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Organizing Principles

Organizing Principles. Organizing. Management function that establishes relationships between activity and authority. A whole consisting of unified parts (a system) acting in harmony to execute tasks. Helps to achieve goals effectively and efficiently and accomplish the company’s mission.

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Organizing Principles

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  1. Organizing Principles 2002 South-Western

  2. Organizing Management function that establishes relationships between activity and authority. A whole consisting of unified parts (a system) acting in harmony to execute tasks. Helps to achieve goals effectively and efficiently and accomplish the company’s mission. 2002 South-Western

  3. Benefits of Organizing • Clarifies the work environment. • Creates a coordinated environment. • Achieves the principle of unity of direction. • Establishes the chain of command. 2002 South-Western

  4. Chain of Command • Unbroken line of reporting relationships. • Defines the formal decision-making structure. • Provides for the orderly progression up and down the hierarchy. 2002 South-Western

  5. Organizing Five Steps • Reviewing plans and goals. • Determining work activities. • Classifying and grouping activities. • Assigning work and delegating authority. • Designing a hierarchy of relationships. 2002 South-Western

  6. Advantages of Work Specialization • Work can be performed more efficiently. • Employees can gain skill and expertise. • Facilitates the process of selecting employees as well as decreasing training requirements. • Allows managers to supervise more employees. 2002 South-Western

  7. Disadvantages of Work Specialization • Jobs can become too simplified. • Employees become bored and tired, safety problems and accident rates increase. • Absenteeism rises. • Quality of work may suffer. 2002 South-Western

  8. Principle of Functional Similarity -Three Steps- • Identify each activity to determine its general nature. • Group the activities into related areas. • Establish the basic department design for the organizational structure. 2002 South-Western

  9. Four Departmental Types 1. Functional Departmentalization 4. Customer Departmentalization 2. Geographical Departmentalization 3. Product Departmentalization 2002 South-Western

  10. Geographical Departmentalization 2002 South-Western

  11. Product Departmentalization 2002 South-Western

  12. Customer Departmentalization 2002 South-Western

  13. Horizontal StructuringTwo Important Effects • It defines the working relationships between operating departments. • It makes the final decision on the span of control of each manager. 2002 South-Western

  14. To Organize Effectively, Leaders/Managers Need to Master • Authority • Power • Delegation • Span of control • Centralization/decentralization 2002 South-Western

  15. Authority • Formal and legitimate right of a manager to make decisions. • Legitimate right of a manager to give orders. • Legitimate right of a manager to allocate resources. 2002 South-Western

  16. Line Authority 2002 South-Western

  17. Staff Authority 2002 South-Western

  18. Functional Authority 2002 South-Western

  19. Manager’s Power Sources 2002 South-Western

  20. Narrow Span of Control 2002 South-Western

  21. Narrow and Wide Spans of Control 2002 South-Western

  22. Considerations for Proper Span of Control • The complexity and variety of the subordinate’s work. • The ability of the manager. • The ability and training of the subordinates themselves. • The supervisor’s willingness to delegate authority. • The company’s philosophy for centralization or decentralization of decision making. 2002 South-Western

  23. Judging Decentralization • The greater the number of decisions made at the lower levels of management. • The more important the decisions made at lower levels. • The more flexible the interpretation of company policy at the lower levels. • The more widely dispersed the operations of the company geographically. • The less a subordinate has to refer to his or her manager prior to making a decision. 2002 South-Western

  24. Informal and Formal Organizations Informal Organization Formal Organization Official organization created by management. Unofficial organization created by relationships. Primary area of emphasis is on people and their relationships. Leverage is provided by power. Source of power: given by group. Functions with power and politics. Behavior guidelines provided by group norms. Sources of control over the individual are positive or negative sanctions. Primary area of emphasis is official organization positions. Leverage is provided by authority. Sources of authority: delegated by management. Functions with authority and responsibility. Behavior guidelines provided by rules, policies, and procedures. Sources of control over the individual are rewards and penalties. 2002 South-Western

  25. Positive Potential ofInformal Organizations 2002 South-Western

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