Ch 9 – Managing The Structure & Design of Organization

Organizing:
The management function that determines how the firms’ resources are arranged & coordinated
the deployment of resources to achieve strategic goals.
- The development of organizational resources to achieve strategic goals.
- Organizing is important because it follows from strategy
Astrategy's success often is determined by fit with organizational structure.
What is organizing in context of organizational resources and strategic goals?
Organizing is the development of organizational resources to achieve strategic goals.

Organizing the Vertical Structure

The set of formal tasks assigned to individuals and departments

Work specialization
Formal reporting relationships
Chain of command
Top-down “scalar chain” management
Changing today
Authority up top and less as goes down

The design of the systems to ensure effective coordination.

Coalition management
Get everyone on the same page.
Ensure proper coordination.
Bring people from different backgrounds together to work toward.
a common goal

Authority is vested in organizational positions, not people.

Authority flows down the vertical hierarchy.
Authority is accepted by subordinates.
Responsibility, Accountability, and Delegation
Responsibility is the duty to perform the task or activity as assigned
Accountability is the mechanism through which authority and responsibility are
aligned.
Delegation is the process managers use to transfer authority and responsibility
down the chain
Empowerment
Line and Staff Authority
Line Departments
Perform primary business tasks
Have formal authority to direct and control immediate subordinates
Staff Departments
Support the departments
Narrower and includes the right to advise, recommend, and counsel in
area of expertise
Span of Management
The number of employees reporting to a supervisor
Less supervision/larger spans of control
Work is stable and routine
Subordinates perform similar work
Subordinates are in one location
Highly trained/require little direction
Rules and procedures are defined
Few planning or nonsupervisory activities
Manager’s preference

Centralization: decision authority is located near the top of the organization

Decentralization: decision authority is pushed downward to all levels
Factors that influence centralization versus decentralization
Change and uncertainty are usually associated with decentralization
Should have a strategic fit
Crisis tends to require centralization
Departmentalization
A fundamental characteristic of organization structure
Basis for grouping positions into departments and departments into the total
organization
Various approaches
Functional
Divisional
Matrix
- Team-based
- Virtualffnetwork

Organizing for Horizontal Coordination

- Companies need more flexibility than vertical structure can offer
Meet fast-shifting business environment
Break down barriers and tie departments together
Needs integration and coordination

oKnowledge, tools, techniques, and activities should match production activities

oManufacturing firms can be categorized according to types of production
technology:
Small-batch and unit production
Large=batch and mass production
Continuous process production
oThe technical complexity of each type of firm differs
Structure Fits with Service Technology
oDistinct feature is the need to be close to customers
oIntangible outputs
oDirect contact with customers