1. Basic Elements of Organizing
Ch 11
Basic Elements of
Organizing

2. Organizational Structure
Factors determining organizational structure
Purpose
Mission
Strategy
Size
Technology
External Environment
Specification of the jobs to be done within an organization and how those jobs relate to one another

3. The Basic Elements of Organizing
Job Specialization
Alternatives to Specialization
Grouping Jobs: Departmentalization
Establishing Reporting Relationships
Distributing Authority
Coordinating Activities

4. The Basic Elements of Organizing
Organization Structure and Design
The overall set of structural elements and the relationships among those elements used to configure the total organization.
A means to implement strategies and plans to achieve organizational goals.
Job Specialization
The degree to which the overall task of the organization is broken down and divided into smaller component parts.

5. Job Specialization Benefits of Specialization
Workers can become proficient at a task.
Transfer time between tasks is decreased.
Specialized equipment can be more easily developed.
Employee replacement becomes easier.
Limitations of Specialization
Employee boredom and dissatisfaction with mundane tasks.
Anticipated benefits of specialization do not always occur.

6. Alternatives to Specialization
Job Rotation
Systematically moving employees from one job to another. Most frequent use today is as a training device for skills and flexibility.
Job Enlargement
An increase in the total number of tasks performed.
Increases training costs, unions want workers paid more pay for doing more tasks, and work may still be dull and routine.
Job Enrichment
Increasing both the number of tasks the worker does and the control the worker has over the job.

7. Alternatives to Specialization … Job Characteristics Approach
Core Dimensions
Skill variety—the number of tasks a person does in a job.
Task identity—the extent to which the worker does a complete or identifiable portion of the total job.
Task significance—the perceived importance of the task.
Autonomy—the degree of control the worker has over how the work is performed.
Feedback— the extent to which the worker knows how well the job is being performed.
Growth-Need Strength
The desire of some people to grow, develop, and expand their capabilities that is their response to the core dimensions.

8. The Job Characteristics Approach

9. Alternatives to Specialization … 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.

10. 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.
Departmentalization
Functional
Geographic
Customer
Product
Process

11. Design
Marketing
Computers
President
Software
Manufacturing
Finance
Phoenix
Dallas
Consumer sales
Industrial sales
St. Louis
Chicago
Southwest U.S.
Southeast U.S.
Northeast U.S.
Northwest U.S.
Central U.S.

12. Functional Departmentalization Jobs involving the similar activities
Advantages
Each department can be staffed by functional-area experts.
Supervision is facilitated in that managers only need be familiar with a narrow set of skills.
Coordination inside each department is easier.
Disadvantages
Decision making becomes slow and bureaucratic.
Employees narrow their focus to the department and lose sight of organizational goals/ issues.
Accountability and performance are difficult to monitor.

13. Product Departmentalization Grouping around product groups
Advantages
All activities associated with one product can be integrated and coordinated.
Speed and effectiveness of decision making are enhanced.
Performance of individual products or product groups can be assessed.
Disadvantages
Managers may focus on their product to the exclusion of the rest of the organization.
Administrative costs may increase due to each department having its own functional-area experts.

14. Customer Departmentalization Respond/interact with 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.

15. Location Departmentalization
The grouping of jobs on the basis of defined geographic sites or areas.
Advantage
Enables the organization to respond easily to unique customer and environmental characteristics.
Disadvantage
Large administrative staff may be needed to keep track of units in scattered locations.

16. 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 lowest to the highest of the organization.

17. Establishing Reporting Relationships (cont’d)
Span of Management (or Span of Control)
The number of people who report to a particular manager.
There is no ideal or optimal span of management.

18. Relatively narrow span of control
Relatively wide span of control

19. Establishing Reporting Relationships: Tall Versus Flat Organizations
Tall Organizations
Are more expensive because of the number of managers involved.
Foster more communication problems because of the number of people through whom information must pass.
Flat Organizations
Lead to higher levels of employee morale and productivity.
Create more administrative responsibility for the relatively few managers.
Create more supervisory responsibility for managers due to wider spans of control.

20. 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.
Reasons for Delegation
To enable the manager to get more work done by utilizing the skills and talents of subordinates.
To foster the development of subordinates by having them participate in decision making and problem solving.

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

22. Problems in Delegation
Manager
Reluctant to delegate.
Disorganization prevents planning work in advance.
Subordinate’s success threatens superior’s advancement.
Lack of trust in the subordinate to do well.
Subordinate
Reluctant to accept delegation for fear of failure.
Perceives no rewards for accepting additional responsibility.
Prefers to avoid any risk and responsibility.

23. Problems in Delegation
Small Business Owners:
Employees can’t do anything as well as you can
Something will go wrong if someone else takes over a job
Lack of time for long range planning
Sense of being in the dark about industry trends and competition
Big Business Managers:
Fear that subordinates don’t really know how to do the job
Fear that a subordinate might “show up” the manager by doing well
Desire for control
Lack of delegating ability

24. 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.

25. Centralized and Decentralized Organizations
Top managers hold most decision-making authority
Decentralized
Lower level managers hold significant decision-making authority

26. Decentralization and Centralization …
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.

27. Coordinating Activities
Coordination
The process of linking the activities of the various departments of the organization.
The Need for Coordination
Departments and work groups are interdependent; the greater the interdependence, the greater the need for coordination.

28. 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.

29. Structural Coordination Techniques
The Managerial Hierarchy
Placing one manager in charge of interdependent departments or units.
Rules and Procedures
Coordinating routine activities 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.

30. Structural Coordination Techniques …
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.

31. Electronic Coordination Techniques
Electronic Information Technology
and instant messaging
Electronic scheduling to coordinate arrangements for group meetings
Local networks structured around a common web-based communication system.
Video-conferencing
Wireless networks

32. Forms of Authority Line Authority Staff Authority
Line Departments
Staff Authority
Staff Members
Committee and Team Authority