Structuring Organizations for Today’s Challenges (Fayol's…
Structuring Organizations for
Fayol's Organization System
Unity of command. Each worker is to report to one, and only one, boss.
Hierarchy of authority. All workers should know to whom they report. Managers should have the right to give orders and expect others to follow.
Division of labor. Functions are to be divided into areas of specialization
• Subordination of individual interests to the general interest. Workers are to think of themselves as a coordinated team. The goals of the team are more important than the goals of individual workers.
Authority. Managers have the right to give orders and the power to enforce obedience.
Degree of centralization. The amount of decision-making power vested in top management should vary by circumstances.
Clear communication channels. All workers should be able to reach others in the firm quickly and easily.
Order. Materials and people should be placed and maintained in the proper location.
Equity. A manager should treat employees and peers with respect and justice.
Esprit de corps. A spirit of pride and loyalty should be created among people in the firm.
Economic of scales: Reducing the cost of production by purchasing raw materials in bulk.
Max Weber Organization Theory
Weber believed in managers; he felt the company would do great if they are the ones and only to make decisions.
Written rules, decision guidelines, and detailed records. Consistent procedures, regulations, and policies. Staffing and promotion based on qualifications.
Hierarchy: One person is at the top of the organization and there is a ranked or sequential ordering from the top down of managers
Chain of command: is the line of authority that moves from the top of the hierarchy to the lowest level
Organization Chart: visual device that shows rela- tionships among people and divides the organization’s work; it shows who reports to whom.
Tall organization structures: An organization with many layers.
Flat organization structure: Fewer layers of management. Responds rapidly to customers needs.
Bureaucracy: A organization with multiple layers of managers.
Companies are adapting to change by letting employees take decisions, This is called empowerment.
Line organization: has direct two-way lines of responsibility, authority, and communication running from the top to the bottom of the organization, with everyone reporting to only one supervisor.
Line personnel are responsible for directly achieving organizational goals, and include production workers, distribution people, and marketing personnel.
Staff personnel advise and assist line personnel in meeting their goals
Formal organization: details lines of responsibility, authority, and position.
Informal organization:he system that develops spontaneously as employees meet and form cliques, relationships, and lines of authority outside the formal organization.
Centralized authority: Decisions making are handled by the top managers.
Decentralized authority: Decision making is delegated between different low ranks of management.
Restructuring: redesigning an organization so it can more effectively and efficiently serve its customers
Inverted Organization has contact people at the top and the chief executive officer at the bottom.