Authority & Control (1) (1).ppt

8/18/2019 Authority & Control (1) (1).ppt

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5-Copyright 2007 Prentice Hall 1


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Group Members


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Organizational Theory, Design, and Change

Fifth EditionGareth R. Jones

Chapter 3

Designing

OrganizationalStructure: Authority

and Control


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Learning Objectives

1. Explain why a hierarchy of authorityemerges in an organiation! an" theprocess of #ertical "i$erentiation

2. %iscuss the issues in#ol#e" in "esigning

a hierarchy to coor"inate an" moti#ateorganiational &eha#ior most e$ecti#ely

'. %iscuss the way in which the "esignchallenges "iscusse" in Chapter (pro#i"e metho"s of control thatsu&stitute for the "irect! personal controlthat managers pro#i"e an" a$ect the

"esign of the organiational hierarchy


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Learning Objectives(cont.)(. )ppreciate the principles of

&ureaucratic structure an" explaintheir implications for the "esign of

e$ecti#e organiational hierarchies5. Explain why organiations are

*attening their hierarchies an"

ma+ing more use of empowere"teams of employees! &oth insi"ean" across "i$erent functions


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TOP Managers andOrganizational Theory Authority: ,he power to hol" people

accounta&le for their actions an" to ma+e"ecisions concerning the use of

organiational resourcesShareholders: ,he ultimate

authority o#er the use of corporationsresources

,hey own the company

,hey exercise control o#er it through theirresponsi&ilities


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Top Managers andOrganizational Theory The Board of Directors: onitor

Corporate managers acti#ities an" rewar"managers who pursue acti#ities that satisfysta+ehol"er goals

Inside Directors: Hol" o/ces in a companysformal hierarchy

Out side Directors: ot full time employees

Corporate Level Management: ,he insi"e sta+ehol"er group that has ultimateresponsi&ility for setting company goals an"allocating organiational resources


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The hie! "#ecutiveO$cers ("O) esponsi&le for setting the organiations goals an"

"esigning its structure

3elects +ey executi#es to occupy the topmost le#els ofthe managerial hierarchy

%etermines top managements rewar"s an" incenti#es

Control the allocation of scare resources such asmoney an" %ecision ma+ing power among theorganiations functional areas or &usiness "i#isions

,he CE4s actions an" reputation ha#e a maor impacton insi"e an" outsi"e sta+ehol"ers #iews of theorganiation an" a$ect the organiations a&ility toattract resources from its en#ironment


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Top Management %ole

CE4- He has primary responsi&ilityfor managing the organiationrelationship with external

sta+ehol"ersC44- esponsi&le for managing the

organiation internal operations

Exec. 6ice Presi"ent- 4#ersees an"manages the companys mostsignicant line an" sta$ role


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The Top ManagementTeamLine ole: anagers who ha#e "irect

responsi&ility for the pro"uction of goo"s an"ser#ices

Sta! ole: anagers who are in chargeof a specic organiation functions such assales or esearch an" %e#elopment89%:

Are Advisory only


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Top Management Team

Top Management Teams : ) groupof managers who report to the CE4an" C44 an" help the CE4 3et the

company strategy an" its long termgoals an" o&ecti#es

Corporate Managers: ,he

mem&ers of top management teamwhose responsi&ility is to set strategyfor the corporation as a whole


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Other Managers

Divisional Managers: anagerswho set the policy for the "i#ision theyhea"

"unctional Managers; anagerswho are responsi&le for "e#eloping thefunctional s+ills an" capa&ilities that

collecti#ely pro#i"e the corecompetencies that gi#es theorganiation its competiti#e e"ges


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&uthority' o and *hy+ertical ,i-erentiationOccurs ,he hierarchy &egins to emerge

when the organiation experiencespro&lems in coor"inating an"

moti#ating employees %i#ision of la&or an" specialiationma+es it har" to "etermine howwell an in"i#i"ual performs

)lmost impossi&le to assessin"i#i"ual contri&utions toperformance when employeescooperate


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&uthority' o and *hy+ertical ,i-erentiation

