Part III Organizing Chapter 5 Fundamentals of Organizing

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Part III OrganizingChapter 5 Fundamentals of
Organizing
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Learning Objectives

• After studying the part III, you should be able
  to
• 1. Identify the factors that influence managers
  choice of an organizational structure.
• 2. Explain how managers group tasks into jobs
  that are motivating and satisfying for employees.
• 3. Describe the types of organizational
  structures managers can design, and explain why
  they choose one structure over another.
• 4. Explain why there is a need to both centralize
  and decentralized authority.

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Learning Objectives (contd)

• 5. Explain why managers must coordinate and
  integrate between jobs, functions, and divisions
  as an organization grows.
• 6. Explain why managers who seek new ways to
  increase efficiency and effectiveness are using
  strategic alliances and network structures.

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Chapter Outline
I. Organizational Structure
Fundamentals of Organizing
II. Job Design
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Chapter 5 Introduction

• I. Organizational Structure
• The Organizational Environment
• Strategy
• Technology
• Human Resources
• II. Job Design
• Job Enlargement and Job Enrichment
• The Job Characteristics Model

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I. Organizational Structure

• Organizational Architecture
• The organizational structure,
• control systems, culture, and
• human resource management
• systems that together
• determine how efficiently
• and effectively organizational
• resources are used.

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I. Organizational Structure

• Organizing ??
• The process by which managers establish working
  relationships among employees to achieve goals.
• Organizational Structure ????
• Formal system of task and reporting relationships
  showing how workers use resources.
• Organizational Design ????
• The process by which managers make specific
  choices that result in a particular kind of
  organizational structure.

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Figure 5.1Factors Affecting Organizational
Structure
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? 5.1 ?????????
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• 1. The Organizational Environment ????
• The quicker the environment changes, the more
  problems face managers.
• Structure must be more flexible (i.e.,
  decentralized authority) when environmental
  change is rapid.

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2. Strategy ??

• Different strategies require the use of different
  structures.
• A differentiation strategy needs a flexible
  structure, low cost may need a more formal
  structure.
• Increased vertical integration or diversification
  also requires a more flexible structure.

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3. Technology ??

• The combination of skills, knowledge, tools,
  equipment, computers and machines used in the
  organization.
• More complex technology makes it harder for
  managers to regulate the organization.

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3.1 Measurement of Technology ?????

• Technology can be measured by
• Task variety????? the number of new problems a
  manager encounters.
• Task analyzability?????? the availability of
  programmed solutions to a manager to solve
  problems.
• High task variety and low analyzability present
  many unique problems to managers.
• Flexible structure works best in these
  conditions.
• Low task variety and high analyzability allow
  managers to rely on established procedures.

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3.2 Types of Technology ?????

• Small Batch Technology?????
• Small quantities of one-of-a-kind products are
  produced by the skills of the workers who work
  together in small groups.
• Appropriate structure is decentralized and
  flexible.
• Mass Production Technology???????
• Automated machines that are programmed to make
  high volumes of standard products.
• Formal structure is the best choice for workers
  who must perform repetitive tasks.

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3.2 Types of Technology

• Continuous Process Technology ????
• Totally mechanized systems of automatic machines.
• A flexible structure is necessary to allow
  workers to react quickly to unexpected problems.
• Information Technology (IT)????
• Knowledge management
• The sharing and integrating of expertise within
  and between functions and divisions through
  realtime, interconnected IT that allows for new
  kinds of tasks and job reporting relationships.

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4. Human Resources ????

• Highly skilled workers whose jobs require working
  in teams usually need a more flexible structure.
• Higher skilled workers (e.g., CPAs and doctors)
  often have internalized professional norms.
• Managers must take into account all four factors
  (environment, strategy, technology and human
  resources) when designing the structure of the
  organization.

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II. Job Design ????

• 1. Job Design ????
• The process by which managers decide how to
  divide tasks into specific jobs.
• The appropriate division of labor results in an
  effective and efficient workforce.
• 2. Job Simplification ?????
• The process of reducing the tasks each worker
  performs.
• Too much simplification and boredom results.

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II. Job Design

• 3. Job Enlargement ?????
• Increasing the number of tasks for a given job to
  reduce boredom.
• 4. Job Enrichment ?????
• Increasing the degree of responsibility a worker
  has over a job.
• can lead to increased worker involvement.

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Figure 5.2 The Job Characteristics Model
??????
Source Adapted from J. R. Hackman and G. R.
Oldham, Work Redesign (Reading, MA
Addison-Wesley, 1980).
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? 5.2 ??????
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Job Characteristics Model
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Part III OrganizingChapter 6 Organization
Structure
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Chapter Outline

• Grouping Jobs into
• Functions and Divisions

Organization Structure
II. Coordinating Functions and Divisions
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Chapter 6 Introduction

• I. Grouping Jobs into Functions and Divisions
• Functional Structure
• Divisional Structure Product, Market, Geographic
• Matrix Structure
• Product Team Structure
• Hybrid Structure
• II. Coordinating Functions and Divisions
• Allocating Authority
• Types of Integrating Mechanisms
• Strategic Alliances,B2B Network Structures and IT

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I. Grouping Jobs into Functions and Divisions
?????????

• 1. Functional Structure ????
• An organizational structure composed of all the
  departments that an organization requires to
  produce its goods or services.
• Advantages
• - Encourages learning from others doing similar
  jobs.
• - Easy for managers to monitor and evaluate
  workers.

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I. Grouping Jobs into Functions and Divisions

• 1. Functional Structure ????
• Disadvantages
• -Difficult for departments to communicate with
  others.
• -Preoccupation with own department and losing
  sight of organizational goals.

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Figure 6.1 The Functional Structure of Pier 1
Imports
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2. Divisional Structure ????

