Management - Griffin 7e

CHAPTER
11
Basic Elements of
Organizing
PowerPoint Presentation
by Charlie Cook
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All rights reserved.
Learning Objectives
After studying this chapter, you should be able to:
– Identify the basic elements of organizations.
– Describe alternative approaches to designing jobs.
– Discuss the rational and the most common basis for
grouping jobs into departments.
– Describe the basic elements involved in establishing
reporting relationships.
– Discuss how authority is distributed in organizations.
– Discuss the basic coordinating activities undertaken by
organizations.
– Describe basic ways in which positions within the
organization can be differentiated.
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11–2
Chapter Outline
• The Elements of Organizing
– Designing Jobs
– Job Specialization
– Benefits and Limitations of
Specialization
– Alternatives to Specialization
• Grouping Jobs:
Departmentalization
– Rationale for
Departmentalization
– Common Bases for
Departmentalization
– Chain of Command
– Narrow Versus Wide Spans
– Tall Versus Flat Organizations
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• Establishing Reporting
Relationships
– Determining the Appropriate
Span
• Distributing Authority
– The Delegation Process
– Decentralization and
Centralization
• Coordinating Activities
– The Need for Coordination
– Structural Coordination
Techniques
• Differentiating Between Positions
– Differences Between Line and
Staff
– Administrative Intensity
11–3
The Elements Organizing
• Organizing
– Deciding how to best group organizational activities and
resources.
• Organization Structure
– The set of building blocks
that can be used to
configure an organization.
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11–4
Designing Jobs
• Job Design
– The determination of an individual’s work-related
responsibilities.
• Job Specialization (Division of Labor)
– The degree to which the overall task of the organization is
broken down and divided into smaller component parts.
– Benefits of Specialization
• Workers can become proficient at a task.
• Transfer time between tasks is decreased.
• Specialized equipment can be more easily developed.
• Employee replacement becomes easier.
– Limitations of Specialization
• Employee boredom and dissatisfaction with mundane tasks.
• Anticipated benefits do not always occur.
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11–5
Adam Smith’s Example
of Job Specialization
Making a pin (nail) requires 18 tasks
1 worker doing all 18 tasks might make
20 pins (nails) a day.
20 workers = (20 x 20) = 400 pins
______________________________
With specialization:
20 workers make 100,000 pins a day.
1 worker = 5,000 pins
20 pins vs. 5,000 pins per worker
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11–6
Alternatives to Specialization
• Job Rotation
– Systematically moving employees from one job to another in
an attempt to reduce employee boredom. Most frequent use
today is as a training device for skills and flexibility.
• Job Enlargement
– An increase in the total number of tasks workers perform.
– Increases training costs, unions contend that workers
deserve more pay for doing more tasks, and the work may
still be dull and routine.
• Job Enrichment
– Increasing both the number of tasks the worker does and the
control the worker has over the job.
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11–7
Alternatives to Specialization (cont’d)
• Job Characteristics Approach:
– Core Dimensions
• Skill variety—the number of tasks a person does in a job.
• Task identity—the extent to which the worker does a complete or
identifiable portion of the total job.
• Task significance—the perceived importance of the task.
• Autonomy—the degree of control the worker has over how the work
is performed.
• Feedback— the extent to which the worker knows how well the job is
being performed.
– Growth-Need Strength
• The desire for some people to grow, develop, and expand their
capabilities that is their response to the core dimensions.
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11–8
Critical
psychological
states
Core job
dimensions
• Skill variety
• Task identity
• Task significance
Experienced
meaningfulness
of the work
Experienced
responsibility
for outcomes
of the work
• Autonomy
• Feedback
Knowledge of the
actual results of
work activities
Job Characteristics
Approach
Employee
growth-need
strength
Personal and
work outcomes
• High internal
work motivation
• High-quality work
performance
• High satisfaction
with the work
• Low absenteeism
and turnover
Source: J. R. Hackman and G. R. Oldham,
“Motivation Through the Design of Work: A Test
of a Theory,“ Organizational Behavior and Human
Performance, Vol. 6 (1976), pp. 250–279.
Copyright © Academic Press, Inc. Reprinted by
permission of Academic Press and the authors.
Figure 11.1
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11–9
Alternatives to Specialization (cont’d)
• Work Teams
– An alternative to job specialization that allows the entire
group to design the work system it will use to perform an
interrelated set of tasks.
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11–10
Grouping Jobs: Departmentalization
• Departmentalization
– The process of grouping jobs according to some logical
arrangement.
