Introduction to management groups g-i - structure and fundamentals of organizing - wednesday oct 15, 2008
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This document summarizes a lecture on organizational structure. It discusses different approaches to structuring organizations, including functional, divisional, horizontal matrix, team-based, and network structures. It also covers topics like centralization vs decentralization, span of control, departmentalization, and how structure should follow strategy and fit the environment. The overall purpose is to explain how organizational structure determines tasks, resource allocation, and coordination to help achieve strategic goals.
Introduction to management groups g-i - structure and fundamentals of organizing - wednesday oct 15, 2008
- 1. MAN1006: Introduction to Management Lecture 7 – Structure and Fundamentals of Organizing Lecturer: Oswy Gayle Wednesday October 15, 2008 University of Technology, Jamaica School of Business Administration
- 2. Short Recap – Previous Weeks Look at the characteristics of organizing Describe the functional and divisional approaches to structure Explain how structure can be used to achieve organization’s strategic goals Objectives of Session
- 3. Recap Week 1 - What is management?, Functions of Management?; Skills a manager needs Week 2 - Organizational Environment and Culture Week 3 - What is Ethics? What is Social Responsibility? Week 4 – Fundamentals of Organizing
- 4. Organizing Organization is the deployment of resources to achieve strategic goals. It is reflected in Division of labor into specific departments & jobs Formal lines of authority Mechanisms for coordinating diverse organizational tasks Manager’s Challenge: Nissan
- 5. Designing Adaptive Organizations Organizing Principles and Concepts Organizing the Vertical Structure Using Mechanisms for Horizontal Coordination Tailoring Various Elements of Structural Design to Organizational Situations
- 6. Organization Structure The framework in which the organization defines how tasks are divided, resources are deployed, and departments are coordinated Set of formal tasks assigned Formal reporting relationships The design of systems to ensure effective coordination of employees across department
- 7. Importance of Organizational Structure How you structure your company has a lot to do with the extent to which a company can be effective and efficient as well as to achieving its goals and mission.
- 8. The Organization Chart – the visual representation of the organization’s structure “ The Home Depot is the world's largest home improvement retailer currently operating 1,363 stores. Visual representation Set of formal tasks Formal reporting relationships Framework for vertical control
- 9. Work Specialization Tasks are subdivided into individual jobs Employees perform only the tasks relevant to their specialized function Jobs tend to be small, but they can be performed efficiently
- 10. Chain of Command Unbroken line of authority that links all persons in an organization Shows who reports to whom Associated with two underlying principles Unity of Command – each employee is held accountable to one supervisor Scalar Principle – clearly defined lines of authority in an organization
- 11. Authority Formal and legitimate right of a manager to make decisions and issue orders Allocate resources to achieve organizationally desired outcomes Authority is distinguished by three characteristics Authority is vested in organizational positions, not people Authority is accepted by subordinates Authority flows down the vertical hierarchy
- 12. Responsibility The duty to perform the task or activity an employee has been assigned Managers are assigned authority commensurate with responsibility Flip side of the authority coin
- 13. Accountability Mechanism through which authority and responsibility are brought into alignment People are subject to reporting and justifying task outcomes to those above them in the chain of command Can be built into the organization structure
- 14. Delegation Process managers use to transfer authority and responsibility Organizations encourage managers to delegate authority to lowest possible level
- 15. Techniques for Delegation Give thorough instructions Maintain feedback Evaluate and reward performance Delegate the whole task Select the right person Delegation Ensure that authority equals responsibility
- 16. Line and Staff Authority Line Authority = individuals in management positions have the formal power to direct and control immediate subordinates Staff Authority = granted to staff specialists in their area of expertise
- 17. Span of Management/ Span of Control Number of employees who report to a supervisor Traditional view = seven subordinates per manager Lean organizations today = 30+ subordinates Supervisor Involvement must be closely involved with subordinates, the span should be small need little involvement with subordinates, it can be large
- 18. Factors Associated With Less Supervisor Involvement Work is stable and routine Subordinates perform similar work tasks Subordinates are concentrated in a single location Subordinates are highly trained Rules and procedure defining task activities are available Support systems and personnel are available for the manager
- 19. Tall versus Flat Structure Span of Control used in an organization determines whether the structure is tall or flat Tall structure has a narrow span and more hierarchical levels Flat structure has a wide span, is horizontally dispersed and fewer hierarchical levels The trend has been toward wider spans of control
- 20. Centralization versus Decentralization Greater change and uncertainty in the environment are usually associated with decentralization The amount of centralization or decentralization should fit the firm’s strategy In times of crisis or risk of company failure, authority may be centralized at the top
- 21. Departmentalization - The basis on which individuals are grouped into departments Vertical functional approach . People are grouped together in departments by common skills. Divisional approach . Grouped together based on a common product, program, or geographical region. Horizontal matrix approach . Functional and divisional chains of command. Some employees report to two bosses Team-based approach . Created to accomplish specific tasks
- 22. Departmentalization The basis on which individuals are grouped into departments Network approach . Small, central hub electronically connected to their other organizations that perform vital functions. Departments are independent, and can be located anywhere. Virtual approach . Brings people together temporarily to exploit specific opportunities then disbands
- 23. Five Approaches to Structural Design
- 24. Five Approaches to Structural Design
- 25. Vertical Functional Approach Grouping of positions into departments based on similar skills, expertise, and resource use Information flows up and down Chain of command converges at the top Managers and employees are compatible because of similar training and expertise Rules and procedures governing duties and responsibilities
- 26. Divisional Structure Advantages Efficient use of resources Skill specialization development Top management control Excellent coordination Quality technical problem solving
- 27. Divisional Structure Disadvantages Poor communications Slow response to external changes Decisions concentrated at top Pin pointing responsibility is difficult Limited view of organizational goals by employees
- 28. Horizontal Matrix Advantages More efficient use of resources than single hierarchy Adaptable to changing environment Development of both general and specialists management skills Expertise available to all divisions Enlarged tasks for employees
- 29. Dual Authority Structure in a Matrix Organization
- 30. Horizontal Matrix Disadvantages 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
- 31. Team Advantages Same advantages as functional structure Reduced barriers among departments Quicker response time Better morale Reduced administrative overhead
- 32. Team Disadvantages Dual loyalties and conflict Time and resources spent on meetings Unplanned decentralization
- 33. Network Approach Advantages Global competitiveness Work force flexibility Reduced administrative overhead
- 34. Network Approach Disadvantages No hands-on control Loss of part of the organization severely impacts remainder of organization Employee loyalty weakened
- 35. Task Forces, Teams, Project Management Task Force = temporary team/committee designed to solve a short-term problem involving several departments Project Manager = responsible for coordinating activities of several departments on a full-time basis for the completion of a specific project
- 36. Reengineering Radical redesign of business processes to achieve dramatic improvements in cost, quality, service, and speed Process = organized group of related tasks and activities that work together to transform inputs into outputs and create value
- 37. Factors Shaping Structure Structure Follows Strategy Reflects the Environment Fits the Technology Service Technology Digital Technology
- 38. Rap-up Structure Structure can be a source of competitive advantage as the organizational goals and plans are aligned around the structure of the organization. Through Teams, delegation, specialization, horizontal and vertical approaches, departmentalization and given employees responsibilities, the organization is able to achieve its goals and objectives.