CHAPTER 9 BASIC ELEMENTS OF ORGANISATIONAL STRUCTURE

1. CHAPTER 9BASIC ELEMENTS OF ORGANISATIONAL STRUCTURE © 2003 McGraw-Hill Australia Pty Ltd. PowerPoint Slides t/a Management: A Pacific Rim Focus Enhanced Edition. Slides prepared by David Meacheam & George Sansbury.

2. Lecture outline • Nature of organisational structure • Job design • Types of departmentalisation • Methods of vertical co-ordination • Promoting innovation (methods of horizontal co-ordination) © 2003 McGraw-Hill Australia Pty Ltd. PowerPoint Slides t/a Management: A Pacific Rim Focus Enhanced Edition. Slides prepared by David Meacheam & George Sansbury.

3. Nature of organisational structure Formal pattern of interactions and co-ordination designed by management to link the tasks of individuals and groups in achieving organisational goals. © 2003 McGraw-Hill Australia Pty Ltd. PowerPoint Slides t/a Management: A Pacific Rim Focus Enhanced Edition. Slides prepared by David Meacheam & George Sansbury.

4. Nature of organisational structure Four elements: • Assignment of tasks and responsibilities to individuals and units. • Clustering these to form a hierarchy. • Mechanisms for vertical co-ordination. • Mechanisms for horizontal co-ordination. © 2003 McGraw-Hill Australia Pty Ltd. PowerPoint Slides t/a Management: A Pacific Rim Focus Enhanced Edition. Slides prepared by David Meacheam & George Sansbury.

5. Nature of organisational structure • The organisation chart • Line diagram depicting broad outlines of an organisation’s structure. • Principles chart design • As few hierarchical levels as possible. • Charts should show who has authority over who. • Charts should show official lines responsibility & communication. © 2003 McGraw-Hill Australia Pty Ltd. PowerPoint Slides t/a Management: A Pacific Rim Focus Enhanced Edition. Slides prepared by David Meacheam & George Sansbury.

6. Nature of organisational structure © 2003 McGraw-Hill Australia Pty Ltd. PowerPoint Slides t/a Management: A Pacific Rim Focus Enhanced Edition. Slides prepared by David Meacheam & George Sansbury.

7. Job design • Job design Specification of task activities associated with a particular job. • Design jobs to enhance motivation Job simplification: breaking jobs into small elements. Job rotation: moving through sets of tasks in sequence. Job enlargement: wider range of similar tasks. • Alternative work schedules Managing work diversity. © 2003 McGraw-Hill Australia Pty Ltd. PowerPoint Slides t/a Management: A Pacific Rim Focus Enhanced Edition. Slides prepared by David Meacheam & George Sansbury.

8. Managing diversity & work schedules ‘… balancing work and personal life’. Flexitime: core hours tobe worked, others at employee discretion Job sharing: two or more people sharing a full-time job Compressed work week: longer hours worked per day, shorter working week © 2003 McGraw-Hill Australia Pty Ltd. PowerPoint Slides t/a Management: A Pacific Rim Focus Enhanced Edition. Slides prepared by David Meacheam & George Sansbury.

9. Types of departmentalisation Departmentalisation: Clustering of individuals into units and units into departments and larger units to facilitate achievement of organisational goals. • Functional • Divisional • Hybrid • Matrix. © 2003 McGraw-Hill Australia Pty Ltd. PowerPoint Slides t/a Management: A Pacific Rim Focus Enhanced Edition. Slides prepared by David Meacheam & George Sansbury.

10. Types of departmentalisation Functional: based on expertise, skill & similarity of work activity. Divisional: based on product or market similarities. Hybrid: some activities grouped by function, some by products or markets. Matrix: Superimpose horizontal divisional over hierarchical functional structure. © 2003 McGraw-Hill Australia Pty Ltd. PowerPoint Slides t/a Management: A Pacific Rim Focus Enhanced Edition. Slides prepared by David Meacheam & George Sansbury.

11. Methods of vertical co-ordination Linking of activities at the top of the organisation with those at the middle and lower levels to achieve organisational goals. • Formalisation • Span of management • Centralisation vs de-centralisation • Delegation • Line & staff positions. © 2003 McGraw-Hill Australia Pty Ltd. PowerPoint Slides t/a Management: A Pacific Rim Focus Enhanced Edition. Slides prepared by David Meacheam & George Sansbury.