• Rationale for Departmentalization
– Organizational growth exceeds
the owner-manager’s capacity
to personally supervise all of
the organization.
– Additional managers are
employed and assigned
specific employees to supervise.
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11–11
Grouping Jobs: Departmentalization
(cont’d)
• Functional Departmentalization
– Is the grouping of jobs involving the same or similar
activities.
• Advantages
– Each department can be
staffed by functional-area
experts.
– Supervision is facilitated in
that managers only need
be familiar with a narrow
set of skills.
– Coordination inside each
department is easier.
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• Disadvantages
– Decision making becomes
slow and bureaucratic.
– Employees narrow their
focus to the department
and lose sight of
organizational goals/
issues.
– Accountability and
performance are difficult to
monitor.
11–12
Bases for Departmentalization: Apex Computers
President
Computers
Manufacturing
Finance
Dallas
Phoenix
Northwest U.S.
Software
Marketing
Marketing
Industrial sales
Consumer sales
Southwest U.S.
Central U.S.
Finance
Design
Chicago
St. Louis
Southeast U.S.
Northeast U.S.
Figure 11.2
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11–13
Product Departmentalization Form
• Product Departmentalization
– The grouping of activities around products or product
groups.
• Advantages
– All activities associated
with one product can be
integrated and
coordinated.
– Speed and effectiveness of
decision making are
enhanced.
– Performance of individual
products or product
groups can be assessed.
Copyright © by Houghton Mifflin Company. All rights reserved.
• Disadvantages
– Managers may focus on
their product to the
exclusion of the rest of the
organization.
– Administrative costs may
increase due to each
department having its own
functional-area experts.
11–14
Customer Departmentalization
• Customer Departmentalization
– Grouping activities to respond to and interact with specific
customers and customer groups.
• Advantage
– Skilled specialists can deal
with unique customers or
customer groups.
• Disadvantage
– A large administrative staff
is needed to integrate activities
of various departments.
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11–15
Location Departmentalization
• Location Departmentalization
– The grouping of jobs on the basis of defined geographic sites
or areas.
• Advantage
– Enables the organization to
respond easily to unique
customer and environmental
characteristics.
• Disadvantage
– Large administrative staff may
be needed to keep track of
units in scattered locations.
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11–16
Departmentalization
• Other Forms of Departmentalization
– Grouping activities by time
• Dividing daily activities into specific units of time (e.g., day, evening,
and night shifts).
• Grouping activities by sequence.
• Assigning responsibilities by a characteristic of the customer,
product, or service (e.g., telemarketing calls from business listings).
• Other Considerations
– Departments are often called by other names (e.g., divisions,
units, sections, and bureaus).
– Organizations are likely to employ multiple bases of
departmentalization, depending on level.
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11–17
Establishing Reporting Relationships
• Chain of Command
– A clear and distinct line of authority among the positions in
an organization.
– Unity of Command
• Each person within an organization must have a clear
reporting relationship to one and only one boss.
– Scalar Principle
• A clear and unbroken line of authority
must extend from the bottom to the
top of the organization.
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11–18
Establishing Reporting Relationships (cont’d)
• Narrow Versus Wide Spans
– Span of Management
• The number of people who report to a particular manager.
• Sometimes called the span of control.
– A. V. Graicunas
• Subordinate interactions
–Direct—the manager’s relationship with each subordinate.
–Cross—among the subordinates themselves.
–Group—between groups of subordinates.
–Formula for the number of interactions of all types:
» I = N(2N/2 + N - 1), where I is the total number of interactions
and N is number of subordinates.
– Ralph Davis
• Operative span for lower-level managers up to 30 workers.
• Executive span for middle and top managers at 3 to 9.
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11–19
Establishing Reporting Relationships:
Tall versus Flat Organizations
• Tall Organizations
– Are more expensive
because of the number of
managers involved.
– Foster more
communication problems
because of the number of
people through whom
information must pass.
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• Flat Organizations
– Lead to higher levels of
employee morale and
productivity.
– Create more administrative
responsibility for the
relatively few managers.
– Create more supervisory
responsibility for managers
due to wider spans of
control.
11–20
Tall Versus Flat Organizations
Tall Organization
Flat Organization
President
President
Figure 11.3
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11–21
Determining the Appropriate Span:
Factors Influencing the Span of Management
1 . C o m p e te n c e o f s u p e rvis or a n d s ub o rd in a tes (th e gre a te r th e
c o m p e te n c e, th e w id e r th e p o te n tia l s p a n ).
