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Chapter-07 Creating a Flexible Organization. Dr. Gehan Shanmuganathan , (DBA). Unilever Restructures using Mobile Technology . Unilever Restructures using Mobile Technology . Unilever is an outcome of a merger between a British soap maker and Dutch margarine company in 1930 - PowerPoint PPT Presentation
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CHAPTER-07
CREATING A FLEXIBLE ORGANIZATION
Dr. Gehan Shanmuganathan, (DBA)
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UNILEVER RESTRUCTURES USING MOBILE TECHNOLOGY
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UNILEVER RESTRUCTURES USING MOBILE TECHNOLOGY Unilever is an outcome of a merger between a British
soap maker and Dutch margarine company in 1930 Grown global powerhouse selling 400 brands in 150
nations being the world’s third-largest manufacturer of consumer goods, with more than $ 75 billion in their annual sales. Workforce of 174,000
Organized by product, location, and function Teleconferencing, internet phones service, other services
for mobile workers This has reduced an office cost of 40% and increased
business efficiency
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LEARNING OBJECTIVES
LEARNING OBJECTIVES
1. Understand what an organization is and identify its characteristics.
2. Explain why job specialization is important.3. Identify the various bases for departmentalization.4. Explain how decentralization follows from
delegation.5. Understand how the span of management describes
an organization.6. Describe four basic forms of organizational structure
LEARNING OBJECTIVES (CONT’D)
7. Describe the effects of corporate culture 8. Understand how committees and task
forces are used9. Explain the functions of the informal
organization and the grapevine in a business
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WHAT IS AN ORGANIZATION ?
WHAT IS AN ORGANIZATION?
A group of two or more people working together to achieve a common set of goals
Developing organization charts Organization chart- positions and relationships Chain of command- line of authority from top to
bottom Staff (advisory) positions- not directly but as
advisors(broken lines)
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MAJOR CONSIDERATION FOR ORGANIZING A BUSINESS
MAJOR CONSIDERATION FOR ORGANIZING A BUSINESS
1. Job design- divide the entire organizational work
2. Departmentalization- manageable unites
3. Delegation- responsibility and authority
4. Span of management- number of subordinates to a manager
5. Chain of command- designate positions with authority and support positions
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JOB DESIGN
JOB DESIGN
Job specialization- separate distinctive tasks Rationale for specialization- increase of production
(Adam Smith- Wealth of nation) Alternatives to job specialization
Job rotation- rotate
Job enlargement- horizontally
Job enrichment- vertically
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EXPLAIN ROTATION, ENLARGEMENT, AND ENRICHMENT
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DEPARTMENTALIZATION
Grouping jobs into manageable units
Common bases for departmentalization By function By product By location By customer Combinations
DEPARTMENTALIZATION
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FUNCTIONS BASED STRUCTURE
GM
marketing
executive
representative
finance production Human resource
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PRODUCT BASED STRUCTURE
MARKETING MANAGER
MANAGER PRODUCT-A
MANAGER PRODUCT-B
MANAGER PRODUCT-C
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MARKET OR GEOGRAPHY BASED STRUCTURE
MARKETING MANAGER
REGION MANAGER-1
REGION MANAGER-2
REGION MANAGER-3
STRUCTURE BY CUSTOMER
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MATRIX STRUCTURE
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1.Inquisitive 2. Analytical3. Collective
4. Explorative 5. Innovative
1.Quality oriented
2. Efficiency oriented 3. Time
oriented 4. Process oriented
1. Winning minded
2. Go-getter 3. Convincin
g 4. Creative
5. Innovative 6. Challenge
status- quo
1. Analytical 2. Collective 3. Number
oriented 4. Cost and
opportunity cost
oriented
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DELEGATION, DECENTRALIZATION, AND CENTRALIZATION
DELEGATION, DECENTRALIZATION, AND CENTRALIZATION
Delegation Assigning part of a manager’s work and power to other
workers
Responsibility- duty to perform a job
Authority- power given to perform a task
Accountability- obligation to accomplish a task
STEPS IN THE DELEGATION PROCESS
The manager assigns responsibility
The subordinating is empowered to do the task
Ultimate accountability remains with the manager
BARRIERS TO DELEGATION Managers unwillingness Fear of subordinate doing the work better
than manager Manager is disorganized so can not delegate Feeling of the manager to get things done