Occurs (cont.) ,o "eal with coor"ination an"moti#ation pro&lems! theorganiation can;


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Occurs (cont.) 3ie an" height limitations Tall organi#ation; an organiation

in which the hierarchy has many

le#els relati#e to the sie of theorganiation

"lat organi#ation; anorganiation that has few le#els in

its hierarchy relati#e to its sie


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igure /01' lat and TallOrganizations


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Occurs (cont.)>y the time an organiation has1!000 mem&ers! it has ( le#els in itshierarchy

)t '!000 mem&ers! it li+ely has 7le#els

)fter 10!000 to 100!000!

organiations ha#e ? or 10 le#els


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igure /02' %elationship 3eteenOrganizational 4ize and 5umber o!

ierarchical Levels


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igure /.6' Types o!Managerial ierarchies


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igure /.7' %elationship 3eteenOrganizational 4ize and The 4ize o! theManagerial omponent


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Occurs (cont.) Pro&lems with tall hierarchies; Communication pro&lems;

communication ta+es longer an" isli+ely to &e "istorte"

oti#ation pro&lems; as hierarchyincreases! the relati#e "i$erence in theauthority possesse" managers at eachle#el "ecreases! as "oes their area ofresponsi&ility

@ess responsi&ility an" authority coul"re"uce moti#ation >ureaucratic costs; managers cost

money


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&uthority' o and *hy+ertical ,i-erentiation Occurs

(cont.) Par+insons @aw Pro&lem )rgues that the num&er of

managers an" hierarchies are

&ase" on two principles )n o/cial wants to multiply

su&or"inates! not ri#als

4/cials ma+e wor+ for one another


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Occurs (cont.)


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igure /0/' 4pans o!ontrol


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Occurs (cont.) Aactors that "etermine the appropriatespan of control ost important factor limiting span of

control is the managers ina&ility to

super#ise increasing num&er of su&or"inatesa"eBuately

,here seems to &e a limit to how wi"e amanagers span of control shoul" &e

%epen"ent on the complexity an"interrelate"ness of the su&or"inates tas+s Complex an" "issimilar tas+s small span

of control outine an" similar tas+s 8e.g.! mass

pro"uction: large span of control


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igure /08' 9ncreasing omple#ity o!Manager:s ;ob as the 4pan o!

ontrol 9ncreases


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igure /0


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ontrol' actors &-ectingthe 4hape o! theierarchy %ori#ontal di!erentiation; an

organiation that is "i#i"e" intosu&units has many "i$erent

hierarchies! not ust one Each function or "i#ision has its own

hierarchy

Horiontal "i$erentiation is theprincipal way an organiation retainscontrol o#er employees withoutincreasing the num&er of hierarchical

le#els


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igure /0=' orizontal,i-erentiation into unctional

ierarchies


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igure /.>' orizontal,i-erentiation *ithin the %?,

unctions


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ontrol' actors &-ectingthe 4hape o! the ierarchy

(cont.) Centrali#ation; with"ecentraliation! less "irectmanagerial super#ision is nee"e"

)uthority is "elegate" to thelower le#els

%ecentraliation "oes not

eliminate the nee" for manyhierarchical le#els in large!complex organiations )ssists relati#ely tall structures to &e

more *exi&le


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ontrol' actors &-ectingthe 4hape o! the ierarchy

(cont.) Standardi#ation; re"uces thenee" for le#els of management&ecause rules su&stitute for

"irect super#ision Dain control o#er employees &y

ma+ing their &eha#ior an" actions

more pre"icta&le


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The Principles o!3ureaucracy ax e&er "esigne" a hierarchy

so that it e$ecti#ely allocates"ecision-ma+ing authority an"

control o#er resources Bureaucracy; a form oforganiational structure in whichpeople can &e hel" accounta&le

for their actions &ecause they arereBuire" to act in accor"ance withrules an" stan"ar" operatingproce"ures


