1. © 2010 South-Western, Cengage Learning, Inc. All rights reserved. PowerPoint Presentation by Charlie Cook The University of West Alabama

2. © 2010 South-Western, Cengage Learning, Inc. All rights reserved.11– 1.Identify the basic elements of organizations. 2.Describe the basic alternative approaches to designing jobs. 3.Discuss the rationale and the most common bases for grouping jobs into departments. 4.Describe the basic elements involved in establishing reporting relationships. 5.Discuss how authority is distributed in organizations. 6.Discuss the basic coordinating activities undertaken by organizations. 7.Describe basic ways in which positions within an organization can be differentiated. Learning Objectives After studying this chapter, you should be able to:

3. © 2010 South-Western, Cengage Learning, Inc. All rights reserved.11– The Elements of Organizing OrganizingOrganizing  Deciding how to best group organizational activities and resources. Organization StructureOrganization Structure  The set of building blocks that can be used to configure an organization.

4. © 2010 South-Western, Cengage Learning, Inc. All rights reserved.11– Designing Jobs Job DesignJob Design  The determination of an individual’s work-related responsibilities. Job Specialization (Division of Labor)Job Specialization (Division of Labor)  The degree to which the overall task of the organization is broken down and divided into smaller component parts.

5. © 2010 South-Western, Cengage Learning, Inc. All rights reserved.11– Designing Jobs (cont’d) Benefits of Job SpecializationBenefits of Job 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 SpecializationLimitations of Specialization  Boredom and dissatisfaction with mundane tasks.  Anticipated benefits do not always occur.

6. © 2010 South-Western, Cengage Learning, Inc. All rights reserved.11– Adam Smith’s Example of Job Specialization Making a pin (nail) requires 18 tasksMaking a pin (nail) requires 18 tasks 1 worker doing all 18 tasks might make1 worker doing all 18 tasks might make 20 pins (nails) a day.20 pins (nails) a day. 20 workers = (20 x 20) = 400 pins20 workers = (20 x 20) = 400 pins ____________________________________________________________ With specialization:With specialization: 20 workers make 100,000 pins a day.20 workers make 100,000 pins a day. 1 worker = 5,000 pins1 worker = 5,000 pins 20 pins vs. 5,000 pins per worker20 pins vs. 5,000 pins per worker

7. © 2010 South-Western, Cengage Learning, Inc. All rights reserved.11– Alternatives to Job Specialization Job Enlargement Job Enrichment Job Rotation Job Specialization Alternatives

8. © 2010 South-Western, Cengage Learning, Inc. All rights reserved.11– Job Characteristics: 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 by the worker 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 for people to grow, develop, and expand their capabilities that is their response to the core dimensions

9. © 2010 South-Western, Cengage Learning, Inc. All rights reserved.11– Alternatives to Specialization (cont’d) Work TeamsWork 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. © 2010 South-Western, Cengage Learning, Inc. All rights reserved.11– Management Challenge Question You will be leading your company’s transition team after the acquisition of your company by a much larger competitor.You will be leading your company’s transition team after the acquisition of your company by a much larger competitor. What organizing problems would you anticipate will arise in merging the two companies?What organizing problems would you anticipate will arise in merging the two companies?

11. © 2010 South-Western, Cengage Learning, Inc. All rights reserved.11– Grouping Jobs: Departmentalization DepartmentalizationDepartmentalization  The process of grouping jobs according to some logical arrangement. Rationale for DepartmentalizationRationale 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.

12. © 2010 South-Western, Cengage Learning, Inc. All rights reserved.11– Departmentalization AdvantagesAdvantages  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. DisadvantagesDisadvantages  Decision making becomes slow and bureaucratic.  Employees narrow their focus to their department and lose sight of broader goals and issues.  Accountability and performance are difficult to monitor. Functional DepartmentalizationFunctional Departmentalization  Grouping jobs involving the same or similar activities.

