1. Basic Elements of Organizing

2. In this chapter you will learn
Definition of Organizing
Definition of organizational structure
The Elements of Organizing
1. Designing Jobs
Job Specialization
Benefits and Limitations of Specialization
Alternatives to Specialization
2. Grouping Jobs: Departmentalization
Rationale
Common Bases and advantage and disadvantages of each base
3. Establishing Reporting Relationships
Chain of Command
Narrow Versus Wide Spans
Tall Versus Flat Organizations
Determining the Appropriate SOC
4. Distributing Authority
The Delegation Process
Decentralization and Centralization
5. Coordinating Activities
The Need for Coordination
Structural Coordination Techniques
6. Differentiating Between Positions
Differences Between Line and Staff
Administrative Intensity
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3. The Elements Organizing
Deciding how to best group organizational activities and resources.
Organization Structure
The set of building blocks that can be used to configure an organization.

4. Hierarchical Organisation
In a hierarchical organisation employees are ranked at various levels within the organisation, each level is one above the other. At each stage in the chain, one person has a number of workers directly under them, within their span of control.

5. Macquarie Bank - Organisation Structure
Macquarie's six business Groups
Macquarie's organizational approach is designed to be non-hierarchical. Management of the organization is largely delegated to the Executive Committee, a central group comprising the Chairman, Managing Director, Deputy Managing Director, Head of Risk Management and heads of the Bank's six major business Groups.
Within overall guidelines and specific parameters set by the Board and Executive Committee, the six business Groups have substantial discretion in the conduct of their various businesses. Business activities are carried out by Divisions, which focus on particular products and markets. Outside the major business Groups is a specialist business, Macquarie Direct Investment, which is responsible for managing the Bank's private equity activities.
Macquarie Bank - Organisation Structure

6. Basic elements organizing
Job Designing
Departmentalization
Reporting Relationships
Distribution of Authority
Coordination
Differentiation

7. Basic Elements of Organizing
1-Job Design
2- Departmentalization
3- Reporting Relationship
4- Distributing Authority
5- Coordination
6- Differentiation

8. Designing Jobs What is ‘Designing Jobs’?
How would you design jobs for an entire organization?
Define ‘Job Specialization - JS’?
What are the benefits of JS?
What are the limitations of JS?
Define the following terms:
Job Rotation
Job Enlargement
Job Enrichment
Team work
Job- Characteristics Approach

9. Job Design
Determination of an individual’s work-related responsibilities.

10. Job Specialization (Division of Labor)
The degree to which the overall task of the organization is broken down and divided into smaller component parts

11. Making a nail dilemma? How many tasks does it take to make a nail?18
How many nails can one worker make in a day, if he/she is doing all the tasks? 20
How many nails can be made by 20 workers?
20 * 20 = 400 nails
How many steps does it take to make a nail? 18
How many nails can one worker process in a day, if he/she is specialized in one task one?
5000
How many nails by 20 workers?
20 * 5000 = 100,000 nails

12. Adam Smith’s Example of Job Specialization
Making a pin (nail) requires 18 tasks
1 worker doing all 18 tasks might make
20 pins (nails) a day.
20 workers = (20 x 20) = 400 pins
______________________________
With specialization:
20 workers make 100,000 pins a day.
1 worker = 5,000 pins
20 pins vs. 5,000 pins per worker 10

13. + & - Job Specialization
Benefits
Proficient
Transfer time
Specialized equipment
Replacement
Limitations
Boredom and dissatisfaction
Anticipated benefits do not always occur.

14. Alternatives to Job Specialization
Job Rotation
Job Enlargement
Job Enrichment
Team Work
Job Characteristics Approach

15. Classify the following into: Work Teams, Job Enrichment, Job Enlargement and Job Rotation.
An operator has four different jobs. He spends three weeks on each of these jobs and then starts the cycle over again with the first job of the operation.
Sulma’s job is a data entry operator. Her job has been redesigned and now she also has a higher level responsibility in the PR. Now she is also responsible to reply customers complaints.
Fatima is a typist for the sales section. Her job has been redesigned to include typing for the advertising section as well.
Ahmed, Sulman and Ali are working as a group. They have the full autonomy to design the work system that they will use to perform an interrelated set of tasks.

16. Alternatives to Specialization
Job Rotation
Systematically moving employees from one job to another in an attempt to reduce employee boredom. Most frequent use today is as a training device for skills and flexibility.
Job Enlargement
An increase in the total number of tasks workers perform.
Job Enrichment
Increasing both the number of tasks the worker does and the control the worker has over the job.

17. Alternatives to JS Work Teams
An alternative to job specialization that allows the entire group to design the work system it will use to perform an interrelated set of tasks.

