Sunteți pe pagina 1din 36

Chapter 8

Concepts of Organizing
After studying this chapter, you will be able to:

1. Identify the organizing function of management.


2. Explain the unity of command principle and its
applications.
3. Define the span of management principle and
the factors that influence its applications.
4. Describe departmentation and alternative
approaches for grouping activities and
assigning work.
5. Explain the importance of authority to
supervisory management.

Chapter 8/Concepts of Organizing


Hilgert & Leonard © 2001
8-2
After studying this chapter, you will be able to:

6. Explain the meaning of line and staff authority


and how these influence organizational
structures and supervisory relationships.
7. Describe how functional authority may be
granted to specialized staff for certain purposes.
8. Discuss applications of matrix-type
organizational structure.
9. Define downsizing (restructuring) and its
implications for organizational principles.

Chapter 8/Concepts of Organizing


Hilgert & Leonard © 2001
8-3
1
THE ORGANIZING FUNCTION OF
MANAGEMENT

Organization—Group structured by management


to carry out designated functions and accomplish
certain objectives

People are the substance and essence


of any organization.

Organizational success is more likely if employees


are given top-priority attention by their managers
and supervisors.

Chapter 8/Concepts of Organizing


Hilgert & Leonard © 2001
8-4
2
THE UNITY OF COMAMAND PRINCIPLE

Unity of command principle—Each employee


has only one direct supervisor.

Having more than one direct


supervisor usually leads to
unsatisfactory performance by
the employee due to confusion
of authority.

Chapter 8/Concepts of Organizing


Hilgert & Leonard © 2001
8-5
3
THE SPAN OF MANAGEMENT
PRINCIPLE
The principle that there is an upper limit
to the number of subordinates that a
supervisor can manage effectively.
Also called span of supervision, span of authority,
and span of control.

Chapter 8/Concepts of Organizing


Hilgert & Leonard © 2001
8-6
3
FACTORS INFLUENCING THE
SPAN OF MANAGEMENT

• Supervisory competence: Training, experience,


and know-how have a direct impact on the number of
employees who can be supervised effectively.
• Specialized staff assistance: Quality help from
others in the organization.
• Employee abilities: The greater the employees’
capacity for self-direction, the greater the feasible
managerial span.

Chapter 8/Concepts of Organizing


Hilgert & Leonard © 2001
8-7
3
FACTORS INFLUENCING THE
SPAN OF MANAGEMENT
• Location of employees: When located in
close proximity to employee, observation and
communication are relatively easy.
• Nature and complexity of activities: The simpler,
routine, and more uniform the work activities, the
greater number of people one supervisor can manage.
• Objective performance standards: Good
performance standards support a broader span of
management. Eliminates the need for frequent
discussions concerning performance.

Chapter 8/Concepts of Organizing


Hilgert & Leonard © 2001
8-8
3
THE SPAN OF MANAGEMENT
PRINCIPLE
Relationship of Managerial Levels
Lead person—Employee placed in charge of other
employees who performs limited managerial functions
but is not considered part of management.

The narrower the span of management, the


more managerial levels have to be introduced
in organizational design. An organization’s
structures tend to be taller when spans of
management are narrower.

Chapter 8/Concepts of Organizing


Hilgert & Leonard © 2001
8-9
RELATIONSHIP
RELATIONSHIP OF
OF MANAGEMENT
MANAGEMENT AND
AND ORGANIZATIONAL
ORGANIZATIONAL LEVELS
LEVELS 4

Chapter 8/Concepts of Organizing


Hilgert & Leonard © 2001
8-10
4
DEPARTMENTATION AND APPROACHES
FOR GROUPING ACTIVITIES

Division of work (specialization)—Dividing work


into smaller components and specialized tasks to
improve efficiency and output.

Department—Organizational unit for which a


supervisor has responsibility and authority.

Flexible workforce—Employees trained in a variety


of skills to perform multiple tasks.

Chapter 8/Concepts of Organizing


Hilgert & Leonard © 2001
8-11
4
DEPARTMENTATION AND APPROACHES
FOR GROUPING ACTIVITIES

• Functional departmentation: Grouping


departments by the jobs to be done. Provides better
coordination than having the same functions
performed in different departments under different
supervisors.

• Product or service departmentation: Grouping


departments by product or service into relatively
independent units within the organization.

