CHAPTER 12 ORGANIZING AND WORK

LE A R N I N G OB J E C T I V E S

READING STRATEGIESAs you read

● PREDICT what the section will be about.

● CONNECT what you read with your own life.

● QUESTION as you read to make sure youunderstand the content.

● RESPOND to what you read.

274 CHAPTER 12 ORGANIZING AND WORK

CHAPTER 12CHAPTER 12ORGANIZING ANDWORK

When you have completed this chapter, you will be able to:

� Recognize the reasons for organizing work.

� Understand how businesses prevent their workers fromlosing interest in their jobs.

� Explain why managers need to delegate authority andresponsibility.

56-6565

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WORKPLACE CONNECTIONS

For further reading on man-agers and management go to:www.businessweek.com

“We believe that all people want tobe involved in decisions that affectthem, care about their jobs and eachother, take pride in themselves and intheir contributions, and want to sharein the success of their efforts.”

—the Saturn Team, in concert withthe UAW and General Motors

“MANAGEMENT TALK”

275

UnderstandingManagement

The Saturn company began inthe mid-1980s as the brainchildof a group of 99 General Motorsemployees. Working conditions atthe company’s Spring Hill,Tennessee, plant are different fromthe typical assembly line factory.Saturn “team members” have thefreedom to improve the produc-tion process. Within a few years,Saturn won awards for the qualityof its vehicles. Other companiesnow look to Saturn for new andeffective ways to manage workers.

Analyzing Management Skills

How might involving employees in mak-ing decisions help factory operationsrun more smoothly?

Applying Management Skills

You are in charge of building yourschool’s homecoming float with ten vol-unteers. How would you organize them?

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www.businessweek.com

DESIGNING ORGANIZATIONS

➤ How organizinghelps groups of peo-ple achieve resultsthey could notachieve individually.

➤ Three reasons whybusinesses organizeworkforces.

➤ Nine characteris-tics of successfulorganizations.

➤ How businessesprevent workersfrom losing interestin highly special-ized jobs.

➤ Why businessesdecentralize theiroperations.

Without a well-definedorganization, nobusiness can besuccessful.

• organization• authority• chain of command• division of labor• job rotation• job scope• job depth


Section 12.1

� ORGANIZATION Without organization, this team of soccer players would not beable to work together to score goals. What role does organization play in abusiness?

What Is an Organization?A team of enthusiastic preschoolers shows up for its first soccer

meet. The team takes the field, but none of the players know where tostand. The children on the team run madly every time the ball iskicked, but no one passes the ball or sets up a play. The lack of organi-zation results in chaos.

On the next field, a group of high-school students competes. Theteams are well organized, with all team members playing their posi-tions well. The competition is fierce, and plays are well executed.

What distinguishes these two scenarios is the organization of theteams. The preschool team is a disorganized group of individuals. It hasno plan for how to work together to achieve its goals. The high-school team takes the field with a clear-cut plan on how to worktogether to beat its opponents.

WHAT YOU’LL LEARN

WHY IT’S IMPORTANT

KEY TERMS

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The high-school students’ team represents an , agroup of people working together in a coordinated effort to reach cer-tain goals. Organizations are formed to help groups of individuals worktogether as efficiently and effectively as possible. In business, as in soc-cer, organizations help people achieve better results than they couldworking individually.

All organizations need managers, people who direct the activity ofothers. Without managers, some people in the organization might notact in ways that help the organization meet its goals. The manager’sjob is to make sure that everyone in the organization works together ina coordinated manner.

Why Do Businesses Organize Their Workforces?

Organizations are formed for three basic reasons: to create clearlines of authority, to improve productivity, and to make it easier forpeople within a company to communicate with each other. In additionto increasing profit, workers feel a sense of stability and belongingwhen working for an effective organization.

Establishing Lines of AuthorityOne of the main reasons businesses organize is to establish author-

ity within a group. is power based on the rights that comewith a position. The Presidentof the United States, for exam-ple, has the authority to orderU.S. troops into battle. Likewise,chief executive officers have theauthority to make importantdecisions about the companiesthat they run. Store managershave the authority to approvereturns or offer discounts ondamaged merchandise.

