Principles Of Management Chapter 6 GTU MBA

7/31/2019 Principles Of Management Chapter 6 GTU MBA

1/23

The Nature of Organizing,

Entrepreneuring,and Reengineering


2/23

Organizational Roles

For an organizational roleto exist and be meaningful, it must

incorporate:

1. Verifiable objectives, which are a major part of planning.

2. A clear idea of the major duties or activities involved.3. An understood area of discretion or authority so that the person

filling the role knows what he or she can do to accomplish goals.


3/23

Organizing involves:

1. The identification and classification of required activities.

2. The grouping of activities necessary to attain objectives.

3. The assignment of each grouping to a manager with the authority

(delegation) necessary to supervise it.4. The provision for coordination horizontally (on the same or a

similar organizational level) and vertically (for example, corporate

headquarters, division, and department) in the organization

structure.


4/23

Definition of Organization

Organization implies a formalized intentional structure of roles or

positions.


5/23

Formal and Informal Organization


6/23

Formal and Informal Organization

Formal organization pertains to the intentional structure of roles

in a formally-organized enterprise.

The informal organization is a network of interpersonal

relationships that arise when people associate with each other.


7/23

Organization Chart

A graphical representation of an organization.

Conveys four kinds of information:

Includes different units of organization

Work performed by different personnel

Reporting relationships indicated by connecting lines

Number of hierarchy levels.


8/23

What is a Department?

The department designates a distinct area, division, or branch of

an organization over which a manager has authority for the

performance of specified activities.


9/23

Organization with Narrow Spans


10/23

Organization with Wide Spans


11/23

What is the Principle of the Span ofManagement?

The principle of the span of management states that there is a

limit to the number of subordinates a manager can effectively

supervise, but the exact number will depend on the impact of

underlying factors.


12/23

What Determines an Effective Spanof management?


13/23

Types of Business Organization

Criterion or basis Types of business organizations

Size SME, Large organizations

Ownership Sole proprietorship, partnership, Pvt. Ltd., Public Ltd., Co-

operatives, Trusts & associations

Purpose For-profit, not for profit

Activity Manufacturing, trading & services

Origin Domestic & Multinational, transnational or global, joint ventures

and alliances

Sector Public sector & Private sector

Style of management Traditionally managed, managed as per the western models,

using adapted or hybrid management models.

Reach of markets Local, regional, national, international or multi-national, global


14/23

Types of Business Organization(contd.)

Criterion or basis Types of businessorganizations

Decision making Centralized, decentralized

Product offering Standard and coordinated product offering indifferent markets or uncoordinated product

offering in different markets adapted to the

local conditions & preferences

Sources of finance Ownership capital or debt-financed, domestic

funds or financed through FDI

Listing on the stock exchange Listed or unlisted


15/23

Difference between an Intrapreneurand an Entrepreneur

An intrapreneur is a person who focuses on innovation and

creativity and who transforms a dream or an idea into a profitable

venture by operating within the organizational environment.

The entrepreneur is a person who does similar things as theintrapreneur, but outside the organizational setting.


16/23

Environment for Entrepreneurship

Steve Wozniak and Steve Jobs at Apple Computers

Entrepreneurship programs


17/23

Situations for Innovations

An unexpected event, failure, or success

An incongruity between what is assumed and what really is

A process or task that needs improvement

Changes in the market or industry structure

Changes in demographics

Changes in meaning or in the way things are perceived

Newly acquired knowledge


18/23

Definition of Reengineering

The fundamental rethinking and radical redesign of businessprocesses to achieve dramatic improvements in criticalcontemporary measures of performance, such as cost, quality,service, and speed.

The underlined words are considered key aspects ofreengineering by Hammer and Champy.


19/23

Key Aspects of Reengineering

Fundamental rethinking of what the organization is doing andwhy.

Radical redesign of the business processes.

(Note: Downsizing or rightsizing is not the primary purpose ofreengineering, although in many cases it does result in a need forfewer people.)

Aim for dramatic results

Careful analysis of business processes


20/23

Management by Processes


21/23

The Steps in the Organizing Process:

1. Establishing enterprise objectives.

2. Formulating supporting objectives, policies, and plans.

3. Identifying, analyzing, and classifying the activities necessary toaccomplish these objectives.

4. Grouping these activities in light of the human and materialresources available and the best way, under the

circumstances, of using them.

5. Delegating to the head of each group the authority necessary toperform the activities.

6. Tying the groups together horizontally and vertically, throughauthority relationships and information flows.


22/23

The Organizing Process


23/23

Basic Questions for EffectiveOrganizing

It is useful to analyze the managerial function of organizing byraising and answering the following questions:

1. What determines the span of management and hence the levels oforganization?

2. What determines the basic framework of departmentation, and whatare the strengths and weaknesses of the basic forms?

3. What kinds of authority relationships exist in organizations?

4. How should authority be dispersed throughout the organization

structure, and what determines the extent of this dispersion?5. How should the manager make organization theory work in practice?

Principles Of Management Chapter 6 GTU MBA

Documents