The Nature of Organizing, Entrepreneuring, and Reengineering

Organizational Roles
For an organizational role to exist and be meaningful, it must incorporate: 1. Verifiable objectives, which are a major part of planning. 2. A clear idea of the major duties or activities involved. 3. An understood area of discretion or authority so that the person filling the role knows what he or she can do to accomplish goals.

Organizing involves:
1. The identification and classification of required activities. 2. The grouping of activities necessary to attain objectives. 3. The assignment of each grouping to a manager with the authority (delegation) necessary to supervise it. 4. The provision for coordination horizontally (on the same or a similar organizational level) and vertically (for example, corporate headquarters, division, and department) in the organization structure.

Definition of Organization
Organization implies a formalized intentional structure of roles or positions.

Formal and Informal Organization

Formal and Informal Organization

Formal organization pertains to the intentional structure of roles in a formally-organized enterprise. The informal organization is a network of interpersonal relationships that arise when people associate with each other.

Organization Chart
A graphical representation of an organization.

Conveys four kinds of information:

Includes different units of organization Work performed by different personnel Reporting relationships indicated by connecting lines Number of hierarchy levels.

What is a Department?
The department designates a distinct area, division, or branch of an organization over which a manager has authority for the performance of specified activities.

Organization with Narrow Spans

Organization with Wide Spans

What is the Principle of the Span of Management?

The principle of the span of management states that there is a limit to the number of subordinates a manager can effectively supervise, but the exact number will depend on the impact of underlying factors.

What Determines an Effective Span of management?

Types of Business Organization

Criterion or basis Types of business organizations Size Ownership Purpose Activity Origin SME, Large organizations Sole proprietorship, partnership, Pvt. Ltd., Public Ltd., Cooperatives, Trusts & associations For-profit, not for profit Manufacturing, trading & services Domestic & Multinational, transnational or global, joint ventures and alliances

Sector
Style of management Reach of markets

Public sector & Private sector

Traditionally managed, managed as per the western models, using adapted or hybrid management models. Local, regional, national, international or multi-national, global

Types of Business Organization (contd.)

Criterion or basis Decision making Types of business organizations Centralized, decentralized

Product offering

Standard and coordinated product offering in different markets or uncoordinated product offering in different markets adapted to the local conditions & preferences
Ownership capital or debt-financed, domestic funds or financed through FDI Listed or unlisted

Sources of finance Listing on the stock exchange

Difference between an Intrapreneur and an Entrepreneur

An intrapreneur is a person who focuses on innovation and creativity and who transforms a dream or an idea into a profitable venture by operating within the organizational environment. The entrepreneur is a person who does similar things as the intrapreneur, but outside the organizational setting.

Environment for Entrepreneurship

Steve Wozniak and Steve Jobs at Apple Computers Entrepreneurship programs

Situations for Innovations

An unexpected event, failure, or success An incongruity between what is assumed and what really is A process or task that needs improvement Changes in the market or industry structure Changes in demographics Changes in meaning or in the way things are perceived Newly acquired knowledge

Definition of Reengineering
The fundamental rethinking and radical redesign of business processes to achieve dramatic improvements in critical contemporary measures of performance, such as cost, quality, service, and speed. The underlined words are considered key aspects of reengineering by Hammer and Champy.

Key Aspects of Reengineering

Fundamental rethinking of what the organization is doing and why. Radical redesign of the business processes. (Note: Downsizing or rightsizing is not the primary purpose of reengineering, although in many cases it does result in a need for fewer people.) Aim for dramatic results Careful analysis of business processes

Management by Processes

The Steps in the Organizing Process:

1. Establishing enterprise objectives. 2. Formulating supporting objectives, policies, and plans. 3. Identifying, analyzing, and classifying the activities necessary to accomplish these objectives. 4. Grouping these activities in light of the human and material resources available and the best way, under the circumstances, of using them. 5. Delegating to the head of each group the authority necessary to perform the activities. 6. Tying the groups together horizontally and vertically, through authority relationships and information flows.

The Organizing Process

Basic Questions for Effective Organizing

1. 2. 3. 4. It is useful to analyze the managerial function of organizing by raising and answering the following questions: What determines the span of management and hence the levels of organization? What determines the basic framework of departmentation, and what are the strengths and weaknesses of the basic forms? What kinds of authority relationships exist in organizations? How should authority be dispersed throughout the organization structure, and what determines the extent of this dispersion? How should the manager make organization theory work in practice?

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