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Management 12e richard draft chapter 10

Chapter 10
Designing Adaptive Organizations

© 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.


Organizing


All organizations wrestle with structural design and reorganization

The deployment of organizational resources to achieve strategic
goals
 Division of labor
 Lines of authority
 Coordination



Organizing is important because it follows from strategy


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© 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.


Organizing the Vertical Structure

Organizing structure defines:



The set of formal tasks assigned to individuals and departments



Formal reporting relationships



The design of the systems to ensure effective coordination

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© 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.


10.1 Sample Organization Chart

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© 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.


Organizing Concepts



Work Specialization is the degree to which organizational tasks are
subdivided into individual jobs; also called division of labor



Chain of Command is an unbroken line of authority that links all

individuals in the organization and specifies who reports to whom

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© 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.


Authority, Responsibility,
and Delegation




Authority is vested in organizational positions, not people
Authority flows down the vertical hierarchy
Authority is accepted by subordinates

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© 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.


Authority, Responsibility,
and Delegation


Responsibility is the duty to perform the task or activity as assigned



Accountability is the mechanism through which authority and
responsibility are aligned



Delegation is the process managers use to transfer authority and
responsibility down the chain

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© 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.


Line and Staff Authority
Line departments perform primary business tasks




Sales
Production

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© 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.


Line and Staff Authority

Staff departments support line departments







Marketing
Labor relations
Research
Accounting
Human Resources

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© 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.


Line and Staff Authority


Line authority means that people in management positions have
formal authority to direct and control immediate subordinates



Staff authority is narrower and includes the right to advise,
recommend, counsel in the staff specialists’ area of expertise

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© 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.


Span of Management



The number of employees reporting to a supervisor
Less supervision/larger spans of control

Work is stable and routine
Subordinates perform similar work
Subordinates are in one location
Highly trained/require little direction
Rules and procedures are defined
Few planning or nonsupervisory activities
Manager’s preference

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© 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.


Span of Management



Tall structure have more levels and narrow span
Flat structure have a wide span and fewer levels

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© 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.


10.2 Reorganization and
Span of Management

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© 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.


Centralization and Decentralization


Centralization – decision authority is located near the top of the
organization




Decentralization – decision authority is pushed downward to all levels
Factors that influence centralization versus decentralization:

Change and uncertainty are usually associated with decentralization
Strategic fit
Crisis requires centralization

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© 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.


Departmentalization:
Functional and Divisional
Basis for grouping positions into departments and departments into
the total organization



Vertical functional approach

Grouping of positions into departments based on skills, expertise, work
activities, and resource use

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© 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.


10.3 Five Approaches to Structural Design

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© 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.


10.3 Five Approaches to Structural Design

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© 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.


10.3 Five Approaches to Structural Design

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© 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.


10.3 Five Approaches to Structural Design

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© 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.


10.3 Five Approaches to Structural Design

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© 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.


Departmentalization:
Functional and Divisional


Divisional approach

Grouping based on organizational output
Product, program, business
Geographic or Customer-based divisions group activities by geography
or customer

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© 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.


10.4 Functional vs. Divisional Structure

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© 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.


10.5 Geographic-Based Global Organization
Structure

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© 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.


Departmentalization:
Matrix and Team Approach


Matrix approach combines functional and divisional approaches

Improve coordination and information
Dual lines of authority


Team approach is a very widespread trend

Allows managers to delegate authority
Flexible, responsive

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© 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.


10.6 Dual-Authority Structure in a Matrix
Organization

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© 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.


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