Establishing authority isimportant in an organization.Without lines of authority,decisions could be made bypeople not qualified to makethem. Salesclerks, for example,could change the prices of theproducts they sell. Bank tellers

Authority

organization

Designing Organizations Section 12.1 277

International Management

LATIN AMERICA

Latin American management styles tend to be multi-focused on many simultaneous issues. Tasks are com-pleted through the strength of relationships. It may bechallenging for a manager who is single-focused to beconstantly interrupted or asked to wait while somethingmore pressing takes precedence.

For further reading aboutInternational Management go to: www.businessweek.com

PANAMA

COSTA RICA

FRENCHGUIANA

SURINAME

GUYANA

CHILE

ECUADOR

PARAGUAY

URUGUAY

NICARAGUA

ARGENTINA

BOLIVIA

COLOMBIA

VENEZUELA

PERU

BRAZIL

Caribbean Sea

MEXICO

THE

BAHAMAS

CUBA

EL SALVADOR

GUATEMALA

BELIZE

HONDURAS

JAMAICACAYMAN

ISLANDS

Gulf

of

Mexico

P a c i f i c O c e a n

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could make loan decisions. Establishing lines of authority means thatdecisions are made only at the appropriate level.

The line of authority within an organization is known as the. In the business world, the chain of command

begins with the chief executive officer. Beneath the chief executive offi-cer are other senior managers, who in turn supervise mid-level man-agers. Mid-level managers supervise lower-level managers, who in turnsupervise their own workers.

ADVANTAGES OF A WELL-DEFINED CHAIN OF COMMAND A well-defined chain of command makes it easy for all members of an orga-nization to understand who is in charge. A counter person in thedeli department of a supermarket, for example, understands that heor she reports to the deli manager. The deli manager understandsthat he or she reports to the store manager. Store managers knowthat they report to the regional manager, who in turn reports to thecorporate office.

This kind of organization means that problems are addressed at thelowest possible level. Only problems that cannot be handled by animmediate supervisor are brought to the attention of higher-levelmanagers. For example, at the media store, all returns will be handledby sales associates, except for those damaged items returned without areceipt. The store manager will tend to these special returns.

chain of command


� CHAIN OF COMMAND The surgeon leading this team of medical professionals is atthe top of the chain of command. How does the chain of command in an operatingroom compare to that in a business organization?

PREDICT

What are some of the advantagesof a chain of command?

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Management Careers in Focus

Convention ServicesManager

stressful conditions and tight deadlines. Com-munication skills are essential, as are the abili-ties to problem-solve, concentrate on details,organize, and direct the work of others.

� Salary RangeThe average salary for a convention ser-

vices manager is $43,000. This varies with loca-tion, size and type of company or organization,as well as responsibilities and experience.

CRITICAL THINKINGName three problems that could arise duringthe course of a large convention. Come upwith possible solutions.

INDUSTRY OUTLOOK In 2002, the U.S.

lodging industry occupancyrate was 59.2 percent andrevenue per available room(REVPAR) was $83.15. The lodging industryincreased total room supply by 1.8 percent, whiledemand for rooms increased 0.8 percent. Fullyear room revenue for the industry was down amodest 0.7 percent from 2001 to $77.5 billion.

� Nature of the WorkConvention services managers may work

for hotels, all kinds of professional organiza-tions, and other businesses. They coordinate allthe activities and services necessary to host largemeetings, conventions, and special events. Theymeet with the organization representatives, planlodging requirements, make reservations,arrange entertainment and speakers, choose thenumber of meeting rooms, and coordinate foodservices. During the event, they resolve unex-pected problems and see that hotel operationsconform to the expectations of the group.

� Working ConditionsConvention service managers work in

pleasant surroundings, either in their offices orat convention sites. They often deal with stress-ful situations and deadlines. They may workmore than 40 hours a week, evenings or week-ends, and may travel to convention sites.

� Training, Other Qualifications, andAdvancementTo become a convention services manager,

you need a bachelor’s degree in liberal arts,plus hotel experience; or a bachelor’s degree inhotel or food management. Internships, workstudy programs, or part-time work in hotels orfood service are useful and are recommended.You must be able to work with people under

For more information on management careers, go to: busmanagement.glencoe.com

BUSINESS MANAGEMENT

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busmanagement.glencoe.com

DISADVANTAGES OF A WELL-DEFINED CHAIN OF COMMAND Establish-ing a chain of command can create problems if the structure is toorigid or too complicated. Too many layers of management makeassigning responsibility difficult. It also means that decisions are madeslowly, often by people with only a limited understanding of theissues involved.

