-
Basic Elements of OrganizingOrganizations are constantly growing
in size and in complexity.Well-established ways of getting things
done may serve an organization for many years.However, innovative
leadership will find new approaches to designing work, linking jobs
and coordinating activities to keep up with the changing
environments in which they work and the new demands made on
organizations by employees, customers, etc.
-
The Elements of OrganizingOrganizing is deciding how best to
group organizational elements (resources).
Organizational Structure is a set of six basic building blocks
(elements) that managers may use to configure (construct) an
organization.
-
Six Basic Building Blocks for Organization StructureDesigning
jobsGrouping JobsEstablishing reporting relationships between
jobsDistributing authority among jobsCoordinating activities among
jobsDifferentiating among positions
-
1. Designing JobsJob design is the determination of an
individuals work-related responsibilities.
Job specialization is the degree to which the overall task of
the organization is broken down and divided into smaller component
parts. Sometimes referred to as the division of labor.
[assembly-line tasks, Disney characters drawn by only one animator,
etc.)
-
Designing Jobs. . . [continued]Benefits of Job
Specialization:
Workers performing small, simple tasks will become very
proficient at each task.Transfer time between tasks decreases.
[switching from one task to another]The more narrowly defined a job
is, the easier it is to develop specialized equipment to assist
with that job.When an employee who performs a highly specialized
job is absent or resigns, the manager is able to train someone new
at relatively low cost.
-
Designing Jobs. . . [continued]Limitations of Job
Specialization:
Workers who perform highly specialized jobs may become bored and
dissatisfied.The job may be so specialized that it offers no
challenge or stimulation.If boredom and monotony set in,
absenteeism rises and the quality of work may suffer.The
anticipated benefits of job specialization do not always occur.
Although some degree of specialization is necessary, it should
not be carried to extremes because of the possible negative
consequences
-
Designing Jobs. . . [continued]
Managers have developed five (5) other approaches to job design
to achieve a better balance between organizational demands for
efficiency and productivity and individual needs for creativity and
job control.
-
Designing Jobs. . . [continued]Alternatives to Job
Specialization:
Job Rotation Job Enlargement Job Enrichment Job Characteristics
Approach Work Teams
-
Designing Jobs. . . [continued]Job Rotation involves
systematically moving employees from one job to another.Different
part of the job is done on various days of the weeks.Used primarily
as a training practice to improve workers skills and
flexibility.
-
Designing Jobs. . . [continued]Job enlargement involves giving
the employee more tasks to perform.Designed to allow the worker to
perform a variety of tasks to reduce the level of job boredom or
dissatisfaction.Disadvantages may include: training costs usually
increase; unions have argued that pay should increase as the worker
is doing more tasks; and in many cases, the work still remains
boring and routine.
-
Designing Jobs. . . [continued]Job enrichment involves
increasing both the number of tasks the worker does and the control
the worker has over the job.To implement job enrichment, managers
remove some controls from the job, delegate more authority to
employees and structure the work in complete, natural units.Another
part of job enrichment is to continually assign new and challenging
tasks to allow the employee an opportunity to grow and
advance.Before undertaking job enrichment, work systems should be
analyzed and managers should ask for employee preferences.
-
Designing Jobs. . . [continued]Job Characteristic Approach
suggests that jobs should be diagnosed and improved along five core
dimensions, taking into consideration both the work system and
employee preferences.The higher a job rates on these dimensions,
the more employees will experience various psychological
states.Five core dimensions include:Skill varietyTask identifyTask
significanceAutonomyFeedback
See Figure 11.1, page 346.
-
Figure 11.1
Job Characteristics Approach
-
Designing Jobs. . . [continued]Work Team allows an entire group
to design the work system it will use to perform an interrelated
set of tasks.The team itself decides how jobs will be allocated and
assigns specific tasks to members, monitors and controls its own
performance and has autonomy over work scheduling.