18. Alternatives to Specialization: Job Characteristics Approach
Skill variety
Task identity
Task significance
Autonomy
Feedback
The number of tasks a person does in a job.
the extent to which the worker does a complete or identifiable portion of the total job
the perceived importance of the task
the degree of control the worker has over how the work is performed
the extent to which the worker knows how well the job is being performed.

19. Assess the jobs below using the dimensions of the job characteristics approach * Assembly line operator responsible to put lids on the moving jam jars * A dentist
Skills Variety
Number of tasks is high
Number of Tasks is limited
Tasks Identity
Worker does a minute or unidentifiable portion of the total job
Worker does a complete or identifiable portion of the total job
Task Significance
The perceived importance of the task is high
The perceived importance of the task is low
Autonomy
The employee has low control over how the work is performed
The employee has high control over how the work is performed
Feedback
The employee clearly and immediately knows how well the job is being performed.
It takes time for the employee to formally know well the job has been performed

20. Skills Variety Tasks Identity Task Significance Autonomy Feedback
Assess the jobs below using the dimensions of the job characteristics approach * Assembly line operator responsible to put lids on the moving jars
Skills Variety
Number of Tasks is limited
Tasks Identity
Worker does a minute or unidentifiable portion of the total job
Task Significance
the perceived importance of the task is low
Autonomy
The employee has low control over how the work is performed
Feedback
It takes time for the employee to know well the job has been performed

21. Skills Variety Tasks Identity Task Significance Autonomy Feedback
Assess the jobs below using the dimensions of the job characteristics approach * A dentist
Skills Variety
Number of tasks is high
Tasks Identity
Worker does a complete or identifiable portion of the total job
Task Significance
the perceived importance of the task is high
Autonomy
The employee has high control over how the work is performed
Feedback
The employee clearly and immediately knows how well the job is being performed.

22. Which of the following job dimensions will lead the dentist to experience the specified psychological state
The dentist will experience meaningfulness of his work because his job includes
High skills variety
High task identity
High task significance
High Autonomy
High Feedback
The dentist will experience that he/she is responsible for the work done because his/her job is designed with
The dentist will experience that he/she has knowledge of the actual results of his/her activities because his/her job is designed with
High skills variety
High task identity
High task significance
High Autonomy
High Feedback

23. Matching the person & the job
You have been asked to design jobs for the following job candidates. Use the Job Characteristics Approach to design the jobs.
Jassim is highly motivated, exercises self control, fast learner ,independent and is a risk taker. He is always on the look for new challenges.
Abullah is a reserved person, who likes to be told what to do and strictly follows the orders. He is risk averse.
Whom would you describe as a person who is eager to grow. In other words who has strong desire to develop, and expand his capabilities.
(a) Jassim
(b) Abullah
Would you design a job for Jassim that is high on the five core dimensions of the job characteristics approach.
(a) Yes
(b) No
Would it be right to describe Jassim as person who has high growth needs.
Would you describe the job that you would design for Jassim as
(a) strong on all five dimensions of the job characteristics approach
(b) Low on all five dimensions of the job characteristics approach

24. Job Characteristics Approach
Core job
dimensions
Personal and
work outcomes
Critical
psychological
states
Experienced
responsibility
for outcomes
of the work •
Skill variety
Task identity
Task significance
Autonomy
Feedback
Knowledge of the
actual results of
work activities
Employee
growth-need
strength
High internal
work motivation
High-quality work
performance
High satisfaction
with the work
Low absenteeism
and turnover
meaningfulness
Job Characteristics Approach

25. Grouping Jobs: Departmentalization
The process of grouping jobs according to some logical arrangement.
Rationale for Departmentalization
Organizational growth exceeds the owner-manager’s capacity to personally supervise all of the organization.
Additional managers are employed and assigned specific employees to supervise.

26. Building Block 2: Grouping Jobs: Departmentalization
What is Departmentalization?
From the facts below, draw an organization chart for Apex Computers. Specify the departmentalization bases for each hierarchical level.
Apex computers has two divisions for its main products, Computers and software. Manufacturing, Finance an Marketing are the departments in the Computers division. The Software division is has Marketing, Finance and Design departments. The Design department has two sections, Saudi Arabia and Bahrain. The Manufacturing Department has two sections, UEA and Oman. The Marketing Department in the Computer Division has two sections, Industrial Sales and Consumer sales. The Consumer Sales section has five units, Saudi Arabia, UAE, Bahrain, Oman and Qatar.
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27. 11–27

28. Bases for Departmentalization: Apex Computers
Design
Marketing
Computers
President
Software
Manufac-
turing
Finance
Oman
UAE
Consumer
sales
Industrial
Bahrain
Saudi
Arabia
Qatar

29. Functional Departmentalization
Is the grouping of jobs involving the same or similar activities.
Disadvantages
slow and bureaucratic.
narrow focus
Accountability
Advantages
experts.
Supervision is facilitated
Coordination

30. Product Departmentalization Form
The grouping of activities around products or product groups.
Disadvantages
Product focus.
Administrative costs
Advantages
All in one
Speed and effectiveness
Performance assessment

31. Customer Departmentalization
Grouping activities to respond to and interact with specific customers and customer groups.
Advantage
Skilled specialists can deal with unique customers or customer groups.
Disadvantage
A large administrative staff is needed to integrate activities of various departments.

