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bateman.Chap008.2 - Chapter 8 Chapter 8 Organization...

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Unformatted text preview: Chapter 8 Chapter 8 Organization Structure Question of the Day Question 1. 2. Borders Group (Books) posted a wider 2010 loss than projected leading senior management to promise a restructuring by mid year. This caused disruptions through layoffs, changes in work flow and performance implications. What is involved in restructuring? How does restructuring impact organization effectiveness? “Take my assets­­but leave me my organization and in five years I’ll have it all back.” ­Alfred P. Sloan Jr. Fundamentals of Organizing Fundamentals Organization chart • The reporting structure and division of labor in an organization 8­4 Organization Chart Chain of Command Input Transaction Work Done Work Specialization Product Disposal Fundamentals of Organizing Fundamentals Differentiation • Job specialization and the division of labor Requires... Integration • The degree to which differentiated work units work together and coordinate their efforts Conventional Organization Chart Chart Authority in Organizations Authority Authority • The legitimate right to make decisions and to tell other people what to do Board of directors • Select, assess, reward, and perhaps replace the CEO • Determine the firm’s strategic direction and review financial performance • Assure ethical, socially responsible, and legal conduct Chief executive officer (CEO) • The authority officially vested in the board of directors is assigned to the CEO Top management team • CEO and other top executives Authority in Organizations Authority 8­9 Span of Control Span Span of control • The number of subordinates who report directly to an executive or supervisor Span of control should be wider when: The work is clearly defined and unambiguous Subordinates are highly trained and have access to information • The manager is highly capable and supportive • Jobs are similar and performance measures are comparable • Subordinates prefer autonomy to close supervisory control • • Organization Shape Organization Flat structure Levels = 3 Span of Control = 7 Total Employees = 57 Tall structure Levels = 4 Span of Control = 3 Total Employees = 40 Key Terms Key Delegation • The assignment of new or additional responsibilities to a subordinate Responsibility • The assignment of a task that an employee is supposed to carry out Accountability • The expectation that employees will perform a job, take corrective action when necessary, and report upward on the status and quality of their performance Advantages of delegation • Leverages managers’ energy and talent • Allows managers to accomplish more than they could on their own Question #1 Question What is the assignment of new or additional responsibilities to a subordinate? A.Subordination B.Delegation C.Designation D.Allocation 8­13 Steps in Effective Delegation Steps Figure 8.2 8­14 Centralization versus Decentralization Decentralization Centralization means that decision authority is located near the top of the organization. Decentralization means decision authority is pushed downward to lower organizational levels. Line and Staff Authority Line Line Authority = individuals in management positions have the formal power to direct and control immediate subordinates Staff Authority = granted to staff specialists in their area of expertise The Functional Organization The Functional organization • Departmentalization around specialized activities such as production, marketing, and human resources Advantages of functional organizations Economies of scale can be realized Effective monitoring of the environment Performance standards better maintained Greater opportunity for specialized training and skill development • Technical specialists are relatively free of administrative work • Decision making and lines of communication are simple and clearly understood • • • • The Functional Organization The 8­18 Figure 8.3 The Divisional Organization The Divisional organization • Departmentalization that groups units around products, customers, or geographic regions Advantages of divisional organizations Information needs are managed more easily People have a full­time commitment to a particular product line • Task responsibilities are clear • People receive broader training • • The Divisional Organization The Figure 8.4 8­20 The Matrix Organization The Matrix organization • An organization composed of dual reporting relationships in which some managers report to two superiors­­a functional manager and a divisional manager Advantages of matrix organizations • • Higher degree of flexibility Higher degree of adaptability Unity­of­command principle • A structure in which each worker reports to one boss, who in turn reports to one boss Dual Authority Structure in a Matrix Organization Organization The Network Organization The Question #2 Question ___________ is establishing common routines and procedures that apply uniformly to everyone. A.Coordination by standardization B.Coordination by plan C.Coordination by mutual adjustment D.Coordination by service 8­24 Organizational Integration Organizational Coordination by standardization Coordination by plan Coordination by mutual adjustment Coordination and communications Coordination by Mutual Adjustment Adjustment Coordination by mutual adjustment • Units interact with one another to make accommodations in order to achieve flexibility • Involves feedback and discussions to jointly approach problems and devise solutions • Can be effective when problems are novel and cannot be programmed in advance with rules, procedures, or plans 5 Approaches to Structure Approaches (WHICH IS “CORRRECT”?) Vertical Divisional Matrix Team Virtual Network 2 Approaches to Structural Design Approaches Two basic structures - examples Environmental Uncertainty and the Performance of Horizontal and Vertical Structure Vertical Horizontal structures and adaptive designs Strategic focus: innovation and flexibility Vertical structures and bureaucratic designs Strategic focus: efficiency and predictability Low High Environmental Uncertainty Chapter Exercise Chapter Work in small groups to resolve this: Joe supervises a group of 7 design engineers & reports to the VP of R&D. His unit is experiencing a heavy work load as demand for the firm’s computer components grows. Joe has 4 customizing projects to supervise and does not have enough time to monitor all 4 plus do his job. What should Joe do in terms of an organization structure for his team? ...
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