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Main Reference:
Management 9th Ed.
by Richard Daft
“The only difference between a
mob and a trained army is
organization”
Calvin Coolidge
ORGANIZING
The deployment of organizational resources to
achieve strategic goals
ORGANIZATION STRUCTURE
ORGANIZATION STRUCTURE
CHAIN OF COMMAND
UNITY OF COMMAND
Each employee is held accountable to only one
supervisor
SCALAR PRINCIPLE
A clearly defined line of authority in the organization
that includes all employees
ORGANIZING THE VERTICAL STRUCTURE
CHAIN OF COMMAND
AUTHORITY
Formal and legitimate right of a manager to make
decisions, issue orders, and allocate resources to achieve
organizationally desired outcomes
ORGANIZING THE VERTICAL STRUCTURE
AUTHORITY
Authority is vested in organizational positions, not
people.
Authority is accepted by subordinates.
Authority flows down the vertical hierarchy.
ORGANIZING THE VERTICAL STRUCTURE
ORGANIZING THE VERTICAL STRUCTURE
AUTHORITY
Authority is vested in organizational positions, not
people.
Authority is accepted by subordinates.
Authority flows down the vertical hierarchy.
ORGANIZING THE VERTICAL STRUCTURE
CHAIN OF COMMAND
RESPONSIBILITY
The duty to perform the task or activity an employee has
been assigned
DELEGATION
The process managers use to transfer authority and
responsibility to positions below them in the hierarchy
ORGANIZING THE VERTICAL STRUCTURE
CHAIN OF COMMAND
LINE AND STAFF AUTHORITY
Line Departments
Perform tasks that reflect the organization’s primary goal
and mission
Staff Departments
Include all those that provide specialized skills in support of
line departments
ORGANIZING THE VERTICAL STRUCTURE
CHAIN OF COMMAND
LINE AND STAFF AUTHORITY
Line Authority
Means that people in management positions have formal
authority to direct and control immediate subordinates
Staff Authority
Narrower and includes the right to advise, recommend,
and counsel in the staff specialists’ area of expertise
ORGANIZING THE VERTICAL STRUCTURE
DECENTRALIZATION
Means decision authority is pushed downward
to lower organization levels
FACTORS THAT INFLUENCE CENTRALIZATION VS.
DECENTRALIZATION
WHAT IT IS...
The grouping of positions into
departments based on similar skills, expertise,
work activities, and resource use
VERTICAL FUNCTIONAL APPROACH
HOW IT WORKS...
Information flows up and down the
vertical hierarchy, and the chain of command
converges at the top of the organization.
VERTICAL FUNCTIONAL APPROACH
WHAT IT IS...
Occurs when departments are grouped
together based on similar organizational outputs
It is sometimes called product structure,
program structure, or self-contained unit structure
DIVISIONAL APPROACH
HOW IT WORKS...
In a divisional structure, differences of
opinion among research and development,
marketing, manufacturing, and finance would be
resolved at the divisional level rather than by
the president.
FUNCTIONAL VS. DIVISIONAL STRUCTURES
WHAT IT IS...
Combines aspects of both functional and
divisional structures simultaneously in the same
part of the organization
One unique feature of the matrix is that it
has dual lines of authority
DUAL-AUTHORITY STRUCTURE IN A MATRIX
ORGANIATION
WHAT IT IS...
Structure in which the entire organization
is made up of horizontal teams that coordinate
their activities and work directly with customers
to accomplish the organization’s goals.
TEAM APPROACH
HOW IT WORKS...
CROSS-FUNCTIONAL TEAMS
Consist of employees from various
functional departments who are responsible to
meet as a team and resolve mutual problems
TEAM APPROACH
HOW IT WORKS...
CROSS-FUNCTIONAL TEAMS
Used to provide needed horizontal
coordination to complement an existing divisional
or functional structure
TEAM APPROACH
HOW IT WORKS...
PERMANENT TEAMS
A group of participants from
several functions who are permanently assigned
to solve ongoing problems of common interest
TEAM APPROACH
WHAT IT IS...