13. © 2010 South-Western, Cengage Learning, Inc. All rights reserved.11– 11.2 Bases for Departmentalization

14. © 2010 South-Western, Cengage Learning, Inc. All rights reserved.11– Departmentalization (cont’d) AdvantagesAdvantages  All activities associated with one product are integrated and coordinated.  Speed and effectiveness of decision making are enhanced.  Performance of individual products or product groups can be assessed. DisadvantagesDisadvantages  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. Product DepartmentalizationProduct Departmentalization  Grouping activities around products or product groups.

15. © 2010 South-Western, Cengage Learning, Inc. All rights reserved.11– Departmentalization (cont’d) Customer DepartmentalizationCustomer 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.

16. © 2010 South-Western, Cengage Learning, Inc. All rights reserved.11– Departmentalization (cont’d) Location DepartmentalizationLocation 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.

17. © 2010 South-Western, Cengage Learning, Inc. All rights reserved.11– Other Forms of Departmentalization Alternative GroupingsAlternative Groupings  By specific units of time  By sequence.  By customer characteristics, products, or services Other ConsiderationsOther Considerations  Departments are often called by other names.  Divisions, units, sections, and bureaus  Organizations are likely to employ multiple bases of departmentalization, depending on level.

18. © 2010 South-Western, Cengage Learning, Inc. All rights reserved.11– Establishing Reporting Relationships Scalar Principle Span of Control Unity of Command Reporting Relationships Considerations

19. © 2010 South-Western, Cengage Learning, Inc. All rights reserved.11– Reporting Relationships Chain of CommandChain 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.

20. © 2010 South-Western, Cengage Learning, Inc. All rights reserved.11– Span of Management Span of ControlSpan of Control  The number of people reporting to a manager.  A. V. Graicunas  Subordinate interactions –Direct—manager’s relationship with each subordinate. –Cross—among the subordinates themselves. –Group—between groups of subordinates.  Formula for the number of interactions of all types: –I = N(2N/2 + N – 1), where I is the total number of interactions and N is number of subordinates.

21. © 2010 South-Western, Cengage Learning, Inc. All rights reserved.11– Span of Management (cont’d) Narrow Versus Wide SpansNarrow Versus Wide Spans  Ralph Davis  Operative span for lower-level managers of up to 30 workers.  Executive span for middle and top managers set at 3 to 9.  Span depends on managers’ jobs, company growth rate, and similar factors  Lyndall Urwick and General Ian Hamilton  Executive span should never exceed six persons.

22. © 2010 South-Western, Cengage Learning, Inc. All rights reserved.11– Establishing Reporting Relationships: Tall versus Flat Organizations Tall OrganizationsTall 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 OrganizationsFlat 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.

23. © 2010 South-Western, Cengage Learning, Inc. All rights reserved.11– 11.3 Tall Versus Flat Organizations

24. © 2010 South-Western, Cengage Learning, Inc. All rights reserved.11– 11.1 Factors Influencing the Span of Management 1.Competence of supervisor and subordinates (the greater the competence, the wider the potential span) 2.Physical dispersion of subordinates (the greater the dispersion, the narrower the potential span) Extent of nonsupervisory work in manager’s job (the more nonsupervisory work, the narrower the potential span) Degree of required interaction (the less required interaction, the wider the potential span) Extent of standardized procedures (the more procedures, the wider the potential span) Similarity of tasks being supervised (the more similar the tasks, the wider the potential span) Frequency of new problems (the higher the frequency, the narrower the potential span) Preferences of supervisors and subordinates

25. © 2010 South-Western, Cengage Learning, Inc. All rights reserved.11– Distributing Authority AuthorityAuthority  Power that has been legitimized by the organization. DelegationDelegation  The process by which managers assign a portion of their total workload to others. Reasons for DelegationReasons 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.

26. © 2010 South-Western, Cengage Learning, Inc. All rights reserved.11– 11.4 Steps in the Delegation Process

27. © 2010 South-Western, Cengage Learning, Inc. All rights reserved.11– Problems in Delegation ManagerManager  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. SubordinateSubordinate  Reluctant to accept delegation for fear of failure.  Perceives no rewards for accepting additional responsibility.  Prefers to avoid any risk and responsibility.

