PMGT 1303 Principles of Management

1
PMGT 1303 Principles of Management

• Chapter 4 Organizing An Effective Department

2
Learning Goals

• Define organizing
• Describe why work specialization should increase
  economic efficiency
• Explain how the span of control affects an
  organizations structure
• Contrast line and staff authority
• Explain why organizations are increasingly
  becoming decentralized
• Describe how flatter structures can be beneficial
  to the organization
• Explain the concept of a learning organization
  and how it influences organizational designs and
  supervisors
• Discuss the value of job descriptions
• Identify the four-step process of delegation

3
What Is Organizing?

• Formal (defined by management)
• Arranging and grouping jobs
• Allocating work resources
• Assigning work so activities can be accomplished
• Developing rules and procedures
• Informal
• Alliances among individuals and groups which are
  outside the formal structure

4
Basic Organizing Concepts

• Work specialization
• Span of control
• Chain of command
• Authority

5
Work Specialization

• The process of breaking a job down into a number
  of steps, with each step being completed by a
  different individual.
• Classical view
• Increases economic efficiencies
• Prevents high skilled workers from performing low
  skilled tasks
• Contemporary view
• Is not an unending source of increased
  productivity
• Work can become too specialized
• Overspecialization can cause stress, fatigue,
  creating poor quality, low productivity, higher
  absenteeism and higher turnover
• Therefore motivation, productivity and quality
  can be increased by increasing variety in
  employee activities

6
Span of Control

• A number of employee a supervisor can efficiently
  and effectively.
• No universal set number
• Depends on the ability of the supervisor and the
  type of tasks, abilities and experience of
  workers
• Trend is towards larger spans of control

There are contrasting spans of control
Wide span of control
Narrow span of control
Contemporary organizations
The 1970s
7
Span of Control

• Wide span of control
• Fewer levels of management
• Reduces costs
• Increased use of telecommuting
• Requires modifications of work assignments,
  increased training
• Requires improvements in skill levels
• Requires redesigning jobs

8
Chain of Command

• The continuous line of authority in an
  organization
• More commonly known as unity of command - an
  employee should have only one supervisor to whom
  he/she is directly responsible
• This principle should not be violated, why?

9
Authority

• Rights inherent in a supervisory position to give
  orders and to expect orders to be obeyed
• Flows from a persons position
• Requires obedience because of managerial position
• Three types of authority relations
• Line authority entitles a supervisor to direct
  the work of his or her employees and to make
  certain decisions without consulting others
• Staff authority a limited authority that
  supports line authority by advising, servicing,
  and assisting
• Functional authority control over individuals
  out side ones own direct areas of responsibility

10
Authority Relationships
President
Line Staff Functional
Assistant to President
Director of Human Resources
Director of Operations
Director of Purchasing
Other Directors
Unit 2 Plant Manager
Unit 1 Plant Manager
Sup.of Human Resources
Sup. of Purchasing
Sup. Of Operations
Other Supervisors
Sup. of Purchasing
Sup. Of Operations
Other Supervisors
Sup.of Human Resources
11
Authority Vs. Responsibility

• Authority comes from the supervisors formal
  position
• Responsibility refers to the obligations of the
  supervisor to use his or her authority to achieve
  stated goals, stay within budgets, follow company
  policies and motivate employees
• Authority without responsibility creates
  opportunities for abuse
• Authority is needed to successfully carry out
  delegated responsibilities
• Responsibility without authority creates
  frustration and the feeling of powerlessness
• Why must authority and responsibility be equal?

12
Where Are Decisions Made?

• Centralization
• Decision-making responsibility in the hands of
  top management
• Problems flow up decisions down
• Old model time consuming
• Decentralization
• Decision making is pushed down
• Very common today
• Supervisor have the power!

