12312 Organizational System

8/6/2019 12312 Organizational System

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Organizational System


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The Elements of Structure

y Organization Design

Is a process in which managers develop or change theirorganizations structure.

y Work Specialization Involves having each discrete step of a job done by a different

individual rather than having one individual do the whole job.


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Organizational Structure: Control

y Chain of Command

The continuous line of authority that extends from upperorganizational levels to the lowest levels and clarifies whoreports to whom.

y Unity of Command

The management principle that no person should report tomore than one boss.

y

Span of Control The number of subordinates a manager can direct efficiently

and effectively.


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Departmentalization byType

y Functional

Grouping jobs by

functions performedy Product

Grouping jobs by

product line

y Geographical Grouping jobs on the

basis of territory or

geography

y Process

Grouping jobs on the

basis of product orcustomer flow

y Customer

Grouping jobs by type

of customer and needs


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Functional Departmentalization

Plant Manager

Manager,

Manufacturing

Manager,

Human Resources

Manager,

Accounting

Manager,

Engineering

Manager,

Purchasing

+ Efficiencies from putting together similar specialtiesand people with common skills, knowledge, and

orientations

+ Coordination within functional area

+ In-depth specialization

Poor communication across functional areas

Limited view of organizational goals


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Geographical Departmentalization

Vice President

for Sales

Sales Director,Central Region

Sales Director,Prairies Region

Sales Director,

Western Region Sales Director,Eastern Region

+ More effective and efficient handling of specificregional issues that arise

+ Serve needs of unique geographic markets better

Duplication of functions

Can feel isolated from other organizationalareas


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Product Departmentalization

+ Allows specialization in particular products andservices

+ Managers can become experts in their industry

+ Closer to customers



Source: Bombardier Annual Report.

GM

CAR DivisionInstrument Division Cosmetics Division


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Process Departmentalization

+ More efficient flow of work activities

Can only be used with certain types of products

PlantSuperintendent

ClothMaking

DepartmentManager

ColouringDepartmentManager

WeavingDepartment

Manager

WashingDepartment

Manager

FinishingDepartment

Manager

ShippingDepartment

Manager


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Customer Departmentalization

+ Customers needs and problems can be met by specialists



Director

of Sales

Manager,

Wholesale Accounts

Manager,

Retail Accounts

Manager,

Government Accounts


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Organizational Structure (contd)

y Chain of Command

The continuous line of authority thatextends from upper levels of an organizationto the lowest levels of the organization andclarifies who reports to whom


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y Line and Staff AuthorityLine managers are responsible for the

essential activities of the organization,

including production and sales. Linemanagers have the authority to issue orders tothose in the chain of commandThe president, the production manager, and the sales

manager are examples of line managers

Staff managers have advisory authority, andcannot issue orders to those in the chain ofcommand (except those in their owndepartment)


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y Centralization

The degree to which decision making isconcentrated at a single point in the organizationOrganizations in which top managers make all the

decisions and lower-level employees simply carry outthose orders

y Decentralization

The degree to which lower-level employees

provide input or actually make decisions Employee Empowerment

Increasing the decision-making discretion ofemployees


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Factors that Influence the Amount ofCentralization

y Centralization Lower-level managers are not as capable or

experienced at making decisions as upper-level

managers Lower-level managers do not want to have a say in

decisions

Decisions are significant

Organization is facing a crisis or the risk of companyfailure

Company is large


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Factors that Influence the Amount ofDecentralization

y Decentralization Lower-level managers are capable and experienced at

making decisions

Lower-level managers want a voice in decisions

Decisions are relatively minor Company is geographically dispersed


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y Formalization

The degree to which jobs within the organizationare standardized and the extent to which employee

behaviour is guided by rules and proceduresHighly formalized jobs offer little discretion over what is to be

done

Low formalization means fewer constraints on howemployees do their work


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Matrix Organization

Matrix Organization is the combining of

functional and product patterns of departmentation

in the same organization structure .


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AMatrix Organization in an AerospaceFirm

Design

EngineeringManufacturing

Contract

AdministrationPurchasing Accounting

Human

Resources (HR)

Design

Group

Alpha

Project

Manufacturing

Group

Contract

Group

Purchasing

Group

Accounting

Group

HR

Group

Design

Group

Beta

Project

Manufacturing

Group

Contract

Group

Purchasing

Group

Accounting

Group

HR

Group

Design

Group

Gamma

Project

Manufacturing

Group

Contract

Group

Purchasing

Group

Accounting

Group

HR

Group

Design

Group

Omega

Project

Manufacturing

Group

Contract

Group

Purchasing

Group

Accounting

Group

HR

Group

Documents

12312 Organizational System