-
2. Grouping Jobs: DepartmentalizationDepartmentalization is the
process of grouping jobs according to some logical arrangement.In
smaller organizations, the owner-manager/partner may be able to
personally oversee everyone who works there.As an organization
grows, new managerial positions are created to supervise work of
others grouped according to some plan which leads to the creation
of departments.
-
2. Grouping Jobs: DepartmentalizationFunctional
Departmentalization groups jobs involving the same or similar
activities.Most common in smaller organizations; has three primary
advantages:Each department can be staffed by experts in that
functional area.Supervision is also facilitated because an
individual manager needs to be familiar with only a relatively
narrow set of skills.Coordinating activities inside each department
is easier.Disadvantages emerge as an organization grows because it
becomes increasingly difficult to monitor accountability and
performance. [was product failure due to poor marketing or
production deficiencies?]
-
2. Grouping Jobs: DepartmentalizationProduct Departmentalization
groups activities around products or product groups.Has three major
advantages:All activities associated with one product or product
group can be easily integrated and coordinated.The speed and
effectiveness of decision making are enhanced.The performance of
individual products or product groups can be assessed more easily
and objectively, thereby improving the accountability of
departments for the results of their activities.Has two major
disadvantages:Managers in each department may focus on their own
product or product group to the exclusion of the rest of the
organization.Administrative costs may rise because each department
must have its own functional specialists for areas such as market
research and financial analysis.
-
2. Grouping Jobs: DepartmentalizationCustomer
Departmentalization occurs when the organization structures its
activities to respond to and interact with specific customers or
customer groups.Major advantage is that the organization is able to
use skilled specialists to deal with unique customers or customer
groups. [different skill sets required to read a balance sheet and
approve a BD500,000 loan to a business vs evaluating an individuals
creditworthiness to receive a BD20,000 loan to buy a car]A
disadvantage is that a fairly large administrative staff is
required to integrate various departments activities to make sure
the organization does not overcommit itself in any one area.
-
2. Grouping Jobs: DepartmentalizationLocation
Departmentalization groups jobs on the basis of defined geographic
sites or areas.Primary advantage is that it enables the
organization to respond easily to unique customer and/or
environmental characteristics in the various regions.A disadvantage
is that a larger administrative staff may be required if the
organization must keep track of units in various locations.
-
2. Grouping Jobs: DepartmentalizationOther Forms of
Departmentalization may include:Departmentalization by Time:
grouping certain activities by time shift system in which each
shift has its own superintendent, who reports to the plant manager,
and functional departments.Hospitals and airlines use time as well
to departmentalize.Departmentalization by Sequence: university
registration by senior, junior, etc; credit checks by employees
according to customer name; insurance company claim division by
policy number.
-
2. Grouping Jobs: DepartmentalizationOther Considerations for
Departmentalization:
In some large organization, departments may be referred to as
Divisions, Units, Sections and Bureaus.Regardless of the label
used, they represent groups of jobs that have been tied together
according to some unifying principle.Almost all organizations are
likely to use multiple bases of departmentalization, depending on
level.It is quite common that organizations use a variety of bases
of departmentalization for different levels and different sets of
activities.
See Figure 11.2, page 349.
-
Figure 11.2: Departmentalization
-
3. Establishing Reporting RelationshipsChain of Command is a
clear and distinct line of authority among the positions in an
organization that has two components:Unity of command each person
within an organization must have a clear reporting relationship to
one and only one boss.Scalar principle there must be a clear and
unbroken line of authority that extends from the lowest to the
highest position in the organization.Someone in the organization
must ultimately be responsible for every decision. [President Harry
Trumans saying that the buck stops here.]
-
3. Establishing Reporting RelationshipsSpan of Management,
sometimes called the span of control, is the number of people who
report to a particular manager.
-
3. Establishing Reporting RelationshipsNarrow versus Wide Span
Theories:A V Graicunas developed a formula for measuring the
possible number of interactions between a manager and subordinates.