28. © 2010 South-Western, Cengage Learning, Inc. All rights reserved.11– Decentralization and Centralization DecentralizationDecentralization  Systematically delegating power and authority throughout the organization to middle- and lower-level managers. CentralizationCentralization  Systematically retaining power and authority in the hands of higher-level managers.

29. © 2010 South-Western, Cengage Learning, Inc. All rights reserved.11– Factors in Choice of Centralization History of the organization Nature (cost and risk) of decisions to be made External environment’s complexity and uncertainty Organization’s Centralization Choice

30. © 2010 South-Western, Cengage Learning, Inc. All rights reserved.11– Coordinating Activities CoordinationCoordination  The process of linking the activities of the various departments of the organization. The Need for CoordinationThe Need for Coordination  Where departments and work groups are interdependent; the greater the interdependence, the greater the need for coordination.

31. © 2010 South-Western, Cengage Learning, Inc. All rights reserved.11– Coordinating Activities: Forms of Interdependence Pooled interdependencePooled interdependence  When units operate with little interaction; their output is simply pooled at the organizational level. Sequential interdependenceSequential interdependence  When the output of one unit becomes the input of another unit in sequential fashion. Reciprocal interdependenceReciprocal interdependence  When activities flow both ways between units.

32. © 2010 South-Western, Cengage Learning, Inc. All rights reserved.11– Input Output Sequential Major Forms of Interdependence Pooled Input Input Input Output Output Input Output InputOutput Input Reciprocal

33. © 2010 South-Western, Cengage Learning, Inc. All rights reserved.11– Structural Coordination Task Forces Integrating Departments Electronic Coordination Structural Coordination Techniques Management Hierarchy Rules and Procedures Managerial Liaison Roles

34. © 2010 South-Western, Cengage Learning, Inc. All rights reserved.11– Structural Coordination Techniques The Managerial HierarchyThe Managerial Hierarchy  Placing one manager in charge of interdependent departments or units. Rules and ProceduresRules and Procedures  Routine coordination of activities using rules and procedures that set priorities and guidelines for actions. Managerial Liaison RolesManagerial Liaison Roles  A manager coordinates interdependent units by acting as a common point of contact, facilitating the flow of information.

35. © 2010 South-Western, Cengage Learning, Inc. All rights reserved.11– Structural Coordination… (cont’d) Task ForcesTask Forces  Used with multiple units when coordination is complex, requiring more than one individual and the need for coordination is acute.  Disbanded when need for coordination has been met. Integrating DepartmentsIntegrating Departments  Permanent organizational units that maintain internal integration and coordination on an ongoing basis.  May have authority and budgetary controls. Electronic CoordinationElectronic Coordination  E-mail, electronic scheduling, PDAs, cell phones

36. © 2010 South-Western, Cengage Learning, Inc. All rights reserved.11– Differentiating Between Positions Line PositionsLine Positions  Positions in the direct chain of command responsible for the achievement of an organization’s goals.  Have formal (legitimate) authority. Staff PositionsStaff Positions  Positions intended to provide expertise, advice, and support to line positions.  Have advisory authority; can give compulsory advice.  Have functional authority to enforce compliance with organizational policies and procedures. Administrative Intensity Administrative Intensity  The degree to which managerial positions are concentrated in staff positions.

37. © 2010 South-Western, Cengage Learning, Inc. All rights reserved.11– Key Terms organizingorganizing organization structureorganization structure job designjob design job specializationjob specialization job rotationjob rotation job enlargementjob enlargement job enrichmentjob enrichment job characteristics approachjob characteristics approach work teamswork teams departmentalizationdepartmentalization functional departmentalizationfunctional departmentalization product departmentalizationproduct departmentalization customer departmentalizationcustomer departmentalization location departmentalizationlocation departmentalization chain of commandchain of command span of managementspan of management authorityauthority delegationdelegation centralizationcentralization coordinationcoordination pooled interdependencepooled interdependence sequential interdependencesequential interdependence reciprocal interdependencereciprocal interdependence line positionline position staff positionstaff position administrative intensityadministrative intensity