32. Location Departmentalization
The grouping of jobs on the basis of defined geographic sites or areas.
Advantage
Quick response
Disadvantage
Large administrative

33. Advantages and Disadvantages of Each Departmentalization Base
Functional
Product
Customer
Location
Advantage (+) and Disadvantage (-)
+The department can be staffed with experts in the functional areas
+Supervision is facilitated as each individual manager has to deal with relatively narrow set of skills
+ All activities associated with a specific product or product group are easily integrated and coordinated. Therefore, the speed and effectiveness of decision making regarding a specific products is enhanced
+ All activities associated with a customers are easily integrated and coordinated. Therefore, the speed and effectiveness of decision making regarding a specific customers is enhanced as skilled specialists can deal with unique customers or customer groups.
+ All activities associated with a specific geographical areas are easily integrated and coordinated. Therefore, the speed and effectiveness of decision making regarding a specific geographical area is enhanced
+ the performance of individual products or product groups can be assessed more easily and objectively
-Accountability and performance becomes more difficult to measure
+Quick response to the specific needs of customers in a specific geographical area
-As the organization grows, decision making tend to become slower and more bureaucratic
-narrow focus as employees tend to concentrate on their own unit rather than the total organization
- A large administrative staff is needed to integrate activities of various departments.
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34. Other Forms of Departmentalization:
Time
Sequence

35. Sometimes departments are called something different, such as:
Other Considerations
Sometimes departments are called something different, such as:
Division.
Units.
Section.
Bureaus.

36. Establishing Reporting Relationships
Chain of Command
A clear and distinct line of authority among the positions in an organization.
Unity of Command
Each person within an organization must have a clear reporting relationship to one and only one boss.
Scalar Principle
A clear and unbroken line of authority must extend from the bottom to the top of the organization.

37. Chain of Command Unity of Command – one and only one boss
Scalar Principal – clear and unbroken line of authority extending from the bottom to the top
02-05-I200-SL

38. Number of people who report to a particular manager
Span of Control (SOC)
Number of people who report to a particular manager
02-12-I200-SL

39. Span of Control
Narrow Span of control
02-12-I200-SL

40. Wide Span of Control Span of Control
Narrow - Effective span of control
Narrow - Effective span of control
Narrow - Effective span of control
Wide Span of Control
02-12-I200-SL

41. Optimum Span of Control ?
02-13-I200-SL

42. Subordinate interactions
? What is the optimum SOC
A. V. Graicunas
Subordinate interactions
I = N(2N/2 + N - 1)
Ralph Davis
Operative span for lower-level managers up to 30 workers.
Executive span for middle and top managers at 3 to 9.
Al-Qosaibi
Refer to article

43. Highlight the appropriate type
Advantages (+) or Disadvantages (-)
Tall Organization
Flat Organization
- Expensive (Why?)
- Communication is relatively more difficult
+ leads to higher levels of employees moral and productivity
-Create more supervisory responsibility for managers due to the wider spans of control.

44. Tall Versus Flat Organizations
President
Tall Organization
Flat Organization

45. Establishing Reporting Relationships: Tall versus Flat Organizations
higher levels of employee morale and productivity
Create more supervisory responsibility for managers due to wider spans of control.
What type of SOC is associated with tall organization?
Tall Organizations
expensive
communication problems
What type of SOC is associated with tall organization?

46. Determining the Appropriate Span: Factors Influencing the Span of Management
Table 11.1

47. Determining the Appropriate Span: Factors Influencing the Span of Management
Table 11.1

48. Distributing Authority
Power that has been legitimized by the organization.
Delegation
The process by which managers assign a portion of their total workload to others.
Temporary
Reasons for Delegation
get more work done
development of subordinates

49. Steps in the Delegation Process
Manager
Step 1
Assigning responsibility
Step 3
Creating accountability
Step 2
Granting authority
Subordinate
Figure 11.4

50. Steps in the Delegation Process
Manager
Step 1
Telling the subordinated
to do the job
Step 3
Establishing
Obligation
Step 2
Power
Subordinate

51. Problems in Delegation
Manager
Reluctant to delegate
Disorganized manager
Threat
Trust issue
Subordinate
Fear of failure
Avoidance of risk and responsibility
no rewards

52. Decentralization and Centralization
The process of systematically delegating power and authority throughout the organization to middle- and lower-level managers.
Centralization
The process of systematically retaining power and authority in the hands of higher-level managers.
Factors Determining the Choice of Centralization
The complexity and uncertainty of the external environment.
The history of the organization.
The nature (cost and risk) of the decisions to be made.

