge Planning
INPUTS
Production
Control
OUTPUT
Land
Labor
Capital
Entrepreneur
Knowledge
Planning
Routing
Scheduling
Dispatching
Follow-Up
Goods
Services
Ideas

12. Operations Management Planning
Planning that converts resources into goods or services.
It helps to solve many of the problems:
Facility Location
Facility Layout
Materials Requirement Planning
Purchasing
Inventory Control
Quality Control.