Chapter 8/Concepts of Organizing


Hilgert & Leonard © 2001
8-12
4
DEPARTMENTATION AND APPROACHES
FOR GROUPING ACTIVITIES

• Geographic (territorial, locational)


departmentation: Units of organization are
physically dispersed or functions performed in
different locations.

• Customer departmentation: Grouping activities


based on customer considerations to better service
differing needs and characteristics of different
customers.

Chapter 8/Concepts of Organizing


Hilgert & Leonard © 2001
8-13
4
DEPARTMENTATION AND APPROACHES
FOR GROUPING ACTIVITIES

• Process and equipment departmentation:


Grouping activities by the process involved or
equipment needed.

• Time departmentation: Grouping according to the


time period during which the work is performed. Other
factors, such as function and service, may also
influence time and shift departmentation.

• Mixed departmentation: Use of several types of


departmentation, such as functional, geographic, and
time, simultaneously.
Chapter 8/Concepts of Organizing
Hilgert & Leonard © 2001
8-14
MIXED
MIXED DEPARTMENTATION
DEPARTMENTATION 4

Chapter 8/Concepts of Organizing


Hilgert & Leonard © 2001
8-15
4
DEPARTMENTATION AND
APPROACHES FOR GROUPING
ACTIVITIES
Work Assignments and
Organizational Stability
Principle of organizational stability—No
organization should become overly dependent on
one or several key “indispensable” individuals.
A supervisor’s task of assigning departmental
work will be less difficult by consistently utilizing
the strengths and experience of all employees.

Chapter 8/Concepts of Organizing


Hilgert & Leonard © 2001
8-16
5
IMPORTANCE OF AUTHORITY TO
SUPERVISORY MANAGEMENT

Understanding Managerial Authority


and Its Delegation

Managerial authority—The legitimate right


to direct and lead others.
Delegation of authority—The process of
assigning duties and related authority to
subordinates.

Chapter 8/Concepts of Organizing


Hilgert & Leonard © 2001
8-17
5
IMPORTANCE OF AUTHORITY TO
SUPERVISORY MANAGEMENT

Understanding Managerial Authority


and Its Delegation

• In order to learn how to give an order, you


must first learn how to take an order.
• If you give people a job to do, give them
the authority they need to carry out their
responsibilities.

Chapter 8/Concepts of Organizing


Hilgert & Leonard © 2001
8-18
5
UNDERSTANDING MANAGERIAL
AUTHORITY AND ITS DELEGATION
Acceptance Theory of Authority: A manager
only possesses authority when the employee accepts it

The origin of authority can be considered from two


viewpoints:
• The formal way that originates from the top and
reaches down
• As something subordinates confer on a supervisor
by the degree of willingness they accept or
respond to direction.

Chapter 8/Concepts of Organizing


Hilgert & Leonard © 2001
8-19
5
LIMITATIONS TO AUTHORITY
Limitations to a supervisor’s authority may arise
from many factors, both within and outside of the
company. Some of these are:

• Explicit and implicit • Ethical


• External and internal • Moral
• Political • Social
• Legal • Economic

Chapter 8/Concepts of Organizing


Hilgert & Leonard © 2001
8-20
6
LINE AND STAFF AUTHORITY AND ITS
INFLUENCE
Organization chart—Graphic portrayal of
authority and responsibility relationships

Line authority—The right to direct others and to


require them to conform to decisions, policies,
rules, and objectives.

Line-type organizational structure—Structure


that consists entirely of line authority arrangement
with a direct chain of authority relationships.

Chapter 8/Concepts of Organizing


Hilgert & Leonard © 2001
8-21
6
LINE AND STAFF AS AUTHORITY
RELATIONSHIPS

All supervisors should know whether they are part


of the organization in a line or staff capacity, and
what these words imply in relation to their positions
and other departments.

Chapter 8/Concepts of Organizing


Hilgert & Leonard © 2001
8-22
6
LINE
LINE TYPE
TYPE OF
OF ORGANIZATIONAL
ORGANIZATIONAL STRUCTURE
STRUCTURE

Chapter 8/Concepts of Organizing


Hilgert & Leonard © 2001
8-23
6
LINE AND STAFF TYPE
ORGANIZATIONAL STRUCTURE

Staff authority—The right to provide


counsel, advice, support, and service in a
person’s area of expertise.

Line department—Department whose


responsibilities are directly related to
making, selling, or distributing the
company’s product or service.