An organization structure that
disaggregates major functions to separate
companies that are brokered by a small
headquarters organization.
VIRTUAL NETWORK APPROACH
HOW IT WORKS...
The different organizational parts may be
spread all over the world. They are drawn
together contractually and coordinated
electronically, creating a new form of
organization.
NETWORK APPROACH TO
DEPARTMENTALIZATION
COORDINATION
Refers to the quality of collaboration across
departments
Without coordination a company’s left hand
will not act in concert with the right hand, causing
problems and conflicts
EVOLUTION OF ORGANIZATION STRUCTURES
REENGINEERING
The radical redesign of business
processes to achieve dramatic improvements in
cost, quality, service, and speed
REENGINEERING MANUFACTURING
STRUCTURE FOLLOWS STRATEGY
MECHANISTIC
This type of organization typically has a
rigid, vertical, centralized structure, with most
decisions made at the top.
ORGANIC
The structure is more horizontal, and
decision-making authority is decentralized.
RELATIONSHIP OF STRUCTURAL APPROACH TO STRATEGY AND THE
ENVIRONMENT
MODERN ORGANIZATION
means a boundaryless organization which are networking
together and collaborating more than ever before
üRELATIONSHIPS
üLISTENING
üUNDERSTANDING
TRADITIONAL VS. MODERN ORGANIZATION
STABILITY
TO: stable in their activities and progress
MO: more dynamic with its multiple business strategy
FLEXIBILITY
TO: are fixed, inflexible and planned
MO: always flexible to change their workflow, focuses as well as
connectivity
TRADITIONAL VS. MODERN ORGANIZATION
HIERARCHY
TO: flow “Tall Hierarchy”
MO: flow “Flat Hierarchy”
TEAMWORK
TO: follows a chain of command where every employee should
be obeyed to his superior
MO: main concept is team work
TRADITIONAL VS. MODERN ORGANIZATION
EMPLOYEE MORALE
TO: a job oriented organization so you are not sure about the matter of
employee morale
MO: get more freedom and flexibility to exchange his or her assessment
RISK MANAGEMENT
TO: maintain a specific policy to protect any kind of risk that would be
hampered for the organization or its employees
MO: always ready to take new challenges so everyone here prepared to
face any risk instantly
TRADITIONAL VS. MODERN ORGANIZATION
DIVERSIFICATION
TO: slightly conservative and they try to follow traditional rules
and regulation
MO: does modification, rescheduling, flexible entity management
and dynamic business strategy
TECHNOLOGY
TO: centralized and backward to accept advanced technology
MO: more technology based and boundaryless
INNOVATION AND THE CHANGING WORKPLACE
INNOVATION AND CHANGING WORKPLACE
ORGANIZATIONAL CHANGE
the adoption of a new idea or behavior by an organization
PRODUCT CHANGE
is a change in the organization’s product or service outputs.
Product and service innovation is the primary way in which
organizations adapt to changes in markets, technology, and
competition
NEW PRODUCTS AND TECHNOLOGY
TECHNOLOGY CHANGE
is a change in the organization’s production process—
how the organization does its work. Technology
changes are designed to make the production of a
product or service more effi cient.
THREE INNOVATIVE STRATEGIES FOR NEW PRODUCTS AND TECHNOLOGIES
EXPLORATION
EXPLORATION
is the stage where ideas for new products and technologies
are born
IDEA INCUBATOR
provides a safe harbor where ideas from
employees throughout the company can be
developed without interference from company
bureaucracy or politics
COOPERATION
INTERNAL CORDINATION
EXTERNAL COORDINATION
COOPERATION
INTERNAL COORDINATION
Successful innovation requires expertise from several
departments simultaneously, and failed innovation is often
the result of failed cooperation
COOPERATION
FAST-CYCLE TEAM
is a multifunctional, and sometimes multinational, team
that works under stringent timelines and is provided
with high levels of resources and empowerment to
accomplish an accelerated product development project
Even as a new manager, you can make sure people are
communicating and cooperating across organizational
boundaries. Implement mechanisms to help your team
or department members stay in touch with what’s
happening in other departments and in the marketplace.