During the past few decades, many companies with complicatedbureaucracies saw profits tumble. In response, many tried to simplifytheir organizational structures. The Ford Motor Company reducedthe number of levels of management from 15 to nine during the1990s. It recognized that the large number of management levelsslowed decision making, thus preventing quick response to customerneeds. The company’s reorganization increased Ford’s ability torespond rapidly to market changes. This is a crucial advantage in ahighly competitive industry.

Improving ProductivityOrganizing involves the , or the assignment of

specific tasks to individuals or groups. In 1776, Adam Smith, a Scottishphilosopher, showed that individuals and economies could increasetheir wealth by dividing labor by tasks. In The Wealth of Nations Smithillustrated his idea with a simple example of a pin factory.

Each worker in a pin factory could perform each step of the pro-duction process—forming the metal, sharpening the point, creatingthe pin head, and so forth. Smith showed that the factory couldincrease the number of pins it produced if each worker specialized in aparticular function. The factory, Smith argued, could produce morepins if it assigned some workers to sharpen pins and others to work onpin heads. Businesses apply this principle today by organizing theirworkforces into groups of people that perform specialized functions(Figure 12–1).

SPECIALIZATION In many companies, groups of workers performvery specific tasks or sets of tasks. Electronics companies, for example,have workers who do nothing but check electrical connections. Bankshave employees who do nothing but process checks. Such workers areeasy to train, because they only need to master a limited set of skills.

Some specialization can increase the productivity of a business. Toomuch specialization, however, can cause boredom. Managers preventthis by taking steps to make specialized jobs more interesting.

JOB ROTATION involves periodically moving workersfrom one job to another. By rotating workers through different posi-tions, managers prevent workers from becoming bored. They also cre-ate a multiskilled workforce.

Job rotation

division of labor


CONNECT

Imagine your ideal “dream job.”What levels of job depth and jobscope would it have?

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MANAGERSManagers are needed when many people work together within an organization. One of a manager’s

most important functions is to assign jobs to workers sothat the company produces its goods efficiently.

3

The division of laborhelps managersincrease productivityby organizing theirworkforces efficiently.

SPECIALIZATIONThis factory is large enough to

enable workers tospecialize in specifictasks. Some workersspend all of theirtime sewing seams.Workers in anotherpart of the factoryput in zippers. Byspecializing in atask, workersbecome very good at what they do.

2

DIVISION OF LABORVery small businesses often are unable to

benefit from the efficien-cies that come with thedivision of labor. Thiswoman works aloneproducing and selling

handmade sweaters.She handles all

functionsherself, frompurchasingwool to billingcustomers.

1

FIGURE 12–1

The Division of Labor

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JOB SCOPE refers to the number of operations involvedin a job. In a job with narrow scope, a worker performs a small numberof operations and repeats them frequently. Assembly-line workers whoonly adjust tires, for example, have very limited job scope. People withlimited job scope often become bored with their jobs, and the qualityof their work declines.

People with a broad job scope perform many job functions.Account managers for advertising firms, for example, meet withclients, develop strategies, brainstorm creative ideas, track marketchanges and advances with the competition, and produce commer-cials. Most people find a job with broad scope more satisfying than onewith narrow scope.

JOB DEPTH is the freedom employees have to plan andorganize their work, interact with co-workers, and work at their ownpace. Corporate sales representatives, for example, often are givenconsiderable freedom to perform their jobs. Many decide for them-selves which customers or potential customers they want to call onand how much of their budget they want to spend trying to win anew account. Their days are much less regulated than those of manyoffice workers.

ImprovingCommunication

Members of an organizationneed to communicate with eachother to help their organizationachieve goals. Managers mustcommunicate goals, strategies,policies, and procedures to theirstaff. Employees must commu-nicate ideas, results, and prob-lems to their managers.

Organizational structureallows companies that employhundreds or thousands to com-municate with their employeesin an organized manner. Thisis done through meetings,memos, e-mail, telephone con-versations, and informal en-counters between employees.Communication ensures thatall employees understand com-pany expectations.

Job depth

Job scope


� TEAM BUILDING This team of Honda workers is responsible for a largenumber of functions. Why do you think Honda uses teams of workersrather than the traditional assembly-line approach, in which workersperform a few highly specialized tasks?

RESPOND

What role does a manager play inimproving the effectiveness of anorganization?

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What Makes an Organization Effective?

No single formula guarantees success for anorganization. Many successful organizationsdo share certain characteristics that are shownin Figure 12–2.

