BADM1103F07Ch08

1/33Adapting to Today’s Markets2/33Reorganization•Reorganization•Adjusting to changing marketsa normal function in a capitalist economy •Flexibility3/33Organizing the Business•Organizing the business•Planning•Organizing (Structuring –Division of labor) deciding what work needs to be done and then dividing up tasks job specialization4/33Organizing … (cont.)•Departmentalization•Setting up departments to do specialized tasks •Assign authority and responsibility5/33Organizing … (cont.)•Structuring•devising a division of labor •setting up teams or departments to do specific tasks •assigning responsibility and authority to people 6/33Organizing … (cont.)•Organization chart •Shows relationships among people7/33Organizing … (cont.)8/33Organizing … (cont.)•Major changes in the business environment•Never before has business changed so quickly•Managing change -critical managerial 9/33Development of the Organizational Design•Organizations -small and organized simply •Mass production•Economies of scaleThe average cost of goods goes down as production levels increase 10/33Rigid Organizations •Fayol •Unity of Commandeach worker is to report to only one boss •Hierarchy of Authorityone should know to whom to report •Division of Laborfunctions should be divided into areas of specialization 11/33Rigid Organizations (cont.)•Subordination of Individual Interests to the General Interestgoals of the organization should be considered more important than personal goals •Authoritymanagers should give orders and expect them to be carried out 12/33Rigid Organizations (cont.)•Degree of Centralization•The amount of decision-making power vested in top management should vary by circumstances •Clear Definition of Communication Channels13/33Rigid Organizations (cont.)•Order•Materials and people should be placed in the proper location •Equity•A manager should treat employees and peers with respect and justice •Esprit de Corps14/33Rigid Policies and Procedures •Max Weber •Pyramid-Shaped Organization great trust in managersthe less decision making employees had to do, the better 15/33Rigid Policies and Procedures (cont.)•Weber’s Principles job descriptions written rules, decision guidelines, and policies consistent procedures, regulations, and policies staffing and promotions based on qualifications 16/33Rigid Policies and Procedures (cont.)•Hierarchy•A ranked or sequential ordering system•Chain of Command•The line of authority that moves from the top of a hierarchy to the lowest level•Layers of Management17/33Rigid Policies and Procedures (cont.)•Bureaucracy•An organization with many layers of managers•Decision making may take too long to satisfy customers•Empowerment 18/33Issues Involved in Structuring Organizations •Centralized Authority•An organizing structure in which decision-making authority is maintained at the top level of management at the company’s headquarters 19/33Issues … (cont.)•Decentralized Authority•An organization structure in which decision-making authority is delegated to lower-level managers20/33Issues … (cont.)•Span of Control•To the optimum number of subordinates a manager supervises or should supervise •Lower levels -wide•Higher levels -narrow21/33Issues … (cont.)•Tall Organization Structure•The pyramidal organization chart is quite tall because of the various levels of management 22/33Issues … (cont.)•Flat Organization Structure•Few layers of management and a broad span of control•More Responsive to Customer Demands 23/33Issues … (cont.)•Departmentalization•Dividing organizational functions into separate units •Functional StructureGrouping of workers into departments based on similar skills, expertise, or resource use 24/33Issues … (cont.)•Advantages skills can be developed in depth resources can be centralized to allow for economies of scale there is good coordination within the function 25/33Issues … (cont.)•Disadvantagescommunication between departments is lacking employees identify with the department rather than the total organization response to external change is slow26/33Issues … (cont.)employees may not be trained in different management responsibilities and become narrow specialists people in the same department tend to think alike 27/3328/33Organization Models •Line Organization•An organization that has direct two-way lines of responsibility, authority, and communication running from the top to the bottom of the organization•All people reporting to only one supervisor 29/33Organization Models (cont.)•Disadvantages •Inflexible •Few specialists to advise line employees •Lines of communication become too long •Unable to handle complex decisions30/33Organization Models (cont.)•Line-and-Staff Organizations •Line PersonnelEmployees who are part of the chain of command that is responsible for achieving organizational goals •Staff PersonnelEmployees who advise and assist line personnel in meeting their goals 31/33Organization Models (cont.)32/33Organization Models (cont.)•Matrix Organization•An organization in which specialists from different parts of the organization are brought together to work on specific projects, but still remain part of a line-and-staff structure 33/33Organization Models (cont.)