Management chap 6
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Transcript of Management chap 6
Management: Science, Theory and Practice
A Global and Entrepreneurial Perspective
MANAGEMENT
PRINCIPLES OF MANAGEMENT
Sr. No.Chapter No.Chapter Heading11Management: Science, Theory and Practice (27th September 2010)24Essentials of Planning and Managing by Objectives (4th Oct)35Strategies, Policies and Planning Premises (11th Oct)46Decision Making (18th Oct)57The Nature of Organizing, Entrepreneuring, and Reengineering (25th Oct)68Organization Structure: Departmentation (1st Nov)79Line/ Staff Authority, Empowerment and Decentralization810Effective Organizing and Organization Culture914Human Factors and Motivation1015Leadership1116Committees, Teams and Group Decision Making1218The System and Process of ControllingSessional EvaluationExternal Evaluation1515205050Quiz per ClassAssignment & PresentationMid-termTotal SessionalExternal ExamPlanning
Organizing
Leading
Controlling
Organization Structure: Departmentation
Chapter 6
TABLE OF CONTENTS
DEPARTMENTATION BY ENTERPRISE FUNCTION
DEPARTMENTATION BY TERRITORY OR GEOGRAPHY
DEPARTMENTATION BY CUSTOMER GROUP
DEPARTMENTATION BY PRODUCT
MATRIX ORGANIZATION
STRATEGIC BUSINESS UNITS
xORGANIZATION STRUCTURES FOR THE GLOBAL ENVIRONMENT
THE VIRTUAL ORGANIZATION
xTHE BOUNDARYLESS ORGANIZATION
CHOOSING THE PATTERN OF DEPARTMENTATION
QUIZ
WHAT DEPARTMENTS WOULD YOU LIKE TO HAVE IN YOUR FUTURE IT ORGANIZATION?
NAME ANY
DEPARTMENTATION BY ENTERPRISE FUNCTION
Departmentation: Grouping of activities according to the functions of an enterprise, such as production, sales and financing. Functions may be production, sales, finance, Human Resources, IT, Technology, Marketing, engineering etc
Functional departmentFound in Not found inProductionManufacturing companyMadrisahs, schools, transportSalesDistribution, Telecommunication, FMCGsNGOsAdvantagesDisadvantagesFunctional departmentation is a logical reflection of functionsDe-emphasizes overall company objectivesMaintains power and prestige of major functionsOverspecializes and narrows view points of key personnelFollows principle of occupational specializationReduces coordination between functionsSimplifies trainingResponsibility for profits is at the top onlyFurnishes means of tight control at topSlow adaptation to changes in the environmentLimits development of general managersA functional
Organization
President
Production
Finance
Assistant to president
Personnel
Engineering
Marketing
Market Research
Marketing Planning
Advertising and promotion
Sales Administration
Sales
Engg Administration
Preliminary design
Electrical engg
Mechanical engg
Hydraulic engg
Packaging
Quality control
Production Planning
Industrial engineering
Production engineering
Purchasing
Tooling
General Production
Financial Planning
Budgets
General Accounting
Cost Accounting
Statistics and data processing
DEPARTMENTATION BY TERRITORY OR GEOGRAPHY
Grouping of activities by area or territory is common in enterprises operating over wide geographic areas for example automobile assembling, chain retailing, wholesaling, oil refining, postal service, courts etc
AdvantagesDisadvantagesPlaces responsibility at lower levelRequires more persons with general manager abilitiesPlaces emphasis on local markets and problemsTends to make maintenance of economical central services difficult and may require services such as personnel or purchasing at the regional levelTakes advantage of economies of local operationsIncreases problem of top management controlBetter face to face communication with local interestsFurnishes measurable training ground for general managersA territorial or geographical Organization
Finance
Purchasing
Personnel
Eastern Region
Marketing
Southeast region
Central Region
Southwest region
Western region
President
Personnel
Accounting
Production
Engg
Sales
DEPARTMENTATION BY CUSTOMER GROUP
Grouping of activities that reflects a primary interest in customers for example consumer banking, corporate banking, wholesale super stores (macro), Glow, Djuice etc
AdvantagesDisadvantagesEncourages concentration on customer needsMay be difficult to coordinate operations between competing customer demandsGives customer feeling that they have an understanding supplier (banker for instance)Requires managers and staff expert in customer problemsDevelops expertise in customer areasCustomer groups may not always be clearly definedPresident
Community-city banking
Real Estate & Mortgage Loans
Corporate Banking
Institutional Banking
Agricultural Banking
DEPARTMENTATION BY PRODUCT
Grouping of activities according to products or product lines especially in multiline, large enterprises
AdvantagesDisadvantagesPlaces attention and effort on the product lineRequires more persons with GM abilitiesFacilitates use of specialized capital, facilities, skills and knowledgeTends to make maintenance of economical central services difficultPermits growth and diversity of products and servicesPresents increased problem of top management controlImproves coordination of functional activitiesPlaces responsibility for profits at the divisional levelFurnishes measurable training ground for general managersA Product Organization grouping
President
Marketing
Instrument division
Indicator lights division
Industrial tools division
Electronic meter division
Personnel
Purchasing
Finance
Engg
Production
Accounting
Sales
Engg
Production
Accounting
Sales
Engg
Production
Accounting
Sales
Engg
Production
Accounting
Sales
MATRIX ORGANIZATION
the combining of functional and project or product patterns of departmentation in the same organization for example installation of a data processing system, construction, engineering etc
AdvantagesDisadvantagesOriented towards end resultsConflict in organization authority existsProfessional identification is maintainedPossibility of disunity of command existsPinpoints product-profit responsibilityRequires manager effective in human relationsProject A Manager
Project B Manager
Project C Manager
Project D Manager
Matrix organization:
in engineering
Director of Engg
Chief of Preliminary Design
Chief Mechanical Engineer
Chief Electrical Engineer
Chief Hydraulic Engineer
Chief Metallurgical engineer
STRATEGIC BUSINESS UNITS
Distinct businesses set up as units in a larger company to ensure that certain products or product lines are promoted and handles as through each was an independent business
To be an SBU, the unit must:
have its own mission, distinct from others
Have definable group of competitors
be able to prepare its own integrative parts
manage its own resources in key areas
be of appropriate size
Potential problems
The allocation of resources to individual SBUs can result in underinvestment in core competencies (such as in engines in automobiles) that benefit the total organization
The SBU managers may tend to hide talented people rather than lend them to another SBU
THE VIRTUAL ORGANIZATION
A rather loose concept of a group of independent firms or people that are connected through, usually information technology
Benefits:
These operate with minimal HR expense
the competencies of remotely operating parts or people or other organizations are accessible
Organizations are flexible
Reduced risks involved
These can respond rapidly to market needs
Disadvantage:
The other competitors have the room to take advantage of the same competencies as well
The virtual library, or virtual university or people working from home for organizations are few examples
CHOOSING THE PATTERN OF DEPARTMENTATION
Keeping in mind the following helps the managers to decide on the type of department they choose
The situation the organization is facing
What kind of jobs are to be done
Who are people and what are their personalities
What is the technology employed in the department
What kind of customers they have
What are the internal and external factors of the organization
What are the goals and objectives of the organization
What are the advantages and disadvantages of each type of departmentation
The types may be modified depending upon the situation
A mixed type of departmentation may also be adopted