Knowing Your Customers andResponding to Their Needs

The success of a business ultimatelydepends on identifying what customers wantand providing it. To do so, companies need tounderstand customers and respond quickly totheir needs.

Kodak owes much of its success to com-mitment to the customer. George Eastman,company founder, created the first simplecamera for general use in 1888. This camera was introduced withthe slogan, “You push the button, we do the rest.” Cameras becameaccessible to everyone, not just professionals.


CHARACTERISTICS OF HIGHLY EFFECTIVEORGANIZATIONSFigure 12–2

Successful organizations are committed to meeting the needs of their customers. Why do youthink such a commitment is important?

• Responsive to the market

• Customer centered

• Committed to maintaining networks and alliances

• Developed around a vision

• Focused on creating top-quality products and services

• Dedicated to positive learning and change

• Attentive to meeting responsibilities to customers, employees,suppliers, and society

• Committed to measuring their progress against world-classstandards of excellence

• Able to respond to changing market conditions quickly

� MEETING CUSTOMERNEEDS To succeed in thebusiness world, compa-nies must change to keepup with customer needs.What are some ways thatKodak has done this?

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Kodak chairman and CEO Daniel Carp has continued this traditionof meeting customer needs. Kodak has held to the belief that photog-raphy should allow all people to capture their most important memo-ries. Computer technology, and its popularity in both business andpersonal lives, has had a major impact on the way photographs aretaken and processed. Kodak has met the changing customer needs withthe introduction of the digital camera, the Advantix system, photoCDs, and Photo-Net online picture service. Kodak continues to takecutting-edge technology and make it accessible, so that people can“Take pictures. Further.”

DecentralizationDuring the nineteenth and early twentieth centuries, many U.S.

companies were highly centralized. Power was held by a few seniormanagers who were responsible for making the most important deci-sions. Today, most U.S. companies find that a decentralized organi-zation is more effective. Managers at all levels make decisions inthese organizations.

ADVANTAGES OF DECENTRALIZATION Organizations decentralize forseveral reasons. First, decentralization increases an organization’s abil-ity to respond to market changes by allowing decisions to be made bymanagers who are close to their customers. Second, decentralizationfrees senior managers from many day-to-day tasks. It permits them to

devote more time to higher-level issues, such as planning.Finally, giving decision-makingauthority to lower-level man-agers increases their job scope.This increases the level ofresponsibility and makes theirjobs more interesting.

Nordstrom’s, the upscaledepartment store chain, does anoutstanding job of meeting itscustomers’ needs. Each depart-ment in each store is respon-sible for its own purchasing.Although it might be more effi-cient to have a single buyerresponsible for shoe depart-ments all over the country,Nordstrom’s prefer to allow eachstore to make its own decisionsabout which shoes to purchase.


� DECENTRALIZATION In certain chain stores, department managersdecide which products to stock. What are some of the advantages ofdecentralizing decision making to the store level?

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Section 12.1 Assessment

FACT AND IDEA REVIEW

1. List and explain the three benefits oforganizing.

2. Why do businesses organize their work-forces?

3. Describe four characteristics of well-organized companies.

4. What is job scope? Why is it important?5. True or false—Businesses are more central-

ized today than they were 100 years ago.

CRITICAL THINKING

1. Predicting Consequences: What are theadvantages of having a clearly definedchain of command?

2. Analyzing Information: Why do businessesdecentralize their operations? What are someof the disadvantages of decentralization?

ASSESSING WRITING SKILLS

You are a senior manager at a highly central-ized record company. Write a one-page essayexplaining why you believe the companyshould be decentralized. What benefits willdecentralization bring to the organization.

CASE ANALYSIS

You just purchased a 35,000-square foot retailstore, which you plan to turn into a gourmetshop and catering company. To staff your newbusiness, you will need to hire several dozenpeople.

Apply: Think about how to structure thechain of command at your new business. Thencreate an organizational chart showing whowill report to whom.

DISADVANTAGES OF DECENTRALIZATION Critics of decentralizationpoint to two potential problems. First, decentralization can result in aloss of managerial control. Corporate managers at Nordstrom’s, forexample, do not determine which products their stores stock becausethese decisions are left largely to store managers. Corporations that arenot comfortable letting lower-level managers make decisions may bereluctant to decentralize.

