Management Project

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PowerPoint Presentation by Charlie Cook
The University of West Alabama

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Identify the basic elements of organizations.
Describe the basic alternative approaches to designing jobs.
Discuss the rationale and the most common bases for grouping jobs into departments.
Describe the basic elements involved in establishing reporting relationships.
Discuss how authority is distributed in organizations.
Discuss the basic coordinating activities undertaken by organizations.
Describe basic ways in which positions within an organization can be differentiated.

Learning Objectives
After studying this chapter, you should be able to:

The Elements of Organizing

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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Designing Jobs

Job Design

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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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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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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Alternatives to Job Specialization

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Job
Enlargement

Job
Enrichment

Job
Rotation

Job Specialization
Alternatives

Job Characteristics: Core Dimensions

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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

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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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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Grouping Jobs: Departmentalization

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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Departmentalization

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.

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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.

Functional Departmentalization
Grouping jobs involving the same or similar activities.

11.2 Bases for Departmentalization

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Departmentalization (cont’d)

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.

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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.

Product Departmentalization
Grouping activities around products or product groups.

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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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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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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Establishing Reporting Relationships

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Scalar
Principle

Span of
Control

Unity of Command

Reporting Relationships
Considerations

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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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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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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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.

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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.

11.3 Tall Versus Flat Organizations

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11.1 Factors Influencing the Span of Management

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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

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 development of subordinates by having them participate in decision making and problem.

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11.4 Steps in the Delegation Process

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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.

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Subordinate
Reluctant to accept delegation for fear of failure.
Perceives no rewards for accepting additional responsibility.
Prefers to avoid any risk and responsibility.

Decentralization and Centralization

Decentralization

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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Factors in Choice of Centralization

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History of the organization

Nature
(cost and risk) of decisions to be made

External environment’s complexity and uncertainty

Organization’s
Centralization Choice

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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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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Major Forms of Interdependence

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Input

Output

Sequential

Pooled

Input

Output

Input

Output

Input

Output

Input

Reciprocal

Structural Coordination

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Task Forces

Integrating Departments

Electronic Coordination

Structural
Coordination
Techniques

Management Hierarchy

Rules and Procedures

Managerial Liaison Roles

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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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

E-mail, electronic scheduling, PDAs, cell phones

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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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Key Terms

organizing

organization structure

job design

job specialization

job rotation

job enlargement

job enrichment

job characteristics approach

work teams

departmentalization

functional departmentalization

product departmentalization

customer departmentalization

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location departmentalization
chain of command
span of management
authority
delegation
centralization
coordination
pooled interdependence
sequential interdependence
reciprocal interdependence
line position
staff position
administrative intensity