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Adapting Organization To Today's Markets - Coggle Diagram
Adapting Organization To Today's Markets
Everyone is doing this
Building an Organization from the Bottom Up
The first step is Organizing: determining what need to be done and dividing the task among members, which is called a "division of labor". (Ex: A team has 3 members, 1 goods at design will responsible as designer, 1 goods at sales, and 1 at another skill)
Dividing the task into smaller jobs is called "job specialization". (Ex: mowing is divided into mowing, trimming, and raking)
The process of setting up individual departments to do specialized tasks is called "departmentalization". (Ex: Many departments like Marketing, Accounting, Production, etc)
Finally, assign authority and responsibility to people so that you can control the whole process. (Ex: if sth wrong in accounting department, you would know who was responsible)
Developing an Organizational Chart to know who is accountable for the completion of specific work, and who report to whom.
The changing Organization
Change is due to evolving business environment - more global competition, a declining economy, faster technological change, and pressure to preserve the natural environment.
Change in customer expectations
Customers today expect high-quality products and fast, friendly services - at a reasonable cost
Companies designed many rules and regulations to give managers control over employees - is called "Bureaucracy"
The development of Organization Design
Mass production: a method for efficiently producing large quantities of goods, did production processes and business organization become so complex
Economies of scale: companies can reduce their production cost by purchasing raw materials in bulk; the average cost of goods decreases as production levels rise.
Business growth led to economies of scale.
Fayol's Principles of Organization
Unity of Command: Each worker is to report to only one boss.
Hierarchy of Authority: Worker should know to whom they report, & Managers have right to give orders and expect others to follow
Division of Labor: Functions are to be divided into areas of specialization such as production, marketing, etc.
Subordination of individual interest to the general interest: Workers are to think of themselves as a coordinated team, goals of team overweight individual's goals.
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. (In larger organization, should be delegated to lower-manager and employees)
Clear communication channel: All workers should be able to reach
others in the firm quickly and easily.
Order: Materials and people should be placed and maintained in 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.
Max Weber and Organizational Theories
Job descriptions
Written rules, decision guidelines, and detailed records
Resembled Fayol's principles
Consistent procedures, regulations, and policies.
Staffing and promotion based on qualifications
Turning Principles into Organization Design
Hierarchy: is a system in which one person is at the top of the organization, and the ranking from the top down of managers and others who are responsible to that person.
Chain of command: is the line of authority that moves from the top
of the hierarchy to the lowest level.
Bureaucracy: An organization with many layers of managers who set rules and regulations and oversee all decisions.
Issues involved Structuring Organization
Centralized authority: occurs when decision making is concentrated at the top level of management
Decentralized authority: occurs when decision making is delegated to lower-level managers and employees
Span of Control: the optimal number of subordinates a manager supervises or should supervise.
Tall organization structure: pyramidal organization chart would be quite tall because of the various levels of management
Flat organization structure: has few layers of management and a broad span of control
Departmentalization: the dividing of organizational functions into separate units.
Advantages
Employees can develop skills in depth and progress within a department as they master more skills.
The company can achieve economies of scale by centralizing all the resources it needs and locate various experts in that area.
Employees can coordinate work within the function, and top management can easily direct and control various departments’ activities.
Disadvantage
Departments may not communicate well (Ex: Production may be not known the needed feedback from customers because it belong to marketing department).
Employees may identify with their department’s goals rather than
the organization’s.
The company’s response to external changes may be slow.
People may not be trained to take different managerial responsibilities; rather, they tend to become narrow specialists.
Department members may engage in groupthink (they think alike) and may need input from outside to become more creative.
Organizational models
Line organizations: has direct two-way lines of responsibility, authority, and communication running from the top to the bottom of the organization,
Line-and-Staff organizations
Staff personnel: advise and assist line personnel in meeting their goals, and include those in marketing research, legal advising, information technology, and human resource management.
Line personnel: are responsible
for directly achieving organizational goals, and include production workers, distribution people, and marketing personnel
Matrix organization: in which specialists from different parts of the organization work together temporarily on specific projects, but still remain part of a line-and-staff structure
Cross-Functional Self-Managed Teams: are groups of employees from different departments who work together on a long-term basis
Managing the interactions among firms
Benchmarking (đối chuẩn): compares an organization’s practices, processes, and products against the world’s best.
Core competencies (năng lực cốt lõi): those functions it can do as well as or better than any other organization in the world.
Adapting to change
Restructuring for Empowerment
Restructuring: redesigning an organization to more effectively and efficiently serve its customers.
Change-Oriented Organizational culture
Organizational (or cooperate) cultures: widely shared values within an organization that provide unity and cooperation to achieve common goals.
Managing the Informal Organization
Formal organization: details lines of responsibility, authority, and position, to be shown on organization charts.
Informal organization: the system that develops spontaneously as employees meet and form cliques, relationships, and lines of authority outside the formal organization. It’s the human side of the organization that doesn’t show on any organization chart