Fundamental of Organising-Prince Dudhatra-9724949948

8/7/2019 Fundamental of Organising-Prince Dudhatra-9724949948

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Fundamentals of Organizing

prince dudhatra-9724949948


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Organizing

The deployment of organizational resources to

achieve strategic goals.

The deployment of resources is reflected in

the division of labor.

Formal lines of authority and mechanisms

for coordinating diverse organization tasks.prince dudhatra-9724949948


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Fundamental Concepts of

Organizing Differentiation means that the

organization is composed of units thatwork on specialized tasks usingdifferent work methods and requiringemployees with unique competencies.

Integration means that the various unitsmust be put back together so that workis coordinated.



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High horizontal differentiation

Rigid hierarchical relationshipsFixed duties

High formalization

Formalized communication channels

Centralized decision authority

Low horizontal differentiation

Collaboration

(vertical and horizontal)

Adaptable duties

Low formalization

Informal communication

Decentralized decision authority

MECHANISTIC VERSUS ORGANIC STRUCTURES



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Open Vs Closed System



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Open System Characteristics Cycle of Events

Negative Entropy (Dont let the systembreak down)

Feedback

Kreitners Dynamic Homeostasis

(maintaining optimal state) Differentiation

Equifinality



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The number of employeesThe number of employeesreporting to a supervisor.reporting to a supervisor.

Traditional view, seven or soTraditional view, seven or soper manager.per manager.

Many organizations today,Many organizations today,30 or more per manager.30 or more per manager.

Generally if supervisors mustGenerally if supervisors mustbe closely involved withbe closely involved withemployees, span should beemployees, span should be

small.small.

Span of ManagementSpan of Management



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Factors Determining Span of

Control

Subordinates location

Support available for the manager Amount of non-supervisory tasks

The competence of both the manager and the employee.

The similarity or dissimilarity of tasks being supervised.

The incidence of new problems in the managers department.

The extent of clear operating standards and rules.



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Tall Versus Flat Structure

Tall structure has an overall narrow span of

management and more levels in the hierarchy

Flat structure has a wide span, is horizontallydispersed, and has fewer hierarchical levels

The trend is toward larger spans ofmanagement as a way to facilitate delegation.



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Tall vs. Flat StructureTall vs. Flat Structure



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Entrepreneuring & Intrapreneuring(Gifford Pinchot)



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Organizing Process Differentiation

Specialization Delegation of Authority

Integration



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OrganizationalOrganizationalStructureStructure

OrganizationalOrganizationalStructureStructure



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Organization Structure

1. The set of formal tasks assigned toindividuals and departments.

2. Formal reporting relationships.

3. The design of systems to ensure effectivecoordination of employees acrossdepartments.

Defined as:



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The Elements of Structure

Organization design

A process in which managers developor change their organizations structure.

Work specialization

A component of organization structurethat involves having each discrete stepof a job done by a different individual

rather than having one individual doprince dudhatra-9724949948


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Four PointsAbout

theOrganization

Chart

Visualrepresentation

Setofformaltasks

Formal

reportingrelationships

Framework

for verticalcontrol



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Economies and Diseconomies

of Work Specialization



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Chain of Command

Unbroken line of authority that links all

persons in an organization.

Underlying principles

Unity of Command.



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DepartmentalizationDepartmentalizationDepartmentalizationDepartmentalization



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DepartmentalizationDepartmentalization

Basis for grouping job positions into departments andBasis for grouping job positions into departments and

departments into the total organization.departments into the total organization. Internal Operations OrientedInternal Operations Oriented

FunctionalFunctional

Network (Virtual)Network (Virtual)

Output OrientedOutput Oriented

DivisionalDivisional

ProductProduct

GeographicGeographic CustomerCustomer

Team (Cluster)Team (Cluster) CombinationsCombinations

Hybrid (different types atHybrid (different types at differentdifferent places in an org.)places in an org.)

Matrix (different types at simultaneous at theMatrix (different types at simultaneous at the samesame places in an org.)places in an org.)prince dudhatra-9724949948


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DepartmentalizationThe basis on which individuals are

grouped into departments

Five structural alternatives

Vertical functional approach. People are grouped

together in departments by common skills. Divisional approach. Grouped together based on a

common product, customer or geographical region.

Matrix approach. Functional and divisional chains of

command are implemented. Two chains ofcommand exists.

Team-based approach. Created to accomplish specific tasks.

Network approach. Small, central hub electronically connected to their

other organizations that perform vital functions. Departments areinde endent, and can be located an where.



