Organizational Management

Organizational Management Chapter 4

I. What is an Organization? • Is a group of two or more people working together in a predetermined fashion to achieve a common goal(s).

Lets define some terms: • Organizing • The process of grouping resources and activities to accomplish some end result in an efficient and effective manner. • Organizational Structure • A fixed pattern of • Positions within the organization • Relationship among those positions

More terms • Organizational Chart • A diagram that represents the positions and relationships within an organization. • Chain of command • Is the line of authority that extends from the highest to the lowest levels of the organization

Organizational Chart

II. Dimensions of organizational Structure • 5 steps to the organizational process • Job design • Divide the work into separate parts and assign those parts to positions within the organization. • This determines the degree of specialization within the organization • Group the various positions in to manageable units. • This creates the nature and Degree of departmentalization • Distribute responsibility and authority • This creates the nature and degree of centralization

Dimensions of organizational structure • Determine the number of subordinates who will report to each manager. • This is called the span of management. • Distinguish between positions that have direct authority and positions that re used for support. • Establishes the chain of command

I. Job Design • Job Specialization • Is the separation of all organizational activities into distinct tasks and the assignment of different tasks to different people.

Possible Solutions of Job Specialization. • Three Solutions • Job Rotation • Is the systematic shifting of employees from one job to another. • Example: Many car companies do this now…. • Job Enlargement • The worker is given more things to do within the same job.

Possible Solutions of Job Specialization • Job Enrichment is perhaps the most advanced alternative to job specialization. • Provides workers with both more tasks to do and more control over how they do their work. • Work is assigned in complete units • Builds more depth and complexity to jobs • Works best when employees seek more challenging work.

Downside of Specialization • People get bored with the Job.

Why use specialization? • Usually thejob is to largefor one person to handle by themselves. So we give responsibility to others to help the process. • If the person learns one task that person should becomevery productivewith that task. • Time is notlost moving from one job to another. • Easier to design specialized equipment for those who do the job. • Easier to train new employeesfor a very specialized job.

II. DEPARTMENTALIZATION • Is the process of grouping jobs into manageable units according o some reasonable scheme. • Departmental Basis – is how the jobs are grouped. • By function • Groups all jobs together that relate to the same organizational activity

IV DEPARTMENTALIZATION • By Product • Is the groping together of all activities related to a particular product or product group. • By Location • Grouped together because of geographic location • By Customer • Grouped together by needs of various customer groups • By Process • Grouped by what the organization and the workers do for the product

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III. Delegation, Decentralization, Centralization • Step three in the organizing process to distribute power in the organization • Delegation of Authority • Is the assigning of part of a managers work and power to a subordinate. • Steps to delegating authority • Manger must assign responsibility. • Manager must grant authority. • manager must create accountability

Barriers to Delegation of AuthorityWhy would I not want to delegate authority to someone? • One reason is that the persons who delegates remains accountable for work. • A manager may fear that a subordinate will do to good of a job and top management will notice. • Some managers are so disorganized that they can not simply plan and assign work in an effective way.

Decentralization of Authority • The general pattern of delegation throughout an organization determines the extent to which that organization is decentralized or centralized.

Decentralized or Centralized Organization • Decentralized - • An organization in which management consciously attempts to spread authority to the lower management levels. • Centralized • An organization that systematically works to concentrate authority at the upper levels of management

A few things about a decentralized organization. • The external environment of where the organization operates • The more complex and unpredictable the environment, the more likely it is that top management will make most of the decisions. • The riskier the decision the more chance the organization will be centralized • How capable is the lower management at making decisions.

IV. Span of Management • Span of management or span of control. • It is the number of subordinates that directly report to one manager. • Wide and Narrow spans of control.

Wide Span of Control (flat span of control) When a manager has a large number of subordinates

Narrow Span of management. (Tall span of management control)

Organizational Height • Is the number of layers, or levels of management in a firm. • The span of management plays a direct role in determining the height of the organization • Is spans are narrow- more levels are needed. Resulting in a tall organization • If spans are wider – fewer levels are needed

IN a tall organization • Administrative costs are higher, more mangers needed. • Communication is distorted • Flat organization • Costs are less, administrative duties are more, more pressure on the managers to perform.

V. Line and Staff management • Last major organizational dimension is the chain of command (lines of authority) • Line management positions • Is part of the chain of command, and a person in this type of position makes decisions and gives orders to subordinates to achieve the goals of the organization. • They can make decisions and issue directives that relate to the organizations goals • Example: Department Heads

Staff management positions • Is a position created to provide support, advice and expertise to someone in the chain of command. • Usually have either advisory authority or functional authority. • Example: Principals or Assistant Principals. • Advisory authority • Simply the expectation that line mangers will consult the appropriate staff manager when making decisions. • Functional authority • Stronger authority. • Is the authority of staff mangers to make decisions and issue directives, but only about their own area of expertise • Ex. A legal advisor can decide whether to retain a particular clause in a contract, but not what price to charge for a new product.