COOPERATION
EXTERNAL COORDINATION
organizations look outside their boundaries to
find and develop new ideas
COORDINATION MODEL FOR INNOVATION
COOPERATION
EXTERNAL COORDINATION
OPEN INNOVATION
Extending the search for and commercialization
of new ideas beyond the boundaries of the
organization.
ENTREPRENEURSHIP
ENTREPRENEURSHIP
creating mechanisms to make sure new ideas are carried
forward, accepted, and implemented.
Remember: Change does not occur by itself. Personal energy and effort are
required to successfully promote a new idea.
FOUR ROLES IN ORGANIZATIONAL CHANGE
ENTREPRENEURSHIP
A NEW-VENTURE TEAM
A new-venture team is a unit separate from the rest of the organization
that is responsible for developing and initiating a major innovation
SKUNKWORKS
Skunkworks is a separate small, informal, highly autonomous, and often
secretive group that focuses on breakthrough ideas for the business
CULTURE CHANGE
pertains to the organization as a whole, such as when the IRS shifted its basic
mind-set from an organization focused on collection and compliance to one
dedicated to informing, educating, and serving customers (taxpayers)
Two specific tools that can smooth the process are
ü training and development programs
ü organization development (OD)
TRAINING AND DEVELOPMENT
TRAINING
is one of the most frequently used approaches to changing people’s
mindsets.
MERGER/ ACQUISITIONS
ORGANIZATIONAL DECLINE/REVITALIZATION
CONFLICT MANAGEMENT
ORGANIZATIONAL DEVELOPMENT
MERGER/ ACQUISITIONS
The disappointing financial results of many mergers and acquisitions are
caused by the failure of executives to determine whether the administrative
style and corporate culture of the two companies fit.
ORGANIZATIONAL DECLINE/REVITALIZATION
Organizations undergoing a period of decline and revitalization
experience a variety of problems, including a low level of trust, lack of
innovation, high turnover, and high levels of confl ict and stress.
CONFLICT MANAGEMENT
Conflict can occur at any time and place within a healthy organization
ORGANIZATIONAL DEVELOPMENT
OD ACTIVITIES
TEAM-BUILDING ACTIVITIES
SURVEY-FEEDBACK ACTIVITIES
LARGE-GROUP INTERVENTIONS
ORGANIZATIONAL DEVELOPMENT
TEAM-BUILDING ACTIVITIES
Team building enhances the cohesiveness and success of organizational
groups and teams.
SURVEY-FEEDBACK ACTIVITIES
Survey feedback begins with a questionnaire distributed to employees on
values, climate, participation, leadership, and group cohesion within their
organization
LARGE-GROUP INTERVENTIONS
Brings together participants from all parts of the organization—often
including key stakeholders from outside the organization as well—to
discuss problems or opportunities and plan for change
ORGANIZATIONAL DEVELOPMENT
REFREEZING
occurs when individuals acquire new attitudes or values and are rewarded
for them by the organization
IMPLEMENTING CHANGE
IMPLEMENTATION
RESISTANCE TO CHANGE
RESISTANCE TO CHANGE
SELF-INTEREST
People typically resist a change they believe confl icts with their self-
interests. The fear of personal loss is perhaps the biggest obstacle to
organizational change
UNCERTAINTY
Uncertainty is the lack of information about future events. It represents a
fear of the unknown.
FORCE-FIELD ANALYSIS
SELECTIVE IMPLEMENTATION TACTICS
STRATEGIES FOR OVERCOMING RESISTANCE TO CHANGE
FORCE-FIELD ANALYSIS
Force-field analysis grew from the work of Kurt Lewin, who
proposed that change was a result of the competition between
driving and restraining forces.
DRIVING FORCES
can be thought of as problems or opportunities that provide motivation
for change within the organization.
RESTRAINING FORCES
are the various barriers to change, such as a lack
of resources, resistance from middle managers, or inadequate employee
skills.