A second potential problem involves duplication of effort. AtNordstrom’s, each of the company’s shoe store managers must deter-mine which shoes to purchase. In contrast, at Borders Books, a highlycentralized company, a single buyer makes purchasing decisions for allof the company’s stores.


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DELEGATING RESPONSIBILITY AND AUTHORITY

➤ Three benefits ofdelegating.

➤ Five reasons somemanagers are reluc-tant to delegate.

➤ How managers del-egate effectively.

Managers cannot andshould not make alldecisions themselves.

• delegate• responsibility• subordinate• unity of command• span of management• accountability

Section 12.2

� DELEGATING TASKS People who manage other people must learn to delegateresponsibility and authority. What kinds of tasks do you think this movie directordelegates to others?

Maintaining AuthorityStudent council president Wayne Forte spends every afternoon in

the student council office. He also spends most weekends working onstudent council affairs. Wayne has good ideas and spends plenty oftime working to implement his ideas. However, he has not been aneffective student leader.

Last year’s president, Kristin Hernandez, put in less time on the stu-dent council. However, she did a very good job of involving other stu-dents. By assigning tasks to others, she achieved much more thanhard-working Wayne.

Wayne had a lot of authority in his organization, but he failedto use it effectively. He tried to keep all of the authority to him-self, rather than delegate some responsibility to others. To isdelegate

WHAT YOU’LL LEARN

WHY IT’S IMPORTANT

KEY TERMS


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to assign responsibility and authority for a task to another person.is the obligation to perform assigned duties. Delegating

responsibility to a , or a person holding a lower positionwithin an organization, means that the manager obligates the subor-dinate to carry out certain duties. The subordinate has been given theability to act and make decisions.

Kristin Hernandez did a good job of delegating authority. Sheasked the student council treasurer to take responsibility for raising$2,000 to finance student activities. She asked the head of the securitycommittee to conduct a survey of students’ concerns about safety atschool. By delegating authority and responsibility, she achieved morethan she could have herself.

Enforcing the Unity of Command Principle

The principle states that an employee shouldhave only one immediate supervisor. The principle is based on thenotion that confusion is likely to result when a person has to report totwo people at the same time.

To see why the unity of command principle is impor-tant, consider the situation faced by production super-visor for personal electronics, Max Lyman. Hisimmediate supervisor is production manager RickHuganir. Each week, Mr. Huganir sets production targetsfor hair dryers. Last month, Mr. Lyman learned that thenew quality control supervisor, to whom he also reports,plans to check the quality of the hair dryers that eachproduction supervisor turns out. To meet the qualitycontrol supervisor’s standards, Mr. Lyman will need toslow down his workers, so that fewer errors are made.However, slowing down the assembly line will meanthat Mr. Lyman will not produce enough hair dryers tomeet the weekly production goals.

Mr. Lyman can meet the standards set by the produc-tion supervisor, or he can meet the standards set by thequality control supervisor. He cannot meet the standardsset by both supervisors. He is in a no-win situation. What-ever he does, one of his superiors will be dissatisfied withhis work.

To avoid this kind of problem, organizations adopt the principle ofunity of command. In the case of Mr. Lyman, the organization needsto restructure its organization so that he reports to a single manager,whose standards he can then try to meet.

unity of command

subordinateResponsibility

Delegating Responsibility and Authority Section 12.2 287

All About

A T T I T U D EBOSSY BOOTSEven if your boss seems diffi-cult to get along with, don’ttake it personally. He or shemay be simply pushing you to do a better job. Your bossneeds to accomplish his or herown work, oversee a depart-ment, and provide perfor-mance evaluations as well.Simply show appreciation forany feedback given.

QUESTION

What is the definition of aprinciple?

CONNECT

Have you ever been in a situationat home, work, or school wherethe unity of command principlewould have prevented a frustrat-ing conflict of expectations?Explain.

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Establishing an Appropriate Span of ManagementAnother way that organizations maintain authority is by control-

ling the number of people who report to each manager. The, or span of control, defines the number of sub-

ordinates a manager can effectively control. Several factors determine how many subordinates a manager can

handle. These include:

• the complexity of the jobs subordinates perform• the quality of the people who fill the positions• the ability of the manager

Managers with too many subordinates may feel over-whelmed. Their span of control may not allow them to managetheir staff effectively.

Managers with too few subordinates may have too little to do.A manager with just two subordinates, for example, may beunnecessary. The organization could eliminate the manager’sposition and have the subordinates report to the next level ofmanagement within the organization.

