BUSINESS ENVIRONMENT. LO 2 : Session 01: Organizational Structure

Transcription

1 BUSINESS ENVIRONMENT LO 2 : Session 01: Organizational Structure

2 Introduction to organizing Organizing is the deployment of organizational resources to achieve strategic goals. Organizing is deciding how best to group organizational activities and resources so that the organization will achieve its goals.

3 Purposes of organizing Divides work to be done into specific jobs and departments Assigns tasks and responsibilities associated with individual jobs Establishes relationships among individuals, groups and departments Establishes formal lines of authority Allocates and deploys organisational resources

4 Organisational structure Organizational structure is the formal arrangement of jobs within an organization. The set of formal tasks assigned to individuals and departments The design of systems to ensure effective coordination of employees Formal reporting across departments relationships, including lines of authority, decision responsibility, number of levels and span of control The design of systems to ensure effective coordination of employees across departments

5 Organization chart The organization chart shows departments and job titles, with lines linking senior executives to the departments of people for whose work they are responsible. This shows who people report to, and clarifies four features of the formal structure: Tasks the major activities of the organization Subdivisions how they are divided Levels the position of each post within the hierarchy Lines of authority these link the boxes to show who people report to

6 Organizations chart

7 Organizational design A process that involves decisions about six key elements Work specialization Departmentalization Chain of command Span of control Centralization and decentralization Formalization

8 01 Work specialization Dividing work activities into separate job tasks. Also known as division of labour People become more expert in one task than they could be in several and are more likely to come up with improved ideas or methods.

9 02 Departmentalization Process of grouping jobs together to ensure coordination of tasks in known as departmentalization. Departmentalization identifies what job tasks will be done by whom? Common work activities Common form of departmentalization: Functional departmentalization Refer page 361 Geographical departmentalization Product departmentalization Customer departmentalization

10 03 Chain of command The lines of authority show the links between people who they report to and who reports to them. In particular chain of command shows who they can ask to do work, who they can ask for help and who will be expecting results from them.

11 04 The span of control The span of control is the number of subordinates reporting directly to the person above them in the hierarchy.

12 04 The span of control Factors associated with less supervisor involvement and larger span of control. Work is stable and routine Subordinates perform similar work Highly trained and need little direction Rules and procedures are defined Little supervision is required

13 Tall vs. flat organizational structure

14 Tall versus flat organizational structure Characteristics of tall structure Characteristics of flat structure Many layers of management Fewer levels in hierarchy between lowest and highest Wider span of control levels Subordinates greater decision Small span of control making authority Close supervision Few management cost Better communication Greater employee motivation but Reduce delegation less control

15 05 Centralization and decentralization Centralization is when a relatively large number of decisions are taken by management at the top of the organization. Decentralization is when a relatively large number of decisions are taken lower down the organization in the operating units.

16 06 Formalization Formalization refers to how standardized an organization s jobs are and the extent to which employee behavior is guided by rules and procedures These include rules, procedures, instruction manuals, job descriptions (things which people must do)

17 Contemporary organizational design

18 Contemporary Organizational Design Team Structure Matrix- Project Structure Boundaryless Structure Learning Structure

19 01 Team Structure A structure in which the entire organization is made up of work groups or teams. Advantages : Employees are more involved and empowered. Reduced barriers among functional areas. Disadvantages : No clear chain of command Pressure on teams to perform

20 02 Matrix Structure Matrix is a structure that assigns specialities from different functional areas to work on projects who then return to their areas when the project is completed. Advantages : Fluid and flexible design that can respond to environmental changes Faster decision making Disadvantages : Complexity of assigning people to projects Task and personality conflicts

21 03 Boundaryless organization A structure nod defined by or limited to artificial or horizontal, vertical, or external boundaries; includes virtual and network types of organizations. Advantages : Highly flexible and responsive Utilizes talent wherever it s found Disadvantages : Lack of control Communication difficulties

22 3.1 A small core organization that outsources major business functions. Highly centralized Little or no departmentalization Outsource the primary functions of the business The core of the organization is a small group of executives whose job is to oversee directly any activities done in house and to coordinate relationships with the other organizations

23 3.2 Consists of a small core of full-time employees and outside specialists temporarily hired as needed to work on projects.

24 04 Learning organization A structure in which employees continually acquire and share new knowledge and apply that knowledge. Advantages : Sharing of knowledge through organization Sustainable source of competitive advantage Disadvantages : Reluctance on part of employees to share knowledge for fear of losing their power Large number of experienced employees on the border of retiring.

25 05 Flexible work arrangements Telecommuting : is a work arrangement in which employees work at home and are linked to the workplace by computer. Compressed work week : A workweek where employees work longer hours per day but fewer days per week. Flexitime/ Flexible work hours : A scheduling system in which employees are required to work a specific number of hours a week but are free to vary those hours within certain limits. Job sharing : The practice of having two or more people split a full time job.

26 Thank You!