Nickels McHugh McHugh

1. * * Nickels McHugh McHugh * Adapting Organizations to Today’s Markets CHAPTER 8 * * 1-1

2. Building an Organization from the Bottom Up • Organizing or Structuring: Determine what work needs to be done. • Division of Labor: Divide the tasks among others. • Job Specialization: Dividing the tasks into smaller jobs. • Departmentalization: The process of setting up individual departments to do specialized tasks. • Assign Authority & Responsibility: • Organization Chart/Organogram • Allocating Resources: • Assigning Specific Tasks: • Establishing Procedures:

3. Centralization (No Delegation) Advantages • Greater Top-Management Control • More Efficiency • Simpler Distribution System • Stronger Brand/Corporate Image Disadvantages • Less Responsiveness to Customers • Less Empowerment • Inter organizational Conflict • Lower Morale Away from Headquarters

4. Decentralization (Delegate Authority) Advantages • Better Adaptation to Customer Wants • More Empowerment of Workers • Faster Decision Making • Higher Morale Disadvantages • Less Efficiency • Complex Distribution System • Less Top-Management Control • Weakened Corporate Image

5. Organization Structures • Tall organization: An organizational structure in which the pyramidal organization chart would be quite tall because of the various levels of management. • Flat organization: An organization structure that has few layers of management and a broad span of control.

6. Organizational Structures Tall Organizations • Many Layers of Management • High Cost of Management • Narrow Span of Control Flat Organizations • Current Trend • Creation of Teams • Broad Span of Control

7. Departmentalization • Departmentalization: The dividing of organizational functions into separate units. • Disadvantages • Lack of Communication • Employees Identify with Department • Slow Response to External Demands • Narrow Specialists • Groupthink • Advantages • Skill Development • Economies of Scale • Good Coordination

8. Ways of Departmentalization • By Product • By Function • By Customer Group • By Geographic Location • By Process

9. Cross Functional Self-Managed Teams • Groups of employees from different departments who work together on a long-term basis. Self-managed means they are empowered to make decisions without management approval. • Cross functional team works better when it includes customers, suppliers, and distributors too.

10. Creating a Change-Oriented Organizational Culture • Organizational (Corporate) Culture: Widely shared values within an organization that provide unity and cooperation to achieve common goals. • Myths, stories, traditions, values etc are part of corporate culture

11. Production process • Land • Labor • Capital • Entrepreneur • Knowledge INPUTS Production Control OUTPUT • Planning • Routing • Scheduling • Dispatching • Follow-Up • Goods • Services • Ideas

12. Operations Management Planning • Planning that converts resources into goods or services. • It helps to solve many of the problems: • Facility Location • Facility Layout • Materials Requirement Planning • Purchasing • Inventory Control • Quality Control.