Chapter 8 Concepts of Organizing. Chapter 8/Concepts of Organizing Hilgert & Leonard © 2001 8-2...

Chapter 8Concepts of Organizing

Chapter 8Concepts of Organizing

Chapter 8/Concepts of OrganizingHilgert & Leonard © 2001

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1.1. Identify the organizing function of management.Identify the organizing function of management.

2. 2. Explain the unity of command principle and its Explain the unity of command principle and its applications.applications.

3.3. Define the span of management principle and Define the span of management principle and the factors that influence its applications.the factors that influence its applications.

4.4. Describe departmentation and alternative Describe departmentation and alternative approaches for grouping activities and approaches for grouping activities and assigning work.assigning work.

5.5. Explain the importance of authority to Explain the importance of authority to supervisory management.supervisory management.

1.1. Identify the organizing function of management.Identify the organizing function of management.

2. 2. Explain the unity of command principle and its Explain the unity of command principle and its applications.applications.

3.3. Define the span of management principle and Define the span of management principle and the factors that influence its applications.the factors that influence its applications.

4.4. Describe departmentation and alternative Describe departmentation and alternative approaches for grouping activities and approaches for grouping activities and assigning work.assigning work.

5.5. Explain the importance of authority to Explain the importance of authority to supervisory management.supervisory management.

After studying this chapter, you will be able to:After studying this chapter, you will be able to:


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6.6. Explain the meaning of line and staff authority Explain the meaning of line and staff authority and how these influence organizational and how these influence organizational structures and supervisory relationships.structures and supervisory relationships.

7.7. Describe how functional authority may be Describe how functional authority may be granted to specialized staff for certain purposes.granted to specialized staff for certain purposes.

8.8. Discuss applications of matrix-type Discuss applications of matrix-type organizational structure.organizational structure.

9.9. Define downsizing (restructuring) and its Define downsizing (restructuring) and its implications for organizational principles.implications for organizational principles.

6.6. Explain the meaning of line and staff authority Explain the meaning of line and staff authority and how these influence organizational and how these influence organizational structures and supervisory relationships.structures and supervisory relationships.

7.7. Describe how functional authority may be Describe how functional authority may be granted to specialized staff for certain purposes.granted to specialized staff for certain purposes.

8.8. Discuss applications of matrix-type Discuss applications of matrix-type organizational structure.organizational structure.

9.9. Define downsizing (restructuring) and its Define downsizing (restructuring) and its implications for organizational principles.implications for organizational principles.

After studying this chapter, you will be able to:After studying this chapter, you will be able to:


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THE ORGANIZING FUNCTION OF THE ORGANIZING FUNCTION OF MANAGEMENTMANAGEMENT

THE ORGANIZING FUNCTION OF THE ORGANIZING FUNCTION OF MANAGEMENTMANAGEMENT

OrganizationOrganization——Group structured by management Group structured by management to carry out designated functions and accomplish to carry out designated functions and accomplish certain objectivescertain objectives

People are the substance and essence People are the substance and essence of any organization.of any organization.

Organizational success is more likely if employees Organizational success is more likely if employees are given top-priority attention by their managers are given top-priority attention by their managers and supervisors.and supervisors.

OrganizationOrganization——Group structured by management Group structured by management to carry out designated functions and accomplish to carry out designated functions and accomplish certain objectivescertain objectives

People are the substance and essence People are the substance and essence of any organization.of any organization.

Organizational success is more likely if employees Organizational success is more likely if employees are given top-priority attention by their managers are given top-priority attention by their managers and supervisors.and supervisors.

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THE UNITY OF COMAMAND PRINCIPLETHE UNITY OF COMAMAND PRINCIPLETHE UNITY OF COMAMAND PRINCIPLETHE UNITY OF COMAMAND PRINCIPLE

Unity of command principleUnity of command principle——Each employee Each employee has only one direct supervisor.has only one direct supervisor.

Having more than one direct Having more than one direct supervisor usually leads to supervisor usually leads to unsatisfactory performance by unsatisfactory performance by the employee due to confusion the employee due to confusion of authority.of authority.

Unity of command principleUnity of command principle——Each employee Each employee has only one direct supervisor.has only one direct supervisor.

Having more than one direct Having more than one direct supervisor usually leads to supervisor usually leads to unsatisfactory performance by unsatisfactory performance by the employee due to confusion the employee due to confusion of authority.of authority.

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THE SPAN OF MANAGEMENT THE SPAN OF MANAGEMENT PRINCIPLEPRINCIPLE


The principle that there is an upper limit to the number of subordinates that a supervisor can manage effectively.

Also called span of supervision, span of authority, and span of control.

The principle that there is an upper limit to the number of subordinates that a supervisor can manage effectively.

Also called span of supervision, span of authority, and span of control.

