Mr. SherpinskyBusiness Management ClassCouncil Rock School District

ORGANIZING WORKChapter 6

Goals & Objectives1. Define

organization, and differentiate between a formal and an informal organization

2. Distinguish between power, authority and responsibility

3. Explain the concept of centralization versus decentralization

4. Define empowerment

5. Identify several reasons why managers are reluctant to delegate authority

6. Explain flextime, telecommuting and job sharing, and discuss their respective impact on the organization of work

Taco BarnThe World of WorkCustomer Service by Foreign Firms

Page 119 TextbookDiscuss Questions

1-4

Warm Up

What is an Organization?• A group of people working

together in a coordinated effort to reach certain goals– Efficiency– Effectiveness– Better Results

• Manager’s role in organization– To ensure that everyone in the

organization works together in a coordinated manner

Organizing Work• Organization Defined:

– A group of people working together in some type of concentrated or coordinated effort

• Process of organizing– Grouping of activities– Assigning each grouping– Manager should have authority

to supervise the people and activities

Organizing Work• Basically, a process of

division of labor accompanied by appropriate delegation of authority.– Directly relates to more

effective use of resources

Organizing Work• Formal Organization:

– Structure that defines the boundaries of the organization and within which the organization operates

• Informal Organization: – Aggregate of the personal

contacts and interactions and associated groupings of people working within the formal organization

Why Organize Their Workforce?1. To create clear lines of authority

a) Absence of authority almost always causes chaos

2. To improve productivitya) More efficiency and higher quality of workb) Synergy (More than the sum of the parts)c) Provide a sense of stability and belonging

when working for an effective organization3. To improve communication

a) Defines channels of communicationAll with a focus to increase profit

Establishing Lines of Authority• Authority: Power based on the

rights that come with a position– President: Can order troops into battle– CEO: To make important decisions– Store Managers: To approve returns or

offer discounts on damaged merchandise• Ensures that those making decisions

are qualified and are made at the appropriate level

• Chain of Command: The line of authority within an organization

Advantages of a Well-Defined Chain of Command

• Makes it easy for all to understand who is in charge

• Problems are addressed at the lowest possible level

Disadvantages of a Well-Defined Chain of Command

• Can create problems if structure is too rigid or too complicated

• Too many layers!– Assigning responsibility

will be difficult– Decisions are made

slowly, often by people with only a limited understanding of the issues involved

BLOG: Reflection• What ways do you organize

your personal lives?• What does authority mean to

you?• What role does authority play

in:– Parenting– Education– Levels of government

Division of Labor• Organizing is basically a

process of division of labor– Benefits are known for

centuries• Two ways labor can be

divided:– Vertical– Horizontal

Division of Labor• Vertical

– Based on the establishment of lines of authority

– Defines the levels that make up the vertical organization

– Facilitates the flow of communication

Division of Labor• Horizontal

– Based on the specialization of work

– Underlying assumptions:• By making the

worker’s task specialized you can produce more with same effort

Division of Labor• Horizontal

Advantages– Fewer skills per worker– Easier to train– Higher proficiency– Focus worker abilities– Simultaneous operations– More conformity in final

product

Division of Labor• Horizontal

Disadvantages– Job Boredom

– Leads to lower productivity, absenteeism and lateness increase, quality of work declines

– Humiliation of employees

Improving Productivity• Specialization

– Groups of workers perform very specific tasks or sets of tasks based on a skill level

• Job Rotation– Periodically moving workers from

one job to another• Job Scope

– Number of operations involved in a job

• Narrow Scope vs. Broad Scope• Job Depth

– Freedom employees have to plan and organize their work, interact with co-workers, and work at their own pace

Division of Labor• Doesn’t work or even

desirable in all situations• At least two basic requirements

must exist for the successful use of division of labor:– Relatively large volume of

work• Allows for specialization• Keeps everyone busy

– Stability• Volume of work, attendance,

quality of raw materials, product design, and production technology

Marshmallow Activity!!!• Teams form assembly lines

to build marshmallow/toothpick towers (at least 12 inches high), using 40 toothpicks and 60 marshmallows

• Post activity discussion:– How did you organized this

project?

Power, Authority, Responsibility

• Power: the ability to influence, command, or apply force

• Authority: power derived from the rights that come with a position and represents the legitimate exercise of power– One source of power for manager– Lines of authority link the various

organizational components• Without them confusion, conflict, and

chaos

Power, Authority, Responsibility

• Responsibility: the accountability for:– The achievement of objectives– The use of resources– The adherence to organizational

policy• Once accepted, work becomes

obligation

Sources of Authority• Function of position

– Chain of command• Formal Theory of Authority

– Top people chose lower people• Theory of Acceptance

– Cooperation

Centralization vs. Decentralization

• Refers to the degree of authority delegated by upper management

• Refers to the numbers and kinds of decisions made by lower levels of management– The more decisions made by

lower levels, the more decentralization increases

Centralization vs. Decentralization

• Centralization – Top Managers or key positions make most of the important decisions– Advantages:

• Extremely efficient regarding business decisions

• Easier to develop the company’s mission and vision, and set objectives

– Disadvantages:• Organizations can suffer from the

negative effects of several layers of bureaucracy.

