© 2010 South-Western, Cengage Learning, Inc. All rights reserved. PowerPoint Presentation by...

© 2010 South-Western, Cengage Learning, Inc. All rights reserved.© 2010 South-Western, Cengage Learning, Inc. All rights reserved.

PowerPoint Presentation by Charlie CookThe University of West Alabama

PowerPoint Presentation by Charlie CookThe University of West Alabama

© 2010 South-Western, Cengage Learning, Inc. All rights reserved. 11–

1.1. Identify the basic elements of organizations.Identify the basic elements of organizations.

2.2. Describe the basic alternative approaches to designing jobs.Describe the basic alternative approaches to designing jobs.

3.3. Discuss the rationale and the most common bases for grouping jobs Discuss the rationale and the most common bases for grouping jobs into departments.into departments.

4.4. Describe the basic elements involved in establishing reporting Describe the basic elements involved in establishing reporting relationships.relationships.

5.5. Discuss how authority is distributed in organizations.Discuss how authority is distributed in organizations.

6.6. Discuss the basic coordinating activities undertaken by Discuss the basic coordinating activities undertaken by organizations.organizations.

7.7. Describe basic ways in which positions within an organization can Describe basic ways in which positions within an organization can be differentiated.be differentiated.

Learning ObjectivesAfter studying this chapter, you should be able to:Learning ObjectivesAfter studying this chapter, you should be able to:


The Elements of OrganizingThe Elements of Organizing

• OrganizingOrganizing Deciding how to best group Deciding how to best group

organizational activities and organizational activities and resources.resources.

• Organization StructureOrganization Structure The set of building blocks The set of building blocks

that can be used to that can be used to configure an organization.configure an organization.


Designing JobsDesigning Jobs

• Job DesignJob Design The determination of an individual’s work-related The determination of an individual’s work-related

responsibilities.responsibilities.

• Job Specialization (Division of Labor)Job Specialization (Division of Labor) The degree to which the overall task of the The degree to which the overall task of the

organization is broken down and divided into smaller organization is broken down and divided into smaller component parts.component parts.


Designing Jobs (cont’d)Designing Jobs (cont’d)

• Benefits of Job SpecializationBenefits of Job Specialization Workers can become proficient at a task.Workers can become proficient at a task. Transfer time between tasks is decreased.Transfer time between tasks is decreased. Specialized equipment can be more easily Specialized equipment can be more easily

developed.developed. Employee replacement becomes easier.Employee replacement becomes easier.

• Limitations of SpecializationLimitations of Specialization Boredom and dissatisfaction with mundane tasks.Boredom and dissatisfaction with mundane tasks. Anticipated benefits do not always occur.Anticipated benefits do not always occur.


Adam Smith’s Example of Job Specialization

Adam Smith’s Example of Job Specialization

Making a pin (nail) requires 18 tasks

1 worker doing all 18 tasks might make 20 pins (nails) a day.

20 workers = (20 x 20) = 400 pins______________________________

With specialization:

20 workers make 100,000 pins a day.1 worker = 5,000 pins

20 pins vs. 5,000 pins per worker


Alternatives to Job SpecializationAlternatives to Job Specialization

Job Enlargement

Job Enrichment

Job Rotation

Job Specialization Alternatives


Job Characteristics: Core DimensionsJob Characteristics: Core Dimensions

Skill VarietySkill Variety The number of tasks a person does in a job

Task IdentityTask IdentityThe extent to which the worker does a complete or identifiable portion of the total job

Task SignificanceTask Significance The perceived importance of the task by the worker

AutonomyAutonomyThe degree of control the worker has over how the work is performed

FeedbackFeedbackThe extent to which the worker knows how well the job is being performed

Growth Need Growth Need StrengthStrength

The desire for people to grow, develop, and expand their capabilities that is their response to the core dimensions


Alternatives to Specialization (cont’d)Alternatives to Specialization (cont’d)• Work TeamsWork Teams

An alternative to job specialization that allows the An alternative to job specialization that allows the entire group to design the work system it will use to entire group to design the work system it will use to perform an interrelated set of tasks.perform an interrelated set of tasks.


Management Challenge QuestionManagement Challenge Question

• You will be leading your company’s transition You will be leading your company’s transition team after the acquisition of your company by team after the acquisition of your company by a much larger competitor.a much larger competitor.

• What organizing problems would you What organizing problems would you anticipate will arise in merging the two anticipate will arise in merging the two companies?companies?