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FACTORS INFLUENCING THE FACTORS INFLUENCING THE SPAN OF MANAGEMENTSPAN OF MANAGEMENT


• Supervisory competence: Training, experience, and know-how have a direct impact on the number of employees who can be supervised effectively.

• Specialized staff assistance: Quality help from others in the organization.

• Employee abilities: The greater the employees’ capacity for self-direction, the greater the feasible managerial span.

• Supervisory competence: Training, experience, and know-how have a direct impact on the number of employees who can be supervised effectively.

• Specialized staff assistance: Quality help from others in the organization.

• Employee abilities: The greater the employees’ capacity for self-direction, the greater the feasible managerial span.

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• Location of employees: When located in close proximity to employee, observation and communication are relatively easy.

• Nature and complexity of activities: The simpler, routine, and more uniform the work activities, the greater number of people one supervisor can manage.

• Objective performance standards: Good performance standards support a broader span of management. Eliminates the need for frequent discussions concerning performance.

• Location of employees: When located in close proximity to employee, observation and communication are relatively easy.

• Nature and complexity of activities: The simpler, routine, and more uniform the work activities, the greater number of people one supervisor can manage.

• Objective performance standards: Good performance standards support a broader span of management. Eliminates the need for frequent discussions concerning performance.

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Relationship of Managerial Levels

Lead person—Employee placed in charge of other employees who performs limited managerial functions but is not considered part of management.

The narrower the span of management, the more managerial levels have to be introduced in organizational design. An organization’s structures tend to be taller when spans of management are narrower.

Relationship of Managerial Levels

Lead person—Employee placed in charge of other employees who performs limited managerial functions but is not considered part of management.

The narrower the span of management, the more managerial levels have to be introduced in organizational design. An organization’s structures tend to be taller when spans of management are narrower.

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RELATIONSHIP OF MANAGEMENT AND ORGANIZATIONAL LEVELSRELATIONSHIP OF MANAGEMENT AND ORGANIZATIONAL LEVELSRELATIONSHIP OF MANAGEMENT AND ORGANIZATIONAL LEVELSRELATIONSHIP OF MANAGEMENT AND ORGANIZATIONAL LEVELS 4


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DEPARTMENTATION AND APPROACHES DEPARTMENTATION AND APPROACHES FOR GROUPING ACTIVITIESFOR GROUPING ACTIVITIES


Division of work (specialization)—Dividing work into smaller components and specialized tasks to improve efficiency and output.

Department—Organizational unit for which a supervisor has responsibility and authority.

Flexible workforce—Employees trained in a variety of skills to perform multiple tasks.

Division of work (specialization)—Dividing work into smaller components and specialized tasks to improve efficiency and output.

Department—Organizational unit for which a supervisor has responsibility and authority.

Flexible workforce—Employees trained in a variety of skills to perform multiple tasks.

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• Functional departmentation: Grouping departments by the jobs to be done. Provides better coordination than having the same functions performed in different departments under different supervisors.

• Product or service departmentation: Grouping departments by product or service into relatively independent units within the organization.

• Functional departmentation: Grouping departments by the jobs to be done. Provides better coordination than having the same functions performed in different departments under different supervisors.

• Product or service departmentation: Grouping departments by product or service into relatively independent units within the organization.



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•Geographic (territorial, locational) departmentation: Units of organization are physically dispersed or functions performed in different locations.

•Customer departmentation: Grouping activities based on customer considerations to better service differing needs and characteristics of different customers.

•Geographic (territorial, locational) departmentation: Units of organization are physically dispersed or functions performed in different locations.

•Customer departmentation: Grouping activities based on customer considerations to better service differing needs and characteristics of different customers.



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• Process and equipment departmentation: Grouping activities by the process involved or equipment needed.

• Time departmentation: Grouping according to the time period during which the work is performed. Other factors, such as function and service, may also influence time and shift departmentation.

•Mixed departmentation: Use of several types of departmentation, such as functional, geographic, and time, simultaneously.

• Process and equipment departmentation: Grouping activities by the process involved or equipment needed.

• Time departmentation: Grouping according to the time period during which the work is performed. Other factors, such as function and service, may also influence time and shift departmentation.

•Mixed departmentation: Use of several types of departmentation, such as functional, geographic, and time, simultaneously.



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MIXED DEPARTMENTATIONMIXED DEPARTMENTATIONMIXED DEPARTMENTATIONMIXED DEPARTMENTATION 4


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Work Assignments and Organizational Stability

Work Assignments and Organizational Stability

Principle of organizational stability—No organization should become overly dependent on one or several key “indispensable” individuals.

A supervisor’s task of assigning departmental work will be less difficult by consistently utilizing the strengths and experience of all employees.

Principle of organizational stability—No organization should become overly dependent on one or several key “indispensable” individuals.

A supervisor’s task of assigning departmental work will be less difficult by consistently utilizing the strengths and experience of all employees.