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The Principles o!3ureaucracy (cont.)$rinciple one; a &ureaucracy is

foun"e" on the concept ofrational-legal authority ational&legal authority: the

authority a person possesses&ecause of his or her position in an

organiation Hierarchy shoul" &e &ase" on the

nee"s of the tas+! not on personalnee"s


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The Principles o!3ureaucracy (cont.) $rinciple t'o: 4rganiational

roles are hel" on the &asis oftechnical competence! not

&ecause of social status! +inship!or here"ity

Principles one an" two esta&lish

the organiational role as the&asic component of organiationstructure


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The Principles o!3ureaucracy (cont.)$rinciple three: ) roles tas+

responsi&ility an" "ecision-ma+ingauthority an" its relationship toother roles in the organiation

shoul" &e clearly specie" ole con(ict; the state of opposition

that occurs when two or more peopleha#e "i$erent #iews of what another

person shoul" "o! an" as a result!ma+e con*icting "eman"s on thatperson

ole am)iguity; the uncertainty thatoccurs for a person whose tas+s orauthority are not clearly "ene"


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The Principles o!3ureaucracy (cont.) $rinciple four; the organiation

of roles in a &ureaucracy is suchthat each lower o/ce in the

hierarchy is un"er the controlan" super#ision of a highero/ce

4rganiations shoul" &e arrange"hierarchically so that people canrecognie the chain of comman"


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The Principles o!3ureaucracy (cont.) $rinciple *ve; rules! stan"ar"

operating proce"ures! an" normsshoul" &e use" to control the&eha#ior an" the relationships

among roles in an organiation ules an" 34Ps are written

instructions that specify a series ofactions inten"e" to achie#e a gi#en

en" orms are unwritten ules! 34Ps! an" norms clarify

peoples expectations an" pre#ent

misun"erstan"ing


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The Principles o!3ureaucracy (cont.) $rinciple si+; a"ministrati#e

acts! "ecisions! an" rules shoul"&e formulate" an" put in writing

>ureaucratic structure pro#i"es anorganiation with memory

4rganiational history cannot &ealtere"

d !


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&dvantages o!3ureaucracy


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The Problems o!3ureaucracy 4#er time managers fail to properly

control the "e#elopment of theorganiational hierarchy

4rganiational mem&ers come to relytoo much on rules an" stan"ar"operating proce"ures 834Ps: to ma+e"ecisions

3uch o#er reliance ma+es themunresponsi#e to the nee"s of customersan" other sta+ehol"ers

M b


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Management byObjectives Management )y o),ectives

-MBO.: a system of e#aluatingsu&or"inates on their a&ility to

achie#e specic organiationalgoals or performance stan"ar"san" to meet operating &u"gets


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4teps in Management byObjectives 3tep 1; 3pecic goals an"

o&ecti#es are esta&lishe" ateach le#el of the organiation

3tep 2; anagers an" theirsu&or"inates together "eterminethe su&or"inates goals

3tep '; anagers an" theirsu&or"inates perio"ically re#iewthe su&or"inates progress

towar" meeting goals

Th 9 @ ! th


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The 9n@uence o! the9n!ormal Organization%ecision ma+ing an" coor"ination

freBuently ta+es place outsi"e theformally "esigne" channels as peopleinteract

ules an" norms sometimes emerge fromthe interaction of people an" not from theformal rules &lueprint

anagers nee" to consi"er the informalstructure when they ma+e changes as itmay "isrupt informal norms that wor+


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9TA "mpoermentA and4el!0managed Teams ,he use of information technology

8


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9TA "mpoermentA and4el!0managed Teams

(cont.) /mpo'erment; the process ofgi#ing employees the authority toma+e important "ecisions an" to

&e responsi&le for their outcomes Self&managed teams; self-lea"

wor+ groups consisting of people

who are ointly responsi&le forensuring that the teamaccomplishes its goals

9T " t d


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9TA "mpoermentA and4el!0managed Teams

(cont.)Cross&functional teams; groups ofemployees from across anorganiations "i$erent functionswho are empowere" to "irect an"coor"inate the #alue-creationacti#ities

Contingent 'or0ers; wor+ers who

are employe" temporarily &y anorganiation an" who recei#e noin"irect &enets such as health

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Authority & Control (1) (1).ppt

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