BUILDING BLOCKS OF ORGANIZING

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BUILDING BLOCKS OF ORGANIZING
1. DESIGNING JOBS 2.GROUPING JOBS 3. ESTABLISHING
REPORTING RELATIONSHIPS BETWEEN JOBS 4.
DISTRIBUTING AUTHORITY AMONG JOBS 5. COORDINATING
ACTIVITIES BETWEEN JOBS 6. DIFFERENTIATING
BETWEEN JOBS
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GROUPING TASKS INTO JOBS JOB DESIGN

• JOB SPECIALIZATION/DIVISION OF LABOR
• BENEFITS OF SPECIALIZATION
• 1. WORKERS PERFORMING SMALL, SIMPLE TASKS WILL B
  ECOME VERY PROFICIENT
• AT THAT TASK.
• 2. TRANSFER TIME BETWEEN TASKS DECREASES.
• THE MORE NARROWLY DEFINED A JOB IS, THE
  EASIER IT IS TO DEVELOP SPECIALIZED
• 3. EQUIPMENT TO ASSIST WITH THE JOBS.
• IN THE CASE OF ABSENCE THE MANAGER IS ABLE TO
  TRAIN SOMEONE NEW AT
• 4. RELATIVELY LOW COST
• LIMITATIONS OF SPECIALIZATION
• 1. WORKERS WHO PERFORM HIGHLY SPECIALIZED JOBS
  MAY BECOME BORED AND
• DISSATISFIED THAT IT OFFERS NO CHALLENGE OR
  STIMULATION.
• 2. THE ANTICIPATED BENEFITS OF SPECIALIZATION DO
  NOT ALWAYS OCCUR.
• ALTERNATIVES TO SPECIALIZATION
• JOB ROTATIONS

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DIVISION OF LABOR A SUMMARY
DIVISION OF LABOR
HIGH
LOW
HIGHLY SPECIALIZED TASK
HIGHLY GENERAL TASK
DEGREE OF SPECIALIZATION
USUALLY LARGE ORGANIZATION
USUALLY SMALL ORGANIZATION
TYPICAL ORGZIZATION SIZE
TENDS TO BE HIGHLY EFFICIENT
TENDS TO BE INEFFICIENT
ECONOMIC EFFICIENCY
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ESTABLISHING REPORTING RELATIONSHIPS

• CHAIN OF COMMAND
• UNITY OF COMMAND
• SPAN OF MANAGEMENT
• CHOOSING THE SPAN.
• A.V.GRAICUNAS
• RALPH C.DAVIS.
• LYNDALL F.URWICK.
• PROBLEMS WITH ORGANIZATIONAL LEVELS.
• LEVELS ARE EXPENSIVE
• LEVELS COMPLICATE COMMUNICATION
• LEVELS COMPLICATE PLANNING AND CONTROL.
• FACTORS DETERMINING AN EFFECTIVE SPAN.
• DETERMINING THE APPROPRIATE SPAN.

