MANAGING THE ORGANIZATIONAL

ENVIRONMENT
 ORGANIZING

• Management function that involves arranging and structuring work to accomplish the

organization’s goals.

• It’s an important process, during which managers design an organization’s structure.

 PURPOSES OF ORGANIZING

• Divides work to be done into specific jobs and departments

• Assigns tasks and responsibilities associated with individual jobs.

• Coordinates diverse organizational tasks.

• Establishes formal lines of authority.

• Establishes relationships among individuals, groups, and departments.

• Allocates and deploys organizational resources.

 COMPONENTS

Organizational structure

• The formal arrangement of jobs within an organization.

Organizational chart

• The visual representation of an organization’s structure

Organizational design

• Creating or changing an organization’s structure

 ELEMENTS OF ORGANIZATIONAL
DESIGN

Organizational design involves decisions about six key elements.

1) Work specialization

2) Departmentalization

3) Chain of command

4) Span of control

5) Centralization and Decentralization

6) Formalization
 WORK SPECIALIZATION

• Dividing work activities into separate job tasks.

• Individual employees “specialize” in doing part of an activity rather than the entire activity in order to
increase work output. It’s also known as division of labor. Most managers today continue to see work
specialization as important because it helps employees be more efficient.

• For example: McDonald’s uses high work specialization to get its products made and delivered to customers
efficiently and quickly that’s why it’s called “fast” food. One person takes orders at the drive-through
window, others cook and assemble the hamburgers, another works the fryer, another gets the drinks, another
bags orders, and so forth.
 DEPARTMENTALIZATION

• The basis by which jobs are grouped together. For example, a hotel might have departments such as front desk operations,

sales and catering, housekeeping and laundry, and maintenance.

• Another popular trend is the use of teams, especially as work tasks have become more complex and diverse skills are

needed to accomplish those tasks. One specific type of team that more organizations are using is a Cross-Functional

Team, which is a work team composed of individuals from various functional specialties. For instance, at Ford’s material

planning and logistics division, a cross-functional team of employees from the company’s finance, purchasing,

engineering, and quality control areas, along with representatives from outside logistics suppliers, has developed several

work improvement ideas

 CHAIN OF COMMAND

• Suppose you were at work and had a problem with some issue that came up. What would you do?

Who would you go to help you resolve that issue? People need to know who their boss is. That’s

what the chain of command is all about

• The line of authority extending from upper organizational levels to the lowest levels, which

clarifies who reports to whom.

 CHAIN OF COMMAND

• To understand the chain of command, you have to understand three other important concepts:

a. Authority

b. Responsibility

c. Unity of command
 CHAIN OF COMMAND

Authority:

• The rights inherent in a managerial position to tell people what to do. Managers in the chain of command had
authority to do their job of coordinating and overseeing the work of others. Another early management writer, Chester
Barnard, proposed another perspective on authority. This view, called the acceptance theory of authority, says that
authority comes from the willingness of subordinates to accept it

• Barnard contended that subordinates will accept orders only if the following conditions are satisfied:
1. They understand the order.
2. They feel the order is consistent with the organization’s purpose.
3. The order does not conflict with their personal beliefs.
4. They are able to perform the task as directed.
 CHAIN OF COMMAND

Responsibility:

• When managers use their authority to assign work to employees, those employees take on an obligation to
perform those assigned duties. This obligation or expectation to perform is known as responsibility. And
employees should be held accountable for their performance!

Unity of command:

• Finally, the unity of command principle (one of Fayol’s 14 management principles) states that a person should
report to only one manager. Without unity of command, conflicting demands from multiple bosses may create
problems
 SPAN OF CONTROL

• How many employees can a manager efficiently and effectively manage? That’s what span of control is all
about. The traditional view was that managers could not and should not directly supervise more than five or
six subordinates. Determining the span of control is important because to a large degree, it determines the
number of levels and managers in an organization an important consideration in how efficient an
organization will be.
 CENTRALIZATION AND DECENTRALIZATION

• The degree to which decision making is concentrated at upper levels of the organization.

