The Nature of

Chapter 7 Organizing,
Entrepreneuring, and
Reengineering
 • LO 1 Realize that the purpose of an organization
structure is to establish a formal system of roles
• LO 2 Understand the meaning of organizing and
Learning organization
• LO 3 Draw a distinction between formal and
Objectives informal organization
• LO 4 Show how organization structures and
their levels are due to the limitation of the span
of management
• LO 5 Recognize that the exact number of people
a manager can effectively
• LO 6 Describe the nature of entrepreneuring
and intrapreneuring
• LO 7 Understand the key aspects and limitations
of reengineering
• LO 8 Demonstrate the logic of organizing and its
relationship to other managerial functions
• LO 9 Appreciate that organizing requires taking
situations into account
Formal and Informal Organization
• Formal Organization means the intentional structure of roles in a
formally organized enterprise.

• Informal Organization is a network of interpersonal relationships that

arise when people associate with each other.
Formal and informal organizations
Organizational Division: The Department
• Department is a distinct area, division, or branch of an
organization over which a manager has authority for the
performance of specified activities.
Organizational Levels and the Span of
Management
• Problems with Organizational Levels

• The Operational Management Position: A Situational Approach

• Principle of the span of management 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.

• Factors Determining an Effective Span

• Need for Balance

Factors influencing the span of management
An Organizational Environment for
Entrepreneuring and Intrapreneuring
• The Intrapreneur and the Entrepreneur
• Intrapreneur is a person who focuses on innovation and creativity and who transforms an idea
into a profitable venture while operating within an established organizational environment.
• Entrepreneur is a person who creates an organization to take advantage of market opportunities.

• Creating an Environment for Entrepreneurship

• Innovation and Entrepreneurship

Reengineering the Organization
• Key Aspects of Reengineering

Management
by processes
The Structure and Process of Organizing
• The Logic of Organizing
• Some Misconceptions
 What determines the span of management and hence
the levels of organization?

What determines the basic framework of

departmentation, and what are the strengths and
Basic weaknesses of the basic forms?

Questions for What kinds of authority relationships exist in

organizations?
Effective
Organizing How should authority be dispersed throughout the
organization structure, and what determines the extent
of this dispersion?

How should the manager make organization theory

work in practice?