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FLAT ORGANIZATION
CEO
FLAT HIERARCHY
RELATIVELY WIDE SPAN OF CONTROL
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TALL ORGANIZATION
CEO
TALL HIERARCHY
RELATIVELY NARROW SPAN OF CONTROL
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FACTORS DETERMINING AN EFFECTIVE SPAN
1. TRAINING OF SUBORDINATES 2. CLARITY OF
DELEGATION OF AUTHORITY 3. CLARITY OF PLANS 4.
USE OF OBJECTIVE STANDARDS 5. RATE OF CHANGE 6.
COMMUNICATION TECHNIQUES 7. AMOUNT OF PERSONAL
CONTACT NEEDED 8. VARIATION BY ORGANIZATIONAL
LEVEL
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DETERMINING THE APPROPRIATE SPAN
1. COMPETENCE OF SUPERVISOR AND SUBORDINATES 2.
PHYSICAL DISPERSION OF SUBORDIANTES. 3. EXTENT OF
NON-SUPERVISORY WORK IN MANAGERS JOB 4. DEGREE
OF REQUIRED INTERACTION 5. EXTENT OF
STANADERIZED PROCEDURES. 6. SIMILARITY OF TASKS
BEING SUPERVISED. 7. FREQUENCY OF NEW
PROBLEMS 8. PREFERENCES OF SUPERVISORS AND
SUBORDINATES
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FACTORS INFLUENCING THE SPAN OF MANAGEMENT
WIDE SPAN (VERY LITTLE TIME SPENT WITH
SUBORDIANTES) RELATED TO
NARROW SPAN (A GREAT DEAL OF TIME SPENT WITH
SUBORDIANTES) RELATED TO
THOROUGH SUBORDINATE TRAINING
LITTLE OR NO TRAINING
CLEAR DELEGATION TO UNDERTAKE WELL-DEFINED TASKS
INADEQUATE OR UNCLEAR AUTHORITY DELEGATION
WELL DEFINED PLANS FOR REPETITIVE OPERATIONS
UNCLEAR PLANS FOR NONREPETITIVE OPERATIONS
VERIFIABLE OBJECTIVES USED AS STANDARDS
NONVERIFIABLE OBJECTIVES AND STANDARDS
SLOW CHANGES IN EXTERNAL AND INTERNAL ENVIRONMENTS
FAST CHANGES IN EXTERNAL AND INTERNAL ENVIRONMENTS
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GROUPING JOBS DEPARTMENTALAIZATION
THE PRACTICE OF GROUPING JOBS ACCORDING TO SOME
LOGICAL ARRANGEMENTS
1. DEPARTMENTATION BY SIMPLE NUMBERS 2.
DEPARTMENTATION BY TIME 3. FUNCTIONAL
DEPARTMENTATION 4. DEPARTMENTATION BY
TERRITORY 5. CUSTOMER DEPARTMENTATION 6. PROCESS
DEPARTMENTATION 8. DEPARTMENTATION BY PRODUCT
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A FUNCTIONAL ORGANIZATION GROUPING
PRESIDENT
ENGINEERING
PRODUCTION
FINANCE
MARKETING
FINANCIAL PLANNING
PRODUCTION PLANNING
ENGINEERING ADMIN
MARKET RESEARCH
BUDGETS
INDUSTRIAL ENGINEERING
PRELIMINARY DESIGN
MARKETING PLANNING
GENERAL ACCOUNTING
PRODUCTION ENGINEERING
ELECTRICAL ENGINNERING
ADVERTISING
SALES ADMIN
MECHANICAL ENGINEERING
COST ACCOUNTING
PURCHASING
STATISTICAL PROCESSING
SALES
HYDRAULIC ENGINEERING
TOOLING
GENERAL PRODUCTION
PACKAGING
QUALITY CONTROL
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ADVANTAGES AND DISADVANTAGES OF FUNCTIONAL
DEPARTMENTALIZATION
ADVANTAGES

• IS A LOGICAL REFLECTION OF FUNCTIONS
• MAINTAINS POWER AND PRESTIGE OF MAJOR FUNCTIONS
• FOLLOWS PRINCIPLE OF OCCUPATIONAL SPECIALIZATION
• SIMPLIFIES TRAINING
• FURNISHES MEANS OF TIGHT CONTROL AT TOP

DISADVANTAGES

• DEEMPHASIS OF OVERALL COMPANY OBJECTIVES.
• OVERSPECIALIZED AND NARROWS VIEWPOINTS OF KEY
  PERSONNEL.
• REDUCES COORDINATION BETWEEN FUNCTIONS
• RESPONSIBILITY FOR PROFITS IS AT THE TOP ONLY
• SLOW ADAPTATION TO CHANGES IN ENVIRONMENT.
• LIMITS DEVELOPMENT OF GENERAL MANAGERS

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DEPARTMENTATION BY TERRITORY OR GEOGRAPHY
PRESIDENT
FINANCE
PERSONNEL
PURCHASING
MARKETING
CENTRAL REGION
SOUTHEAST REGION
EASTERN REGION
SOUTHWEST REGION
WESTERN REGION
PERSONNEL
PRODUCTION
SALES
ACCOUNTING
ENGINEERING
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ADVANTAGES AND DISADVANTAGES OF GEOGRAPHICAL
DEPARTMENTALIZATION
ADVANTAGES

• PLACES RESPONSIBILITY AT A LOWER LEVEL
• PLACES EMPHASIS ON LOCAL MARKETS AND PROBLEMS
• IMPROVES COORDINATION IN A REGION
• TAKES ADVANTAGES OF ECONOMIES OF LOCAL OPERATIONS
• BETTER FACE-TO-FACE COMMUNICATION WITH LOCAL
  INTERESTS
• FURNISHES MEASURABLE TRAINING GROUND FOR GENERAL
  MANAGERS

