1. The Basic Elements of Organizing
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2. The Elements Organizing
Deciding how to best group organizational activities and resources.
Here are the main elements we will cover:
Job Design
Departmentalization
Chain of Command
Span of Management
Authority
Centralization vs. Decentralization
Tall vs. Flat Organizations
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3. Job Specialization (Division of Labor)
Job Design--
Job Specialization (Division of Labor)
The degree to which the overall task of the organization is broken down and divided into smaller component parts.
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
boredom and dissatisfaction with mundane tasks.
Anticipated benefits do not always occur.
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4. 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
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5. Alternatives to Specialization
Job Rotation
Systematically moving employees from one job to another in an attempt to reduce employee boredom.
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.
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6. Alternatives to Specialization
Job Characteristics Approach: suggests jobs should be diagnosed and improved along 5 core dimensions.
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.
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7. 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.
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8. 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.
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9. Departmentalization (cont’d)
Functional Departmentalization
Grouping jobs involving the same or similar activities.
Product Departmentalization
Grouping activities around products or product groups.
Customer Departmentalization
Grouping activities to respond to and interact with specific customers and customer groups.
Location Departmentalization
The grouping of jobs on the basis of defined geographic sites or areas.
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10. Bases for Departmentalization
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11. Reporting Relationships
Chain of Command
A clear and distinct line of authority among the positions in an organization.
Span of Management (Span of Control)
The number of people who report to a particular manager. Determined by many factors:
Competence of manager and subordinate
Extent of Standardized Procedures
Degree of required interaction
Amount of non-supervisory work in manager’s job
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12. Tall Versus Flat Organizations
Wide spans of management result in flat organizations which can improve communication and flexibility.
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13. 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 development of subordinates by having them participate in decision making and problem.
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14. Decentralization and Centralization
Systematically delegating power and authority throughout the organization to middle- and lower-level managers.
Centralization
Systematically retaining power and authority in the hands of higher-level managers.
Factors Determining Choice of Centralization
External environment’s complexity and uncertainty
History of the organization
Nature (cost and risk) of the decisions to be made.
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15. The Nature of Organization Design
The overall set of structural elements and the relationships among those elements used to manage the total organization.
A means to implement strategies and plans to achieve organizational goals.
Organization Design Concepts
Organizations are not designed and then left intact.
Organizations are in a continuous state of change.
Designs for larger organizations are extremely complex and have many nuances and variations.
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16. The Bureaucratic Model of Organization Design
Bureaucratic Model (Max Weber)
A logical, rational, and efficient organization design based on a legitimate and formal system of authority.
Characteristics
A division of labor with each position filled by an expert.
A consistent set of rules that ensure uniformity in task performance.
A hierarchy of positions which creates a chain of command.
Impersonal management; with the appropriate social distance between superiors and subordinates.
Employment and advancement is based on technical expertise, and employees are protected from arbitrary dismissal.
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17. Situational View of Organization Design
Assumes that the optimal design depends on a set of relevant situational factors. Four Basic Factors:
Technology
Unit or Small Batch
Large-Batch or Mass Production
Continuous-Process Technology
Environment
Stable environments that remain constant over time.
Mechanistic – similar to bureaucratic, most frequently found in stable environments
Unstable environments subject to uncertainty and rapid change
Organic – flexible and informal; usually found in unstable and unpredictable environments
Size
Organizational Life Cycle
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18. Basic Forms of Organization Design
Functional or U-form (Unitary) Design
Organizational members and units are grouped into functional departments such as marketing and production.
Coordination is required across all departments.
Design approach resembles functional departmentalization in its advantages and disadvantages.
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19. Functional or U-form Design for a Small Manufacturing Company
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20. Basic Forms of Organization Design (cont’d)
Conglomerate or H-form (Holding) Design
Organization consists of a set of unrelated businesses with a general manager for each business.
Holding-company design is similar to product departmentalization.
Coordination is based on the allocation of resources across companies in the portfolio.
Design has produced only average to weak financial performance; has been abandoned for other approaches.
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21. Conglomerate (H-form) Design at Samsung
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22. Basic Forms of Organization Design (cont’d)
Divisional or M-form (Multidivisional) Design
Multiple businesses in related areas operating within a larger organizational framework.
Results from a strategy of related diversification.
Some activities are decentralized down to the divisional level; others are centralized at the corporate level.
M-form design advantages are the opportunities for coordination and sharing of resources.
Successful M-form organizations can out perform U-form and H-form organizations.
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23. Multidivisional (M-form) Design at Limited Brands
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24. Basic Forms of Organization Design (cont’d)
Matrix Design
Two overlapping bases of departmentalization:
A set of product groups or temporary departments are superimposed across the functional departments.
Employees in the matrix belong to their departments and the project team:
A multiple command structure in which an employee reports to both departmental and project managers.
A matrix design is useful when:
There is strong environmental pressure.
There are large amounts of information to be processed.
There is pressure for shared resources.
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25. A Matrix Organization
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26. Basic Forms of Organization Design (cont’d)
Hybrid Designs
Based on two or more common forms of organization design—may have a mixture of related divisions and a single unrelated division.
Most organizations use a modified form of organization design that permits them to have sufficient flexibility to make adjustments for strategic purposes.
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27. Emerging Issues in Organization Design
The Team Organization
Relies almost exclusively on project-type teams, with little or no underlying functional hierarchy.
The Virtual Organization
Has little or no format structure with few permanent employees, leased facilities, and outsourced basic support services.
May conduct its business entirely on-line and exists only to meet for a specific and present need.
The Learning Organization
Works to facilitate the lifelong learning and development of its employees while transforming itself to respond to changing demands and needs.
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