Chapter 8/Concepts of Organizing


Hilgert & Leonard © 2001
8-24
6
LINE AND STAFF TYPE
ORGANIZATIONAL STRUCTURE

Staff department—Specialized department


responsible for supporting line
departments and providing specialized
advice and services.

Line-and-staff-type organizational
structure—Structure that combines line
and staff departments.

Chapter 8/Concepts of Organizing


Hilgert & Leonard © 2001
8-25
6
LINE-AND-STAFF
LINE-AND-STAFF TYPE
TYPE
ORGANIZATIONAL
ORGANIZATIONAL STRUCTURE
STRUCTURE

Chapter 8/Concepts of Organizing


Hilgert & Leonard © 2001
8-26
6
SUPERVISORS AND THE HUMAN
RESOURCES DEPARTMENT

Human resources management


(HRM) —Organizational philosophies,
policies, and practices that strive for the
effective use of employees.

Human resources department


—Staff department which provides advice

and service to other departments on


human resources matters.
Chapter 8/Concepts of Organizing
Hilgert & Leonard © 2001
8-27
6
SUPERVISORS AND THE HUMAN
RESOURCES DEPARTMENT

In most organizations, the director of human


resources and the human resources operate
in a staff capacity.

Human resources departments


are becoming more strategic
within an organization.
Effectiveness depends on how
clearly top-level managers have defined
their activities and authority.
Chapter 8 /Concepts of Organizing
Hilgert & Leonard © 8888
8-28
7
FUNCTIONAL AUTHORITY

Principle of compulsory staff advice


(service)—Situation in which supervisors
are required to consult with specialized staff
before making certain decisions.

Functional authority—Granted to
specialized staff people to give directives
concerning matters within their expertise.

Chapter 8/Concepts of Organizing


Hilgert & Leonard © 2001
8-29
8
MATRIX-TYPE ORGANIZATIONAL
STRUCTURE

A hybrid structure in which regular functional


departments co-exist with project teams from
different departments.

Many high-tech firms employ project (matrix)


structures to focus special talents from
different departments on specific projects for
certain periods.

Chapter 8/Concepts of Organizing


Hilgert & Leonard © 2001
8-30
8
MATRIX-TYPE
MATRIX-TYPE ORGANIZATIONAL
ORGANIZATIONAL STRUCTURE
STRUCTURE

P r e s i d e n t

D e p a r t m D e en p t a r t m D e en pt a r t m e n t
S u p e r v i sS o u r p e r v i s S o u r p e r v i s o r
F u n c t i o n F uX n c t i o n F Yu n c t i o n Z

M a n a g e r
P r o j e c t A

M a n a g e r
P r o j e c t B

Chapter 8/Concepts of Organizing


Hilgert & Leonard © 2001
8-31
8
MATRIX-TYPE
MATRIX-TYPE ORGANIZATIONAL
ORGANIZATIONAL
STRUCTURE
STRUCTURE
Problems
associated
with matrix
organization
structure
include:
• Direct accountability—violates the principle of
unit of command
• Priorities of scheduling for individuals assigned
to work on several projects
Chapter 8/Concepts of Organizing
Hilgert & Leonard © 2001
8-32
DOWNSIZING AND ITS 9
IMPLICATIONS
Also called Restructuring or Right-sizing

Large-scale reduction and elimination of jobs that


usually results in reduction of middle-level managers,
removal of organizational levels, and a widened span
of management for remaining supervisors.

Chapter 8/Concepts of Organizing


Hilgert & Leonard © 2001
8-33
9
DOWNSIZING AND ITS
IMPLICATIONS
Some middle-level management and staff
positions have been eliminated because
information technology has made it possible for
higher-level managers to acquire data quickly and
keep in close touch with operations.
Organizations that downsized most effectively are
those that have planned for it and have tried to
harmonize the new structure with the old.

Chapter 8/Concepts of Organizing


Hilgert & Leonard © 2001
8-34
9
DOWNSIZING AND ITS
IMPLICATIONS
Re-engineering—Restructuring on the basis of
processes and customer needs and services,
rather than by department and functions.
Horizontal corporation—A firm restructured by
customer process and organizational structure is
very flattened.
Virtual corporation—Companies linking together
on a temporary basis to take advantage of
marketplace opportunities.

Chapter 8/Concepts of Organizing


Hilgert & Leonard © 2001
8-35
END

Chapter 8/Concepts of Organizing


Hilgert & Leonard © 2001
8-36