DISADVANTAGES

• REQUIRES MORE PERSONS WITH GENERAL MANAGER
  ABILITIES
• TENDS OF MAKE MAINTENANCE OF ECONOMICAL CENTRL
  SERVICES DIFFICULT AND
• MAY REQUIRE SERVICES SUCH AS PERSONNEL OR
  PURCHASING AT
• THE REGIONAL LEVEL
• INCREASES PROBLEM OF TOP MANAGEMENT CONTROL

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CUSTOMER DEPARTMENTATION
PRESIDENT
INSTITUTIONAL BANKING
CORPORATE BANKING
COMMUNITY-CITY BANKING
AGRICULTURAL BANKING
REAL ESTATES MORTGAGE LOANS
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ADVANTAGES AND DISADVANTAGES OF CUSTOMER
DEPARTMENTATION
ADVANTAGES

• ENCOURAGES CONCENTRATION ON CUSTOMER NEEDS
• GIVES CUSTOMERS FEELING THAT THEY HAVE AN
  UNDERSTANDING SUPPLIER(BANKER)
• DEVELOPS EXPERTENESS IN CUSTOMER AREA

DISADVANTAGES

• MAY BE DIFFICULT TO COORDINATE OPERATIONS BETWEEN
  COMPETING CUSTOMER
• DEMANDS
• REQUIRES MANAGERS AND STAFF EXPERT IN CUSTOMERS
  PROBLEMS
• CUSTOMER GROUPS MAY NOT ALWAYS BE CLEARLY
  DEFINED(FOR EXAMPLE, LARGE
• CORPORATE FIMS VS OTHER CORPORATE BUSINESSES)

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PROCESS OR EQUIPMENT DEPARTMENTATION
PRESIDENT
ENGINEERING
ENGINEERING
ENGINEERING
ENGINEERING
ENGINEERING
ELECTROPLATING
WELDING
PUNCH PRESSES
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ADVANTAGES AND DISADVANTAGES OF PROCESS
DEPARTMENTATION
ADVANTAGES

• ACHIEVES ECONOMIC ADVANTAGE
• USES SPECIALIZED TECHNOLOGY
• UTILIZES SPECIAL SKILLS
• SIMPLIFIES TRAINING

DISADVANTAGES

• COORDINATION OF DEPARTMENTS IS DIFFICULT
• RESPONSIBILITY FOR PROFIT IS AT THE TOP
• IS UNSTUITABLE FOR DEVELOPING GENERAL MANAGERS

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PRODUCT ORGANIZATION
PRESIDENT
GENERAL MANAGER
ASSISTANT MANAGER
ASSISTANT MANAGER
ASSISTANT MANAGER
PRODUCT GROUP 3
PRODUCT GROUP 2
PRODUCT GROUP 1
PRODUCTION
PRODUCTION
PRODUCTION
SALES
SALES
SALES
RESEARCH
RESEARCH
RESEARCH
ACCOUNTING
ACCOUNTING
ACCOUNTING
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DEPARTMENTATION BY PRODUCT
PRESIDENT
FINANCE
PERSONNEL
PURCHASING
MARKETING
INDICATOR LIGHTS DIVISION
INDUSTRIAL TOOLS DIVISION
ELECTRONIC METER DIVISION
INSTRUMENT DIVISION
ACCOUNTING
ENGINEERING
ACCOUNTING
ENGINEERING
SALES
PRODUCTION
SALES
PRODUCTION
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ADVANTAGES AND DISADVANTAGES OF CUSTOMER
DEPARTMENTATION
ADVANTAGES

• PLACES ATTENTION AND EFFORT ON PRODUCT LINE
• FACILITATES USE OF SPECIALIZED CAPITAL,
  FACILITIES, SKILLS AND KNOWLEDGE
• PERMITS GROWTH AND DIVERSITY OF PRODUCTS AND
  SERVICES
• IMPROVES COORDINATION OF FUNCTIONAL ACTIVITIES
• PLACES RESPONSIBILITY FOR PROFITS AT THE DIVISION
  LEVEL
• FURNISHES MEASURABLE TRAINING GROUND FOR GENERAL
  MANAGERS

DISADVANTAGES

• REQUIRES MORE PERSONS WITH GENERAL MANAGER
  ABILITIES
• TENDS TO MAKE MAINTENANCE OF ECONOMICAL CENTRAL
  SERVICES DIFFICULT
• PRESENTS INCREASED PROBLEM OF TOP MANAGEMENT
  CONTROL

