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Organization Basics. Organization Basics. Why organize? Examples from group work (good and bad) What is organization Deciding how best to group the activities and resources i.e. who does what Line and staff organizations. Job Design. Practice

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Organization Basics

  • Why organize?

    • Examples from group work (good and bad)

  • What is organization

    • Deciding how best to group the activities and resources

    • i.e. who does what

  • Line and staff organizations


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Job Design

Practice

  • Determination of individual’s work responsibilities

  • Job specialization

    • Examples

    • Benefits

      • Workers become proficient

      • Transfer time between tasks goes down

      • Easier to design equipment for

      • Can train employee at relatively low cost

    • Negatives

      • Potentially boring

      • Not challenging

      • Not always beneficial

  • Like most things, do not carry to extreme


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Other Job Designs

Practice

  • Job rotation

    • People change jobs, jobs don’t change

    • Hasn’t been very effective

    • Often used for training

  • Job enlargement

    • Increases number of tasks performed

    • Training costs are higher

    • Unions want more pay

    • Work may still be boring


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More Job Designs

Practice

  • Job enrichment

    • Increase worker tasks and control

    • Need to analyze jobs before trying to enrich

  • Job Characteristics Approach

    • Evaluate (score) skill variety, task identity, task significance, autonomy, feedback

    • No significant improvements

  • Work teams

    • Allows a team to design its work system


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DepartmentalizationFunctional Structure

Theory

  • Put same org. functions together

    • E.g. finance, R&D, marketing, production

      Practice

  • Advantages

    • Put experts together

    • Manager has tighter scope

    • Coordinating dept activities is easier

  • Disadvantages

    • May not be as responsive as other structures

    • Employees may become too narrow

    • Accountability is harder (e.g. for a single product)


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DepartmentalizationProduct Structure

Theory

  • Group staff by product

    • E.g. living room furniture and kitchen furniture

      Practice

  • Advantages

    • Can integrate activities essential to a product

    • Fast, effective decision making

    • Good accountability for results

  • Disadvantages

    • Focus on product vs. overall company

    • Inefficient allocation of resources

    • Higher overhead


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DepartmentalizationCustomer Structure

Theory

  • Group staff by types of customers

    • E.g. banks (lending, deposits, investments)

      Practice

  • Advantages

    • Focus on customer

    • Attuned to customer needs

  • Disadvantage

    • May have high duplication of resources

    • Large administrative overhead


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DepartmentalizationLocation Structure

Theory

  • Group staff based upon geography

    • E.g. sales territories

      Practice

  • Advantages

    • Better communication

    • Faster response

  • Disadvantages

    • Higher overhead

    • Groups can become “territorial”


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Exercise

  • What organization structure would you use for a company:

    • With sports drinks and bakery products

    • Sneakers and sports clothing

    • Farm machinery

    • Nation-wide computer service

    • Nation-wide landscaping

    • A hospital

    • An established company trying to get into new businesses


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Reporting Relationships

  • Chain of command

    • Who has authority for a decision?

    • Who is responsible to whom?

  • Unity of command

    • Everyone reports to one and only one person

  • Scalar principle

    • Clear, unbroken line from lowest to highest position

    • Someone must be responsible for every decision

  • Question: What if two people share responsibility?


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Span of Control

  • How many people should a person manage?

    • Narrow vs. wide

  • Number of interactions

    • Interactions = N(2N/2 + N – 1)

    • If N = 2 then I = 6, if N = 5, then I = 100

  • Executive span of control

    • Between 3 and 6

  • Operational span of control

    • Could be 30

  • What does span of control depend upon?


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Tall vs. Flat Organization

  • “Tall” organizations have many levels of management

  • “Narrow” organizations have few levels

  • What are disadvantages of tall organizations?

    • What happens when you flatten a tall org.?

  • Turnarounds and tall organizations


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Exercises

  • How big should the span of control be for:

    • A call center

    • An accounting department

    • A legal department

    • A home painting company

    • A factory

    • An architectural firm


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Delegation

  • Process where a manager assigns a portion of his or her workload to others

    • Grant responsibility

    • Grant authority

    • What’s the difference?

    • What’s one without the other?

  • Why delegate?

  • Some managers can not delegate – why?


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