13
Departmentalization

• Grouping departments based on work functions,
  product of service, target customer or client,
  geographic territory, or the process used to turn
  inputs into outputs
• How Are Employees Grouped
• Functional departmentalization
• Product departmentalization
• Geographic departmentalization
• Customer departmentalization
• Process departmentalization
• Matrix design

14
Functional Departmentalization
15
Product Departmentalization
16
Geographic Departmentalization
17
Customer Departmentalization
18
Process Departmentalization
Folgers Coffee
Jif Peanut Butter
Crest Toothpaste
Sure Deodorant
Tide Detergent
Quality Control
Research Development
Manufacturing
Human Resources
Accounting
Inspect, Pack And Ship
Finishing
Tube
Press
Casting
19
Large organizations Vs Small organizations

• Large Organizations
• Highly complex and formalized organizational
  structure
• Centralized decision making
• Rigid, multileveled
• Bureaucratic and inefficient
• Unable to adjust to a rapidly changing
  environment

• Small Organizations
• Simple structure
• Manager and owner are usually one and the same
• Communication much more efficient
• Flexible and able to respond to changing
  environmental conditions
• Accountability clear

20
Simple Structure

• A nonelaborate structure low in complexity, with
  little formalization, and with authority
  centralized in a single person a flat
  organization with only two or three levels
• Weaknesses
• Become inadequate as organization grows
• Decision making slows/stop as the owner/manager
  gets bogged down with making all decisions
• If owner-manager dies or gets injured, the entire
  business may come to a standstill

21
Organizational structures

• Functional struture in which simillar and related
  occupational specialities are grouped together.
• Divisional structure an organization made up of
  self-contained units
• Matrix weaves together elements of functional and
  product departmentalization, creating a dual
  chain of command
• Team-based structure consists entirely of work
  groups or teams.
• Boundaryless organization is not defined or
  limited by boundaries or categories imposed by
  traditional structures
• Learning organization has been developed the
  capacity to adapt and change continuously

22
Matrix Design
Design
MFG
Contract Admin
Purchasing
Accounting
HR
Human Resources Group
Purchasing Group
MFG Group
Design Group
Alpha Project
Contracts Group
Accounting Group
Human Resources Group
Purchasing Group
MFG Group
Design Group
Beta Project
Contracts Group
Accounting Group
Human Resources Group
Purchasing Group
MFG Group
Design Group
Gamma Project
Contracts Group
Accounting Group
Human Resources Group
Purchasing Group
MFG Group
Design Group
Omega Project
Contracts Group
Accounting Group
23
Are There Simple-Like Structures for Larger
Organizations?

• Horizontal Structure
• Flat organization used in small businesses as
  well as giant companies in which job-related
  activities cut across all parts of the
  organization
• Focus is on the entire work being done by teams
  rather than individualized tasks
• Requirements
• Employees will have to master multiple skills and
  be rewarded accordingly
• Rewards based on how the team, not the individual
  performs
• Employee evaluations on multiple bases I.e., the
  360 evaluation

24
Organizing Your Employees

• Begin by making a list of all the specific tasks
  which your department must do
• Combine tasks into individual jobs
• Be sure work loads are balanced based on
  physical, mental and time demands
• Job Description
• Describes what the employee is supposed to be
  doing
• Lists job duties, working conditions, and
  operating responsibilities, -what the job holder
  does
• Acts as a standard against which employee
  performance is measured

25
Empowering Others Through Delegation

• Empowerment
• An increase in the decision-making discretion of
  workers.
• What is delegation?
• Allocation of duties the tasks and activities
  that a manager desires to have someone do
• Delegation of authority empowering the employee
  to whom you have extended the authority the right
  to act on your behalf
• Assignment of responsibility the corresponding
  obligation to carry out the assigned duties that
  goes along with the delegation of authority
• Creation of accountability to hold the employee
  answerable for properly carrying out his or her
  duties

26
Questions

• ?

27
Discussion

• Work in group of 5 and do exercise A and B (as
  delivered in class) and write short essay answers
  to following questions and submit to your
  instructor via e-mail by Tuesday 26th June, 2007.
• For any given job, why must authority and
  responsibility be equal?
• How can simple-like structures be created for
  large organizations?
• Why is it so difficult for some managers to
  delegate?