rather sharing
DECENTRALIZATION OF AUTHORITY
Decentralized organization- spreads authority Centralized organization- authority centralized at
the upper level Factors favoring decentralization-
External environmental factors (dynamism) Nature of the decision Abilities of the lower level managers Lower level decision making skills Company tradition
THE SPAN OF MANAGEMENT/CONTROL
Span of control- number of workers reporting directly Wide or narrow
Organizational height- number of layers, or levels, of management in a firm Flat organizations- wider span of management
Tall organizations- narrow span of management
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FLATTER AND TALLER ORGANIZATIONS
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FORMS OF ORGANIZATIONAL STRUCTURE
CHAIN OF COMMAND: LINE AND STAFF MANAGEMENT Line management position
Line authority- a person makes a decision and gives orders to subordinates to achieve the organization’s goal
Staff management position Advisory authority – provides support advises, and
expertise within an organization Functional authority – the authority of staff managers
to make decisions and issue directives about their areas of expertise
CHAIN OF COMMAND: LINE AND STAFF MANAGEMENT
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LINE-STAFF CONFLICT Reasons for conflict
Staff managers have formal education and more ambitious
Line managers perceive staff as a threat Minimizing conflict
Form teams Clear definition of responsibilitiesHold both accountable for results
FORMS OF ORGANIZATIONAL STRUCTURE
Bureaucratic structure Characteristics- high specialization, departmentalization
by function, formal delegation, high centralization, narrow span of management, formal relationships
Advantages- manage large number of employees in fair manner
Disadvantages- lack of flexibility and lack of individual identity in the mass
Matrix structure- that combines vertical and horizontal lines of authority (cross functional teams)
THE MATRIX STRUCTURE (CONT’D)
Advantages Flexibility Increased productivity Nurture creativity Innovative
Disadvantages Employees report to more
than one supervisor Confusion about who is in-
charge Takes time to resolve
issues than individuals Personality clashes Poor communication Expensive to maintain
FORMS OF ORGANIZATIONAL STRUCTURE (CONT’D) Cluster structure- consists of primarily of teams
with no or very few departments- teams Strengths- special projects, flexibility, explore new
ideas Weaknesses- job security, stress level high
Network structure (virtual organization)- perform mainly admin work while other functions outsourced Strengths- flexibility Weaknesses- high turnover
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CORPORATE CULTURE
ADDITIONAL FACTORS THAT INFLUENCE AN ORGANIZATION Corporate culture
Indicators of corporate culturePower PeopleTaskProcess
Cultural change is needed when the organizations need a paradigm change
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TYPES OF CORPORATE CULTURES Networked culture- main function is admin
while other functions outsourced Mercenary culture- employees high
motivation and commitment to perform Fragmented culture- employees do not
become friends, but work at the office not for the office
Communal culture- friendship, commitment, high focus on performance
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ADDITIONAL FACTORS THAT INFLUENCEAN ORGANIZATION (CONT’D)
Committees- Types- ad hoc and standing committees
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ADDITIONAL FACTORS THAT INFLUENCEAN ORGANIZATION (CONT’D)
Coordination techniques- rules and procedures
Informal organization
Informal groups
The grapevine- informal communications network
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WRITE FIVE KEY THINGS (AREAS) THAT YOU CAN CRITICALLY REMEMBER IN TODAY’S DISCUSSION
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WHAT WE DISCUSSED TODAY..
LEARNING OBJECTIVES
1. Understand what an organization is and identify its characteristics.
2. Explain why job specialization is important.3. Identify the various bases for departmentalization.4. Explain how decentralization follows from
delegation.5. Understand how the span of management describes
an organization.6. Describe four basic forms of organizational structure
LEARNING OBJECTIVES (CONT’D)
7. Describe the effects of corporate culture 8. Understand how committees and task
forces are used9. Explain the functions of the informal
organization and the grapevine in a business
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WEEKLY ASSIGNMENT - 07
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WEEKLY ASSIGNMENT -07
Discuss with examples the importance of
managing a flexi-organization over highly
structured organizations when managing
special projects. E.g- computer projects,
research, and advertising projects and so on.