I = N(2N/2 + N 1)He stated that managers must deal with three kinds
of interactions with and among subordinates:Direct one-to-one with
each subordinateCross among the subordinate themselvesGroup between
groups of subordinatesRalph C Davis described an operational span
for lower-level managers [maximum 30] and an executive span
[maximum 3-9] for middle and top managers.Lyndall F Urwick and
General Ian Hamilton believe executive span should never exceed 6
subordinates.
-
3. Establishing Reporting RelationshipsTall versus Flat
Organizations:Flat structures seem to lead to higher levels of
employee morale and productivity.A wider span of management in a
flat structure may result in a managers having more administrative
and supervisory responsibilities. If these responsibilities become
excessive, the flat organization may suffer.A tall structure is
more expensive because of the larger number of
managers.Communication in a tall structure seems to suffer due to
the increased number of people through whom information must
pass.See Figure 11.3, page 354.
-
Figure 11.3 Tall Versus Flat Organizations
-
3. Establishing Reporting RelationshipsDetermining the
Appropriate Span:
The relative importance of each factor varies in different
settings.Managers must determine the importance of each factor or
set of factors when deciding the optimal span of management for
their unique situation.
-
4. Distributing AuthorityAuthority is the power that has been
legitimized (approved) by the organization.
Organizations must determine how authority is to be distributed
among positions.An employee must have the power to make some
decisions on his/her own, some in consultation with coworkers and
must defer some decisions to his/her boss.Two issues that managers
must address when distributing authority are delegation and
decentralization.
-
4. Distributing AuthorityDelegation is the process by which
managers assign a portion of their total workload to
others.Managers generally delegate to:enable themselves to get more
work done.allow employees with more expertise than they have to
handle a particular problem.develop subordinates managerial skills
by participating in decision making and problem solving.allow
subordinates to learn more about overall operations.
-
4. Distributing AuthoritySteps in the Delegation Process:Manager
should assign responsibility or give the subordinate a job to
do.Manager must give the subordinate the authority to do the
job.Manager must establish the subordinates accountability
willingness to accept an obligation to carry out the task
assigned.
-
Steps in the Delegation Process
-
4. Distributing AuthorityProblems in Delegation:Some managers
may be too disorganized to plan in advance and therefore cannot
delegate to others.Some managers are afraid the subordinate may do
a better job and pose a threat to their own advancement.Managers
may not trust their subordinates to be accountable.Some
subordinates may be afraid to fail at a task and be reprimanded as
a result.Some subordinates may see no reward for accepting
additional responsibility.However, the ultimate responsibility for
the outcome of any delegated task still rests with the manager.
-
4. Distributing AuthorityDecentralization:
The process of systematically delegating power and authority
throughout the organization to middle and lower-level managers.
-
4. Distributing AuthorityCentralization:The process of
systematically retaining power and authority in the hands of
higher-level managers.
-
4. Distributing AuthorityWhich Way to Go?No organization is ever
completely decentralized or centralized; some firms tend toward one
or the other.Usually, the greater the complexity and uncertainty of
the external environment, the greater the tendency to
decentralize.An organizations history will play a role firms tend
to do what they have done in the past.The costlier and riskier the
decisions, the more pressure there is to centralize.If lower-level
managers are well qualified, there is a tendency to decentralize
and vice versa.
-
5. Coordinating ActivitiesCoordination is the process of linking
the activities of the various departments of the
organization.Primary reason for coordination is that departments
and work groups are interdependent they depend on each other for
information and resources to perform their respective
activities.The greater the interdependence between departments, the
more coordination the organization requires so departments are able
to perform effectively.
-
5. Coordinating ActivitiesPooled interdependence exists when
units operate with little interaction; their output is simply
pooled.Each unit has its own budget, staff, etc., and their
profits/losses are added together at the organizational level. They
do not interact on a day-to-day basis. [Debenham's, Marks &
Spenser, etc.]
