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Organizational Considerations• Mechanic Organizations
• Are bureaucratic• Follow rules through tight control• Specialized jobs• Decisions made by top managers• Work well in stable environments
• Organic Organizations• Are flexible• Minimal focus on rules• Broadly defined jobs decisions made at lower levels• Work well in dynamic environment
Command and Direction• Unity of Command:
• Requires that each employee report to only one boss• Unity of Direction:
• Requires that all activities be directed toward the same objectives
• Chain of Command or the Scalar Principle:• The clear line of authority from the top to the bottom of an
organization
Span of Management• The number of employees reporting to a manager
• Tall organization: • Many levels with narrow spans of management
• Flat organization:• Few levels with wide spans of management
Authority
• Based on the specified relationship among employees
• Sanctioned way of getting the job done
• Common in mechanistic organizations
• Based on patterns of relationship that evolve as employees interact
• Unsanctioned way of getting the job done
• More accepted in organic organizations
Formal Authority Informal Authority
Centralized and Decentralized Authority
• Important decisions are made by top managers
• Allows for control and reduced duplication of work
• Mechanic organization use centralized authority
• Important decisions are made by middle and first-line managers
• Pushes authority and accountability further down the line
• Allows for efficiency and flexibility
• Organic tend to use decentralized authority
Centralized Authority Decentralized Authority
Levels of Authority• The Authority to Inform:
• May inform the supervisor alternative actions• The Authority to Recommend:
• May list alternative decision and actions, analyze them and recommend one action
• The Authority to Report:• May select a course of action but must report the action
• Full Authority: • May make decisions without the supervisor’s knowledge
Line and Staff Authority• Line authority:
• The responsibility to make decisions and issue orders down the chain of command
• Staff authority:• The responsibility to advise and assist other personnel
Organization Chart• Graphic illustration of the organizations management
hierarchy and departments and their working relationships• The Level of Management Hierarchy
• Top, middle and first line• Chain of Command
• Who reports to whom• Division of work
• Who is responsible for what function• Departmentalization
• The grouping of related activities into units
Internal Departmentalization• Based on Internal Operations or Functions
• Also called “Functional Departmentalization”• Involves organizing department around essential input
activities• Sales, production, and finance
• Used by small organizations
External Departmentalization• Based on the external or output and activities outside
the organization• Product Departmentalization
• Organizing departments around goods or services• Customer Departmentalization
• Organizing department around the needs of different types of customers
• Territory Departmentalization• Establishing separate units in each area in which enterprise does
business
Multiple Departmentalization• Many organizations, particularly large, complex ones,
use several types of departmentalization to create a hybrid structure
• Matrix departmentalization • Combines functional and product departmentalization• Divisional structure is based on semiautonomous strategic
business units
Conglomerate Structure• Based on autonomous profit centers or many unrelated
diversified business units• Top management focuses on business portfolio
management to buy and sell lines of business without great concern for coordinating divisions
Contemporary Organizational Designs • Networks
• Boundariless interrelationships among different organizations• Modular
• Firms that focus on what they do best, outsource the rest to other companies, and coordinate their activities
• Virtual Organization• Continually evolving network of companies that unite
temporarily to exploit specific opportunities or to attain strategic advantages and then disband when objectives are met
Job Simplification and Job Expansion
• Changes in the work sequence enhance performance
• Makes job more specialized
• Work smarter, not harder• Three steps:
• Eliminate• Combine• Change sequence
• Makes jobs less specialized
• Jobs can be expanded through:• Rotation- performing
different jobs in certain period of time
• Enlargement- adding tasks to broaden variety
• Enrichment- building motivators into the job itself to make it more interesting.
Job Simplification Job Expansion
Setting Priorities• Make a to-do list of tasks• Assign each task a priority• Focus on accomplishing only one task at a time
Priority Determination Questions• Do I need to be personally involved because of my
knowledge or skills?• Is the task my responsibility or will it affect the
performance of my department?• When is the deadline - is quick action needed?
Delegating• The process of assigning responsibility and authority for
accomplishing objectives• Obstacles to delegation: Managers believe that they can
perform the task more efficiently than others
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