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Introduction to Management LECTURE 19: Introduction to Management MGT 101 1 Introduction to Management In lecture 18 we discussed Topics from Chapter 8: • Corporate Strategies • Competitive Strategies • Strategic Management Today 2 Introduction to Management Today in Chapter 9 we will discuss • Organizational Structure • Organizational Design 3 Introduction to Management (Chapter 9) Chapter 9: Organizational Structure & Design 4 Introduction to Management (Chapter 9) Organizational Structure 5 Introduction to Management (Chapter 9) Organizing Arranging and structuring work to accomplish an organization’s goals. 6 Introduction to Management (Chapter 9) Organizational Structure The formal arrangement of jobs within an organization. 7 Introduction to Management (Chapter 9) Organizational Design 8 Introduction to Management (Chapter 9) Organizational Design A process involving decisions about six key elements: Work specialization Departmentalization Chain of command Span of control Centralization and decentralization Formalization 9 Introduction to Management (Chapter 9) Purposes of Organizing • Divides work to be done into specific jobs and departments. • Assigns tasks and responsibilities associated with individual jobs. • Coordinates diverse organizational tasks. 10 Introduction to Management (Chapter 9) Purposes of Organizing • Clusters jobs into units. • Establishes relationships among individuals, groups, and departments. • Establishes formal lines of authority. • Allocates and deploys organizational resources. 11 Introduction to Management (Chapter 9) Work Specialization The degree to which tasks in the organization are divided into separate jobs with each step completed by a different person. Overspecialization can result in human diseconomies from boredom, fatigue, stress, poor quality, increased absenteeism, and higher turnover. 12 Introduction to Management (Chapter 9) Departmentalization by Type Functional Grouping jobs by functions performed Product Grouping jobs by product line Geographical Grouping jobs on the basis of territory or geography 13 Introduction to Management (Chapter 9) Departmentalization by Type Process Grouping jobs on the basis of product or customer flow Customer Grouping jobs by type of customer and needs 14 Introduction to Management (Chapter 9) 15 Introduction to Management (Chapter 9) Geographical Departmentalization 16 Introduction to Management (Chapter 9) Product Departmentalization 17 Introduction to Management (Chapter 9) Process Departmentalization + More efficient flow of work activities – Can only be used with certain types of products 18 Introduction to Management (Chapter 9) Customer Departmentalization + Customers’ needs and problems can be met by specialists - Duplication of functions - Limited view of organizational goals 19 Introduction to Management (Chapter 9) Chain of Command The continuous line of authority that extends from upper levels of an organization to the lowest levels of the organization and clarifies who reports to whom. 20 Introduction to Management (Chapter 9) Authority The rights inherent in a managerial position to tell people what to do and to expect them to do it. 21 Introduction to Management (Chapter 9) Responsibility The obligation or expectation to perform. 22 Introduction to Management (Chapter 9) Unity of Command The concept that a person should have one boss and should report only to that person. 23 Introduction to Management (Chapter 9) Span of Control The number of employees who can be effectively and efficiently supervised by a manager. 24 Introduction to Management (Chapter 9) Width of span is affected by: Skills and abilities of the manager Employee characteristics Characteristics of the work being done 25 Introduction to Management (Chapter 9) Width of span is affected by: Similarity of tasks Complexity of tasks Physical proximity of subordinates Standardization of tasks 26 Introduction to Management (Chapter 9) Width of span is affected by: Sophistication of the organization’s information system Strength of the organization’s culture Preferred style of the manager 27 28 Introduction to Management (Chapter 9) Centralization The degree to which decision making is concentrated at upper levels in the organization. Organizations in which top managers make all the decisions and lower-level employees simply carry out those orders. 29 Introduction to Management (Chapter 9) Decentralization Organizations in which decision making is pushed down to the managers who are closest to the action. 30 Introduction to Management (Chapter 9) Employee Empowerment Increasing the decision-making authority (power) of employees. 31