• An organizational structure composed of separate
  business units within which are the functions
  that work together to produce a specific product
  for a specific customer.

• -Divisions create smaller, manageable parts of a
  firm.
• -Divisions develop a business-level strategy to
  compete.
• -Divisions have marketing, finance, and other
  functions.
• -Functional managers report to divisional
  managers who
• then report to corporate management.

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Product, Market, and Geographic Structures
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2.1 Product Structure ????

• Customers are served by self-contained divisions
  that handle a specific type of product or
  service.
• - Allows functional managers to specialize in one
  product area
• - Division managers become experts in their area
• - Removes need for direct supervision of division
  by corporate managers
• - Divisional management improves the use of
  resources

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Figure 6.2 Viacoms 2001 Product
Structure
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2.2 Geographic Structure ????

• Each regional or a country or area with customers
  with differing needs is served by a local
  self-contained division producing products that
  best meet those needs.

• Global geographic structure ??????
• Different divisions serve each world region when
  managers find different problems or demands
  across the globe.
• Generally, occurs when managers are pursuing a
  multidomestic strategy

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2.3 Market (Customer) Structure??(??)??

• Each kind of customer is served by a
  self-contained division
• Global market (customer) structure
• ????(??)??
• Customers in different regions buy similar
  products so firms can locate manufacturing
  facilities and product distribution networks
  where they decide is best.
• Firms pursuing a global strategy will use this
  type of structure.

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Figure 6.3 Global Geographic and Global
Product Structures
?????????
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-Results in a complex network of
superior-subordinate reporting
relationships.-The structure is very flexible
and can respond rapidly to the need for
change.-Each employee has two bosses (functional
manager and product manager) and possibly
cannot satisfy both.

• 3. Matrix Structure ????
• Matrix Structure An organizational structure
  that simultaneously groups people and resources
  by function and product.

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Figure 6.4 Matrix Structure ????
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4. Product Team Design Structure??????

• Product Team Structure
• The members are permanently assigned to the team
  and empowered to bring a product to market.
• Avoids problems of two-way communication and the
  conflicting demands of functional and product
  team bosses.
• Cross-functional team is composed of a group of
  managers from different departments working
  together to perform organizational tasks.

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Figure 6.5 Product Team Structure??????
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5. Hybrid Structure ????

• Hybrid Structure
• The structure of a large organization that has
  many divisions an simultaneously uses many
  different organizational structures
• Managers can select the best structure for a
  particular divisionone division may use a
  functional structure, another division may have a
  geographic structure.
• The ability to break a large organization into
  smaller units makes it easier to manage.

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Figure 6.6 Targets Hybrid Structure
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II. Coordinating Functions Allocating
Authority ?????????

• Authority ??
• The power to hold people accountable for their
  actions and to make decisions concerning the use
  of organizational resources.

• Hierarchy of Authority ??????
• An organizations chain of command, specifying
  the relative authority of each manager.
• Span of Control refers to the number of workers
  a manager manages.

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• Span of Control ????
• The number of subordinates that report directly
  to a manager
• Line Manager ?????
• Managers in the direct chain of command who have
  authority over people and resources lower down.
• Primarily responsible for the production of goods
  or services.
• Staff Manager ?????
• Managers who are functional-area specialists that
  give advice to line managers.

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Figure 6.7 The Hierarchy of Authority and Span
of Control at McDonalds Corporation
Source
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1. Tall and Flat Organizations ?????????

• - Tall structures have many levels of authority
  and narrow spans of control.
• As hierarchy levels increase, communication gets
  difficult creating delays in the time being taken
  to implement decisions.
• Communications can also become garbled as it is
  repeated through the firm.

• - Flat structures have fewer levels and wide
  spans of control.
• Structure results in quick communications but can
  lead to overworked managers.

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Figure 6.8 Tall Organizations ?????
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Figure 6.9 Flat Organizations ?????
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• Managers should carefully evaluate
• Do the organization have the right number of
  middle managers?
• Can the structure be altered to reduce levels?
• Centralized and Decentralized of Authority
• Decentralization puts more authority at lower
  levels and leads to flatter organizations.
• Works best in dynamic, highly competitive
  environment.
• Stable environment favor centralization of
  authority.

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2. Types of Integrating Mechanisms
???????

• Direct contact ????
• Liason roles ????
• Task forces ?????
• Cross-functional team ?????
• Integrating roles and departments
• ???????
• Matrix structures ????

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Figure 6.10 Integrating Mechanisms ???????
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?6.10 ?????????? ??
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Figure 6.11 Forms of Integrating Mechanisms
Source
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3.Strategic Alliances ,Network Structures and IT
????,?????????

• Strategic Alliance ????
• An agreement in which managers pool or share
  firms resources and know-how with a foreign
  company and the two firms share in the rewards
  and risks of starting a new venture.

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3.Strategic Alliances,B2B Network Structures and
IT ????,?????????

• Network Structure ????
• A series of strategic alliances that an
  organization creates with suppliers,
  manufacturers, and distributors to produce and
  market a product.
• Network structures allow firms to bring resources
  together in a boundary-less organization.

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3.Strategic Alliances,B2B Network Structures and
IT ????,?????????

• Boundaryless Organization ?????
• An organization whose members are linked by
  computers, faxes, computer-aided design systems,
  and video-conferencing and who, rarely, if ever,
  see one another face-to-face.
• Knowledge Management System ??????
• A company-specific virtual information system
  that allows workers to share their knowledge and
  expertise and find others to help solve problems.

Source
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3.Strategic Alliances,B2B Network Structures and
IT ????,?????????

• Business to Business (B2B ) network ?????
• A group of organizations that join together and
  use IT to link themselves to potential global
  suppliers to increase efficiency and
  effectiveness.

Source