53. Coordinating Activities
Coordination
The process of linking the activities of the various departments of the organization.
The Need for Coordination - Interdependence -

54. Coordinating Activities: Three Major Forms of Interdependence
When the output of one unit becomes the input of another unit in an ordered fashion.
Pooled interdependence
Sequential interdependence
Reciprocal interdependence
When units operate with little interaction; their output is simply gathered at the organizational level.
When activities flow both ways between units.
Pooled interdependence
Sequential interdependence
Reciprocal interdependence

55. Coordinating Activities: Three Major Forms of Interdependence
Pooled interdependence
When units operate with little interaction; their output is simply pooled at the organizational level.
Sequential interdependence
When the output of one unit becomes the input of another unit in sequential fashion.
Reciprocal interdependence
When activities flow both ways between units.

56. Three Major Forms of Interdependence
Sequential
Reciprocal
Input
Output
Input
Output
Input
Output
Pooled
Input
Input
Output
Input
Input
Output

57. Coordination Techniques Structural Coordination Techniques
The nature of the Finance
and Project Management
Department is acute
Coordination Techniques
Select the appropriate coordinating technique to each of the cases
1- Rules and Regulations
- Routine coordination activates can be handled via Rules and Regulations
2-Liaison Roles
- A manager in a liaison role coordinates interdependent units
3-Managerial Hierarchy
– Placing one manager in charge of two interdependent units
4- Integrating Department
-Creating a permanent department to coordinate between to highly interdependent units
5- Taskforce
- Creating a temporary taskforce to manage the coordination
In Kmart, lunching a
new product requires
temporary coordinating
between many units
In Kmart the nature of work
in the Loading and
Unloading sections is
highly interrelated
Structural Coordination Techniques
In Kmart, everyone knows
that the truck shipment
has priority over mail
shipment
2 groups of employees
working on different
shipments for the
same destination.
One manager is
Acting as a point of contact
between the two groups

58. Structural Coordination Techniques
Routine coordination activities can be handled via formal predetermined steps that set priorities and guidelines for actions.
The Managerial Hierarchy
Rules and Procedures
Liaison Roles
Task Forces
Integrating Departments
Placing one manager in charge of interdependent departments or units.
A manager coordinates interdependent units by acting as a common point of contact, facilitating the flow of information.
Used with multiple units when coordination is complex, requiring more than one individual, and the need for coordination is acute. This type of coordination is disbanded when the need for coordination has been met.
The Managerial Hierarchy
Rules and Procedures
Liaison Roles
Task Forces
Integrating Departments
Permanent organizational units that maintain internal integration and coordination on an ongoing basis. It may have authority and budgetary controls.

59. Structural Coordination Techniques
The Managerial Hierarchy
Placing one manager in charge of interdependent departments or units.
Rules and Procedures
Routine coordination activities can be handled via rules and procedures that set priorities and guidelines for actions.
Liaison Roles
A manager coordinates interdependent units by acting as a common point of contact, facilitating the flow of information.

60. Structural Coordination Techniques (cont’d)
Task Forces
Used with multiple units when coordination is complex requiring more than one individual and the need for coordination is acute.
Disbanded when the need for coordination has been met.
Integrating Departments
Permanent organizational units that maintain internal integration and coordination on an ongoing basis.
May have authority and budgetary controls.

61. Narrow Versus Wide Spans Tall Versus Flat Organizations
Designing Jobs
Job Specialization
Benefits and Limitations of Specialization
Alternatives to Specialization
Rationale
Common Bases
Product
Customer
Location
Functional
Chain of Command
Unity of Command
Scalar Principle
Span of Control
Narrow Versus Wide Spans
Tall Versus Flat Organizations
The Delegation Process
Decentralization and Centralization
The Need for Coordination
Types of Coordination
Structural Coordination Techniques
Differences Between Line and Staff
Administrative Intensity

62. In this chapter you will learnt
Definition of Organizing?
Definition of organizational structure
The Elements of Organizing
1. Designing Jobs
Job Specialization
Benefits and Limitations of Specialization
Alternatives to Specialization
2. Grouping Jobs: Departmentalization
Rationale
Common Bases and advantage and disadvantages of each base
3. Establishing Reporting Relationships
Chain of Command
Narrow Versus Wide Spans
Tall Versus Flat Organizations
Determining the Appropriate SOC
4. Distributing Authority
The Delegation Process
Decentralization and Centralization
5. Coordinating Activities
The Need for Coordination
Structural Coordination Techniques
6. Differentiating Between Positions
Differences Between Line and Staff
Administrative Intensity
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