Chapter 9 Adapting Organizations to Today’s Markets
Fayol’s Principles of Organization
Unity of command: Each worker is to report to one, and only one, boss.
Hierarchy of authority: All workers should know to whom they should report.
Division of labor: Functions are to be divided into areas of specialization.
Subordination of individual interest: Workers are to think of themselves as a coordinated
Authority: Managers have the right to give orders and the power to enforce obedience.
Degree of centralization: The amount of decision-making power vested in top
management should vary by circumstances.
Communication channels: All workers should be able to reach others in the firm quickly
Order: Materials and people should be placed and maintained in the proper location.
Equity: A manager should treat employees and peers with respect and justice.
Esprit de corps: A spirit of pride and loyalty should be created among people in the firm.
Weber’s Organizational Principles
Written rules, decision guidelines, and detailed records
Consistent procedures, regulations, and policies
Staffing and promotions based on qualifications
Centralization vs. Decentralization of Authority
Centralized authority: An organization structure in which decision-making authority is maintained
at the top level of management at the company’s headquarters.
Decentralized authority: An organization structure in which decision-making authority is
delegated to lower-level managers more familiar with local conditions than headquarters
management could be
Variables To Consider in Span of Control
Capabilities of the manager
Capabilities of the subordinates
Need for coordination
o Many layers of management
o Span of control limited
o Costly to maintain o Lots of paperwork
Inefficient communication and decision making
o Few layers of management
o Broad span of control
o Highly responsive to customer demands due to increased employee empowerment
Departmentalization by Function
Departmentalization: Dividing an organization into separate units.