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2. The Elements of 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.
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3. Designing Jobs Job Design Job Specialization (Division of Labor)
The determination of an individual’s work-related responsibilities.
Job Specialization (Division of Labor)
The degree to which the overall task of the organization is broken down and divided into smaller component parts.
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4. Designing Jobs (cont’d)
Benefits 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 Specialization
Boredom and dissatisfaction with mundane tasks.
Anticipated benefits do not always occur.
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5. 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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6. Alternatives to Job Specialization
Job Enlargement
Job Enrichment
Job Rotation
Job Specialization Alternatives
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7. 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
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8. Alternatives to Specialization (cont’d)
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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9. Management Challenge Question
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?
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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.
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11. Departmentalization Functional Departmentalization
Grouping jobs involving the same or 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 their department and lose sight of broader goals and issues.
Accountability and performance are difficult to monitor.
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12. 11.2 Bases for Departmentalization
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13. Departmentalization (cont’d)
Product Departmentalization
Grouping activities around products or product groups.
Advantages
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.
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.
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14. Departmentalization (cont’d)
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.
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15. Departmentalization (cont’d)
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.
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16. Other Forms of Departmentalization
Alternative Groupings
By specific units of time
By sequence.
By customer characteristics, products, or services
Other 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.
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17. Establishing Reporting Relationships
Scalar Principle
Span of Control
Unity of Command
Reporting Relationships Considerations
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18. 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.
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19. Span of Management Span 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.
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20. Span of Management (cont’d)
Narrow 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.
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21. 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.
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22. 11.3 Tall Versus Flat Organizations
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23. 11.1 Factors Influencing the Span of Management
Competence of supervisor and subordinates (the greater the competence, the wider the potential span)
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
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24. 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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25. 11.4 Steps in the Delegation Process
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26. 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.
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27. 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.
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28. 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
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29. Coordinating Activities
Coordination
The process of linking the activities of the various departments of the organization.
The Need for Coordination
Where departments and work groups are interdependent; the greater the interdependence, the greater the need for coordination.
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30. Coordinating Activities: 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.
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31. Major Forms of Interdependence
Sequential
Reciprocal
Input
Output
Input
Output
Input
Output
Pooled
Input
Input
Output
Input
Input
Output
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32. Structural Coordination
Task Forces
Integrating Departments
Electronic Coordination
Structural Coordination Techniques
Management Hierarchy
Rules and Procedures
Managerial Liaison Roles
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33. Structural Coordination Techniques
The Managerial Hierarchy
Placing one manager in charge of interdependent departments or units.
Rules and Procedures
Routine coordination of activities using rules and procedures that set priorities and guidelines for actions.
Managerial Liaison Roles
A manager coordinates interdependent units by acting as a common point of contact, facilitating the flow of information.
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34. Structural Coordination… (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 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.
Electronic Coordination
, electronic scheduling, PDAs, cell phones
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35. Differentiating Between Positions
Line Positions
Positions in the direct chain of command responsible for the achievement of an organization’s goals.
Have formal (legitimate) authority.
Staff 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
The degree to which managerial positions are concentrated in staff positions.
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