Post on 18-Dec-2015
Adeyl Khan, Faculty, BBA, NSU
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
Adeyl Khan, Faculty, BBA, NSU3
Job SpecializationAlternatives to
SpecializationGrouping Jobs:
DepartmentalizationEstablishing Reporting
RelationshipsDistributing AuthorityCoordinating Activities
The Basic Elements of Organizing
Adeyl Khan, Faculty, BBA, NSU
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.
Adeyl Khan, Faculty, BBA, NSU5
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.
Adeyl Khan, Faculty, BBA, NSU6
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.
Adeyl Khan, Faculty, BBA, NSU
Alternatives to Specialization …Job Characteristics ApproachCore 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.
Adeyl Khan, Faculty, BBA, NSU9
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.
Adeyl Khan, Faculty, BBA, NSU
Grouping Jobs: DepartmentalizationDepartmentalization
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
Adeyl Khan, Faculty, BBA, NSU
DesignMarketingMarketing
Computers
President
Software
Manufacturing FinanceFinance
PhoenixDallas
Consumer salesIndustrial sales
St. LouisChicago
Southwest U.S. Southeast U.S. Northeast U.S.Northwest U.S. Central U.S.
Adeyl Khan, Faculty, BBA, NSU
Functional DepartmentalizationJobs 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.
Adeyl Khan, Faculty, BBA, NSU
Product DepartmentalizationGrouping 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.
Adeyl Khan, Faculty, BBA, NSU
Customer DepartmentalizationRespond/interact with customer groups
Advantage
• Skilled specialists can deal with unique customers orcustomer groups.
Disadvantage
• A large administrative staff is needed to integrate activities of various departments.
Adeyl Khan, Faculty, BBA, NSU
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 trackof units in scattered locations.
Adeyl Khan, Faculty, BBA, NSU
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.
Adeyl Khan, Faculty, BBA, NSU
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.
Adeyl Khan, Faculty, BBA, NSU19
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.
Adeyl Khan, Faculty, BBA, NSU20
Distributing Authority
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.
Adeyl Khan, Faculty, BBA, NSU
Steps in the Delegation Process
Manager
Step 1Assigning
responsibility
Step 3Creating
accountability
Step 2Grantingauthority
Manager
Subordinate
Manager
Subordinate
ManagerManager
Subordinate
Adeyl Khan, Faculty, BBA, NSU
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.
Adeyl Khan, Faculty, BBA, NSU
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
Adeyl Khan, Faculty, BBA, NSU
Decentralization and Centralization
Decentralization 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.
Adeyl Khan, Faculty, BBA, NSU
Centralized and Decentralized Organizations
Centralized
Decentralized
Lower level managers hold significant decision-making
authority
Top managers hold most decision-making authority
Adeyl Khan, Faculty, BBA, NSU26
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.
Adeyl Khan, Faculty, BBA, NSU27
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.
Adeyl Khan, Faculty, BBA, NSU
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.
Adeyl Khan, Faculty, BBA, NSU29
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.
Adeyl Khan, Faculty, BBA, NSU
Structural Coordination Techniques …Task Forces
Used with multiple units when coordination is complex requiring more than one individualand 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.
Adeyl Khan, Faculty, BBA, NSU
Electronic Coordination Techniques
Electronic Information Technology E-mail 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