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Functional Structure



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Functional Design

Potential Benefits

Supports skill specialization

Reduces duplication ofresources & increasescoordination

Enhances career development& training within functional area

Allows superiors andsubordinates to share commonexpertise

Promotes high-quality technicaldecision making

Potential Pitfalls

Inadequatecommunication

Difficulties with interunitcoordination

Focus on departmentalrather than organizationalissues and goals



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Product Design



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Product Design

Potential Benefits

Permits fast changes in aproduct line

Allows greater productline visibility

Fosters a concern forcustomer demand

Clearly defines

responsibilities for eachproduct line

Develops managers whocan think across functionallines

Potential Pitfalls

Not allowing efficientutilization of skills and

resources Not fostering coordination of

activities across product

Encourages politics andconflicts in resource

allocation across productlines

Limits career mobility forpersonnel outside their ownproduct lines



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Geographical Design

Geographical design organizesactivities around location.



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Geographical Structure

for Apple ComputerCEO

Steve Jobs

AppleEurope

ApplePacific

France

AppleMiddle East

Asia

Japan

Australia

AppleAmerica

Canada

LatinAmerica/

Caribbean

USA



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Geographical Design

Potential Benefits

Has facilities and theequipment used for

production and/ordistribution all in one place,saving time and costs

Able to develop expertise insolving problems unique to

one location Gaining an understanding of

customers problems anddesires

Getting production closer to

raw materials and suppliers

Potential Pitfalls

Duplication of functions,to varying degrees, at

each regional or individualunit location

Conflict between eachlocation's goals and theorganization's goals

Adds levels ofmanagement andextensive use of rules andregulations to coordinateand ensure uniformity of

quality among locationsprince dudhatra-9724949948


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Matrix, Team and Network



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Matrix Design Functional and divisional chains of

command simultaneously

Dual lines of authority

Functional hierarchy of authority runsvertically

Divisional hierarchy runs laterally

Violates the unity of command concept.



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Matrix Organization

Engineering

Manager

Production

Manager

Marketing

Manager

Quality

Manager

757

Project Mgr 8 240 6 4

767

Project Mgr8 186 6 4

737

Project Mgr 6 112 4 2

747

Project Mgr5 153 3 3



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Matrix Design

Potential Benefits

More efficient use ofresources than single

hierarchy Adaptable to changing

environment

Development of both

general and specialistsmanagement skills

Expertise available to alldivisions

Enlarged tasks foremployees.

Potential Pitfalls

Dual chain of command

High conflict between

two sides of matrix Many meetings to

coordinate activities

Need for human

relations training Power domination by

one side of matrix.



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Team Approach

Cross-functional teams consist ofemployees from various functional

departments Interdisciplinary approach to

management

Permanent team = to solve ongoingproblems

Reengineering = radical redesign forimprovements in cost, quality, service

and s eed. prince dudhatra-9724949948


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Team Approach

Potential Benefits

Same advantages asfunctional structure

Reduced barriersamong departments

Quicker response time

Better morale

Potential Pitfalls

Dual loyalties andconflict

Time and resourcesspent on meetings

Unplanned

decentralization.



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Network Approach

Organization divides major functions into

separate companies brokered by a smallheadquarters organization

Especially appropriate for internationaloperations

Held together with phones, faxes, andother electronic technology.



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Network Approach

Potential Benefits

Global competitiveness

Work force flexibility

Reduced administrativeoverhead.

Potential Pitfalls

No hands-on control

Loss of part of theorganizationseverely impactsremainder oforganization

Employee loyaltyweakened.



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Functional

Structure

Hybrid StructurePresident

Technology

Vice

President

Financial

Services

Vice Pres.

Human

Resources

Director

Chief

Counsel

ChemicalsVice

President

LubricantsVice

President

FuelsVice

President

ProductStructure



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Other Forms of

Departmentalization Simple Number

Time Process

Virtual Organization



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Determinants of

Organizational Structure

The environment The size of the organization

Technology

The organizations strategy



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Organization Structure Determinantsand Outcomes

CausesCauses

Strategy Size

Technology

Environment

StructuresStructures

Mechanistic

Organic

Determines

PerformancePerformanceandand

SatisfactionSatisfaction

Moderated by

individual differences

and cultural norms



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Elements of DesignElements of Design



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Hierarchy

Hierarchy is a pyramid showingrelationships among levels.



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Authority, Responsibility, and

Accountability



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AuthorityAuthorityFormal and legitimate right of a manager to makeFormal and legitimate right of a manager to make

decisions, issue orders, and to allocate resources todecisions, issue orders, and to allocate resources toachieve organizationally desired outcomes.achieve organizationally desired outcomes.

Authority is distinguished by three characteristicsAuthority is distinguished by three characteristics::

Authority is vested in organizational positions, notAuthority is vested in organizational positions, notpeople.people.

Authority is accepted by subordinates.Authority is accepted by subordinates.

