ORGANIZING WORK
Chapter 6 Exam Review
Mr. Sherpinsky
Business Management Class
Council Rock School District
What is an Organization?
• A group of people working together
in a coordinated effort to reach
certain goals
– Efficiency
– Effectiveness
– Better Results through
•
• Manager’s role in organization
– Ensure the organization works together in a
coordinated manner
Organizing Work
• Organization Defined:
– A group of people working
together in some type of
concentrated or coordinated effort
• Process of organizing
– Grouping of activities
– Assigning each grouping
– Manager should have authority to
supervise the people and activities
Organizing Work
• Basically, a process of
division of labor
accompanied by
appropriate delegation
of authority.
– Directly relates to more
effective use of resources
Organizing Work
• Formal Organization:
– Structure that defines the
boundaries of the organization and
within which the organization
operates
• Informal Organization:
– Aggregate of the personal contacts
and interactions and associated
groupings of people working within
the formal organization
Why Organize Their Workforce?
1. To create clear lines of authority
a) Absence of authority almost always causes chaos
2. To improve productivity
a) More efficiency and higher quality of work
b) Synergy (More than the sum of the parts)
c) Provide a sense of stability and belonging when
working for an effective organization
3. To improve communication
a) Defines channels of communication
All with a focus to increase profit
Establishing Lines of Authority
• Authority: Power based on the rights
that come with a position
– President: Can order troops into battle
– CEO: To make important decisions
– Store Managers: To approve returns or offer
discounts on damaged merchandise
• Ensures that those making decisions are
qualified and are made at the appropriate
level
• Chain of Command: The line of
authority within an organization
Advantages of a Well-Defined
Chain of Command
• It’s all about
communications!
• Makes it easy for all to
understand who is in
charge
• Problems are addressed
at the lowest possible
level
Division of Labor
• Organizing is basically a
process of division of labor
– Benefits are known for centuries
• Two ways labor can be divided:
– Vertical
– Horizontal
Division of Labor
• Vertical
– Based on the
establishment of lines
of authority
– Defines the levels
that make up the
vertical organization
– Facilitates the flow of
communication
Division of Labor
• Horizontal
– Based on the
specialization of
work
– Underlying
assumptions:
• By making the
worker’s task
specialized you
can produce more
with same effort
Division of Labor
• Horizontal Advantages
– Fewer skills per worker
– Easier to train
– Higher proficiency
– Focus worker abilities
– Simultaneous operations
– More conformity in final
product
Division of Labor
• Horizontal Disadvantages
– Job Boredom
– Leads to lower productivity,
absenteeism and lateness
increase, quality of work
declines
– Humiliation of employees
Improving Productivity
• Specialization
– Groups of workers perform very
specific tasks or sets of tasks based
on a skill level
• Job Rotation
– Periodically moving workers from one
job to another
• Job Scope
– Number of operations involved in a
job
• Narrow Scope vs. Broad Scope
• Job Depth
– Freedom employees have to plan and
organize their work, interact with coworkers, and work at their own pace
Heart of Horizontal
Organizations
• Free thinking
• Restructured traditional
management hierarchy
• Usually organized by
process
• Employee
Empowerment
Heart of Vertical Organizations
• Well-Defined
Authority Chains
• Three (3) main levels
1) Top management
2) Middle Management
3) Supervisory Level
Power, Authority, Responsibility
• Power: the ability to influence,
command, or apply force
• Authority: power derived from the
rights that come with a position
and represents the legitimate
exercise of power
– One source of power for manager
– Lines of authority link the various
organizational components
• Without them confusion, conflict, and
chaos
Power, Authority, Responsibility
• Responsibility: the accountability
for:
– The achievement of objectives
– The use of resources
– The adherence to organizational policy
• Once accepted, work becomes
obligation
Sources of Authority
• Function of position
– Chain of command
• Formal Theory of Authority
– Top people chose lower people
• Theory of Acceptance
– Cooperation
Centralization vs. Decentralization
• Refers to the degree of authority
delegated by upper
management
• Refers to the numbers and kinds of
decisions made by lower levels
of management
– The more decisions made by
lower levels, the more
decentralization increases
Centralization vs. Decentralization
• Centralization – Top Managers or key
positions make most of the important
decisions
– Advantages:
• Extremely efficient regarding business
decisions
• Easier to develop the company’s mission and
vision, and set objectives
– Disadvantages:
• Organizations can suffer from the negative
effects of several layers of bureaucracy.
• Multiple management layers stretching from
the owner down to frontline operations
• May require more time to make decisions
Centralization vs. Decentralization
• Decentralization – Managers at
all levels make decisions
– Advantages:
• Increases an organization’s ability to
respond to market changes by allowing
decisions to be made by managers who
are close to their customers
• Frees senior managers from many dayto-day tasks
• Increases lower-level managers’ job
scope which increasing their
responsibility and interest on the job
– Disadvantages:
• Can result in a loss of managerial control
• Duplication of effort
Empowerment
• EMPOWERMENT: A
form of
decentralization
– Giving subordinates
substantial authority to
make decisions
– Requires trust and
confidence
Empowerment
• To work, empowerment must have
these characteristics
– Participation
– Innovation
– Access to information
– Accountability
Empowerment
• Organizations can create
more empowerment by
– Restructuring units to be smaller
– Reducing hard rules
– Emphasizing a change throughout the
organization
– Providing training and education
• Self-managed work teams
– Work units without a frontline manager
and empowered to do their own work
Authority and Delegation
• Parity principle
– States authority and
responsibility must coincide
– Delegate sufficient authority to
allow subordinates to do their
job
• Subordinate:
– Person holding a lower position
within an organization
Authority and Delegation
• Reluctance to delegating
– Fears subordinates will fail in doing
the task
– Easier to it yourself
– Humans’ attraction to power
– Comfort in doing the tasks in
previous jobs held
– Preconceived ideas about
employees
– Desire to set the right example
Authority and Delegation
• How to delegate
–
–
–
–
Define objectives and standards
Involve subordinates in the delegation process
Initiate training that encourages delegation
Control the delegation
• Exception principle
– Managers should concentrate their efforts on matters
that deviate significantly from normal and let
subordinates handle routine matters
Authority and Delegation
• Unity of command
principle
– An employee should have
one and only one immediate
manager
• Avoids confusion and conflict
• Scalar principle
– Authority in organizations
flow through a chain of
managers one link at a time
Authority and Delegation
• Span of management
– (Also known as the
Span of Control)
– Refers to the number of
subordinates a manager can
effectively manage
– Optimum number depends on
complexity, variety and
proximity of the jobs, the
people filling the jobs and
ability of manager
Workplace Changes
• Flextime
– Allows employees to
choose within certain limits
when they start and end
their workday
• Telecommuting
– Practice of working
remotely using technology
– Can create lower turnover,
reduce travel times and
avoid rush hour
Workplace Changes
• Job sharing
– Two or more part-time
employees perform one
full-time job together
– Can be motivating to
employees
– Challenges: How to
handle benefits, pay
and communication a
concern