• The degree to which lower-level employees provide input or actually make decisions

• As organizations have become more flexible and responsive to environmental trends, there’s been a

distinct shift toward decentralized decision making. This trend, also known as employee empowerment.
 Factors Affecting an Organization’s Use of
Centralization or Decentralization

More Centralization More Decentralization

 Environment is stable.  Environment is complex, uncertain.
• Lower-level managers are not as capable or experienced • Lower-level managers are capable and experienced at
at making decisions as upper-level managers. making decisions.
• Lower-level managers do not want a say in decisions. • Lower-level managers want a voice in decisions.
• Organization is facing a crisis or the risk of company • Corporate culture is open to allowing managers a say in
failure. what happens.
• Effective implementation of company strategies • Effective implementation of company strategies
depends on managers retaining say over what happens. depends on managers having involvement and flexibility
to make decisions.
 FORMALIZATION

• How standardized an organization’s jobs are and the extent to which employee behavior is guided by rules and

procedures.

In highly formalized organizations, there are

 Clear job descriptions

 Numerous organizational rules

 Clearly defined procedures covering work processes.

 TRADITIONAL ORGANIZATIONAL
DESIGNS

• When designing a structure, managers may choose one of the traditional organizational designs.

• These structures tend to be more mechanistic in nature.

1) Simple structure

2) Functional structure

3) Divisional structure
 TRADITIONAL
ORGANIZATIONAL DESIGNS

Simple Structure:
• An organizational design with little departmentalization, wide spans of control, centralized authority,
and little formalization. As employees are added, however, most don’t remain as simple structures. The
structure tends to become more specialized and formalized.

• Rules and regulations are introduced, work becomes specialized, departments are created, levels of
management are added, and the organization becomes increasingly bureaucratic. At this point, managers
might choose a functional structure or a divisional structure.
 TRADITIONAL
ORGANIZATIONAL DESIGNS

Functional structure:

• An organizational design that groups together similar or related

occupational specialties.

Divisional structure:

• An organizational structure made up of separate, semi autonomous units

or divisions.
CREATING AND MANAGING TEAMS
 GROUPS AND GROUP
DEVELOPMENT
Group:
Two or more interacting and interdependent individuals who come together to achieve specific goals.

Formal Groups are work groups defined by the organization’s structure and have designated work assignments
and specific tasks directed at accomplishing organizational goals.

Informal Groups are social groups. These groups occur naturally in the workplace and tend to form around
friendships and common interests. For example, five employees from different departments who regularly eat
lunch together are an informal group
STAGES OF GROUP
DEVELOPMENT
 STAGES OF GROUP
DEVELOPMENT
Forming stage:
The first stage of group development in which people join the group and then define the group’s purpose,
structure, and leadership.

Storming stage:
The second stage of group development, characterized by intragroup conflict. There’s conflict over

who will control the group?

what the group needs to be doing?

 STAGES OF GROUP
DEVELOPMENT
Norming stage:
The third stage of group development, characterized by close relationships and cohesiveness.

Performing stage:
The fourth stage of group development when the group is fully functional and works on group task.

Adjourning:
The final stage of group development for temporary groups during which group members are concerned with
wrapping up activities rather than task performance.
 CONFLICT

The next factor that determines group performance and satisfaction concerns the processes that go on within a
work group such as communication, decision making and conflict management.

Conflict:

• Perceived incompatible differences that result in interference or opposition. Three different views have
evolved regarding conflict.

 Traditional view of conflict

 Human relations view of conflict

 Interactionist view of conflict

 CONFLICT

Traditional view of conflict:

• It was first developed in the late 1930s and early 1940s, with the most linear and simple approach towards

conflict. The view that all conflict is bad and must be avoided. Although conflicts are of different types, the

traditional view only sees conflict as dysfunctional and destructive.

 CONFLICT

Human relations view of conflict:

• From the late 1940s to the mid-70s, the human relations view dominated the topic of organizational conflict

• The human relations view on organizational conflict primarily teaches us to accept conflict, It identifies
conflict as an important aspect of any organization. The view that conflict is a natural and unavoidable
outcome in any group

• Moreover, this perspective even suggests that organizational conflicts within groups may even lead to better
group performance and outcome
 CONFLICT

Interactionist view of conflict:

• It suggests that an ongoing, minimum level of conflict is actually necessary and beneficial for a group. In the
interactionist view, an organization or group with no conflict is more likely to become static, non-responsive,
inflexible and inadaptable. It maintains a certain level of creativity, self-evaluation, and competition among the
individuals.

• All these things result in increased group performance, more creative solutions to problems and better
outcomes.

• It clearly states that only the functional and constructive forms of conflict help the group, while the
dysfunctional or destructive forms of conflict should be avoided.
 TYPES OF CONFLICTS

Task Conflict:

• Conflicts over content and goals of the work.

Relationship Conflict:

• Conflict based on interpersonal relationships

Process Conflict:

• Conflict over how work gets done.