ORGANIZING

Organizational Designs

Robbins et al., Fundamentals of Management, 4th Canadian Edition 2005 Pearson Education Canada, Inc.

Organization Structure
The framework for dividing, assigning, and coordinating work
Robbins et al., Fundamentals of Management, 4th Canadian Edition 2005 Pearson Education Canada, Inc.

Organization Design
Developments in or changes to the structure of an organization

Key Elements of Organization Structure

Work Specialization Chain of Command Span of Control
Robbins et al., Fundamentals of Management, 4th Canadian Edition 2005 Pearson Education Canada, Inc.

Authority and Responsibility Centralization vs. Decentralization Departmentalization

Work Specialization
High

Job is broken down into a number of steps Each step is completed by a separate individual Makes efficient use of the diversity of skills that workers have
Work Specialization

Low

Productivity

Low

High

Robbins et al., Fundamentals of Management, 4th Canadian Edition 2005 Pearson Education Canada, Inc.

Work Specialization
High

Impact from Human Diseconomies

Impact from Economies of Specialization

Low

Productivity

Low

Work Specialization

High

Robbins et al., Fundamentals of Management, 4th Canadian Edition 2005 Pearson Education Canada, Inc.

Job Enlargement vs Job Enrichment

Robbins et al., Fundamentals of Management, 4th Canadian Edition 2005 Pearson Education Canada, Inc.

Other Aspects of Organization Structure

Chain of Command
Who reports to whom?

Robbins et al., Fundamentals of Management, 4th Canadian Edition 2005 Pearson Education Canada, Inc.

The Chain of Command

Chief Executive Officer Executive Vice President Executive Vice President

President

Vice President

Vice President

Vice President

Vice President

Vice President

Region 1 District A District B

Region 2 District C

Region 3 District D

Region 4 District E

Region 5 District F District G

Robbins et al., Fundamentals of Management, 4th Canadian Edition 2005 Pearson Education Canada, Inc.

Other Aspects of Organization Structure

Span of Control
How many direct reports can a manager manage?
Robbins et al., Fundamentals of Management, 4th Canadian Edition 2005 Pearson Education Canada, Inc.

Span of Control

Number of employees that an manager can manage effectively Increased over the last several years Contingency variables impact number

Robbins et al., Fundamentals of Management, 4th Canadian Edition 2005 Pearson Education Canada, Inc.

Authority vs. Responsibility

Rights inherent in managerial position to give orders and expect them to be followed Related to ones position--not the characteristics of person

Obligation to perform Goes hand-in-hand with authority

Robbins et al., Fundamentals of Management, 4th Canadian Edition 2005 Pearson Education Canada, Inc.

The Concept of Authority

Chief Executive Officer

Finance

Accounting

Marketing

Production

Research and Development

Human Resources

Robbins et al., Fundamentals of Management, 4th Canadian Edition 2005 Pearson Education Canada, Inc.

Line Authority

Level of authority that entitles manager to direct the work of an employee Contributes directly to the achievement of organizational objectives

Robbins et al., Fundamentals of Management, 4th Canadian Edition 2005 Pearson Education Canada, Inc.

Making Decisions in Organizations

High Managerial Control Employee Empowerment High

Centralized Decision Making

Low
Employee Empowerment

Decentralized Decision Making

Managerial Control

Low

Robbins et al., Fundamentals of Management, 4th Canadian Edition 2005 Pearson Education Canada, Inc.

The Degree of Centralization

Lower Higher Employee Empowerment Lower

Top Management Control

Decentralization

Centralization
Higher
Robbins et al., Fundamentals of Management, 4th Canadian Edition 2005 Pearson Education Canada, Inc.

The Degree of Formalization

Lower Higher

High Formalization
Higher Lower

Robbins et al., Fundamentals of Management, 4th Canadian Edition 2005 Pearson Education Canada, Inc.

Employee Freedom

Standardization

Low Formalization

Few Departments

Wide Spans of Control

The Simple Structure

Little Formalization
Robbins et al., Fundamentals of Management, 4th Canadian Edition 2005 Pearson Education Canada, Inc.

Centralized Authority

Strategy

Contingency Factors and Organization Design

Size

Technology

Environmental Uncertainty
Robbins et al., Fundamentals of Management, 4th Canadian Edition 2005 Pearson Education Canada, Inc.

The Team-Based Structure

Empower Workers
Robbins et al., Fundamentals of Management, 4th Canadian Edition 2005 Pearson Education Canada, Inc.

Hold Teams Accountable

The Virtual Organization

Independent R & D Consulting Firm Advertising Agency

Executive Group

Factories in South Korea

Robbins et al., Fundamentals of Management, 4th Canadian Edition 2005 Pearson Education Canada, Inc.

Commissioned Sales Representatives

Mechanistic Versus Organic Structures

High horizontal differentiation Rigid hierarchical relationships Fixed duties High formalization Formalized communication channels Centralized decision authority
Robbins et al., Fundamentals of Management, 4th Canadian Edition 2005 Pearson Education Canada, Inc.

Low horizontal differentiation Collaboration (vertical and horizontal) Adaptable duties Low formalization Informal communication Decentralized decision authority

Organization Structure Determinants and Outcomes

Causes
Strategy Size Technology Environment

Performance and Satisfaction

Structures
Determines

Mechanistic Organic
Moderated by individual differences and cultural norms

Robbins et al., Fundamentals of Management, 4th Canadian Edition 2005 Pearson Education Canada, Inc.

The Concept of Power

The Power Core

Authority Level

Accounting

Finance

Human Resources

Marketing

Production
Function

Research and Development

Robbins et al., Fundamentals of Management, 4th Canadian Edition 2005 Pearson Education Canada, Inc.

Coercive Referent

Reward

Power
Expert
Robbins et al., Fundamentals of Management, 4th Canadian Edition 2005 Pearson Education Canada, Inc.

Legitimate

POWER

How do You Build Power in and Organization

Robbins et al., Fundamentals of Management, 4th Canadian Edition 2005 Pearson Education Canada, Inc.