2 . P h ys ic a l dis p ers io n o f s u b o rd in a te s (th e gre a te r th e d is p e rs io n,
th e n a rrow e r th e p o te n tial s p a n ).
3 . E x te n t o f n o n s u p ervis o ry w o rk in a m a n a g e r’s jo b (th e m ore
n o n s u p e rv is ory w ork, the n arro w er th e p o te n tial s p a n ).
4 . D e g re e o f re q uire d in tera c tio n (th e le s s re q u ire d in tera c tio n, th e
w id er th e p o te n tial s p a n ).
5 . E x te n t o f s ta n d ard iz e d p ro c e d ures (th e m ore p ro ce d u re s, th e
w id er th e p o te n tial s p a n ).
6 . S im ilarity o f tas k s b e in g s u p ervise d (th e m ore sim ilar th e ta sk s,
th e w id er th e p o te n tial s p a n ).
7 . F re q u e n c y o f n ew pro b lem s (th e hig h e r th e fre q u e n c y, th e n a rro w er th e p o te n tial s p a n ).
8 . P re fe re n c e s o f s u p e rv is ors a n d su b o rd in a te s.
Table 11.1
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11–22
Distributing Authority
• Authority
– Power that has been legitimized by the organization.
• Delegation
– The process by which managers assign a portion of their
total workload to others.
• Reasons for Delegation
– To enable the manager to get more work done by utilizing the
skills and talents of subordinates.
– To foster the development of subordinates by having them
participate in decision making and problem solving that
allows them to learn about overall operations and improve
their managerial skills.
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11–23
Steps in the Delegation Process
Step 1
Assigning
responsibility
Manager
Subordinate
Step 2
Granting
authority
Manager
Manager
Subordinate
Step 3
Creating
accountability
Manager
Manager
Subordinate
Figure 11.4
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11–24
Problems in Delegation
• Manager
– Reluctant to delegate.
– Disorganization
prevents planning
work in advance.
– Subordinate’s success
threatens superior’s
advancement.
– Lack of trust in the
subordinate to do well.
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• Subordinate
– Reluctant to accept
delegation for fear of
failure.
– Perceives no rewards
for accepting
additional
responsibility.
– Prefers to avoid any
risk and responsibility.
11–25
Decentralization and Centralization
• Decentralization
– The process of systematically delegating power and authority
throughout the organization to middle- and lower-level
managers.
• Centralization
– The process of systematically retaining power and authority
in the hands of higher-level managers.
• Factors Determining the Choice of Centralization
– The complexity and uncertainty of the external environment.
– The history of the organization.
– The nature (cost and risk) of the decisions to be made.
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11–26
Coordinating Activities
• Coordination
– The process of linking the activities of the various
departments of the organization.
• The Need for Coordination
– Departments and work groups are interdependent; the
greater the interdependence, the greater the need for
coordination.
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11–27
Coordinating Activities:
Three Major Forms of Interdependence
• Pooled interdependence
– When units operate with little interaction; their output is
simply pooled at the organizational level.
• Sequential interdependence
– When the output of one unit becomes the input of another
unit in sequential fashion.
• Reciprocal interdependence
– When activities flow both ways
between units.
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11–28
Three Major Forms of Interdependence
Sequential
Input
Reciprocal
Output
Input Output
Input Output
Pooled
Input
Input
Output
Input
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Input
Output
11–29
Structural Coordination Techniques
• The Managerial Hierarchy
– Placing one manager in charge of interdependent
departments or units.
• Rules and Procedures
– Routine coordination activities can be handled via rules and
procedures that set priorities and guidelines for actions.
• Liaison Roles
– A manager coordinates
interdependent units by acting
as a common point of contact,
facilitating the flow of
information.
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11–30
Structural Coordination Techniques
(cont’d)
• Task Forces
– Used with multiple units when coordination
is complex requiring more than one
individual and the need for coordination
is acute.
– Disbanded when the need for
coordination has been met.
• Integrating Departments
– Permanent organizational units that maintain internal
integration and coordination on an ongoing basis.
– May have authority and budgetary controls.
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11–31
Differentiating Between Positions
• Line Positions
– Positions in the direct chain of command that are responsible
for the achievement of an organization’s goals.
– Have formal (legitimate) authority to direct the workforce.
• Staff Positions
– Positions intended to provide expertise, advice, and support
to line positions.
– Have advisory authority; can give compulsory advice.
– Have functional authority to enforce compliance with
organizational policies and procedures.
• Administrative Intensity
– The degree to which managerial positions are concentrated
in staff positions.
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11–32

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