12. Methods of vertical co-ordination Formalisation: • Degree to which written policies, rules, procedures, job descriptions and other documents specify what actions are(not) to be taken under a given set of circumstances. • Extent of formalisation tends to grow with age & size. © 2003 McGraw-Hill Australia Pty Ltd. PowerPoint Slides t/a Management: A Pacific Rim Focus Enhanced Edition. Slides prepared by David Meacheam & George Sansbury.

13. Methods of vertical co-ordination Factors influencing span of management: • High competencelevels. • Low interaction requirements. • Work similarity (between organisational peers). • Low problem frequency and seriousness. • Physical proximity. • Few non-supervisory duties of managers. • Considerable available assistance. • Highmotivational possibilities of work. © 2003 McGraw-Hill Australia Pty Ltd. PowerPoint Slides t/a Management: A Pacific Rim Focus Enhanced Edition. Slides prepared by David Meacheam & George Sansbury.

14. Methods of vertical co-ordination Centralisation Extent to which power & authority are retained at the top organisational levels. De-centralisation Extent to which power & authority are delegated to lower levels. Factors favouring centralisation • Large organisational size • Geographic dispersion • Technological complexity • Environmental uncertainty. © 2003 McGraw-Hill Australia Pty Ltd. PowerPoint Slides t/a Management: A Pacific Rim Focus Enhanced Edition. Slides prepared by David Meacheam & George Sansbury.

15. Methods of vertical co-ordination ‘… extent to which power and authority will be retained at upper levels’. Influenced by: Large size: larger organisations likely to be more Decentralised. Geographic dispersion: more dispersed likely to be decentralised, to enable control at a number of sites. Environmental uncertainty: with rapid change, need for more employees to be involved in responding to challenges. Technological complexity: with more complex technology,need to devolve authority to lower levels. © 2003 McGraw-Hill Australia Pty Ltd. PowerPoint Slides t/a Management: A Pacific Rim Focus Enhanced Edition. Slides prepared by David Meacheam & George Sansbury.

16. Methods of vertical co-ordination Delegation Assignment of part of a manager’s work to others, along with both responsibility & authority necessary to achieve expected results. Factors restraining delegation • Fear subordinate failure. • Time to train subordinates. • Enjoy doing tasks. • Release of authority. • Concern for task performance. • Fear subordinate competence. © 2003 McGraw-Hill Australia Pty Ltd. PowerPoint Slides t/a Management: A Pacific Rim Focus Enhanced Edition. Slides prepared by David Meacheam & George Sansbury.

17. Methods of vertical co-ordination Configuration of line and staff positions: • Line authority Authority following the chain of command established by the formal hierarchy. • Functional authority Authority of staff over others in the organisation in matters related directly to their respective functions e.g. HRM dept. © 2003 McGraw-Hill Australia Pty Ltd. PowerPoint Slides t/a Management: A Pacific Rim Focus Enhanced Edition. Slides prepared by David Meacheam & George Sansbury.

18. Methods of horizontal co-ordination Horizontal co-ordination: Linking of activities across departments at similar levels. • Need for information processing across the organisation. • Promotes innovation through dissemination of ideas & information. © 2003 McGraw-Hill Australia Pty Ltd. PowerPoint Slides t/a Management: A Pacific Rim Focus Enhanced Edition. Slides prepared by David Meacheam & George Sansbury.

19. Methods of horizontal co-ordination Horizontal co-ordination promoted by: • Slack resources Cushion of resources that facilitates adaptations to internal/external pressures, as well as initiation of changes. • Information systems One information source for many users. • Lateral relations Direct contact, liaison roles, task forces, teams. © 2003 McGraw-Hill Australia Pty Ltd. PowerPoint Slides t/a Management: A Pacific Rim Focus Enhanced Edition. Slides prepared by David Meacheam & George Sansbury.

20. Lecture summary • The nature of organisational structure • Definition • Organisation chart • Job design. • Job design • Designing for motivation: • Jobenlargement, rotation, enrichment, simplification. • Types of departmentalisation • Functional, divisional, hybrid, matrix. © 2003 McGraw-Hill Australia Pty Ltd. PowerPoint Slides t/a Management: A Pacific Rim Focus Enhanced Edition. Slides prepared by David Meacheam & George Sansbury.

21. Lecture summary • Methods of vertical co-ordination • Formalisation • Span of management • Centralisation vs de-centralisation • Delegation • Line & staff authority. • Methods of horizontal co-ordination • Slack resources • Information systems • Lateral relations. © 2003 McGraw-Hill Australia Pty Ltd. PowerPoint Slides t/a Management: A Pacific Rim Focus Enhanced Edition. Slides prepared by David Meacheam & George Sansbury.