1. Nickels
Cover
Nickels
McHugh

2. Adapting Organizations to Today’s Markets
Chapter 8
Adapting Organizations to Today’s Markets
8-2

3. Front Line/Supervisory
Management Pyramid
CEO,
Comptroller,
Vice Pres.
Top
Sales Mgrs Plant Mgrs.
Mid-Level
Supervisors
Foremen
Front Line/Supervisory

4. Workers in Large* Companies in the Last 5 Years Have Undergone...
*500+ Employees
Source: Gallup for Carlson Marketing Group

5. Purpose of an Organizational Chart
Show the activities of the organization
Highlight subdivisions of the organization
Identify different types of work performed
Provide information about different management levels
Show the lines of authority and the flow of organizational communications

6. Organizational Design
Division
Department
Group
Individual

7. Fayol’s Principles of Organization
Unity of Command
Hierarchy of Authority
Division of Labor
Subordination of Individual Interest
Authority
Degree of Centralization
Communication Channels
Order
Equity
Esprit de Corps

8. Weber’s Organizational Principles
Job Descriptions
Written Rules
Procedures, Regulations, Policies
Staffing/Promotions based on Qualifications

9. Fundamentals of Bureaucracy
Chain of Command
Rules & Regulations
Set Up by Function
Communication is Minimal

10. Centralization (No Delegation)
Advantages
Increased Uniformity
Less Duplication
Maximum Control
Disadvantages
Lots of Policies & Procedures
Many Layers/Slower

11. Decentralization (Delegate Authority)
Advantages
Informed Decisions
Worker Responsibility
Few Layers/Faster
Disadvantages
Loss of Control
Possible Duplication

12. Span of Control Capabilities of Subordinates & Manager
Complexity of Job
Geographically Close
Functional Similarity
Need for Coordination
Planning Demands
Functional Complexity

13. Organizational Structures
Flat Organizations
Current Trend
Creation of Teams
Tall Organizations
Many Layers of Management
High Cost of Management

14. Departmentalization by Function
Advantages
Skill Development
Economies of Scale
Good Coordination

15. Departmentalization by Function
Disadvantages
Lack of Communication
Employees Identify with Department
Slow Response to External Demands
Narrow Specialists

16. Departmentalization
Customer
Location
Process
Product
Function

17. Line Organizations Advantages Disadvantages
Clear Authority & Responsibility
Easy to Understand
One Supervisor per Employee
Disadvantages
Inflexible
Few Specialists for Advice
Long Line of Communication
Difficult to Handle Complex Decisions

18. Layers of Authority Top Managers- Decision Makers
Middle Managers- Developed Rules & Procedures
Workers and Supervisors

19. Line/Staff Organizations
Line Personnel
Perform Functions
Contribute Directly to Organizational Goals
Staff Personnel
Advise
Assist Line Personnel

20. Matrix Organizations Advantages Disadvantages Costly/Complex
Flexibility
Cooperation & Teamwork
Creativity
More Efficient Use of Resources
Disadvantages
Costly/Complex
Confusion in Loyalty
Requires Good Interpersonal Skills & Cooperation
Not Permanent

21. Tips for Team Leaders Don’t be afraid to admit ignorance
Know when to intervene
Learn to truly share power
Worry about what you take on, not what you give up
Get used to learning on the job

22. How to Increase Team Productivity
Teach other members by sharing skills/strengths
Emphasize concern for teammates
Ask/invite questions
Motivate teammates through praise & recognition

23. Networking
Networking
Real Time
Transparency
Virtual Corporations

24. A Virtual Corporation Core Firm Production Firm Accounting Firm
Distribution Firm
Core
Firm
Legal Firm
Advertising Agency
Design Firm

25. Reasons to Outsource
Source: CIO, “2003 Outsourcing Trends”

26. Outsourcing Benefits Downside
Time to focus on company’s primary function
Increased level of expertise
Cost effectiveness
Decreased overhead
Risk reduction
Flexibility
Technology
Less personal approach
Less control by owner in planning, implementing & carrying out company’s future
Potential for competing for the outsourcing firm’s time

27. Top Five Outsourced Business Categories
Source: BusinessWeek, July 8, 2002

28. Outsourcing Possibilities
Country
Possibilities
China
Hardware, Software, Call Centers
Philippines
Accounting, Graphic Artists, Architects, Telemarketers
Mexico
Car & Electronic Manufacturing
Costa Rica
Call Centers, IT Support, Bookkeeping
South Africa
French, English, German Speaking Call Centers
Russia
R & D Centers in Sciences, IT, Math
India
IT, Chip Design, Call Centers
Source: BusinessWeek, February 3, 2003

29. How to Improve Organizational Structure
Break business into smaller units
Build teamwork
Impose autonomy
Create meaningful incentives
Outsource non-operating activities
Share business capabilities across units

30. The Four “Rs” of Organizational Transformation
Reframe
Restructure
Revitalize
Renew

31. Customer -Focused Design
Information
Build teamwork
cross-functional
integration
Self-management & autonomy
Bottom-up relationships
Outsource
Global orientation
Internal vs. external customers

32. Inverted Organization Structure
Empowered front-line workers
Support Personnel
Top Mgmt.

33. Examples of Informal Group Norms
Do your job but don’t produce more than the rest of the group.
Don’t tell off-color jokes or use profane language among group members.
Listen to the boss and use his/her expertise but don’t trust him/her.
Everyone is to be clean/organized at the workstation.

34. Examples of Informal Group Norms(cont’d)
Never side with managers in a dispute involving group members.
Respect/help your fellow group members on the job.
Criticize the organization only among group members- never among strangers.
Drinking is done off-the-job Never at work!