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Create a flexible organization (Types of structures (Matrix structure:…
Create a flexible organization
Organization: group of people towards a common goal
Inventor: produce and market a new invention, hire people, decide what to do who to report
Developing an organization chart (diagram represent the position and relationship)
Chain of command: line of authority
not everyone is in direct chain of command (eg: advisory staff)
useful for smaller orgazation
large organization find it difficult to chart & always change their structure
Major consideration: job design, departmentalizatio, delegation, span of management, chain of command
Job design:
Job sepcialization: separate organizational activities into distinct task and assign tasks to people
Rationale:
because job is too large for 1 person
worker have to learn 1 specific, higly specialized task
repeat job don't lose time chaning operation
the more specialized, the easier for specialized equipment, training
Alternatives to job specialization:
drawbacks: boredom and dissatisfaction (absent, not put effort, sabotage)
solution: job rotation: systematic shift, job enlargement, job enrichment
Deparmentalization
By function: job relate to the same organizational activity (marketing, production...)
supervise is simplified, for small firms
slow decision making and emphasize the department over the whole organization
By product: group activities relate to certain product
for large firms, each department have its own marketing, production, HR, financial activity
make decision easier, integrate all activities of each department
duplication of specialized activities and emphasize the product
By customer: need of customer population
deal effectively with unique customers
larger-than-usual administrative staff
By location: defined geographical area
whole countries to within contries to several blocks
ready to unique demand of local
need large administrative staff and elaborated control system
Combine
Delegation, decentralization and centralization
Delegation of authority: assign part of manager role and power to another worker -> develop skills and ability to subordinate, for potential managers
Steps:
assign responsibility (duty)
grant authority (power)
create accountability (obligation): created, not delegated
Barriers:
trust - employee underperform
fear - overperform -> attract notice of higher level
managers themselves are disorganized -> not able to plan assign
Decentralization
Decentralized: management conciously attempt to spread authority widely in lower level
Centralized: systematically work to concentrate authority at upper level
Factors of decentralized/centralized:
external environment: complex and unpredictable -> lower manager closer to problem
risky decision
ability of lower level
tradition in the company
Span of management: number of worker direct report to one manager (eg: mechanized: wide, ad agency: narrow)
Wide and narrow span of management
wide: larger number of subordinate
Wide span (flat):
high level of competence
standard operating procedure
few new problem
Narrow span (tall):
physical dispersion of subordinate
manager have addtional tasks
high level of interaction required
high frequency of problem
Organizational height: number of layers, level of managerment
Tall:
administrative cost
communication distorted
cut cost = cut height: simplify structure
Flat: - more administrative duties for 1 manager - managers spend more time supervising and working with subordinate
Form of organizational structure
Line structure: chain of command go directly
(eg: small retails)
line manager: make decision and give order to subordinate
simplicit and clear chain: line manager make decision quick because only 1 supervisor to report
downside: line manager are responsible for too many duties, need more range of knowledge -> for small organization
Line and staff structure: utilize chain of command with assistance of staff manager (specialists)
staff manager: provide support and advice and expertise to line manager
Line authority: make decision and issue directives relate to organisation goals
Staff authority:(not part of the chain of command but have authority)
advisory authority: expectation that line manager will consult the appropriate staff manager
functional authority: authority to make decision in their expertise area
Staff manager have more access to information -> line have to rely on staff -> issue when staff manager make wrong decision
staff and line conflict:
staff: younger, more formal education, angry when not listened
line see staff as threat to their authority
solution:
integrate line and staff manager into one team
clearly define responsiblility
both hold accountable for their decision
Types of structures
functional structure: criterion: functional specialization, classic form of bureaucracy, reflect clearly relationship between hierachy and specialization
suitabe for single product firm
ad: specialization, logic of custom and practice, clear chain of command
dis: conflicting department objective, management value, lack of coordination and consumer orientation
Multi-divisional structure: associate with market expansion and product diversification
each division is self-contained and operate as profit centre, group by product
activities are directed by headquarter unit with global view
ad: profit centre operation, encouragement of entrepreneurship
dis: cooperation and interdependent, accounting procedures, esp: transfer pricing, increase diversity of operation, overall management control
Holding company: looser arrangement of multidivisional, lack focus, associate with growth of firm by acquisition and high product diversification
group of independent companies controlled by coordinating group (direct executive and constituent companies)
Project team: unit created to cope with unstable environment, temporary structure form around particular task, reflect technical expertise rather than management hierachy
ad: ability to cope with unstable environment, use of individual expertise, ability to cope with diverse problems, directly deal with customer
dis: costly duplication of service, scheduling, no functional home, what's next?
Matrix structure: combine: customer orientation of project team, economies of scale and specialist orientation of functional, product/market focus of dimensional -> devise structure to effectively manage at least 2 element (size, product, market, customer) Dow Corning
deal with complexity (esp. technical complexity and increase rate of change)
ad: emphasize strenth of functional and project typesm flexible labour, transfer expertise where needed, dual control via function and project, closeness to customer
dis: coordinate and control, proliferation of committees and meetings, too many bosses, conflict loyaties for staff, slow to adapt
Network structure: administration is the primary function, other function are constructed out to other firm (engineering, production, marketing, finances)
limited formal structure because few permanent employees (top management, hourly clerial workers) leased facilities, tempopary workers
ad: flexible, a lot of term working together -> not rely on 1 centralized leader, can survive if lose important member
dis: controlling the quality of work performed by other organization, low morale, high turnover, lack clear hierachy
Corporate culture
culture: represent human activity that is socially transmitted, including norms, values and beliefs in behavior, practices, institutions
growth of cross-border trade and investment with expansion of multinationals and the need to deal with multinationals workforce
layers: - most visible: artefacts, goods, institutions distinguishable from another (architecture, food, ceremonies, language, emphasize on aspects of education)
deeper: notion of rights or wrong, base on value, norms, beliefs
deepest: basic assumption enable groups to solve daily problem without thinking about it, the way people act
interaction with business by:
socialization: influence shape our behavior in particular in particular social settings and individual orientation to work
organization are societies in microcosm with other culture and way of transmitting culture to other members (HR )
analytic device to distinguish are society from another
Informal organization and grapevine
informal organization: pattern of behivior and interaction stem from personal not official relationship
informal group: created by member themselves to achieve goals not related to organization, powerful, can restrict output, help managers, disagreement, conflict boost job satisfaction
grapevine: informal communication network, sometimes faster, parallel path
rational approval: recognize its existence, can come in handy to receive information from informal organization