Organizing Principles Chapter MANAGEMENT Meeting and Exceeding Customer Expectations EIGHTH EDITION Prepared by Deborah Baker Texas Christian University Copyright ©2005 by South-Western, a division of Thomson Learning All rights reserved learning objectives Explain the relationship between planning and organizing Explain the importance of the organizing process List and discuss the five steps in the organizing process Describe and give an example of the four approaches to departmentalization Define authority, and explain how line, staff, and Chapter functional authority differ Copyright ©2005 by South-Western, a division of Thomson Learning All rights reserved learning objectives (continued) Explain the concept of power and its sources Discuss the following major organizing concepts and how they influence organizing decisions • Unity of direction • Chain of command • Line and staff departments • Unity of command Explain the term “informal • Delegation • Responsibility • Accountability • Span of control • Centralization and organization” decentralization Compare the informal organization to the formal Chapter organization Copyright ©2005 by South-Western, a division of Thomson Learning All rights reserved 11 Organizing Process Organizing Organizing The management function that establishes relationships between activity and authority  Governed by plans that state where the organization is going  Organization must be built or modified to ensure those plans are executed Chapter  Resources must be concentrated in a unified way Copyright ©2005 by South-Western, a division of Thomson Learning All rights reserved Downsizing 11 Chapter Downsizing Downsizing Also known as rightsizing, it calls for shrinking both the size of the company and the number of employees Copyright ©2005 by South-Western, a division of Thomson Learning All rights reserved 22 Benefits of Organizing 1 ItIt clarifies clarifies the the work work environment environment 2 ItIt creates creates aa coordinated coordinated environment environment 3 ItIt achieves achieves the the principles principles of of unity unity of of direction direction Chapter 4 ItIt establishes establishes the the chain chain of of command command Copyright ©2005 by South-Western, a division of Thomson Learning All rights reserved 77 Organizing Concepts Unity Unityof of Direction Direction Chapter Chain Chainof of Command Command The establishment of one authority figure for each designated task of the organization The unbroken line of reporting relationships from the bottom to the top of the organization Copyright ©2005 by South-Western, a division of Thomson Learning All rights reserved 33 Five-Step Organizing Process 1 Reviewing Reviewing plans plans and and goals goals 2 Determining Determining work work activities activities 3 Classifying Classifying and and grouping grouping activities activities Chapter 4 Assigning Assigning work work and and delegating delegating authority authority 5 Designing Designing aa hierarchy hierarchy of of relationships relationships Copyright ©2005 by South-Western, a division of Thomson Learning All rights reserved Chapter 33 Five-Step Organizing Process Copyright ©2005 by South-Western, a division of Thomson Learning All rights reserved Chapter 33 Five-Step Organizing Process Copyright ©2005 by South-Western, a division of Thomson Learning All rights reserved 10 77 Delegation Process Assignment Assignment of of tasks tasks Delegation Delegation of of authority authority Acceptance Acceptance of of responsibility responsibility Chapter Creation Creation of of accountability accountability Copyright ©2005 by South-Western, a division of Thomson Learning All rights reserved 37 Chapter 77 Successful Delegation of Authority Copyright ©2005 by South-Western, a division of Thomson Learning All rights reserved 38 77 Organizing Concepts Responsibility Responsibility Chapter Accountability Accountability The obligation to carry out one’s assigned duties to the best of one’s ability The need to answer to someone for your actions; it means accepting the consequences— either credit or blame—for these actions Copyright ©2005 by South-Western, a division of Thomson Learning All rights reserved 39 Chapter 77 Spans of Control Copyright ©2005 by South-Western, a division of Thomson Learning All rights reserved 40 Proper Spans of Control 77 The Thenumber numberof of subordinates subordinatesdepends dependson… on…  The complexity and variety of the subordinates’ work  The ability of the manager  The ability and training of the subordinates  The supervisor’s willingness to delegate authority  The company’s philosophy for centralization or Chapter decentralization of decision making Copyright ©2005 by South-Western, a division of Thomson Learning All rights reserved 41 77 Organizing Concepts Centralization Centralization Chapter Decentralization Decentralization Focuses on systematically retaining authority in the hands of higher-level managers Focuses on systematically delegating authority throughout the organization to middle- and lower-level managers Copyright ©2005 by South-Western, a division of Thomson Learning All rights reserved 42 77 Guidelines for Judging Decentralization The greater number of decisions made at the lower levels of management, the more the company is decentralized The more important the decisions made at lower levels, the greater the decentralization The more flexible the interpretation of company policy at lower levels, the greater the degree of decentralization The more widely dispersed the operations of the company geographically, the greater the degree of decentralization The less a subordinate has to refer to his/her manager Chapter prior to making a decision, the greater the decentralization Copyright ©2005 by South-Western, a division of Thomson Learning All rights reserved 43 Chapter 77 Centralized and Decentralized Organizations Copyright ©2005 by South-Western, a division of Thomson Learning All rights reserved 44 88 The Informal Organization Chapter Informal Informal Organization Organization A network of personal and social relationships that arise spontaneously as people associate with one another in a work environment Copyright ©2005 by South-Western, a division of Thomson Learning All rights reserved 45 99 Informal and Formal Organizations Formal FormalOrganization Organization Chapter Informal InformalOrganization Organization  Unofficial organization created by relationships  Official organization created by management  Primary area of emphasis is on people and their relationship  Primary area of emphasis is official organization positions   Leverage is provided by power   Leverage is provided by authority   Functions with power and politics  Behavior guidelines provided by group norms Functions with authority and responsibility   Sources of control over the individual are positive or negative sanctions Behavior guidelines provided by rules, policies, and procedures  Sources of control over the individual are rewards and penalties Source of power: given by group Sources of authority: delegated by management Copyright ©2005 by South-Western, a division of Thomson Learning All rights reserved 46 99 Emergence of the Informal Organization Employees sometimes act differently than anticipated Employees often interact with people other than those the formal organization specifies Workers may adopt a whole set of beliefs and attitudes that differ from those expected by the organization The groups of workers that form begin to display Chapter cohesion Copyright ©2005 by South-Western, a division of Thomson Learning All rights reserved 47 Chapter 99 Structure of the Informal Organization Copyright ©2005 by South-Western, a division of Thomson Learning All rights reserved 48 Chapter 99 Composition of an Informal Group Copyright ©2005 by South-Western, a division of Thomson Learning All rights reserved 49 99 Working with the Informal Organization Steps Stepsaamanager managermust must take takeare: are: Recognize that informal groups exist Identify the roles members play within those groups Use that information to work with the informal Chapter groups Copyright ©2005 by South-Western, a division of Thomson Learning All rights reserved 50 Chapter 99 Impact of the Informal Organization Copyright ©2005 by South-Western, a division of Thomson Learning All rights reserved 51 ... the concept of power and its sources Discuss the following major organizing concepts and how they influence organizing decisions • Unity of direction • Chain of command • Line and staff departments... Process 1 Reviewing Reviewing plans plans and and goals goals 2 Determining Determining work work activities activities 3 Classifying Classifying and and grouping grouping activities activities... Based Based on on product product activities activities Customer Customer Based Based on on the the needs needs of of specific specific customer customer groups groups Copyright ©2005 by South-Western,