Grouping Jobs: DepartmentalizationGrouping Jobs: Departmentalization

• DepartmentalizationDepartmentalization The process of grouping jobs according to some The process of grouping jobs according to some

logical arrangement.logical arrangement.

• Rationale for DepartmentalizationRationale for Departmentalization Organizational growth exceeds the owner-manager’s Organizational growth exceeds the owner-manager’s

capacity to personally supervise all of the capacity to personally supervise all of the organization. organization.

Additional managers are employed and assigned Additional managers are employed and assigned specific employees to supervise.specific employees to supervise.


DepartmentalizationDepartmentalization

• AdvantagesAdvantages Each department can be Each department can be

staffed by functional-staffed by functional-area experts.area experts.

Supervision is facilitated Supervision is facilitated in that managers only in that managers only need be familiar with need be familiar with a narrow set of skills.a narrow set of skills.

Coordination inside each Coordination inside each department is easier.department is easier.

• DisadvantagesDisadvantages Decision making becomes Decision making becomes

slow and bureaucratic.slow and bureaucratic. Employees narrow their focus Employees narrow their focus

to their department and lose to their department and lose sight of broader goals and sight of broader goals and issues.issues.

Accountability and Accountability and performance are difficult performance are difficult to monitor.to monitor.

• Functional DepartmentalizationFunctional DepartmentalizationGrouping jobs involving the same or similar activities.Grouping jobs involving the same or similar activities.


11.2 Bases for Departmentalization


Departmentalization (cont’d)Departmentalization (cont’d)

• AdvantagesAdvantages All activities associated All activities associated

with one product are with one product are integrated and integrated and coordinated.coordinated.

Speed and effectiveness Speed and effectiveness of decision making are of decision making are enhanced. enhanced.

Performance of individual Performance of individual products or product groups products or product groups can be assessed.can be assessed.

• DisadvantagesDisadvantages Managers may focus Managers may focus

on their product to the on their product to the exclusion of the rest of the exclusion of the rest of the organization.organization.

Administrative costs Administrative costs may increase due to each may increase due to each department having its own department having its own functional-area experts.functional-area experts.

• Product DepartmentalizationProduct DepartmentalizationGrouping activities around products or product groups.Grouping activities around products or product groups.



• Customer DepartmentalizationCustomer Departmentalization Grouping activities to respond to and interact with Grouping activities to respond to and interact with

specific customers and customer groups.specific customers and customer groups. AdvantageAdvantage

Skilled specialists can deal with unique customers orSkilled specialists can deal with unique customers orcustomer groups.customer groups.

DisadvantageDisadvantage A large administrative staff is needed to integrate activities of A large administrative staff is needed to integrate activities of

various departments.various departments.



• Location DepartmentalizationLocation Departmentalization The grouping of jobs on the basis of defined The grouping of jobs on the basis of defined

geographic sites or areas.geographic sites or areas. AdvantageAdvantage

Enables the organization to respond easily to unique Enables the organization to respond easily to unique customer and environmental characteristics.customer and environmental characteristics.

DisadvantageDisadvantage Large administrative staff may be needed to keep track of Large administrative staff may be needed to keep track of

units in scattered locations.units in scattered locations.


Other Forms of DepartmentalizationOther Forms of Departmentalization• Alternative GroupingsAlternative Groupings

By specific units of timeBy specific units of time

By sequence.By sequence.

By customer characteristics, products, or servicesBy customer characteristics, products, or services

• Other ConsiderationsOther Considerations Departments are often called by other names.Departments are often called by other names.

Divisions, units, sections, and bureausDivisions, units, sections, and bureaus

Organizations are likely to employ multiple bases of Organizations are likely to employ multiple bases of departmentalization, depending on level.departmentalization, depending on level.


Establishing Reporting RelationshipsEstablishing Reporting Relationships

Scalar Principle

Span of Control

Unity of Command

Reporting RelationshipsConsiderations


Reporting RelationshipsReporting Relationships

• Chain of CommandChain of Command A clear and distinct line of authority among A clear and distinct line of authority among

the positions in an organization.the positions in an organization. Unity of CommandUnity of Command

Each person within an organization must have a clear Each person within an organization must have a clear reporting relationship to one and only one boss.reporting relationship to one and only one boss.

Scalar PrincipleScalar Principle A clear and unbroken line of authority must extend from A clear and unbroken line of authority must extend from

the bottom to the top of the organization.the bottom to the top of the organization.


Span of ManagementSpan of Management

• Span of ControlSpan of Control The number of people reporting to a manager.The number of people reporting to a manager.

