Mgmt 371
Chapter Eleven
Basic Elements of Organizing
Much of the slide content was created by Dr, Charlie Cook, Houghton Mifflin, Co.©
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The Elements Organizing
 Organizing
Deciding how to best
group organizational
activities and
resources.
 Organization Structure


The set of building
blocks that can be used
to configure an
organization.
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Designing Jobs
 Job Design

The determination of an individual’s workrelated responsibilities.
 Organizing TDR into a productive unit of
work. Reasons for systematic job design:



Maximize performance
Enhance job satisfaction
Reduce adverse affects to physical and
mental health.
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Designing Jobs (Job Specialization )
 Job Specialization (Division of Labor) --
The degree to which the overall task of the
organization is broken down and divided into
smaller component parts

Benefits of Specialization

Workers can become proficient at a task.

Transfer time between tasks is decreased.

Specialized equipment can be more easily
developed.

Employee replacement becomes easier.
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Designing Jobs (Job Specialization )
 Job Specialization (Division of
Labor).
 Limitations
of Specialization

Employee boredom and dissatisfaction
with mundane tasks.

Anticipated benefits do not always
occur.
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Adam Smith’s Example
of Job Specialization
Making a pin (nail) requires 18 tasks
1 worker doing all 18 tasks might make
20 pins (nails) a day.
20 workers = (20 x 20) = 400 pins
______________________________
With specialization:
20 workers make 100,000 pins a day.
1 worker = 5,000 pins
20 pins vs. 5,000 pins per worker
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Alternatives to Specialization
 Job Rotation
 Systematically moving employees from one job to
another in an attempt to reduce employee
boredom.
 Job Enlargement
 An increase in the total number of tasks workers
perform (increasing the scope of the job).
 Job Enrichment
 Increasing both the number of tasks the worker
does and the control the worker has over the job
(increasing the scope and depth of the job).
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Alternatives to Specialization
 Job Characteristics Approach:

Core Dimensions





Skill variety—the number of tasks a person does
in a job.
Task identity—the extent to which the worker
does a complete or identifiable portion of the total
job.
Task significance —the perceived importance of
the task.
Autonomy—the degree of control the worker has
over how the work is performed.
Feedback— the extent to which the worker knows
how well the job is being performed.
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Alternatives to Specialization
 Job Characteristics Approach:
 Growth-Need

Strength
The desire for some people to grow,
develop, and expand their capabilities that
is their response to the core dimensions.
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The Job Characteristics Approach
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Alternatives to
Specialization (Work Teams)
 Work Teams


An alternative to job specialization that allows
the entire group to design the work system it
will use to perform an interrelated set of tasks.
Self-Directed Work Teams (SDWT) –
composed of individuals who are assigned a
cluster of TDR to be performed and are
empowered to make decisions regarding work
assignments within the group.
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Grouping Jobs:
Departmentalization
 Departmentalization

The process of grouping jobs according to
some logical arrangement.
 Rationale for Departmentalization

Organizational growth exceeds the ownermanager’s capacity to personally
supervise all of the organization.

Additional managers are employed and
assigned specific employees to supervise.
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Grouping Jobs:
Departmentalization (Functional)
 Functional Departmentalization

Grouping jobs involving the same or similar
activities.
 Advantages

Each department can be staffed by
functional-area experts.

Supervision is facilitated in that managers
only need be familiar with a narrow set of
skills.

Coordination inside each department is
easier.
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Grouping Jobs:
Departmentalization (Functional)
 Functional Departmentalization
 Disadvantages

Decision making becomes slow and
bureaucratic.

Employees narrow their focus to the
department and lose sight of organizational
goals/ issues.

Accountability and performance are difficult
to monitor.
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Product Departmentalization Form
 Product Departmentalization

Disadvantages

Managers may focus on their product to the
exclusion of the rest of the organization.

Administrative costs may increase due to
each department having its own functionalarea experts.
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Product Departmentalization Form
 Product Departmentalization

Grouping activities around products or product
groups.

Advantages

All activities associated with one product can
be integrated and coordinated.

Speed and effectiveness of decision making
are enhanced.

Performance of individual products or
product groups can be assessed
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Customer Departmentalization
 Customer Departmentalization
Grouping activities to respond to and interact
with specific customers and customer
groups.
 Advantage
 Skilled specialists can deal with unique
customers or
customer groups.
 Disadvantage
 A large administrative staff is needed to
integrate activities of various departments.

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Location Departmentalization
 Location (Geographic) Departmentalization
The grouping of jobs on the basis of defined
geographic sites or areas.
 Advantage
 Enables the organization to respond easily
to unique
customer and environmental
characteristics.
 Disadvantage
 Large administrative staff may be needed
to keep track of units in scattered
locations.

