Chapter Eight

1. Chapter Eight Organizing a Customer-Driven Business

2. Management Pyramid CEO, Comptroller, Vice Pres. Top Sales Mgrs Plant Mgrs. Mid-Level Supervisors Foremen Front Line/Supervisory

3. Workers in Large* Companies During the Last 5 YearsHave Undergone... *500+ Employees Source: Gallup for Carlson Marketing Group

4. Show the activities of the organization Highlight subdivisions of the organization Identify different types of work performed Provide information about different management levels Show the lines of authority in the organization and the flow of organizational communications Purpose of an Organizational Chart

5. Organization Division Department Group Individual Organizational Design

6. Unity of Command Hierarchy of Authority Division of Labor Subordination of Individual Interest Authority Degree of Centralization Communication Channels Order Equity Esprit de Corps Fayol’s Principles of Organization

7. Weber’s Organizational Principles • Job Descriptions • Written Rules • Procedures, Regulations, Policies • Staffing/Promotions based on Qualifications

8. Chain of Command Rules & Regulations Set Up by Function Communication = Minimal Fundamentals of Bureaucracy

9. Tall Organizations Many Layers of Mgmt. Cost of Mgmt.=High Flat Organizations Current Trend Creation of Teams Organizational Structures

10. Capabilities of Subordinates & Manager Complexity of Job Geographically Close Functional Similarity Need for Coordination Planning Demands Functional Complexity Span of Control

11. Advantages Skill Development Economies of Scale Good Coordination Departmentalization

12. Departmentalization Disadvantages • Lack of Communication • Employees Identify with Department • Slow Response to External Demands • Narrow Specialists

13. Product Function Customer Location Process Departmentalization

14. Advantages Increased Uniformity Less Duplication Maximum Control Disadvantages Lots of Policies & Procedures Many Layers/Slower Centralization(No Delegation)

15. Advantages Informed Decisions Worker Responsibility Few Layers/Faster Disadvantages Loss of Control Possible Duplication Decentralization (Delegate Authority)

16. Advantages Clear Authority & Responsibility Easy to Understand One Supervisor per Employee Disadvantages Inflexible Few Specialists for Advice Long Line of Communication Difficult to Handle Complex Decisions Line Organizations

17. Layers of Authority • Top Managers- Decision Makers • Middle Managers- Developed Rules & Procedures • Workers and Supervisors

18. Line Personnel Perform Functions Contribute Directly to Organizational Goals Staff Personnel Advise Assist Line Personnel Line/Staff Organizations

19. Advantages Flexibility Cooperation & Teamwork Creativity More Efficient Use of Resources Disadvantages Costly/Complex Confusion in Loyalty Requires Good Interpersonal Skills & Cooperation Not Permanent Matrix Organizations

20. Tips forTeam Leaders • Don’t be afraid to admit ignorance • Know when to intervene • Learn to truly share power • Worry about what you take on, not what you give up • Get used to learning on the job

21. Networking & ‘Nets • Networking • Real Time • Transparency • ‘Nets • Extranet • Intranet Teleconference

22. A Virtual Corporation (Figure 8.7) Production Firm Distribution Firm Accounting Firm Core Firm Legal Firm Advertising Agency Design Firm

23. The Four “Rs” ofOrganizational Transformation • Reframe • Restructure • Revitalize • Renew

24. How to ImproveOrganizational Structure • Break business into smaller units • Build teamwork • Impose autonomy • Create meaningful incentives • Outsource non-operating activities • Share business capabilities across units

25. Inverted Organization Structure Empowered front-line workers Support Personnel Top Mgmt.

26. Time to focus on company’s primary function Increased level of expertise Cost effectiveness Decreased overhead Risk reduction Flexibility Technology Less personal approach Less control by owner in planning, implementing & carrying out company’s future Potential for competing for the outsourcing firm’s time Outsourcing Benefits Downside

27. Information Build teamwork cross-functional integration Self-management & autonomy Bottom-up relationships Outsource Global orientation Internal vs. external customers Customer -Focused Design

28. Examples ofInformal Group Norms • Do your job but don’t produce more than the rest of the group. • Don’t tell off-color jokes or use profane language among group members. • Listen to the boss and use his/her expertise but don’t trust him/her. • Everyone is to be clean/organized at the workstation.

29. Examples ofInformal Group Norms(cont’d) • Never side with managers in a dispute involving group members. • Respect/help your fellow group members on the job. • Criticize the organization only among group members- never among strangers. • Drinking is done off-the-job. Never at work!

30. Bureaucracy 236 Centralized authority 244 Continuous improvement 251 Cross functional teams 248 Decentralized authority 244 Departmentalization 241 Formal organization 255 Informal organization 255 Inverted organization 252 Line personnel 245 Matrix organization 246 Networking 249 Organizational culture 254 Organizational design 236 Outsourcing 254 Reengineering 252 Restructuring 238 Span of control 239 Staff personnel 249 Total quality management 251 Key Terms