• Multiple management layers stretching from the owner down to frontline operations

• May require more time to make decisions

Centralization vs. Decentralization• Decentralization –

Managers at all levels make decisions– Advantages:

• Increases an organization’s ability to respond to market changes by allowing decisions to be made by managers who are close to their customers

• Frees senior managers from many day-to-day tasks

• Increases lower-level managers’ job scope which increasing their responsibility and interest on the job

– Disadvantages:• Can result in a loss of managerial

control• Duplication of effort

Empowerment• EMPOWERMENT:

A form of decentralization– Giving subordinates

substantial authority to make decisions

– Requires trust and confidence

Empowerment• To work, empowerment must

have these characteristics– Participation– Innovation– Access to information– Accountability

Empowerment• Organizations can create

more empowerment by– Restructuring units to be smaller– Reducing hard rules– Emphasizing a change throughout

the organization– Providing training and education

• Self-managed work teams– Work units without a frontline

manager and empowered to do their own work

Authority and Delegation• Parity principle

– States authority and responsibility must coincide

– Delegate sufficient authority to allow subordinates to do their job

• Subordinate: – Person holding a lower

position within an organization

Why Delegate?1. Task is too time-consuming to

handle alone2. Task is too routine to warrant

a manager’s attention3. Task requires special skills

that a manager may not possess

• Benefits of Delegating– Decisions are made by people with

the most direct knowledge of issues– Employees feel that management has

confidence in their abilities when work is delegated to them

– Employees are more committed– Increase employees’ job skills and

knowledge of the organization

Authority and Delegation• Reluctance to

delegating– Fears subordinates will fail in

doing the task– Easier to it yourself– Humans’ attraction to power– Comfort in doing the tasks in

previous jobs held– Preconceived ideas about

employees– Desire to set the right example

Authority and Delegation• Reasons to

delegate– Time is free– Subordinates gain

feelings of belonging and being needed

– Commitment on the part of the subordinates

– Satisfying customers

Learning to Delegate1. Analyze how you spend your time as

manager2. Identify tasks that could be handled by

subordinates3. Determine which subordinates could best

handle them4. Make sure subordinate understands and

accepts responsibility for the task he or she is being given

5. Clearly define objectives of all tasks6. Set standards 7. Provide appropriate training

Authority and Delegation• How to delegate

– Define objectives and standards– Involve subordinates in the delegation process– Initiate training that encourages delegation– Control the delegation

• Exception principle– Managers should concentrate their efforts on

matters that deviate significantly from normal and let subordinates handle routine matters

Authority and Delegation• Unity of command

principle– An employee should

have one and only one immediate manager• Avoids confusion and

conflict• Scalar principle

– Authority in organizations flow through a chain of managers one link at a time

Authority and Delegation• Span of

management– Refers to the number of

subordinates a manager can effectively manage

– Optimum number depends on complexity, variety and proximity of the jobs, the people filling the jobs and ability of manager

Workplace Changes• Flextime

– Allows employees to choose within certain limits when they start and end their workday

– Can accommodate work styles and schedules but may result in communication problems

Workplace Changes• Telecommuting

– Practice of working at home while traveling and being able to interact with the office using technology

– Can create lower turnover, reduce travel times and avoid rush hour

Workplace Changes• Job sharing

– Two or more part-time employees perform one full-time job together

– How to handle benefits, pay and communication a concern

– Can be motivating to employees

Characteristics of Highly Effective Organizations

• Responsive to the market• Customer centered• Committed to maintaining networks and alliances• Developed around a vision• Focused on creating top-quality products and

services• Dedicated to positive learning and change• Attentive to meeting responsibilities to customers,

employees, suppliers, and society• Committed to measuring their progress against

world-class standards of excellence• Able to respond to changing market conditions

quickly

Traditional Manager Team Manager Thinks of self as a manager or boss

Follows the chain of command

Works within a set organizational structure

Makes most decisions alone

Hoards information Tries to master one discipline

Demands long hours

Sponsor, Team Leader, Internal Consultant Deals with anyone necessary to get the job done Changes organizational structure in response to market changes Invites others to join in decision-making Shares information Tries to master a broad array of managerial disciplines Demands results

The team manager represents one who is more of a team player than a boss. What are the benefits of this new type of management?

Reflection• What do you respect about

authority and how do you work best with it– Teacher – Student– Parent – Child– Coach – Player– Supervisor – Employee

• What are the advantages and disadvantages of working in teams?

• What role does responsibility play?