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Bases for Departmentalization
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Departmentalization
 Other Forms of Departmentalization
 Grouping activities by time
 By specific units of time
 By sequence.
 By a characteristic of the customer, product, or
service
 Other Considerations
 Departments are often called by other names.
 Divisions, units, sections, and bureaus
 Organizations are likely to employ multiple bases
of departmentalization, depending on level.
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Establishing Reporting
Relationships
 Chain of Command (scalar chain)



A clear and distinct line of authority among the
positions in an organization.
Scalar Principle (Fayol)
 A clear and unbroken line of authority must
extend from the bottom to the top of the
organization.
Unity of Command (Fayol)
 Each person within an organization must have
a clear reporting relationship to one and only
one boss.
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Establishing Reporting
Relationships (Span of Control)
 Narrow Versus Wide Spans
 Span of Management (Span of Control)
 The number of people who report to a particular
manager.

A. V. Graicunas
 Subordinate interactions




Direct—manager’s relationship with each subordinate.
Cross—among the subordinates themselves.
Group—between groups of subordinates.
Formula for the number of interactions of all types:
 I = N(2N/2 + N - 1), where I is the total number of
interactions and N is number of subordinates.
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Establishing Reporting
Relationships (Span of Control)
 Narrow Versus Wide Spans
 Ralph Davis




Operative span for lower-level managers of up to
30 workers.
Executive span for middle and top managers set
at 3 to 9.
Span depends on managers’ jobs, company
growth rate, and similar factors
Lyndall Urwick and General Ian Hamilton

Executive span should never exceed six
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Establishing Reporting Relationships:
Tall versus Flat Organizations
 Tall Organizations
 Are more expensive because of the
number of managers involved.
 Foster more communication problems
because of the number of people through
whom information must pass
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Establishing Reporting Relationships:
Tall versus Flat Organizations
 Flat Organizations
 Lead to higher levels of employee morale
and productivity.
 Create more administrative responsibility
for the relatively few managers.
 Create more supervisory responsibility for
managers due to wider spans of control.
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Figure 11.3: Tall
Versus Flat Organizations
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Factors Influencing the Span of
Management
 Competence of the supervisor.
 Competence of the subordinates.
 Physical dispersion.
 Extent of manager’s nonsupervisory work (the greater the




narrower the span).
Degree of required interaction (the greater, the narrower
the span).
Extent of SOPs (the greater the wider the span).
Frequency of problems (the greater, the narrower the
span).
Preferences of supervisors and subordinates.
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Distributing Authority
 Authority
Power that has been legitimized by the
organization.
 Delegation
 The process by which managers assign a
portion of their total workload to others.
 Reasons for Delegation



To enable the manager to get more work done
by utilizing the skills and talents of subordinates.
To foster development of subordinates by having
them participate in decision making and problem.
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Steps in the Delegation Process
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Problems in Delegation
 Manager
Reluctant to delegate.
 Disorganization prevents planning work in
advance.
 Subordinate’s success threatens superior’s
advancement.
 Lack of trust in the subordinate to do well.

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Problems in Delegation
 Subordinate
Reluctant to accept delegation for fear of
failure.
 Perceives no rewards for accepting
additional responsibility.
 Prefers to avoid any risk and responsibility.

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Decentralization and Centralization
 Decentralization
Systematically delegating power and
authority throughout the organization to
middle- and lower-level managers.
 Centralization
 Systematically retaining power and
authority in the hands of higher-level
managers.

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Decentralization and Centralization
 Factors Determining Choice of
Centralization
External environment’s complexity and
uncertainty
 History of the organization
 Nature (cost and risk) of the decisions to
be made.

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Coordinating Activities
 Coordination

The process of linking the activities of the
various departments of the organization.
 The Need for Coordination

Departments and work groups are
interdependent; the greater the
interdependence, the greater the need for
coordination.
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Coordinating Activities: Three Major
Forms of Interdependence
 Pooled interdependence
When units operate with little interaction;
their output is simply pooled at the
organizational level.
 Sequential interdependence
 When the output of one unit becomes the
input of another unit in sequential fashion.
 Reciprocal interdependence
 When activities flow both ways between
units.

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Structural Coordination
Techniques
 The Managerial Hierarchy
Placing one manager in charge of
interdependent departments or units.
 Rules and Procedures
 Routine coordination activities can be
handled via rules and procedures that set
priorities and guidelines for actions.

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Structural Coordination
Techniques
 Liaison Roles
A manager coordinates interdependent
units by acting as a common point of
contact, facilitating the flow of information.
 Task Forces
 Used with multiple units when coordination
is complex, requiring more than one
individual and the need for coordination is
acute.
 Disbanded when need for coordination has
been met.

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Structural Coordination
Techniques (cont’d)
 Integrating Departments
Permanent organizational units that
maintain internal integration and
coordination on an ongoing basis.
 May have authority and budgetary controls.
 Electronic Coordination
 E-mail, electronic scheduling, PDAs, cell
phones.

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Differentiating Between Positions
 Line Positions
Positions in the direct chain of command
responsible for the achievement of an
organization’s goals.
 Have formal (legitimate) authority.
 Staff Positions
 Positions intended to provide expertise,
advice, and support to line positions.



Have advisory authority; can give compulsory
advice.
Have functional authority to enforce compliance
with organizational policies and procedures.
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Differentiating Between Positions
 Administrative Intensity

The degree to which managerial positions
are concentrated in staff positions.
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