Learning Objectives. Apply organization design concept. Understand span of control. Distinguish between tall and flat structures

Transcription

1 Ibrahim Sameer 1

2 Learning Objectives Apply organization design concept Understand span of control Distinguish between tall and flat structures Contrast authority and responsibility 2

3 Introduction No other topic in management has undergone as much change in the past few years as that of organization structure and design. The challenge for the manager is to design an organizational structure that allows employees to effectively and efficiently do their job. 3

4 What is an organizational design Organizational design is the process of choosing and implementing structures that best arrange resources to serve the organization s mission and objectives. In designing an organization it is important to take into consideration the implications of environment, strategies, people, technology and size. 4

5 What is an organizational design (cont ) A framework for organizational design is as follows: 5

6 What is an organizational structure Organizational structure is the linking of departments and jobs within an organization. It is the work arrangement at a section or department that directs the behaviour of individuals and groups towards the achievement of an organization s objectives. 6

7 Why the structure of an organization important? The cost of operating It influence the way people behave. It effects the perception of customers. The speed with which an organization does thing The risk it runs 7

8 Tall Vs Flat Organization 8

9 Tall Vs Flat Organization (cont ) Tall structures have many levels of authority and narrow spans of control. As hierarchy levels increase, communication gets difficult creating delays in the time being taken to implement decisions. Communications can also become distorted as it is repeated through the firm. Can become expensive 9

10 Tall Vs Flat Organization (cont ) Flat structures have fewer levels and wide spans of control. Structure results in quick communications but can lead to overworked managers. 10

11 Organization Design Process Organizational Design A process involving decisions about six key elements: Work specialization Departmentalization Chain of command Span of control Centralization and decentralization Formalization 11

12 Organization Design Process Work Specialization (cont ) 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

13 Functional Departmentalization Grouping jobs by functions performed Product Grouping jobs by product line Geographical Grouping jobs on the basis of territory or geography Process Grouping jobs on the basis of product or customer flow Customer Grouping jobs by type of customer and needs 13

14 Functional Departmentalization Advantages Efficiencies from putting together similar specialties and people with common skills, knowledge, and orientations Coordination within functional area In-depth specialization Disadvantages Poor communication across functional areas Limited view of organizational goals 14

15 Geographical Departmentalization Advantages More effective and efficient handling of specific regional issues that arise Serve needs of unique geographic markets better Disadvantages Duplication of functions Can feel isolated from other organizational areas 15

16 Product Departmentalization Allows specialization in particular products and services Managers can become experts in their industry Closer to customers Duplication of functions Limited view of organizational goals 16

17 Process Departmentalization + More efficient flow of work activities Can only be used with certain types of products 17

18 Customer Departmentalization + Customers needs and problems can be met by specialists - Duplication of functions - Limited view of organizational goals 18

19 Chain of Command 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 who. 19

20 Span of Control Span of Control The number of employees who can be effectively and efficiently supervised by a manager. Width of span is affected by: Skills and abilities of the manager Employee characteristics Characteristics of the work being done Similarity of tasks Complexity of tasks Physical proximity of subordinates Standardization of tasks 20

21 Centralization The degree to which decision-making is concentrated at a single point in the organizations. Organizations in which top managers make all the decisions and lower-level employees simply carry out those orders. 21

22 Decentralization Organizations in which decision-making is pushed down to the managers who are closest to the action. Employee Empowerment Increasing the decision-making authority (power) of employees. 22

23 More Centralization Environment is stable. Centralization Lower-level managers are not as capable or experienced at making decisions as upper-level managers. Lower-level managers do not want to have a say in decisions. Decisions are relatively minor. Organization is facing a crisis or the risk of company failure. Company is large. Effective implementation of company strategies depends on managers retaining say over what happens. 23

24 More Decentralization Decentralization Environment is complex, uncertain. Lower-level managers are capable and experienced at making decisions. Lower-level managers want a voice in decisions. Decisions are significant. Corporate culture is open to allowing managers to have a say in what happens. Company is geographically dispersed. Effective implementation of company strategies depends on managers having involvement and flexibility to make decisions. 24

25 Formalization The degree to which jobs within the organization are standardized and the extent to which employee behavior is guided by rules and procedures. Highly formalized jobs offer little discretion over what is to be done. Low formalization means fewer constraints on how employees do their work. 25

26 Approach to job design Job Simplification The process of reducing the tasks each worker performs. Too much simplification and boredom results. 26

27 Approach to job design (cont ) Job Enlargement Increasing the number of different tasks in a given job by changing the division of labor Job Enrichment Increasing the degree of responsibility a worker has over a job 27

28 Approach to job design (cont ) Job Enrichment 1. Empowering workers to experiment to find new or better ways of doing the job 2. Encouraging workers to develop new skills 3. Allowing workers to decide how to do the work 4. Allowing workers to monitor and measure their own performance 28

29 Q & A 29