A. V. GraicunasA. V. Graicunas Subordinate interactionsSubordinate interactions

– Direct—manager’s relationship with each subordinate.Direct—manager’s relationship with each subordinate.

– Cross—among the subordinates themselves.Cross—among the subordinates themselves.

– Group—between groups of subordinates.Group—between groups of subordinates.

Formula for the number of interactions of all types:Formula for the number of interactions of all types:

I = N(2N/2 + N – 1)I = N(2N/2 + N – 1), where , where II is the total number of is the total number of interactions and interactions and NN is number of subordinates. is number of subordinates.


Span of Management (cont’d)Span of Management (cont’d)

• Narrow Versus Wide SpansNarrow Versus Wide Spans Ralph DavisRalph Davis

Operative span for lower-level managers of up to 30 Operative span for lower-level managers of up to 30 workers.workers.

Executive span for middle and top managers set at 3 to 9.Executive span for middle and top managers set at 3 to 9.

Span depends on managers’ jobs, company growth rate, Span depends on managers’ jobs, company growth rate, and similar factorsand similar factors

Lyndall Urwick and General Ian HamiltonLyndall Urwick and General Ian Hamilton Executive span should never exceed six persons.Executive span should never exceed six persons.


Establishing Reporting Relationships: Tall versus Flat Organizations

Establishing Reporting Relationships: Tall versus Flat Organizations• Tall OrganizationsTall Organizations

Are more expensive Are more expensive because of the number because of the number of managers involved.of managers involved.

Foster more Foster more communication problems communication problems because of the number of because of the number of people through whom people through whom information must pass.information must pass.

• Flat OrganizationsFlat Organizations Lead to higher levels Lead to higher levels

of employee morale of employee morale and productivity.and productivity.

Create more administrative Create more administrative responsibility for the relatively responsibility for the relatively few managers.few managers.

Create more supervisory Create more supervisory responsibility for managers due responsibility for managers due to wider spans of control.to wider spans of control.


11.3 Tall Versus Flat Organizations


11.1 Factors Influencing the Span of Management

1. Competence of supervisor and subordinates(the greater the competence, the wider the potential span)

2. Physical dispersion of subordinates(the greater the dispersion, the narrower the potential span)

3. Extent of nonsupervisory work in manager’s job(the more nonsupervisory work, the narrower the potential span)

4. Degree of required interaction (the less required interaction, the wider the potential span)

5. Extent of standardized procedures(the more procedures, the wider the potential span)

6. Similarity of tasks being supervised (the more similar the tasks, the wider the potential span)

7. Frequency of new problems (the higher the frequency, the narrower the potential span)

8. Preferences of supervisors and subordinates


Distributing AuthorityDistributing Authority

• AuthorityAuthority Power that has been legitimized by the organization.Power that has been legitimized by the organization.

• DelegationDelegation The process by which managers assign a portion of The process by which managers assign a portion of

their total workload to others.their total workload to others.

• Reasons for DelegationReasons for Delegation To enable the manager to get more work done by To enable the manager to get more work done by

utilizing the skills and talents of subordinates.utilizing the skills and talents of subordinates. To foster development of subordinates by having To foster development of subordinates by having

them participate in decision making and problem.them participate in decision making and problem.


11.4 Steps in the Delegation Process


Problems in DelegationProblems in Delegation

• ManagerManager Reluctant to delegate.Reluctant to delegate.

Disorganization Disorganization prevents planning prevents planning work in advance.work in advance.

Subordinate’s success Subordinate’s success threatens superior’s threatens superior’s advancement.advancement.

Lack of trust in the Lack of trust in the subordinate to do well.subordinate to do well.

• SubordinateSubordinateReluctant to accept Reluctant to accept

delegation for fear of delegation for fear of failure.failure.

Perceives no rewards for Perceives no rewards for accepting additional accepting additional responsibility.responsibility.

Prefers to avoid any risk Prefers to avoid any risk and responsibility.and responsibility.


Decentralization and CentralizationDecentralization and Centralization

• DecentralizationDecentralization Systematically delegating power and authority Systematically delegating power and authority

throughout the organization to middle- and throughout the organization to middle- and lower-level managers.lower-level managers.

• CentralizationCentralization Systematically retaining power and authority Systematically retaining power and authority

in the hands of higher-level managers.in the hands of higher-level managers.


Factors in Choice of CentralizationFactors in Choice of Centralization

History of the organization

Nature (cost and risk) of decisions to

be made

External environment’s complexity and

uncertainty

Organization’s Centralization Choice


Coordinating ActivitiesCoordinating Activities

• CoordinationCoordination The process of linking the activities of the various The process of linking the activities of the various

departments of the organization.departments of the organization.