DEPARTMENTATION AND DEPARTMENTATION AND APPROACHES FOR GROUPING APPROACHES FOR GROUPING

ACTIVITIESACTIVITIES

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IMPORTANCE OF AUTHORITY TO IMPORTANCE OF AUTHORITY TO SUPERVISORY MANAGEMENTSUPERVISORY MANAGEMENT


Understanding Managerial Authority and Its Delegation


Managerial authority—The legitimate right to direct and lead others.

Delegation of authority—The process of assigning duties and related authority to subordinates.

Managerial authority—The legitimate right to direct and lead others.

Delegation of authority—The process of assigning duties and related authority to subordinates.

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• In order to learn how to give an order, you must first learn how to take an order.

• If you give people a job to do, give them the authority they need to carry out their responsibilities.

• In order to learn how to give an order, you must first learn how to take an order.

• If you give people a job to do, give them the authority they need to carry out their responsibilities.

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UNDERSTANDING MANAGERIAL UNDERSTANDING MANAGERIAL AUTHORITY AND ITS DELEGATIONAUTHORITY AND ITS DELEGATIONUNDERSTANDING MANAGERIAL UNDERSTANDING MANAGERIAL

AUTHORITY AND ITS DELEGATIONAUTHORITY AND ITS DELEGATION

Acceptance Theory of Authority: A manager only possesses authority when the employee accepts it Acceptance Theory of Authority: A manager only possesses authority when the employee accepts it

The origin of authority can be considered from two viewpoints:

• The formal way that originates from the top and reaches down

• As something subordinates confer on a supervisor by the degree of willingness they accept or respond to direction.

The origin of authority can be considered from two viewpoints:

• The formal way that originates from the top and reaches down

• As something subordinates confer on a supervisor by the degree of willingness they accept or respond to direction.

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LIMITATIONS TO AUTHORITYLIMITATIONS TO AUTHORITYLIMITATIONS TO AUTHORITYLIMITATIONS TO AUTHORITY

Limitations to a supervisor’s authority may arise from many factors, both within and outside of the company. Some of these are:

Limitations to a supervisor’s authority may arise from many factors, both within and outside of the company. Some of these are:

• Explicit and implicit

• External and internal

• Political

• Legal

• Explicit and implicit

• External and internal

• Political

• Legal

• Ethical

• Moral

• Social

• Economic

• Ethical

• Moral

• Social

• Economic

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LINE AND STAFF AUTHORITY AND ITS LINE AND STAFF AUTHORITY AND ITS INFLUENCEINFLUENCE

LINE AND STAFF AUTHORITY AND ITS LINE AND STAFF AUTHORITY AND ITS INFLUENCEINFLUENCE

Organization chart—Graphic portrayal of authority and responsibility relationships

Line authority—The right to direct others and to require them to conform to decisions, policies, rules, and objectives.

Line-type organizational structure—Structure that consists entirely of line authority arrangement with a direct chain of authority relationships.

Organization chart—Graphic portrayal of authority and responsibility relationships

Line authority—The right to direct others and to require them to conform to decisions, policies, rules, and objectives.

Line-type organizational structure—Structure that consists entirely of line authority arrangement with a direct chain of authority relationships.

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LINE AND STAFF AS AUTHORITY LINE AND STAFF AS AUTHORITY RELATIONSHIPSRELATIONSHIPS

LINE AND STAFF AS AUTHORITY LINE AND STAFF AS AUTHORITY RELATIONSHIPSRELATIONSHIPS

All supervisors should know whether they are part of the organization in a line or staff capacity, and what these words imply in relation to their positions and other departments.

All supervisors should know whether they are part of the organization in a line or staff capacity, and what these words imply in relation to their positions and other departments.

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LINE TYPE OF ORGANIZATIONAL STRUCTURELINE TYPE OF ORGANIZATIONAL STRUCTURELINE TYPE OF ORGANIZATIONAL STRUCTURELINE TYPE OF ORGANIZATIONAL STRUCTURE6


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LINE AND STAFF TYPE LINE AND STAFF TYPE ORGANIZATIONAL STRUCTUREORGANIZATIONAL STRUCTURE


Staff authority—The right to provide counsel, advice, support, and service in a person’s area of expertise.

Line department—Department whose responsibilities are directly related to making, selling, or distributing the company’s product or service.

Staff authority—The right to provide counsel, advice, support, and service in a person’s area of expertise.

Line department—Department whose responsibilities are directly related to making, selling, or distributing the company’s product or service.

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Staff department—Specialized department responsible for supporting line departments and providing specialized advice and services.

Line-and-staff-type organizational structure—Structure that combines line and staff departments.

Staff department—Specialized department responsible for supporting line departments and providing specialized advice and services.

Line-and-staff-type organizational structure—Structure that combines line and staff departments.

