Chapter 5 Organizing
Feb 24, 2016
Chapter 5Organizing
Advanced Organizer
Decision Making
Planning
Organizing
Leading
Controlling
Research
Design
Production
Quality
Marketing
Project Management
Time Management
Ethics
Career
Management Functions Managing Technology Personal Technology
Managing Engineering and Technology
Chapter Objectives
• Analyze the different forms of an organization
• Explain different organizational structures• Describe the differences in line and staff
relationships • Describe the use and value of teams
Legal Forms of Organization
• Sole Proprietorship • Partnership • Corporations
– S-Corporation– Limited Liability Companies
• Cooperatives
Sole Proprietorship
Ownership:1 personLegal Restrictions: fewDuration: Life of the ProprietorTaxation: Through personal taxAdvantages• Simple to operate• Owner is free to make all decisionsDisadvantages• Owner faces unlimited liability• Difficult to raise capital
Partnership
Ownership: 2 or MoreLegal Restrictions: FewDuration:Taxation: Through personal taxAdvantages• Pooling of management skills, financial strengthDisadvantages• Divided decision-making authority• Partners face unlimited liability
Corporations
Ownership: ShareholdersLegal Restrictions: manyDuration: PerpetualTaxation: Double taxesAdvantages• Easy to raise capital, • Easy to transfer ownership, and change mgmt.Disadvantages• Difficult to organize• Double taxes
S-Corporation
Ownership: ShareholdersLegal Restrictions: manyDuration: No perpetual lifeTaxation: Through personal taxRestrictions• No more than 75 owners • Only one class of stock• No retained earnings
Limited Liability Companies (LLC)
Ownership: MembersDuration: Perpetual (in most of states)Taxation: Through personal taxAdvantages• Limited liabilities • No limitation on the number of members• May issue more than one class of stock
Cooperatives
Ownership: UsersLegal Restrictions: Duration: Taxation: Tax-freeAdvantages Disadvantages
Organizing:
• Identification and classification of required activities
• Grouping of activities necessary to attain objectives
• Assignment of each grouping to a manager with authority
• Provision for coordination horizontally and vertically
Purpose of Organizing
“Organizations are not built to serve customers; they are built to preserve internal order. To customers, the internal structure may not only mean very little; it may serve as a barrier.
“Organizational charts are vertical and serving the customers is horizontal.”
George Fisher, CEO, Motorola
Patterns of Departmentation
• Function• Product• Geographic location• Type of customers• Process or equipment• Shift or time• Numbers
Span of Control
Number of people reporting directly to each manager
• Number of relationships: n [2(n-1) + n – 1]• Subordinate training• Nature of job supervised• Rate of change of activities and personnel• Clarity of instruction and delegation• Staff assistance
Line & Staff Relationships
Line functions: those accomplish the main mission of the organization, e.g. production, sales, finance, etc
Staff functions: those help the line accomplish the objectives by providing some sort of advice or service
• Personal staff• Specialized staff: serve the entire organization,
e.g., personnel, procurement, legal counsel, market research
Line & Staff Relationships
• Line relationships: Superior-subordinate relationships (chain of command) typically represented vertically in organizational charts
• Staff relationships: Advisory in nature, degree of influence may vary– Provide advice on request– Recommendations when appropriate– Must be consulted by line but have no direct
authority– Concurring authority - veto authority over line
Line and Staff Relationships
• Service: Centralized support functions– Custodial– Security– Medical
Line and Staff Relationships
Staff
Line
Modern Organization Structures
• Project and Other Temporary Organizations
• Impact of Information Revolution
Project and Other Temporary Organizations
• Matrix management• Team Organization
Teams
• Small group of people• Serve interests of its members• Exchange ideas freely and clearly• Have common goals• Committed to achieving goals• Each team member treated equally
Impact of Information Revolution
• Computer
• Internet
• Intranet
Computer Technology’s Impact on the Work Force
• Factory workers will require a higher level of skills– Visualization– Conceptual thinking– Knowledge of production process– Statistical inference– Oral and visual communication– Attentiveness– Individual responsibility
Impact of Information Revolution
• Disappearance of job security• Shared responsibility of employers (providing opportunity)
and employees (self-improving)• Increasing demand for professional & technical workers• Decreasing demand for operators, laborers, craftsmen,
clerical staff, and farm workers.• Reduced real wages• Continuing downsizing of staff, longer working hours under
high stress.• Increases in part-time, contract, and self-employed workers.