Chapter 6: Fundamentals of Organising Flashcards
When do you organize?
After strategic planning is done
What is organising?
Deployment of organisational resources
To achieve strategic goals
What is departmentalization
Basis for grouping positions
Positions into departments
Departments into total organization
How many traditional approaches are there?
3
What are the traditional approaches?
Functional
Divisional
Matrix
What are the innovative departmentalization approaches?
Team
Network
How to assess advantages or disadvantages?
Use of resources: efficient (economies of scale) or not
Technical Depth: specialization and development
Communication across divisions: barriers
Environment response: flexible and fast
Customer service
Decision concentration: delay, response time
Decision making: direction and control/unplanned decentralization
What does departmentalization create?
Chain of command
Reporting relationships
Organizational structure
How does different departmentalization approaches affect?
Employee goals
Employee motivation
How are activities grouped in a functional structure?
By common function
Or type of organizational resources
What are the advantages of a functional approach?
Efficient use of resources : economies of scale
In depth skill specialization and development
Top manager direction and control
What are the disadvantages of functional approach?
Poor communication across functional department
Slow response to external changes (lagging innovation)
Decisions concentrated at top hierarchy: delay
What are activities grouped based on in the divisional approach
Based on similar organizational outputs
What is the divisional structure also called?
M form
Multi divisional
Decentralized form
What are the types of divisional structure?
Product/services
Geographical region
Customer
What are the advantages of a divisional structure?
Fast response and flexibility to unstable environment
Fosters concern for customer need
Excellent coordination across functional departments
What are the disadvantages of a divisional structure?
Duplication of resources across divisions
Less technical depth and specialization
Poor coordination across divisions
How are activities divided in divisional approach, product and services?
By the type of product/services
When is division by geographical region used?
When operations/markets are
Physically dispersed
Non-interdependent
When is division by customer used?
company provides
Different services to different types of customers
What does the matrix approach involve?
Both functional and divisional structure
What is the matrix structure called?
Dual
Hence it has dual lines of authority
How do horizontal and vertical units work together?
The functional department operate as vertical units
Supporting the horizontal divisions
What are the advantages of a matrix approach
More efficient use of resources
Flexibility, adaptability or changing environment
Expertise available to all divisions: interdisciplinary cooperation
What are the disadvantages of a matrix approach?
Frustration and confusion from dual chain of command
High conflict between two sides of the matrix
Many meetings more discussion than action
When is team approach used?
Delegate authority quickly to lower levels
More flexible and responsive in a complex and competitive environment
How to use team approach?
Through cross functional teams
What are cross functional teams?
Employees from various functional departments meeting as a team to resolve problems
Advantages of a team approach?
Reduced barriers among departments: increased compromise
Shorter response time, quicker decisions
Better morale, enthusiasm from employee involvement
What are the disadvantages of a team approach?
Dual loyalties and conflict
Time and resources spent on meetings
Unplanned decentralization
What is the network approach?
Collaboration beyond the organization
Outsourcing/farming to loosely connected groups of companies
Advantages of a network approach?
Can draw on expertise worldwide
Highly flexible and responsive
Reduced overhead costs
Disadvantages of a network approach?
Lack of control, weak boundaries
Greater demands on managers
Weaker employee loyalty
What are the steps in organising?
- Consider org. Objectives
- Determine type work activities
- Departmentalization
- Design hierarchy of relationship
- Set up Mechanism for coordination
What is organisational resource is deployed?
Labour
How is the organisational resource deployed?
In 5 steps
Why do you consider org. objectives?
Everything directed to accomplish obj
Allocating resources
Managing people
Best way to support org. objectives
How do you determine type of activities?
Distinguishing activities one from another
Why do you departmentalise?
Efficient, effective
Use of org. resources
How do you departmentalise?
Grouping
How to design a hierarchy of relationship?
Determine
Operating relationship of organisation
Horizontal: departmentalisation
vertical: chain of command
=organisation structure
How do we set up mechanisms for coordination?
Integrate departmental activities into a coherent whole
Monitor the effectiveness of integration
What is an organisation structure?
Set of formal tasks assigned to individual and department
Formal reporting relationship
Design of systems to ensure effective coordination
The vertical structure of an organisation structure is portrayed in ?
Organisation chart
An organisation chart shows
Major positions and departments Chain of command (managers, subord) Span of control Official channels of communication Departmentalisation: the way work is grouped Type of work performed
What is work specialization
Division of labour = efficiency
Degree to which org. tasks are subdivided into separate jobs
In work specialization how do employees work?
They perform tasks relevant to the specialized function of their department.
They specialize in a single task
What are the disadvantages of work specialization
Isolated, creates separation
Hinders coordination
Boring
What is a chain of command? It is also known as?
Unbroken line of authority
Links all employees
Authority structure
What does the chain of command show?
Reporting relationship
What are the 2 principles supporting this chain of command?
Unity of command
Scalar principle
In unity of command, each employee is _______ to only one supervisor.
Held accountable
Is the scalar principle the same as the COC?
Yes
What is authority?
Legitimate right of a manager
With authority you can
Make decisions
Issue orders
Allocate resources to achieve org desirable
outcomes
What are the characteristics of authority
Vested in position, not individual
Flows down the hierarchy
Accepted by subordinates
What is responsibility
Duty to perform task assigned
With authority comes ______
When responsibility>authority, _______
When authority>responsibility,_____
Responsibility
Difficulty
Tyrants, achieve frivolous outcomes
What is accountability?
Responsibility and authority brought into alignment
People who are accountable are ______
Subject to reporting
Justifying task outcomes
To those above them in COC
What is delegation ?
Process to transfer authority and responsibility
Positions below them
Why do people delegate?
Provide maximum flexibility to meet customer needs
Adapt to shifts in environment
Highly motivating
Improve creativity
What are line departments?
Perform tasks that reflect org. Primary goal and mission
What are staff departments?
Advisory relationship with line department
What is line authority?
Formal authority to direct and control immediate subordinates
What is staff authority?
Right to advise, recommended, counsel
In staff specialists area of expertise
What is the span of management?
No. of employees reporting to a supervisor
What does the span of control determine?
How closely a supervisor can monitor subordinates
Factors for larger spans of control
Work routine and simple Sub in one location Perform similar work takes Highly train and need little direction Rules and procedures available Support systems and personnel Preference
Two types of span
Tall
Flat
Characteristics of a tall structure
Narrow span of control
A lot of hierarchical levels
Characteristics of a flat structure
Wide span
Fewer hierarchical levels
Disadvantage of tall structure
Routine decisions made too high up: take away high level executives
What is centralization and decentralization?
Refers to heretical level at which decisions are made
Where are decisions made in centralization
Decision authority is high up
Where is decision authority in decentralization?
It is pushed down to lower levels
When decentralization is adopted, there is _______
Greater change and uncertainty
Centralization and decentralization should fit _______
Firms strategy
When is authority centralized at the top?
In crisis or risk of company failure