Conflict for line-staff mangers • Staff mangers often have more formal education and are sometimes younger (perhaps more ambitious) than line mangers • Line mangers -May perceive staff mangers as a threat to their own authority • Line managers- may resent depending on the expertise of the staff mangers • Staff managers may become resentful if their expert recommendations are not adopted by line management

Elements of Organizational Structure • We discussed the 5 dimensions of organizational structure. • Job Design • Departmentalization • Delegation • Span of management • Line and staff management

SWOT ANALYSIS…….. • Please look at the handout that I gave you…. SWOT ANALYSIS explanation.htm This is in your shared drive. Today along with finishing the market analysis you should read the article on SWOT analysis and do both a personal analysis and a business analysis.

3 newer elements that effect your companies organizational structure • Work Schedules • Different types of work schedules • Compressed work schedule • An arrangement whereby a employee works a full forty hours per week, but in fewer than standard 5 days. • Usually work 4 – 10 hour days, and have a three day weekend. • Flexible work week • Employee chooses the hours during which he or she will work, subject to certain limitations • Core time – when all employees must be at work • Flexible time – when employees may choose whether to be at work. • All employees must work 8 hours per day… • Ex. Real estate agent

Work week scheduling • Job Sharing • Is an arrangement where two people share one full-time job • Secretaries do this a lot

Scheduling Sim….. • Please begin to work on Work Schedule • Will need two of them. • One for your business • One for the simulation

committees • Types of committees used within an organization • Ad hoc committee • Committee created for a specific short-term purpose. • Ex. Used to reviewing the firm’s employee benefits plan. • Standing committee • Is a relatively permanent committee charged with performing some recurring task. • Budget review committee

Task Force • Is a committee established to investigate a major problem or pending decision

Advantages/disadvantages of committees • Advantages • Members bring more information, and knowledge to task at hand • Tend to make more accurate decisions and to transmit their results through the organization mare effectively. • Disadvantages • Deliberation may take to long • Unnecessary compromise may take place • Some people of the committee may feel obligated to listen to one person or another. I'll scratch your back you scratch mine?

Coordination Techniques of committees • The coordination of organizational resources so that there is minimize in duplication and maximize effectiveness. • There has to be a managerial hierarchy • Who is in charge? • Resources have to be coordinated • Complex situations • Create a liaison – person who is the “go between” two departments. • A task force or committee may be established.

Forms of Organizational Structure • We have been spending the last couple of classes discussing the parts of the puzzle and now we will put them all together to create a actual structure.

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1. Bureaucratic Structure • Is a management system based on a formal framework of authority that is carefully outline and precisely followed. • Major Characteristics • High level of job specialization • Departmentalized by function • Precise and formal patterns of delegation • High degree of centralization’ • Narrow spans of management (tall organization) • Clearly defined line and staff positions, with formal relationships between the two.

Organic Structure • Is a management system founded on cooperation's and knowledge-based authority. An organic structure is likely to have the following dimensions: • Low level of job specialization • Departmentalization by product, location, or customer • General and informal patterns of delegation • A high degree of decentralization • Wide spans of management • Less clearly defined line and staff positions, with less formal relationships between the two

Matrix Structure • Is an organizational structure that combines vertical and horizontal lines of authority. • Matrix structure occurs when product departmentalization is superimposed on a functionally departmentalized organization • Authority flows both down and across week10-11-organizational_structure.ppt

4 stages of the matrix structure • The firms is organized as a functional structure • A smaller number of interdepartmental groups are created to work on important projects • More groups are created, and they become an integral and important part of the organization • The firm becomes what is called a natural matrix.

Advantages of matrix’s • Very flexible • People become deeply committed to their special projects – improves motivation • Staff development from doing a number of jobs • People communicate more as they become liaisons between their project groups and their functional departments

Disadvantages of matrix’s • Can cause confusions about who ahs authority in various situations • These groups may take longer to resolving issues than working alone. • May be more expensive because more mangers and support staff are needed.

Informal Organizations • Describes the pattern of behavior and interaction that stems from personal rather than official relationships. • Informal groups • Is one that is created by the member of the group themselves to accomplish goals that may or may not be relevant to the organization. • Company softball team • Union

How do informal organizations communicate. • Through the grapevine…….. • Informal form of communication.

Organizational Management