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MATRIX ORGANIZATION IN ENGINEERING
DIRECTOR OF ENGINEERING
CHIEF OF PRELIMINARY DESIGN
CHIEF OF PRELIMINARY DESIGN
CHIEF OF PRELIMINARY DESIGN
CHIEF OF PRELIMINARY DESIGN
PROJECT A MANAGER
PROJECT B MANAGER
PROJECT C MANAGER
PROJECT D MANAGER
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ADVANTAGES AND DISADVANTAGES OF MATRIX
ORGANIZATION
ADVANTAGES

• IS ORIENTED TOWARD END RESULTS
• PROFESSIONAL IDENTIFICATION IS MAINTAINED
• PINPOINTS PRODUCT-PROFIT RESPONSIBILITY

DISADVANTAGES

• CONFLICT IN ORGANIZATION AUTHORITY EXISTS
• POSSIBILITY OF DISUNITY OF COMMAND EXISTS
• REQUIRES MANAGER EFFECTIVE IN HUMAN RELATIONS

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PROJECT ORGANIZATION IN ENGINEERING
DIRECTOR OF ENGINEERING
PROJECT D MANAGER
PROJECT C MANAGER
PROJECT B MANAGER
PROJECT A MANAGER
PRELIMINARY DESIGN
ELECTRICAL ENGINEER
PRELIMINARY DESIGN
ELECTRICAL ENGINEER
MECHANICAL ENGINEER
HYDRAULIC ENGINEER
MECHANICAL ENGINEER
HYDRAULIC ENGINEER
METALLURGICAL ENGINEER
METALLURGICAL ENGINEER
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DISTRIBUTING AUTHORITY AMONG JOBS

• POWER
• AUTHORITY
• RESPONSIBILITY
• AUTHORITY RESPONSIBILITY PARITY PRINCIPLE.
• DELEGATION OF AUTHORITY.
• DELEGATION HAS DUAL CHARACTERISTICS
• KINDS OF DELEGATION
• REASONS FOR DELEGATION
• PROCESS OF DELEGATION
• THE ART OF DELEGATION
• PERSONAL ATTITUDES TOWARD DELEGATION
• WHY MANGERS DOT DELEGATE
• GETTING MANAGERS TO DELEGATE
• CENTRALIZATION VS DECENTRALIZATION
• FACTORS DETERMINING THE DEGREE OF
  DECENTRALIZATION OF AUTHORITY
• ADVANTAGES AND DISADVANTAGES OF DECENTRALIZATION.

