structuring organizations for today's challenges – chapter 9

job specialization

dividing tasks into smaller jobs

departmentalization

setting up individuals departments to do specialized tasks. the traditional way to departmentalize

advantages:

employees can develop skills and depth and can progress within a department as a master those skills

company can achieve economies of scale in that it can centralize similar resources in one area

disadvantages:

Maybe a lack of communication among the different departments

individual employees may begin to identify with their department and its goals rather than with the
goals of the organization as a whole

People in the same department tend to think alike

departmentalization by function

advantage:

economies of scale by centralizing all the resources

better coordination of activity

in depth skills development of employees

disadvantage:

lack of communication

slow response to external demands

narrow specialists

economies of scale

refers to the fact that companies can reduce their production costs if they purchase raw materials in
bulk. this focuses on the supply side of the business.

economies of scope

research to the efficiencies that can be realized through product bundling and family branding. focuses
on the demand side of the business
Management has four basic functions

planning organizing leading and controlling. without these there would be little to no structure and
focus on an organization

Fayol’s principles of organization

voting principle of management that looks at an organization from top-down approach to help
managers get the best from employees and run the business with ease

Division of Labor: functions are divided into areas of specialization such as production marketing and
finance

Authority: managers have the right to give orders and power to enforce obedience

clear communication channels: all workers should be able to reach each other in the firm quickly and
easily

subordination, degree of centralization, order, equity, Esprit de corps, unity of command, hierarchy of
authority

Weber’s organizational principle

Job Descriptions, written rule, procedures regulations and policies, staffing/promotion based on
qualifications

Henry mitzberg

He found that there is no single structure that will lead to success for all organizations. Current trends
are toward smaller and more flexible structures that that companies react more quickly to today's fast
changing technology competitive business climate

centralized authority

occurs when decision making authority is maintained at the top level of management at the company’s
headquarters

advantage: greater top management control, more efficiency, stronger brand image

disadvantages: less responsiveness to customers, conflict

decentralized authority

Occurs in decision making authority is delegated to lower-level managers and employees were more
familiar with the local conditions and headquarters management could be

advantage: better adaptations to what customers want, faster decision making, higher morale

disadvantages: less efficiency, less top management control, weakened corporate image

span of control

refers to the optimum number of staff a manager supervisor should supervise

capabilities of staff and manager, complexity of job, planning demands, need for coordination

narrow span of control

Single manager or supervisor overseas a few subordinates. it gives the rise to a tall organizational
structure

widespan of control

Single manager supervisor overseas a large number of subordinates. It gives rise to a flat organizational
structure.

four models of organization

Line organization, line and staff organization, matrix style organization, self-managed teams

Line organizations

Example CEO which has complete control over everybody from the top to the bottom

Advantages:

Clear authority and responsibility

easy to understand

one supervisor per employee

Disadvantages:

few specialists for advice

long line of communication

difficult to handle complex decisions

Line and staff organization

to minimize advantage of simple line organization many organizations that have both line and staff
personnel

line personnel

employees who are part of the chain of command that is responsible for achieving organizational goals

staff personnel

employees word advice and assistant personnel in meeting their goals

matrix style organizations

specialists from different sports of their canonization are brought together to organ specific project but
remain part of the line and staff structure
Cross functional self-managed teams

Group of employees from different departments who work together on long term basis

Networking

using communications technology and other means to link organizations and allow them to work
together on common objectives

transparency

a concept that describes the company being so open to other companies working with it that the other
once-solid barriers between them become see through electronic information is shared as if the
companies were one

Virtual corporation

A temporary networked organization made-up of replaceable firms that join and leave as needed. the
structure tends to be flexible and changing. it has no permanent ties to the firms that do its production,
distribution, legal and other work. such firms are very flexible and can adapt to changes in the market
quickly

benchmarking

comparing an organization's practices processes and products against the world's best

core competencies

the functions that an organization can do as well as or better than any organization in the world

restructuring

redesigning an organization so that it can more effectively and efficiently serve its customers

TQM - total quality management

companies try for maximum customer satisfaction by ensuring quality from all departments

continuous improvement – CI

custom improving the way that organization does things so that a customer can be satisfied

reengineering

the fundamental rethinking and radical redesign of an organizational processes to achieve dramatic
improvements in crickets on measures of performances

informal group norms examples

do your job but not produce more than the rest of the group

Everyone has to be clean and organized at the workstation

listen to the boss but do not trust them