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LINE-AND-STAFF TYPE LINE-AND-STAFF TYPE ORGANIZATIONAL STRUCTUREORGANIZATIONAL STRUCTURE

LINE-AND-STAFF TYPE LINE-AND-STAFF TYPE ORGANIZATIONAL STRUCTUREORGANIZATIONAL STRUCTURE

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SUPERVISORS AND THE HUMAN SUPERVISORS AND THE HUMAN RESOURCES DEPARTMENTRESOURCES DEPARTMENT


Human resources management (HRM) —Organizational philosophies, policies, and practices that strive for the effective use of employees.

Human resources department—Staff department which provides advice

and service to other departments on human resources matters.

Human resources management (HRM) —Organizational philosophies, policies, and practices that strive for the effective use of employees.

Human resources department—Staff department which provides advice

and service to other departments on human resources matters.

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In most organizations, the director of human resources and the human resources operate in a staff capacity.

In most organizations, the director of human resources and the human resources operate in a staff capacity.

Human resources departmentsare becoming more strategic within an organization. Effectiveness depends on how clearly top-level managers have defined their activities and authority.

Human resources departmentsare becoming more strategic within an organization. Effectiveness depends on how clearly top-level managers have defined their activities and authority.

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FUNCTIONAL AUTHORITYFUNCTIONAL AUTHORITYFUNCTIONAL AUTHORITYFUNCTIONAL AUTHORITY

Principle of compulsory staff advice (service)—Situation in which supervisors are required to consult with specialized staff before making certain decisions.

Functional authority—Granted to specialized staff people to give directives concerning matters within their expertise.

Principle of compulsory staff advice (service)—Situation in which supervisors are required to consult with specialized staff before making certain decisions.

Functional authority—Granted to specialized staff people to give directives concerning matters within their expertise.

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MATRIX-TYPE ORGANIZATIONAL MATRIX-TYPE ORGANIZATIONAL STRUCTURESTRUCTURE


A hybrid structure in which regular functional departments co-exist with project teams from different departments.

Many high-tech firms employ project (matrix) structures to focus special talents from different departments on specific projects for certain periods.

A hybrid structure in which regular functional departments co-exist with project teams from different departments.

Many high-tech firms employ project (matrix) structures to focus special talents from different departments on specific projects for certain periods.

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MATRIX-TYPE ORGANIZATIONAL STRUCTUREMATRIX-TYPE ORGANIZATIONAL STRUCTUREMATRIX-TYPE ORGANIZATIONAL STRUCTUREMATRIX-TYPE ORGANIZATIONAL STRUCTURE

DepartmentSupervisorFunction X

ManagerProject A

ManagerProject B

DepartmentSupervisorFunction Y

DepartmentSupervisorFunction Z

President

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Problems Problems associated associated with matrix with matrix organization organization structure structure include:include:

Problems Problems associated associated with matrix with matrix organization organization structure structure include:include:

• Direct accountability—violates the principle of Direct accountability—violates the principle of unit of commandunit of command

• Priorities of scheduling for individuals assigned Priorities of scheduling for individuals assigned to work on several projectsto work on several projects

• Direct accountability—violates the principle of Direct accountability—violates the principle of unit of commandunit of command

• Priorities of scheduling for individuals assigned Priorities of scheduling for individuals assigned to work on several projectsto work on several projects

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DOWNSIZING AND ITS IMPLICATIONS


Large-scale reduction and elimination of jobs that usually results in reduction of middle-level managers, removal of organizational levels, and a widened span of management for remaining supervisors.

Large-scale reduction and elimination of jobs that usually results in reduction of middle-level managers, removal of organizational levels, and a widened span of management for remaining supervisors.

Also called Also called RestructuringRestructuring or or Right-sizingRight-sizingAlso called Also called RestructuringRestructuring or or Right-sizingRight-sizing

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Some middle-level management and staff positions have been eliminated because information technology has made it possible for higher-level managers to acquire data quickly and keep in close touch with operations.

Organizations that downsized most effectively are those that have planned for it and have tried to harmonize the new structure with the old.

Some middle-level management and staff positions have been eliminated because information technology has made it possible for higher-level managers to acquire data quickly and keep in close touch with operations.

Organizations that downsized most effectively are those that have planned for it and have tried to harmonize the new structure with the old.

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Re-engineering—Restructuring on the basis of processes and customer needs and services, rather than by department and functions.

Horizontal corporation—A firm restructured by customer process and organizational structure is very flattened.

Virtual corporation—Companies linking together on a temporary basis to take advantage of marketplace opportunities.

Re-engineering—Restructuring on the basis of processes and customer needs and services, rather than by department and functions.

Horizontal corporation—A firm restructured by customer process and organizational structure is very flattened.

Virtual corporation—Companies linking together on a temporary basis to take advantage of marketplace opportunities.

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