• The Need for CoordinationThe Need for Coordination Where departments and work groups are Where departments and work groups are

interdependent; the greater the interdependence, interdependent; the greater the interdependence, the greater the need for coordination.the greater the need for coordination.


Coordinating Activities: Forms of InterdependenceCoordinating Activities: Forms of Interdependence

• Pooled interdependencePooled interdependence When units operate with little interaction; their output When units operate with little interaction; their output

is simply pooled at the organizational level.is simply pooled at the organizational level.

• Sequential interdependenceSequential interdependence When the output of one unit becomes the input of When the output of one unit becomes the input of

another unit in sequential fashion.another unit in sequential fashion.

• Reciprocal interdependenceReciprocal interdependence When activities flow both ways between units.When activities flow both ways between units.


InputInput OutputOutput

SequentialSequential

Major Forms of InterdependenceMajor Forms of Interdependence

PooledPooled

InputInput

InputInput

InputInput

OutputOutput

OutputOutputInputInput

OutputOutputInputInputOutputOutputInputInput

ReciprocalReciprocal


Structural CoordinationStructural Coordination

Task Forces

Integrating Departments

Electronic Coordination

Structural Coordination Techniques

Management Hierarchy

Rules and Procedures

Managerial Liaison Roles


Structural Coordination TechniquesStructural Coordination Techniques

• The Managerial HierarchyThe Managerial Hierarchy Placing one manager in charge of interdependent Placing one manager in charge of interdependent

departments or units.departments or units.

• Rules and ProceduresRules and Procedures Routine coordination of activities using rules and Routine coordination of activities using rules and

procedures that set priorities and guidelines for procedures that set priorities and guidelines for actions.actions.

• Managerial Liaison RolesManagerial Liaison Roles A manager coordinates interdependent units by A manager coordinates interdependent units by

acting as a common point of contact, facilitating the acting as a common point of contact, facilitating the flow of information.flow of information.


Structural Coordination… (cont’d)Structural Coordination… (cont’d)

• Task ForcesTask Forces Used with multiple units when coordination is Used with multiple units when coordination is

complex, requiring more than one individual and the complex, requiring more than one individual and the need for coordination is acute.need for coordination is acute.

Disbanded when need for coordination has been met.Disbanded when need for coordination has been met.

• Integrating DepartmentsIntegrating Departments Permanent organizational units that maintain internal Permanent organizational units that maintain internal

integration and coordination on an ongoing basis.integration and coordination on an ongoing basis. May have authority and budgetary controls. May have authority and budgetary controls.

• Electronic CoordinationElectronic Coordination E-mail, electronic scheduling, PDAs, cell phonesE-mail, electronic scheduling, PDAs, cell phones


Differentiating Between PositionsDifferentiating Between Positions

• Line PositionsLine Positions Positions in the direct chain of command responsible for the Positions in the direct chain of command responsible for the

achievement of an organization’s goals.achievement of an organization’s goals. Have formal (legitimate) authority.Have formal (legitimate) authority.

• Staff PositionsStaff Positions Positions intended to provide expertise, advice, and support to Positions intended to provide expertise, advice, and support to

line positions.line positions. Have advisory authority; can give compulsory advice.Have advisory authority; can give compulsory advice. Have functional authority to enforce compliance with organizational Have functional authority to enforce compliance with organizational

policies and procedures.policies and procedures.

• Administrative IntensityAdministrative Intensity The degree to which managerial positions are concentrated in The degree to which managerial positions are concentrated in

staff positions.staff positions.


Key TermsKey Terms

• organizingorganizing

• organization structureorganization structure

• job designjob design

• job specializationjob specialization

• job rotationjob rotation

• job enlargementjob enlargement

• job enrichmentjob enrichment

• job characteristics approachjob characteristics approach

• work teamswork teams

• departmentalizationdepartmentalization

• functional departmentalizationfunctional departmentalization

• product departmentalizationproduct departmentalization

• customer departmentalizationcustomer departmentalization

• location departmentalizationlocation departmentalization• chain of commandchain of command• span of managementspan of management• authorityauthority• delegation delegation • centralizationcentralization• coordinationcoordination• pooled interdependencepooled interdependence• sequential interdependencesequential interdependence• reciprocal interdependencereciprocal interdependence• line positionline position• staff positionstaff position• administrative intensityadministrative intensity

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