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The Organizing Process

The Organizing Process and Communication

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An Internal Audit Presentation Report

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The Organizing Process

The Organizing Process

Elements of Organization

Coordination of effortA common goal or purposeDivision of laborA hierarchy of authority

Classifications of Organizations

BusinessesNonprofit service organizationsMutual benefit organizationsCommonweal organizations

Organizational Charts

Theories of OrganizingClosed-system Perspective Treats the organization as focused on economic efficiency in a reasonably predictable environmenta) Hierarchy of authority b) Principle of unity of commandc) Authority should be proportionate to responsibilityd) Authority but not responsibility may be delegated

Open-system PerspectiveTreats the organization as focused on survival in an uncertain environmentAdaption to changesCharacterized by synergismEquifinalityLearning organization

Organizational Effectiveness

ProductivitySocietys expectationsTimeAdaptive organization

Contingency ApproachStresses that the search for answers to organizational design problems depends on contingencies that can be discovered and studied

Determines the structure that suits the environmental uncertainty:Stability of demand for the organizations goods and servicesReliability of supplyRate of technological changeSocioeconomic and political pressures

Mechanistic OrganizationMost likely to succeed in stable and certain environments

Organic OrganizationMost likely to succeed in unstable and unscertain environments

Mintzbergs Five Organizational StructuresSimple StructureMachine BureaucracyProfessional BureaucracyDivisional StructureAdhocracy

Departmentation-Division of labor breaks complex processes into their simpler components

Departmentation by Function

Departmentation by Territory

Departmentation by Product

Departmentation by Customer

Lean ProductionFocuses on minimization of waste in everything from inventories to labor hours

Line and Staff OrganizationCombines line organization with staff departments, that support and advice line departmentsHas wide variety of positions

Line Positions and Staff PositionsLine PositionsDirectly involved in day to day operationsEngage in activities that are functionally and directly related to the principal workflow of an organizationStaff PositionsServes the organization by indirectly supporting line functionsEngage in activities that are supportive

Line and Staff AuthorityLine AuthorityFlows down the chain command; not limited to line personnelGives an INDIVIDUAL a certain degree of power relating to the performance of an organizational taskStaff AuthorityHas the right to advice or counsel those with the line authority

Functional AuthorityLimited line authorityGives a staff person a power over a particular function such as safety and accountingUsually it is given to a specific staff personnel with expertise in a certain areaSpecial type of authority for staff personnel which must be designated by management

Line and Staff ConflictCaused by:Poor human relationsOverlapping authority and responsibilityMisuse of staff personnel by top managementExcessive staffHow to MINIMIZE:Clearly define areas of activity and authorityUse concept of completed staff work

Span of Controla.k.a. Span of Management or Span of AuthorityAn upper limit to the number of people who can be effectively and efficiently supervised by one personGraicunas formulaManagers must not only manage one-to-one direct reporting relationships but also relationships with various groups of subordinates and the relationships that exist between and among invididual subordinates

Span of ControlBehavioral school states that there has to be an expansion of control if possibleIncreases autonomy and morale of individual workersDecreases communication problems by reducing organizational levels

Flat Organizational StructureHave relatively few levels from beginning to bottomHas wide span of controlProvides fast information flowDisadvantages:Poorer employee trainingLack of coordinationBehavioral problems

Tall Organizational StructureHas many levels between top and bottomHas relatively narrow span of controlIncreased frequency of interaction between superior and employeeMore expensive because of the large number of managersDisadvantages:Slow decision making, excessive supervision and greater administrative costd

Centralization and DecentralizationCentralizationProcess where the concentration of decision making is in a few handsLower level decisions are subject to approval of the top managementImplications:Reservation of decision making power at the top levelReservation of operating authority with the middle level managersReservation of operations at lower level at the directions of the top level

Centralization and DecentralizationDecentralizationSystematic delegation of authority at ALL LEVELS of managementAuthority is retained by the top management for taking the MAJOR decisions and framing policiesImplications:diversification and horizontal can be easily implantedthere is greater motivation and morale of the employees since they get more independence to act and decide.the subordinates get a chance to decide and act independently which develops skills and capabilities. This way the organization is able to process reserve of talents in it

Centralization and DecentralizationDelegationFormal process of assigning authority downwardDelegation versus DelegationResponsibilityNeedControlGood ResultsNature

FINAL COMMUNICATION

PRACTICE ADVISORY 2410-1: COMMUNICATION CRITERIAIt should contain at least the purpose, scope and results of the engagement.It may include Background information and Summaries.

Purpose Statements: describe the engagement objectivesScope Statements: identify the reviewed activities and include the nature and extent of engagement workResults: observations, conclusions, recommendations, and action plans

Observations(findings): relevant statement of factRecommendations: may suggest approaches for correcting or improving performanceConclusions(opinions): evaluations of the effects of the observations and recommendations

Attributes of Observations and RecommendationsCriteria: what should beCondition: what existsCause: why a difference between the actual and expected conditions existsEffect: risk or exposure resulting from the difference

QUALITY OF COMMUNICATIONSAccurateObjective ClearConciseConstructiveComplete Timely

Effective Communication

Communication is the process of conveying and understanding information between one person and another.

5 ElementsSender- the person who originates the message.Symbols- in which the message is encoded.Medium- the channel through which the message flows.Receiver- the person who decodes the message and interprets the senders meaningFeedback- acknowledging to the sender that the message was correctly understood.

Communication is the secret to the success of any manager.

Written communication- provides a permanent record of the message and tends to be accurate but can be time consuming to prepare.

Oral communication- less formal and less accurate than written communication but permits immediate feedback.

Electronic communication- better control of information and improvement of competitiveness due to improved technology.

Direction of CommunicationDownward

Upward

Horizontal

Organizational StructureTraditional or Classical management- one way communication.Participative management- multidirectional communicationSystems Theory- stresses the importance of feedback.

Nonverbal CommunicationOccurs in clusters, whether or not accompanied by verbal communication.Easily misunderstoodRequires establishment of the norms in a particular persons nonverbal repertoire

Communication Strategy1.) Spray and Pray- receivers are showered with information in the hope that some of it will stick.2.) Tell and Sell- involves communicating a more restricted set of messages and taking time to explain their importance and relevance.3.) Underscore and Explore- allowing employees the freedom to explore the implications of those ideas in a disciplined way.4.) Identify and Reply- reactive and defensive strategy. Employees concerns about prior communications are the central focus here.5.) Withhold and Uphold- you tell people what you think they need to know.

Problems in CommunicationPoorly encoded messagesFaulty media selectionNoisePerceptual problemsLoss in transmissionPoor retentionNonreceptionMedia breakdown

Guides To More Effective ListeningEmpathy- mentally putting oneself in another persons position to understand his or her feeling, attitudes and thoughtsSensitivity Training- gives managers a greater awareness of their own attitudes, feelings and beliefs.Interpersonal Communications Training- give and receive information.

Effective Listening ToolsParaphrasing what has been heard.Being attentive physically and mentally.Asking relevant questions.Avoiding premature judgments.Summarizing after the speaker has finished.