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REASONS FOR DELEGATION
1. TO ENABLE THE MANGERS TO GET MORE WORK DONE 2.
SUBORDINATES HELP EASE THE MANAGERS BURDEN
BY DOING MAJOR PORTIONS OF THE ORGANIZATIONS
WORK. 4. A SUBORDINATE MAY HAVE MORE EXPERTISE
IN ADDRESSING A PARTICULAR PROBLEM THAN THE
MANAGER DOES 5. DELEGATIN ALSO HELPS DEVELOP
SUBORDINATES
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PROCESS OF DELEGATION
STEP 4
STEP 2
STEP 3
STEP 1
CREATING ACCOUNTABILITY
ASSIGNING RESPONSIBILITY
GRANTING AUTHORITY
DETERMINING THE RESULTS EXPECTED FROM A POSITION
MANAGER
MANAGER
MANAGER
MANAGER
SUBORDINATE
SUBORDINATE
SUBORDINATE
SUBORDINATE
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WHY MANAGERS DONT DELEGATE
PERSONAL ATTITUDES TOWARD DELEGATION
1. RECEPTIVENESS 2. WILLINGNESS TO LET GO 3.
WILLINGNESS TO LET OTHERS MAKE MISTAKES. 4.
WILLINGNESS TO TRUST SUBORDINATES. 5. WILLINGNESS
TO ESTABLISH AND USE BROAD CONTROLS.
1. TENDENCY OF HUMAN BEING TO WANT TO DO THINGS
PERSONALLY 2. LACK OF ASSUMING THE MANAGERIAL
ROLE WHEN PROMOTED TO THE MANAGERIAL RANKS 3.
FEAR OF BEING EXPOSED 4. UNCONSIOUS ACCEPTANCE OF
THE INDISPENSIBLE PERSON THEORY 5. DESIRE TO
DOMINATE 6.UNWILLINGNESS TO ACCEPT RISKS 7.
ATTITUDE THAT SUBORDINATES IS INCAPABLE OF USING
AUTHORITY PROPERLY
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GETTING MANAGERS OT DELEGATE
1. MAKE THE POTENTIAL DELEGATOR FEEL SECURE 2.
REALIZE THE NEED FOR AND BELIEVE DEEPLY IN
DELEGATION 3. ESTABLISHING A WORK CLIMATE FREE
FROM FEAR AND FRUSTRATION. 4. TIE IN WITH
INTELLIGENT PLANNING. 5. DETERMINE HOW THE
DELEGATOR KEEPS A HAND IN DUTIES 6. DETERMINE
WHAT TO DELEGATE AND PROVIDE ADEQUATE
AUTHORITY. 7. CHOOSE THE DELEGATEE WISELY. 8.
GIVE ASSISTANCE TO DELEGATOR
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CENTRALIZED ORGANIZATION
PRESIDENT
VP PRODUCTIION
VP FINANCE
VP SALES
PURCHASING
COST
RESEARCH
STANDARD
ENGINEERING
PUBLIC RELATIONS
MANAGER PLANT 4
MANAGER PLANT 2
MANAGER PLANT 3
MANAGER PLANT 1
DEPARTMENTS
DEPARTMENTS
DEPARTMENTS
DEPARTMENTS
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DECENTRALIZED ORGANIZATION
PRESIDENT
VP PRODUCTION
VP FINANCE
VP SALES
MANAGER PLANT 2
MANAGER PLANT 3
MANAGER PLANT 4
MANAGER PLANT 1
PURCHASING
PURCHASING
PURCHASING
PURCHASING
RESEARCH
RESEARCH
RESEARCH
ENGINEERING
ENGINEERING
COST
COST
COST
COST
STANDARDS
STANDARDS
ENGINEERING
STANDARDS
PUBLIC RELA
DEPARTMENTS
DEPARTMENTS
DEPARTMENTS
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FACTORS DETERMINING THE DEGREE OF
DECENTRALIZATION OF AUTHORITY
1. COSTLINESS OF DECISION 2. DESIRE FOR
UNIFORMITY OF POLICY 3. SIZE AND CHARACTER OF THE
ORGANIZATION. 4. MANAGEMENT PHILOSOPHY 5. DESIRE
FOR INDEPENDENCE 6. AVAILABILITY OF MANAGERS 7.
CONTROL TECHNIQUES 8. BUSINESS DYNAMICS THE PACE
OF CHANGE
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ADVANTAGES OF DECENTRALIZATION
1. RELIEVES TOP MANGEMENT OF SOME BURDEN OF
DECISION MAKING AND FORCES UPPER LEVEL MANAGERS
TO LET GO. 2. ENCOURAGES DECISION MAKING AND
ASSUMPTION OF AUTHORITY AND RESPONSIBILITY. 3.
GIVES MANAGERS MORE FREEDOM AND INDEPENDENCE IN
DECISION MAKING. 4. PROMOTES ESTABLISHMENT AND
USE OF BROAD CONTROLS WHICM MAY INCREASE
MOTIVATION 5. MAKES COMPARISON OF PERFORMANCE OF
DIFFERENT ORGANIZATIONAL UNITS POSSIBLE. 6.
FACILITATES SETTING UP OF PROFIT CENTERS 7.
FACILITATES PRODUCT DIVERSIFICATION 8. PROMOTES
DEVELOPMENT OF GENRAL MANAGERS 9. AIDS IN
ADAPTATION TO FAST-CHANGING ENVIRONMENT
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LIMITATIONS OF DECENTRALIZATION
1. MAKES IT MORE DIFFICULT TO HJAVE A UNIFORM
POLICY 2. INCREASE COMPLEXITY OF COORDINATION OF
DECENTRALIZED ORGANIZATIONAL UNITS 3. MAY RESULT
IN LOSS OF SOME CONTROL BY UPPER-LEVEL
MANAGERS. 4. MAY BE LIMITED BY INADEQUATE CONTROL
TECHNIQUES. 5.MAY BE CONSTRAINED BY INADEQUATE
PLANNING AND CONTROL SYSTEMS. 6. CAN BE LIMITED
BY THE AVAILABILITY OF QUALIFIED MANAGERS. 7.
INVOLVES CONSIDERABLE EXPENSES FOR TARINING
MANAGERS 8. MAY BE LIMITED BY EXTERNAL FORCES
(NATIONAL LABOR UNIONS, GOVT CONTROLS, TAX
POLICIES) 9. MAY NOT BE FAVORED BY ECONOMIES OF
SCALE OF SOME OPERATIONS