Creating a Flexible Organization

1. Creating a Flexible Organization Chapter 7

2. What Is an Organization? • A group of two or more people working together to achieve a common set of goals • Developing organization charts • Organization chart • A diagram that represents the positions and relationships within an organization • Chain of command • The line of authority that extends from the highest to the lowest levels of the organization • Staff (advisory) positions • Jobs that are not part of the direct chain of command in the organization

3. A Typical Corporate Organization Chart

4. Major Considerations for Organizing a Business • Job design- • Specialization • Alternatives to specialization • Departmentalization • Delegation • Span of management • Chain of command

5. Job Design • Job specialization • The separation of activities into distinct tasks and the assignment of different tasks to different people • Rationale for specialization • The “job” of the organization is too large for one person to accomplish. • A worker learning only a specific, highly specialized task should be able to learn to do it efficiently. • Workers do not lose time switching from one operation to another. • Specialization makes it easier to design machinery to assist those who do the job. • Specialization makes it easier to train new workers.

6. Job Design (cont.) • Alternatives to job specialization • Job rotation systematically shifts employees from one job to another • Job enlargement-adding more responsibilities • Job enrichment-more variety and more responsibility Needs photo credit

7. Departmentalization (Ways of Organizing) • Grouping jobs into manageable units • Common bases for departmentalization • By function • By product • By location • By customer • Combinations

8. Evolution of an Organization Chart

9. Departmentalization by Function

10. Departmentalization by Product

11. Departmentalization by Location

12. Departmentalization by Customer

13. Multibase Departmentalization forNew-Wave Fashions, Inc.

14. Delegation, Decentralization, and Centralization • Delegation—assigning part of a manager’s work and power to other workers • Steps in delegation • Responsibility—the duty to do a job or perform a task • Authority—the power, within an organization, to accomplish an assigned task • Accountability—the obligation to accomplish an assigned job or task • Barriers to delegation • Fear the work will not get done • Fear the work will be done too well • Inability to plan and assign work effectively

15. Steps in the Delegation Process • The manager assigns responsibility. • The subordinate is empowered to do the task. • Ultimate accountability remains with the manager.

16. Decentralization of Authority • Decentralized organization • Spreads the authority widely into the lower levels • Centralizedorganization • Authority is concentrated at the upper levels

17. The Span of Management • The number of workers who report directly to one manager • Wide span • Large number of subordinates to one manager • Narrow span • Only a few subordinates to one manager

18. The Span of Management (cont.)

19. The Span of Management (cont.) • Organizational height—number of layers, or levels, of management in a firm • Flat organizations • Have wider spans of management and fewer levels • Require managers to perform more administrative tasks and to spend more time supervising subordinates • Tall organizations • Have narrow spans of management and many levels • Have higher administrative costs (more managers) • May distort internal communications during passage of the communications through the multiple levels of organization

20. Line and Staff Managers

21. Forms of Organizational Structure (cont.) • Line-and-staff structure (cont.) • Line managers make decisions and give orders to subordinates. • Line authority—line managers can make decisions and issue directives related to organizational goals • Staff managers provide support, advice, and expertise. • Advisory authority—the expectation that line managers will consult with staff managers before making decisions • Example: A manager has concerns that one of his employees may be sexually harassing another so he consults with HR first before taking action. • Functional authority—staff managers’ authority to make decisions and issue directives within their area of expertise • Example: A staff manager in the Finance Dept tells a Line Manager in the Production Dept to bring her payroll figures so that Finance can create a month-end report.

22. Forms of Organizational Structure (cont.) • Line-and-staff structure (cont.) • Reasons for conflict between line and staff managers • Staff managers often have more formal education. • Staff managers are sometimes younger and more ambitious. • Line managers may perceive staff managers as a threat. • Staff managers may become angry if their recommendations are not adopted. • Minimizing conflict between line and staff managers • Integrate line and staff managers into one team. • Ensure that responsibilities are clearly defined. • Hold both line and staff managers accountable for results.

23. The Informal Organization • Pattern of behavior and interaction that stems from personal rather than official relationships • Informal groups • Formed by the members themselves to accomplish goals that may or may not be relevant to the organization • Can be powerful forces in organizations, exerting positive as well as negative influences • The grapevine • Informal communication network within an organization that is completely separate from—and sometimes faster than—the organization’s formal communication channels • May be accurate or distorted; managers should be aware and use appropriately

24. Chapter Quiz • Solid vertical lines on an organization chart indicate • staff positions. • employees. • delegated positions. • the chain of command. • line and staff positions.

25. Chapter Quiz • The systematic shifting of employees from one job to another is called job • specialization. • rotation. • sharing. • enlargement. • enrichment.

26. Chapter Quiz • Grouping all activities according to the geographic area in which they are located is departmentalization by • function. • employee. • product. • customer. • location.

27. Chapter Quiz • In a ______ organization, administrative costs are higher because more managers are needed. • long • flat • tall • short • broad

28. Chapter Quiz • The power to accomplish an assigned job is called • authority. • accountability. • responsibility. • delegation. • obligation.