Many businesses are moving away from this traditional spanof management and toward a team structure of organization (seeChapter 13). This change is part of a new emphasis in manage-ment that emphasizes flexibility in order to meet customer needs.Figure 12–3 contrasts the traditional view of the manager withthe contemporary view.

span of management


� SUPERVISION A manager in a telemarketing firm may supervise dozens oftelemarketers. What factor makes it possible for these managers to supervise such a large number of subordinates?

HEY, COACH!Most likely you’ll receivesome coaching to getwhere you’re headed in business. As youbecome more skilled inyour daily routines, takethe time to coach otherson your areas of exper-tise. Pass down yourexperiences along theway to help your organi-zation grow.

EADING THE AY

LWEADING

THE AY

RESPOND

Why is it important to control thenumber of subordinates man-agers supervise?

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Giving Subordinates the Authority to Make Decisions

Managers cannot delegate responsibility without delegating theauthority to perform the task. Consider Paula Brookes, a departmentalmanager who delegates the responsibility for purchasing office suppliesto her administrative assistant, Leslie Wong. Paula delegates responsi-bility to Leslie, but she does not give her the authority to actually pur-chase the supplies. As a result, every time Leslie needs to order newsupplies, she must go to Paula for approval. Paula has delegatedresponsibility without having delegated the necessary authority tomeet that responsibility. As a result, she finds herself having to makedecisions that could have been made by her assistant.

Ensuring AccountabilityManagers cannot simply delegate responsibility to their subordi-

nates. They must also ensure that their subordinates will actually per-form the tasks that have been delegated to them. To do so, managersmust be able to hold their subordinates accountable for their actions.

is the obligation to accept responsibility for one’s actions. Accountability


Traditional Manager

Thinks of self as a manager or boss

Follows the chain ofcommand

Works within a setorganizational structure

Makes most decisions alone

Hoards information

Tries to master one discipline

Demands long hours

Team Manager

Thinks of self as a sponsor, teamleader, or internal consultant

Deals with anyone necessary to getthe job done

Changes organizational structure inresponse to market changes

Invites others to join in decision-making

Shares information

Tries to master a broad array of managerial disciplines

Demands results

THE TRADITIONAL MANAGER VERSUS THE TEAM MANAGERFigure 12–3

The team manager represents one who is more of a teamplayer than a boss. What are the benefits of this new type ofmanagement?

WORKING WITH CHARTS

“The New Non-Managers,” Fortune, February 12, 1993.

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Douglas K. Smith, an expert onorganizational change and

also on teamwork, discussedhis book, “Taking Charge ofChange,” with BusinessWeek.

Q: A huge proportion ofcompanies that try to changefail to do it successfully. Why?

A: The most prevalent rea-son for such failures has to dowith not understanding the“how” part of change.

Q: How does teamwork fitinto the concepts of successfulchange?

A: Team performance isone of the 10 basic principlesfor managing profound change.

Q: What is the best way toteach the team concept to staff?

A: First, focus on what per-formance goals or challengesmight require teams. Then,decide whether the goals inquestion truly need real-timeintegration of many people orcan be accomplished throughthe sum of individual best per-formances. Then, if teams areneeded, have the teams learnabout the discipline of a teamin pursuit of their real goals,not just in training classes.

Q: Do you believe in incre-mental or revolutionary change?

A: Both. First, distinguishbetween organizational changethat requires hundreds of peo-ple to change and organiza-tional change that depends ona big decision like a downsiz-ing. If it is behavior-drivenchange, then it must happenat the individual level. What isprofound behavioral changefor individuals may not seemrevolutionary to companies.But unless hundreds of indi-viduals learn new things, therevolutionary change the com-pany seeks won’t happen!

Q: List some effectivemethods for motivating staffto need to be part of the team.

A: First, strong perfor-

DOUGLAS K. SMITH

“Taking Charge of Change”mance goal-setting and man-agement. Second, the teammust be in control, not theboss. Third, if the organizationdepends on teams performing,then career paths must reflectteam skills and opportunities.

Q: How do you measurethe readiness of an organiza-tion for change?

A: First, look who signs upfor specific performance chal-lenges. Second, talk with peo-ple involved and figure outwhat their reluctance stemsfrom.

Management Model


Excerpted with permission fromBusinessWeek, January 3, 1996.

CRITICAL THINKINGExplain what Smith meanswhen he states that the mostprevalent reason why com-panies fail to change has todo with not understandingthe “how” part of change.

