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Management meeting and exceeding customer expectation 8th ch09

Organizing Principles

Chapter 9

MANAGEMENT
Meeting and Exceeding Customer Expectations
EIGHTH EDITION
Prepared by
Deborah Baker
Texas Christian University
Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved

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learning objectives
1. Explain the relationship between planning and
organizing

2. Explain the importance of the organizing process
3. List and discuss the five steps in the organizing

process

4. Describe and give an example of the four
approaches to departmentalization

5. Define authority, and explain how line, staff, and

Chapter 9

functional authority differ

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learning objectives

(continued)

6. Explain the concept of power and its sources
7. Discuss the following major organizing concepts and
how they influence organizing decisions
• Unity of direction
• Chain of command
• Line and staff departments
• Unity of command
Explain
the term “informal
• Delegation

• Responsibility
• Accountability
• Span of control
• Centralization and
organization”
decentralization

8.
9. Compare the informal organization to the formal



Chapter 9

organization

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11

Organizing Process

Organizing
Organizing

The management function that
establishes relationships
between activity and authority

 Governed by plans that state where the
organization is going

 Organization must be built or modified to ensure
those plans are executed

Chapter 9

 Resources must be concentrated in a unified way

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Downsizing

11

Chapter 9

Downsizing
Downsizing

Also known as rightsizing, it
calls for shrinking both the size
of the company and the number
of employees

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22

Benefits of Organizing
1.
1. ItIt clarifies
clarifies the
the work
work environment
environment
2.
2. ItIt creates
creates aa coordinated
coordinated environment
environment
3.
3. ItIt achieves
achieves the
the principles
principles of
of unity
unity of
of direction
direction

Chapter 9

4.
4. ItIt establishes
establishes the
the chain
chain of
of command
command

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77

Organizing Concepts
Unity
Unityof
of
Direction
Direction

Chapter 9

Chain
Chainof
of
Command
Command

The establishment of one
authority figure for each
designated task of the
organization

The unbroken line of reporting
relationships from the bottom to
the top of the organization

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33

Five-Step Organizing Process
1.
1. Reviewing
Reviewing plans
plans and
and goals
goals
2.
2. Determining
Determining work
work activities
activities
3.
3. Classifying
Classifying and
and grouping
grouping activities
activities

Chapter 9

4.
4. Assigning
Assigning work
work and
and delegating
delegating authority
authority
5.
5. Designing
Designing aa hierarchy
hierarchy of
of relationships
relationships
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Chapter 9

33

Five-Step Organizing Process

Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved

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Chapter 9

33

Five-Step Organizing Process

Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved

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Chapter 9

33

Five-Step Organizing Process

Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved

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Chapter 9

33

Five-Step Organizing Process

Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved

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Chapter 9

33

Five-Step Organizing Process

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Chapter 9

33

Five-Step Organizing Process

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33

Specialization of Labor

Chapter 9

Specialization
Specialization
of
ofLabor
Labor

Division of labor
Breaks a potentially complex
job down into simpler tasks
or activities

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Specialization of Labor

33

Specialization

High

High

Efficiency

Low

Each employee
completes a few basic
operations, such as
assembling the VCR
frame.
Each employee
assembles one
component of a VCR.

Chapter 9

Each employee
assembles a
complete VCR.

Low

Low

Job Satisfaction

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High

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Advantages of Work Specialization
 Work can be performed more efficiently
 Employees gain skill and expertise
 Facilitates the process of employee
selection

 Decreases training requirements
 Allows managers to supervise more

Chapter 9

employees

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33

Disadvantages of Work
Specialization
 Jobs can become too simplified
 Employees become bored and tired
– safety problems and accident rates
increase
– absenteeism rises

Chapter 9

– quality of work may suffer

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Classifying and Grouping Activities

44

Simultaneous

The
The Principle
Principle of
of Functional
Functional Similarity
Similarity
1.
1. Examine
Examine each
each activity
activity to
to determine
determine its
its
general
general nature
nature
2.
2. Group
Group the
the activities
activities into
into these
these related
related areas
areas

Chapter 9

3.
3. Establish
Establish the
the basic
basic department
department design
design for
for
the
the organizational
organizational structure
structure

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Chapter 9

44

Departmentalization
Functional
Functional

Based
Based on
on specialized
specialized
activities
activities of
of the
the business
business

Geographical
Geographical

Based
Based on
on territory
territory

Product
Product

Based
Based on
on product
product activities
activities

Customer
Customer

Based
Based on
on the
the needs
needs of
of
specific
specific customer
customer groups
groups

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44

Departmentalization Examples
Functional
Functional

}






Geographical
Geographical

}




Southern Region
Northern Region

}






Helicopter Division
Power Systems Division
Aircraft Engine Division
Elevator Products Division

}





Pharmaceutical
Professional
Final customer

Chapter 9

Product
Product

Customer
Customer

Finance
Production
Marketing
Human Resources

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44

Horizontal Structuring
Important
Important Effects
Effects

1. It defines the working relationships
between operating departments

2. It makes the final decision on the span

Chapter 9

of control of each manager

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44

Horizontal Structuring
Span
Spanof
of
Control
Control

Chapter 9

Organization
Organization
Chart
Chart

The number of subordinates
under the direction of a manager

The complete organizational
structure shown visually

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Chapter 9

44

Organization Chart

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44

Organization Chart
1. Who reports to whom
2. How many subordinates work for each manager
3. The channels of official communication
4. How the company is departmentalized
5. The work being done in each position
6. The hierarchy of decision making

Chapter 9

7. The types of authority relationships

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