Authority flows down the vertical hierarchy.Authority flows down the vertical hierarchy.



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AccountabilityAccountability

Mechanism through which authority andMechanism through which authority and

responsibility are brought into alignment.responsibility are brought into alignment.

People are subject to reporting andPeople are subject to reporting and

justifying task outcomes to those abovejustifying task outcomes to those above

them in the chain of command.them in the chain of command.

Can be built into the organization structure.Can be built into the organization structure.prince dudhatra-9724949948


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PowerPower

An individuals capacity to influence

decisions.



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Authority Versus Power:

Authority



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Types of Power

Coercive powerPowerbased on fear.

Reward power Powerbased on the ability to distribute

something that others value.

Legitimate power Powerbased on ones position in the

formal hierarchy.

Expert power Powerbased on ones expertise,special skill, orknowledge.

Referent powerPowerbased on identification with a

person who has desirable resources or

personal traits.prince dudhatra-9724949948


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Line & Staff Function



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Line

Line departments perform tasks thatreflect the organization's primary goaland mission

Line authority means that managershave formal authority to direct andcontrol immediate subordinates.



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Staff

Staff departments include all those whoprovide specialized skills in support ofline departments

Staff authority is generally more narrowthan line authority

Staff authority includes the right toadvise, recommend, and counsel in thestaff specialists' area of expertise.



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Types of Organizational

Authority Line authority

The position authority (given and defined by

the organization) that entitles a manager todirect the work of operative employees.

Staff authority

Positions that have some authority (e.g.,organization policy enforcement) but that arecreated to support, assist, and advise theholders of line authority.

Functional Authoritprince dudhatra-9724949948


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Line & Staff ConflictLine

Theory Bias

Dilution of Authority

Lack of Accountability

Staff Lack of Authority

Sidelined



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Centralization & Decentralization



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Centralization

Decision authority is located near thetop of the organization.



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Decentralization

Decision authority is pushed down thechain of command to lower levels.



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Decentralization Tends To Make greater use of human resources

Reduce burdens of top managers

Cause decisions to be made close tothe action

Permit rapid response to changes.prince dudhatra-9724949948

Centralization versusCentralization versus


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Centralization versusCentralization versus

DecentralizationDecentralizationGreater change and uncertainty in theGreater change and uncertainty in the

environment are usually associated withenvironment are usually associated withdecentralization.decentralization.

The amount of centralization or decentralizationThe amount of centralization or decentralization

should fit the firms strategy.should fit the firms strategy.

In times of crisis or risk of company failure,In times of crisis or risk of company failure,

authority may be centralized at the top.authority may be centralized at the top.prince dudhatra-9724949948


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Factors That Influence

Centralization/Decentralization Amount of change and uncertainty

Availability of competent managers

Corporate culture Geographical dispersion

Size of organization

Efficiency of communication and controlsystems.

Cost and risk of failure



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DELEGATION



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Delegation

Process managers use to transfer

authority.

Organization encourage managers

to delegate authority to lowest possible level.



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Effective Delegation Techniques

Give

thorough

instructions

Maintain

feedback

Evaluate and reward

performance

Delegate the whole

task

Select the right

personEnsure that

authority equals

res onsibilitprince dudhatra-9724949948


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Organizational Culture



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Organizational Culture

A systemofshared values,assumptions, beliefs,and

normsthatunitethemembersofanorganization.

Reflectsemployeesviewsaboutthe way things are

done

Theculturespecifictoeachfirmaffectshow

employeesfeelandactandthetypeofemployee

hiredandretained bythecompany.prince dudhatra-9724949948


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Characteristics of Organization

Culture It is distinctive

It is based on certain Norms

It promotes Stable values

It leads to common behavioral aspects

It shapes philosophy and rules

Its strength varies



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Layers of Organizational Culture

Cultural

Values

Shared

Assumptions

SharedBehaviors

Cultural

Symbols


F ti P f d B


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Functions Performed ByOrganizational Culture

Employee Self-Management

Sense of shared identity

Facilitates commitment Stability

Sense of continuity

Satisfies need for predictability, security, and comfort

Socialization Internalizing or taking organizational values as ones own

Implementation Support

If strategy and culture reinforce each other, employees

find it natural to be committed to the strategyprince dudhatra-9724949948


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Steps in Socialization

1. Careful selection

2. Challenging early workassignments

3. Training to develop capabilitiesconsistent with culture

4. Rewards that sustainthe culture

5. Adoption of culturalvalue policies

6. Rituals, taboos, rites, andstories to reinforce culture

7. Role model to sustainculture

Removal ofEmployees whodeviate from culture

Removal of candidates whodo not fit culture

Fundamental of Organising-Prince Dudhatra-9724949948

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