DECISION MAKINGThe corporation you workfor is downsizing. As a man-ager, which of Smith’s theo-ries of change will help youinstigate change in yourcompany?

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Accountability allows managers to monitor the work of subordi-nates. The administrative assistant who purchases the department’soffice supplies is accountable for the money he or she spends. Themanager has the right to ask the subordinate to account for all fundsspent in order to ensure that money is not being spent inappropriately.

Why Delegate?Managers delegate for several reasons. First, sometimes a task is sim-

ply too time-consuming for a manager to handle alone. In this case,managers have no choice but to delegate responsibility to subordinates.

Second, some tasks are too routine to warrant a manager’s atten-tion. Allowing a lower-level employee to handle such tasks frees up themanager’s time for more important tasks. Managers who use their timewisely, for example, allow subordinates to take care of such routinetasks as tracking sick leave and ordering supplies.

In the 1970s, President Jimmy Carter was widely criticized for hisfailure to delegate responsibility for minor tasks. According to pressreports, the President personally handled the scheduling of court timeon the White House tennis courts. Carter’sreported failure to delegate such dutiesraised doubts about his managerial skills.

Third, sometimes a task requires spe-cial skills that a manager may not possess.In this case, the manager needs to dele-gate responsibility to subordinates withthe appropriate job skills. Lyn Stein is amid-level manager in charge of develop-ing a new light aircraft for a major aero-space company. Lyn’s background is inengineering, but she is not an expert inmetal strength. She delegates all responsi-bility for issues relating to metal strengthto the metal expert on her staff, who isbetter qualified than she is to make theappropriate decisions.

Companies benefit enormously whenmanagers delegate effectively because itmeans that decisions are made by peoplewith the most direct knowledge of issues.It improves a business’s ability to respondto customer needs.

Delegating also has a positive effecton staff. Employees who are given respon-sibility and authority know that their


� DELEGATING RESPONSIBILITY Reportedly President Carterhad difficulty delegating responsibility for some minor tasks,such as scheduling tennis court time at the White House. Why is it important for managers to delegate routineresponsibilities to their subordinates?

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managers have confidence in them. As a result, they are more likely tofeel a sense of commitment to the organization. Delegating alsoincreases employees’ job skills and knowledge of an organization.

Learning to DelegateTo delegate successfully, managers must identify which tasks can

be delegated. To do so, they need to analyze how they spend theirtime. They should look for tasks that could be handled by subordi-nates. Once they identify these tasks, they then need to determinewhich subordinates could best handle them. Finally, they need to

make sure that the subordinate towhom they delegate understandsand accepts responsibility for thetask he or she is being given.

Managers who delegate respon-sibility must clearly define theobjectives of all tasks and set stan-dards that subordinates need tomeet. They also need to provide


� COMMUNICATION To delegatesuccessfully, managers must make surethat their subordinates clearly understandthe objectives of the tasks they areassigned. What else must managers do to make sure their subordinatesperform their duties appropriately?

REASONS MANAGERS RESIST DELEGATINGFigure 12–4

Many managers are unwilling to delegate authority and responsibility. What are some reasonsfor their resistance?

• Fear that subordinates will not perform the task well

• Fear that subordinates will do the job too well, showing up the manager

• The belief that it is easier to perform the task oneself than todelegate it to someone else

• The natural tendency to want to hold on to power

• Comfort in performing the tasks one is used to performing

CONNECT

Imagine that you are the generalmanager of a movie theater. Whattasks would you delegate to youremployees? What skills would youlook for in the employees to whomyou assigned the tasks?

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Section 12.2 Assessment

FACT AND IDEA REVIEW

1. What is the unity of command principle?2. Name three factors that control the number

of subordinates that a manager can handle.3. Give three reasons why it is important for

managers to delegate.4. Explain the process by which managers

determine which tasks to delegate.

CRITICAL THINKING

1. Analyzing Information: How does delega-tion help a company respond to customerneeds?

2. Understanding Cause and Effect: Why doyou think entrepreneurs who start theirown companies sometimes have troubledelegating responsibility and authority?

ASSESSING LANGUAGE ARTS SKILLS

Write a one-page essay describing why it isimportant to delegate authority and responsi-bility. Use the text for ideas, but use your ownwords to write the essay.

