What is organizing as a management function?
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Organizing the process of arranging people and other resources to work together to
accomplish a goal.
The system of tasks, workflows, reporting relationships, and communication channels that
link together diverse individuals and groups.
Figure 8.1 Organizing viewed in relationship with the other management
Formal structure the structure of the organization in its official state.
organization chart describes arrangement of work position within an org
An organization chart identifies the following aspects of formal structure:
The division of work - positions and titles show work responsibilities
Supervisory relationships – lines show who reports to whom
Communication channels – lines show formal comm. flows
Major subunits - positions reporting to common manager shown
Levels of management – vertical layers of management shown
A “shadow” organization made up of the unofficial, but often critical, working relationships
between organization members.
Social network analysis identifies informal structures and their embedded social
relationships that are active in an org. Informal learning is learning that takes place as people interact informally throughout the
workday and in a wide variety of unstructured situations.
Helping people accomplish their work. May work against best interests of entire
Overcoming limits of formal structure. organization.
Gaining access to interpersonal networks. Susceptibility to rumor.
Informal learning. May carry inaccurate information.
May breed resistance to change.
Diversion of work efforts from important
Feeling of alienation by outsiders. What are the traditional types of organization
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departmentalization––the process of grouping together people and jobs into work units.
People with similar skills and performing similar tasks are grouped together into formal work
Members work in their functional areas of expertise.
Are not limited to businesses.
Work well for small organizations producing few products or services.
Functional chimney problem – lack of communication and coordination across
Figure 8.2 Functional structures in a business, branch bank, and community
Economies of scale. Difficulties in pinpointing responsibilities.
Task assignments consistent with Functional chimneys problem.
expertise and training. Sense of cooperation and common High-quality technical problem solving, purpose break down.
In-depth training and skill development. Narrow view of performance objectives.
Clear career paths within functions. Excessive upward referral of decisions.
Group together people who work on the same product or process, serve similar
customers, and/or are located in the same area or geographical region.
Common in complex organizations.
Avoid problems associated with functional structures.
Figure 8.3 Divisional structures based on product, geography, customer, and
Divisional Structure Types: + how they group together people/activities..
Product structures focus on a single product or service.
Geographical structures focus on the same location or geographical region.
Customer structures focus on the same customers or clients.
Process structures focus on the same processes. Advantages of divisional Disadvantages of divisional
More flexibility in responding to Duplication of resources and efforts
environmental changes. across divisions.
Improved coordination. Competition and poor coordination across
Clear points of responsibility. divisions.
Expertise focused on specific customers, Emphasis on divisional goals at expense
products, and regions. of organizational goals.
Greater ease in restructuring.
Combines functional and divisional structures to gain advantages and minimize
disadvantages of each.
Multi-national corporations Figure 8.4 Matrix structure in a small multi-project business firm.
Advantages of matrix structures: Disadvantages of matrix
Better cooperation across functions. structures:
Improved decision making. Two-boss system is susceptible to power
Increased flexibility in restructuring. struggles.
Better customer service. Two-boss system can create task
Better performance accountability. confusion and conflict in work priorities.
Improved strategic management. Team meetings are time consuming.
Team may develop “groupitis.”
Increased costs due to adding team leers
to structure. 4/11/2013 8:03:00 PM
HORIZONATAL ORGANIZATION STRUCTURES
Extensively use permanent and temporary teams to solve problems, complete special
projects, and accomplish day-to-day tasks.
Often use cross-functional teams composed of members from different functional
Project teams are convened for a specific task or project and disbanded once completed.
Figure 8.5 How a team structure uses cross-functional teams for improved lateral
Eliminates difficulties with Conflicting loyalties among members.
communication and decision making. Excessive time spent in meetings.
Eliminates barriers between operating Effective use of time depends on quality
departments. of interpersonal relations, group
Improved morale. dynamics, and team management.
Greater sense of involvement and
Increased enthusiasm for work.
Improved quality and speed of decision
Uses IT to link w/ networks of outside suppliers and service contractuers Own only core components and use strategic alliances or outsourcing to provide other
Figure 8.6 A network structure for a Web-based retail business.
Firms can operate with fewer full-time Control and coordination problems may arise
employees and less complex internal systems. from network complexity.
Reduced overhead costs and increased Potential loss of control