M2 Chapter 4.5 Organizing and Structuring Flashcards
Organizing
the deployment of organizational resources to achieve strategic goals in an effective and efficient manner (money, people)
The Structure of organizing
1) The set of formal tasks assigned to departments and individuals
2) Formal reporting relationships, including lines of authority, decision responsibility, number of levels and span of management
3) The design of systems to ensure effective coordination of employees across departments
Work Specialization
the division of tasks into individual jobs called division of labor
Chain of Command
a line of authority that links individuals and direct reports
Scalar Chain
each person has only one boss
Authority
the formal right to make decisions and issues orders
- vested in organizational positions, not people
- accepted by subordinates
- flows down the vertical hierarchy
Responsibility
the duty to perform the task or activity assigned
Delegation
what managers use to transfer authority and responsibility to others
Steps of proper delegation
1) Select the right person
2) Train that person
3) Give authority that is equivalent to the responsibility
4) Assign the whole task
5) Regular follow up
Line departments
perform the tasks that reflect the organization’s primary goals
- work directly with customers/products
- Value Added (Value Stream)
Staff departments
those departments that provide specialized skills in support of line departments
- ie: Legal, Human Resources, Marketing
Span of management
The number of employees reporting to a supervisor is
Centralization
When decision authority is located near the top of the organization
Decentralization
When decision authority is pushed downward to lower organizational levels
- Change and uncertainty are usually associated with decentralization
- The amount of centralization or decentralization should fit the firm’s strategy
- During crisis, such as risk of company failure, authority may be centralized
Why has span of management increased?
- Work is stable and routine
- Subordinates perform similar work
- Subordinates in single location
- Highly trained and need little direction
- Rules and procedures are defined
- Support systems and personnel are available to manager
- Little supervision is required
- Managers’ personal preference favor a large span
Departmentalization
- Basis for grouping positions and functions into departments
- Choices regarding chain of command
Three traditional approaches:
1) Vertical Functional
2) Divisional
3) Matrix
Recent more Innovative approaches:
4) Teams
5) Virtual Networks
Vertical Functional Approach
- Grouping into departments based on skills, expertise, work activities and resource use
- Departmentalized by organizational resources
• Accounting
• Human resources-
• Engineering
• Manufacturing
Divisional Approach
- Departments are grouped based on outputs (products)
- Organizations may assign division responsibility by geographic region, customer group, or product group.
Matrix Approach
- Combines aspects of both functional and divisional structures simultaneously
- Improves coordination and information sharing
- Employees report to two supervisors (key challenge)
- Violates Scalar Chain
Team Approach
- growing trend
- Teams allow organizations to delegate authority
- Become flexible and competitive in global environment
Virtual Network Approach
- Extending the boundaries of collaboration beyond the organization
- Subcontracting functions to other companies
- Coordinate activities
- Interconnected groups of companies
- partnerships and collaborations
Coordination
the quality of collaboration across departments
- required regardless of the structure!
Task Force
A temporary team or committee formed to solve a specific short-term problem
Project Managers
responsible for coordinating the activities of several departments on a full-time basis for the completion of a specific project
Reengineering/Restructuring
- Radical redesign of business processes to achieve dramatic improvements - Value
- Reengineering or business process reengineering – 70% fail
Why does restructuring fail?
- They wait too long to make a change.
- Most companies can’t financially withstand a radical restructuring.
- Some companies are too large
What should be done with restructuring?
- Commitment to constant, small incremental changes.
- Structure designed for change.
- Constant observance for internal and external forces for change.
- Careful analysis of change options.
- Implement with employee involvement.
- Reinforce the change.