CASE ANALYSIS

Jim Waters is a detail man. Despite headingup a 30-person marketing department for amajor corporation, he types all of his own cor-respondence, keeps track of all employees’ sickand vacation days, and makes all of his owntravel arrangements. As his supervisor, you areconcerned that he is spending too much timeon tasks that could be handled by his assistant.

Apply: Write a one-page memo explaininghow and why you would like Mr. Waters to del-egate some of his responsibilities.

appropriate training so that subordinates are able to takeon additional responsibility.

Resistance to DelegatingFailure to delegate can cause catastrophic results for

businesses. As you learned in Chapter 2, Henry Ford’s lackof confidence in his subordinates and his unwillingness toshare power almost destroyed the company he founded.Managers resist delegating authority for a variety of rea-sons, as Figure 12–4 shows. Managers need to let go ofsome of their control and have confidence in their subor-dinates. They should evaluate whether doing particulartasks would take away from their management functions,and delegate those tasks that do interfere.


Tips from Robert Half In business, success is

usually a team effort. Help outwhenever your help is necessary,even if it is “not your job.” Showinitiative, and take credit for thegroup when someone compli-ments a job well done.

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REVIEWING VOCABULARY

Define each of the following terms and use each in a sentence.

organizationauthoritychain of commanddivision of laborjob rotationjob scope

RECALLING KEY CONCEPTS

1. Why are organizations necessary? 2. What is a chain of command?3. What can happen to productivity if workers

become bored with their jobs?4. Why do managers need to learn to delegate

responsibility and authority?5. Give two reasons why some managers are reluc-

tant to delegate.

THINKING CRITICALLY

1. Why is authority important in an organization? 2. Do you think centralized organizations or decen-

tralized organizations are more effective in meet-ing customer needs? Explain your answer.

3. Is it possible to manage successfully with delegat-ing? Why or why not?

4. Why is it important for businesses to get close totheir customers?

job depthdelegatesubordinateunity of commandspan of managementaccountability

CHAPTER SUMMARY

Section 12.1

� Organizations help individuals worktogether efficiently and effectively.

� A well-defined chain of commanddefines who is in charge for allmembers of an organization.

� The division of labor assigns spe-cific tasks to individuals or groups.

� Companies prevent boredom inspecialized workforces by rotatingjobs, widening job scope, andincreasing job depth.

Section 12.2

� Managers should delegate author-ity and responsibility for decision-making to subordinates.

� The unity of command principlestates that an employee shouldhave one immediate supervisor.

� The span of management definesthe number of subordinates a man-ager can effectively control.

� In successful delegation managersidentify tasks to be delegated,choose a subordinate to handletasks, and establish expectations.

CHAPTER 12 ASSESSMENTCHAPTER 12 ASSESSMENT


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Assessment CHAPTER 12 295

PREPARING FOR COMPETITIVE EVENTS

Answer true or false to the following state-ments. Explain your answers.

a. Rotating employeesfrom job to jobreduces productivity.

b. Unity of commandstates that employeesoften need many managers.

CHAPTER 12 ASSESSMENTCHAPTER 12 ASSESSMENT

ASSESSING ACADEMIC SKILLS

MATH SKILLS Cindy Giovanetti earns $6.25an hour as a cashier at a video store. The man-ager of the store, Jon Laughlin, earns $12.00 anhour. Last week Jon put in 10 hours of over-time stocking the shelves with new products.He was paid $18.00 an hour. How much wouldthe company save if Cindy had stocked theshelves during her regular working hours?

APPLYING MANAGEMENT PRINCIPLES

SOLVE THE PROBLEM You have just beenpromoted to production manager of a com-pany that manufactures picture frames. Yourdepartment employs 25 workers on an assem-bly line. One set of workers cuts wood for theframes. Another sands the edges, while a thirdnails the four pieces of wood together. A fourthgroup of workers dusts the frames and packsthem into cartons. Turnover and absenteeismare high, and the quality often is unsatisfactory.

Language Arts What changes wouldyou make that might reduce the high level ofturnover and absenteeism? How would youimprove the quality of work that the companyproduces? Write a step-by-step plan of yourideas for implement-ing change in a two-page report.

In this chapter you read the Busi-nessWeek Management Model aboutan expert on organizational changeand teamwork. For more information,go to BusinessWeek online at:www.businessweek.com

Find several articles on teamwork.Then make a list of the advantages anddisadvantages of teamwork in a busi-ness. Share your list with the class.

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CHAPTER 12 ORGANIZING AND WORK