Organizations

Organization

A group of people working together in a coordinated effort to reach certain goals.

In business, organizations help people achieve better results than they could working individually.

All organizations need managers to make sure everyone works together in a coordinated manner to help the organization in a positive way.

Why do Businesses Organize

Organizations are formed for 3 basic reasons1. To create a clear lines of authority2. To improve productivity3. To make it easier for people within a company to

communicate with each other. Workers feel a sense of stability and

belonging when working for an effective organization

Authority

The power based on the rights that come with a position.

Without clear lines of authority, decisions could be made by people not qualified to make them.

Establishing lines of authority means that decisions are made only at the appropriate level

Chain of Command

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

starts with the CEO

Advantages of a Defined Chain of Command

Makes it easy for all members of an organization to understand who is in charge.

Allows for problems to be handled at the lowest possible level.

Only problems that cannot be handled by a lower level supervisor will be introduced to a higher level

Disadvantages of a Defined Chain of Command

Can create problems if the structure is too rigid and complicated

Too many layers make assigning responsibility difficult.

Decisions are made slowly often by people with limited understanding of the issues involved. Ford motor company reduced the levels of mgt from

15 to 9. Larger mgt numbers meant longer time to respond to

customer needs. This is a crucial advantage in a highly competitive

industry

Improving Productivity

In early industrial times, it was proven that assigning specific tasks to individuals or groups will improve productivity

This technique is called Division of Labor.Division of Labor may include:

Specialization Job Rotation Job Scope Job Depth

Specialization

In many companies, groups of workers perform very specific tasks or sets of tasks.

Makes training workers easy due to only needing to master a limited set of skills.

Specialization can increase productivityToo much specialization may result in

employee boredom.

Job Rotation

Periodically moving of workers from one job to another.

This will help prevent workers from becoming bored

It also creates a multiskilled workforce

Job Scope

Refers to the number of operations involved in a job.

A narrow scope means a worker performs a small number of operations frequently A narrow scope may result in boredom and decline in

job performance qualityA broad scope means performing many job

functionsMost people find a broad scope more

satisfying.

Job Depth

The freedom employees have to: Plan and organize their work Interact with co-workers Work at their own pace

A job with depth allows for the workday to be much less regulated than those with minimal job depth

Improving Communication Review

Members of an organization need to communicate to help their organization achieve goals

Managers must communicate Goals, Strategies, Policies, and Procedures to their staff

Employees must communicate ideas, results, and problems to their managers

Improving Communication

Organizational structure allows companies that employ hundreds of thousands to communicate in an organized manner.

This is done through: Meetings Memos Emails Telephone Informal Encounters between employees

Communication ensures all employees understand company expectations.

What makes an Organization Effective

Responsive to the MarketCustomer CenteredCommitted to maintaining networks and alliancesDeveloped around a visionFocused on creating top-quality products and servicesDedicated to positive learning and changeAttentive to meeting responsibilities to customers,

employees, suppliers, and societyCommitted to measuring their progress against world-

class standards of excellenceAble to respond to changing market conditions quickly

Tomorrow

DecentralizationAuthorityUnity of CommandSpan of ManagementAccountability

Decentralization

The process by which decisions are made by managers at various levels within an organization.

During industrial times (late 19th and early 20th centuries) many companies were centralized: Power was held by a few senior managers who were

responsible for making most important decisionsManagers at all levels making decisions is

found to be more effective

Decentralization

Advantages: Increase an organizations ability to respond to market

changes by allowing mgrs to make them close to their customers

Frees many senior mgrs from day-to-day tasks and allows them to concentrate on higher-level issues, like planning.

Giving decision making authority to lower level mgrs increases their job scope and makes work more interesting

Disadvantages: May result in a loss of managerial control Duplication of effort.

Maintaining Authority

Authority is not effective when abusedAn effective manager must delegate

responsibility to others inside the organization This empowers employees And relieves the manager of all responsibility

Delegate

To assign responsibility and authority for certain tasks to another person

Delegating responsibility to a subordinate means that the manager obligates the subordinate to carry out certain duties, giving the subordinate the ability to act and make decisions.

Responsibility

The obligation to perform assigned duties

Subordinate – Person holding a lower position within the organization

Unity of Command

Principle that states an employee should have only one immediate supervisor to report to.

Confusion may result if the employee has to report to more than one person

Span of Management

The number of subordinates a manager can effectively control.

AKA – SPAN OF CONTROLToo many subordinates might cause the

manager to feel overwhelmed and not manage effectively

Managers with too few subordinates may have too little to do, not justifying his position

Giving Subordinates the Authority to Make Decisions

Managers cannot delegate responsibility without delegating the authority to perform the task.

Employees must be accountable for the responsibility and actions that ensue.

Accountability

The obligation to accept responsibility for ones actions.

NO T.O.B.Accountability allows managers to monitor

the work of subordinates

Organization Structure

All organizations serve a purpose and have a set of goals. What about the FBLA? What about the Christian Club? What about the Alexandria Football Team? What about Wal Mart?

Organizational Structure

Business organizations exist to meet their preset goals, and ultimately earn profits.

To meet goals, they organize their employees into some kind of structure. This helps minimize confusion over job expectations. Structure clearly identifies who is responsible for

which tasks.

Types of Organizational Structures

Line StructureLine and Staff StructureMatrix StructureTeam Structure

Each type can be shown by an organizational chart, which is a visual representation of a businesses structure.

Shows who reports to whom and what type of work each department does.

Line Structure

Authority originates at the top and moves downward in a line.

All managers perform line functions. Line functions – functions that contribute directly to

company profits. EX. Production mgrs, sales reps, marketing mgrs

What type of companies have a line structure?

Line Structure Chart

CEOSenior

ManagersMid-level Managers

Lower Level Managers

Nonmanagement Operatives

Line and Staff Structure

In a mid to large sized company, line managers cant perform all tasks required to run their department.

Other employees are hired to help by performing staff functions. Advise and support line functions EX. Legal dept, human resources, public relations

Contribute only indirectly to company profitsStaff are usually specialists in one field, and

only advise line managers.

Line and Staff Structure Chart

Staff mgrs

Line mgrs

Top mgrsPresident

Vice President,

Sales

Advertising Sales Personnel

Vice President,

Manufacturing

Fabrication Assembly

Matrix Structure

Allows employees from different departments to come together temporarily to work on special project teams.

Allows flexibility to respond quickly to customer needs by a team of people devoting time to the project, then return to their departments after completion. Common for companies that take on very large

projects EX. Boeing, new aircraft design

Matrix Structure Chart

Team Structure

Brings together people with different skills in order to meet a particular objective.

More and more companies are using this over Line and staff. Allows them to meet customer needs quicker than

traditional structuresTeams make their own decision instead of

having to get approval of senior mgrs

Team Structure Chart

Senior MGT

Team A

Marketing,

Production

Research,Finance

Team BMarketing

, Productio

nResearch, Finance

Team C

Marketing,

Production

Research, Finance

Flat Structure

An organization that has a small number of levels and a broad span of mgt at each level. This calls for a good bit of delegation on the part of

the mgr. Employees have more power within the company.

Advantages Greater job satisfaction More delegation Increased communication between levels of mgt.

Tall Structure

Organization that has many levels with small spans of management. Power is centralized on the top levels and there is

more employee control by senior mgrs. Advantages

Greater control Better performance