****** 1 1-1 MUSOLINO Adapting Organizations to Today’s Markets 8 CHAPTER.
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Transcript of ****** 1 1-1 MUSOLINO Adapting Organizations to Today’s Markets 8 CHAPTER.
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1-1
MUSOLINO
Adapting Organizations
to Today’s Markets 8
CH
APTER
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Structuring an Organization Comprises:
Accountability
Allocating Resources
Establishing Procedures
Division of Labor
Team Tasks
Assigning Responsibility/ Authority
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Fayol’s Principles of Organization
Unity of Command Hierarchy of
Authority Division of Labor Subordination of
Individual Interest to the General Interest
Authority
Degree of Centralization
Clear Communication Channels
Order Equity Esprit de Corps
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Weber’s Organizational Principles
Job Descriptions Written Rules Procedures, Regulations,
Policies Staffing/Promotions
Based on Qualifications
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Centralization (No Delegation)
Advantages Greater Top-
Management Control More Efficiency Simpler Distribution
System Stronger
Brand/Corporate Image
Disadvantages
Less Responsiveness to Customers
Less Empowerment
Interorganizational Conflict
Lower Morale Away from Headquarters
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Decentralization (Delegate Authority)
Advantages Better Adaptation
to Customer Wants More Empowerment
of Workers Faster Decision
Making Higher Morale
Disadvantages Less Efficiency Complex Distribution
System Less Top-
Management Control Weakened
Corporate Image
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*** Organizational Structures
Tall Organizations• Many Layers of
Management• High Cost of
Management• Narrow Span of
Control
Flat Organizations• Current Trend• Creation of Teams• Broad Span of
Control
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How to Make Jobs Fit Your Company (Part 1 of 2)
Each manager must ask: What resources do I control to
accomplish my tasks? What measures will be used to evaluate
my performance? Who do I need to interact with and
influence to achieve my goals? How much support can I expect when I
reach out to others for help?Source: HBS Working Knowledge, October 31,2005
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How to Make Jobs Fit Your Company (Part 2 of 2)
Four Basic Spans of a Job: The Span of Control The Span of Accountability The Span of Influence The Span of Support
Source: HBS Working Knowledge, October 31,2005
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*** Span of Control - Narrow
Advantages More Control by
Top Management More Chances for
Advancement Greater
Specialization Closer Supervision
Disadvantages Less Empowerment Higher Costs Delayed Decision
Making Less
Responsiveness to Customers
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*** Span of Control - Broad
Advantages Reduced Costs More
Responsiveness to Customers
Faster Decision Making
More Empowerment
Disadvantages Fewer Chances for
Advancement Overworked
Managers Loss of Control Less Management
Expertise
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Advantages Skill
Development Economies of
Scale Good
Coordination
Departmentalization by Function
Disadvantages Lack of
Communication Employees Identify
with Department Slow Response to
External Demands Narrow Specialists Groupthink
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*** Departmentalization
By Product By Function By Customer
Group By
Geographic Location
By Process
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*** Line Organizations
Advantages Clear Authority
& Responsibility
Easy to Understand
One Supervisor Per Employee
Disadvantages Inflexible Few Specialists
for Advice Long Line of
Communication Difficult to
Handle Complex Decisions
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*** Line/Staff Organizations
Line Personnel
Formal Authority
Make Policy Decisions
Staff Personnel
Advise Line Personnel
Assist Line Personnel
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*** Matrix Organizations
Advantages Flexibility
Cooperation & Teamwork
Creativity
More Efficient Use of Resources
Disadvantages Costly/Complex
Confusion in Loyalty
Requires Good Interpersonal Skills & Cooperation
Not Permanent
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Important Conditions for Small Teams
1. Clear Purpose2. Clear Goals3. Correct Skills4. Mutual Accountability5. Shift Roles When Appropriate
Source: CIO Dec 2003
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Networking
Real Time
Transparency
Virtual Corporations
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A Virtual CorporationA Virtual Corporation
CoreCore
FirmFirm
Accounting Accounting FirmFirm
ProductioProduction Firmn Firm DistributioDistributio
n Firmn Firm
AdvertisinAdvertising Agencyg Agency
Design Design FirmFirm
Legal Legal FirmFirm
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Benefits and Concerns of Healthcare Outsourcing
Benefits Provides Enough
Staff to Operate the Facility
Cost Savings
Concerns Lower Employee
Morale Liability Should Patients be
Informed Confidentiality &
Security
Source: Healthcare Financial Management, 2005
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Which Jobs Will Be Outsourced Next?
0% 2% 4% 6% 8% 10% 12%
CustomerSupport/Sales
InformationTechnology
Manufacturing
Source: USA Today
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Adapting to Change
Restructuring for Empowerment
Focusing on the Customer
Creating a Change-Oriented Organizational Culture
The Informal Organization
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*** Layers of Authority-Traditional
Top Managers- Decision Makers
• Middle Managers- Develops Middle Managers- Develops Rules & Rules & ProceduresProcedures
• Workers and SupervisorsWorkers and Supervisors
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Inverted Organization Structure
Empowered Empowered front-line front-line workersworkersSupport Support
PersonnelPersonnel
Top Top Mgmt.Mgmt.
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Examples ofInformal Group Norms
• Do your job but don’t produce more than the rest of the group.
• Don’t tell off-color jokes or use profane language among group members.
• Listen to the boss and use his/her expertise but don’t trust him/her.
• Everyone is to be clean/organized at the workstation.
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• Never side with managers in a dispute involving group members.
• Respect/help your fellow group members on the job.
• Criticize the organization only among group members-- never among strangers.
• Drinking is done off-the-job-- Never at work!
More Examples ofMore Examples ofInformal Group NormsInformal Group Norms