-
5. Coordinating ActivitiesSequential interdependence occurs when
the output of one unit becomes the input for another in sequential
fashion.Level of interdependence is generally one way.Nissan has
one plant which assembles engines and then ships them to another
plant where the cars are completed.
-
5. Coordinating ActivitiesReciprocal interdependence occurs when
activities flow both ways between units.
This form of interdependence is the most complex.Within any
hotel, the reservations department, front-desk check-in and
housekeeping are all reciprocally interdependent.Reservations has
to provide front-desk employees with information about how many
guests to expect each day, and housekeeping needs to know which
rooms need priority cleaning. If any of the three units does not do
its job properly, all will be affected.
-
5. Coordinating ActivitiesStructural Coordination Techniques
These techniques were designed to achieve and maintain
coordination among interdependent units. They include:The
managerial hierarchyRules and proceduresLiaison rolesTask
forcesIntegrating departments
-
5. Coordinating ActivitiesThe Managerial Hierarchy
One manager is placed in charge of interdependent departments or
units.Wal-Marts distribution center places one manager in charge of
both receiving and unloading shipments from railroad cards and
loading other shipments onto trucks for distribution to retail
outlets.Both departments are interdependent because they share the
same loading docks.
-
5. Coordinating ActivitiesRules and ProceduresRoutine
coordination activities may be handled by rules and standard
procedures.However, complex or unusual problems may have to be
handled independently.Wal-Mart has a rule that an outgoing truck
has priority over an incoming rail shipment. So all forklifts and
related equipment are available to loading outgoing trucks
first.
-
5. Coordinating ActivitiesLiaison RolesA manager acts as a
common point of contact but has no formal authority over the
interdependent groups.He/she simply serves as a facilitator of
information flow between the units.He/she maintains familiarity
with each unit and can answer questions and otherwise serve to
integrate the activities. [engineering groups working on a large
project may interact through a liaison]
-
5. Coordinating ActivitiesTask ForcesA task force may be needed
when interdependence is complex and several interdependent units
are involved.It is created by drawing one representative from each
unit.Coordination function is then spread across several
individuals, each of whom has special information about one of the
units involved.When coordination of project is completed, the task
force is dissolved.
-
5. Coordinating ActivitiesIntegrated Departments
Similar to a task force but is more permanent.Usually has more
authority than a task force and may even be given some budgetary
control.Generally has some permanent members as well as members who
are assigned temporarily from units that are particularly in need
of coordination.Firms characterized by complex and dynamic
environments tend to use integrated departments to maintain
internal integration and coordination.
-
5. Coordinating ActivitiesElectronic Coordination
E-mail makes it easier for people to communicate at all
levels.Electronic scheduling is used and makes it easier for
individuals schedules to be coordinated to set meetings and know
when individuals are otherwise available.Some organizations require
project contractors, subcontractors and suppliers to use a common
web-based communication/reporting system to make coordination
easier among the units.
-
6. Differentiating Between PositionsLine position is in the
direct chain of command that is responsible for achieving an
organizations goals.Staff position is one intended to provide
expertise, advice and support for line positions.
-
6. Differentiating Between PositionsDifferences between Line and
StaffLine managers work toward organizational goals; staff managers
advise and assist.Line managers have formal and legitimate
authority; staff authority is less concrete and may take a variety
of forms:Compulsory authority line manager must listen to advice of
staff manager, but can choose to take it or ignore it. [Finance
Manager must listen to advice of auditor, but may take it or leave
it]Functional authority formal or legitimate authority given to
staff managers over activities related to their specialties. [HR
specialist who is expert in discrimination or Labor Law]
-
6. Differentiating Between PositionsAdministrative
IntensityAdministrative intensity is the degree to which managerial
positions are concentrated in staff positions.An organization with
high administrative intensity is one with many staff positions
relative to the number of line positions.Relative low
administrative intensity reflects more line positions relative to
staff positions.Organizations would generally like to devote most
of their HR investment to line managers because they contribute
directly to the organizations basic goals.Practice today is leading
toward reducing staff positions.