FORCE-FIELD ANALYSIS TO CHANGE FROM TRADITIONAL TO JIT INVENTORY SYSTEM
FORCE-FIELD ANALYSIS
JUST-IN-TIME (JIT) INVENTORY CONTROL SYSTEMS
schedule materials to arrive at a company just as they are needed on the
production line.
IMPLEMENTATION TACTICS
The other approach to managing implementation is to
adopt specific tactics to overcome resistance.
TACTICS FOR OVERCOMING RESISTANCE TO CHANGE
IMPLEMENTATION TACTICS
COERCION
Coercion means that managers use formal power to force employees to
change. Resisters are told to accept the change or lose rewards or even their
jobs.
POWER
ability to exert influence
FORMAL AUTHORITY
type of power, based on the recognition of legitimacy or lawfulness of
the attempt to exert influence
BASIS OF FORMAL AUTHORITY
CLASSICAL VIEW
top-down authority
BASIS OF FORMAL AUTHORITY
ACCEPTANCE VIEW
• bottom-up authority
• formulated by Mary Parker Follett
• popularized by Chester Barnard
FIVE SOURCES OF POWER
LEGITIMATE POWER
EXPERT POWER
COERCIVE POWER
REWARD POWER
REFERENT POWER
SOURCES OF POWER
LEGITIMATE POWER
A person has the formal right to make demands and to expect others to
be compliant and obedient
EXPERT POWER
A person’s high level of skill and knowledge
COERCIVE POWER
A person can punish others for noncompliance
REWARD POWER
One person's ability to compensate another for compliance
REFERENT POWER
A person's perceived attractiveness, worthiness and right to others'
respect
POWER IN ORGANIZATIONS
TWO FACES OF
POWER
• Two faces of
power by David
POSITIVE
McClelland NEGATIVE
FACE OF POWER FACE OF POWER
LINE AND STAFF Authority
LINE AND STAFFING AUTHORITY
LINE POSITIONS
People in the organization who are directly responsible
for achieving organizational goals
LINE AND STAFFING AUTHORITY
STAFF POSITIONS
Primary purpose is providing specialized expertise and
assistance to line positions
LINE AND STAFF AUTHORITY
LINE AND STAFF AUTHORITY
FUNCTIONAL AUTHORITY
Authority over others in the organization in matters
related directly to their respective functions
LINE AND STAFF AUTHORITY
DELEGATION
Administrative process of getting things done by
others by giving them responsibility
CLASSICAL GUIDELINES FOR EFFECTIVE DELEGATION
Maintain an Effective
Work Manage Talent
Wages and Salary Training
Benefits Development
Labor Relations Appraisal
Terminations
ATTRACTING AN EFFECTIVE WORKFORCE
Manage
Talent
Choose
Training Select the Welcome
HR Planning Recruiting
Development Candidate New
Retirement Sources
Appraisal Application Employee
Growth Want ads
Resignations Interview
Headhunters Tests
Internet
Matching Model
Company’s Needs
Employee Contributions
Strategic goals Match with
Ability
Current and future competencies
Education and experience
Market changes
Creativity
Employee turnover
Company Inducements Commitment
Corporate culture Employee’s Needs
Pay and benefits Match with Expertise and
knowledge Stage of career
Meaningful work
Personal values
Advancement
Promotion aspirations
Training
Outside
interests
HUMAN RESOURCE PLANNING
Forecasting of human resource needs and
the projected matching of individuals
with expected job vacancies
RECRUITING
The activities or practices that define the desired characteristics of
applicants for specific jobs
E-CRUITING
-Recruiting employees through the internet
JOB ANALYSIS
LEGAL CONSIDERATIONS
Recruiting practices conform to the law
SELECTION
the process of screening job applicants to ensure that
the most appropriate candidates are hired.
SELECTION DECISION OUTCOMES
SELECTION TOOLS
ü Application Form
ü Interview
ü Employment Test
ü Assessment Center
OTHER SELECTION APPROACHES
• BACKGROUND INVESTIGATIONS
ØVerification of application data
ØReference checks:
vLack validity because self-selection of references ensures only positive
outcomes.
• PHYSICAL EXAMINATIONS
ØUseful for physical requirements and for insurance purposes
related to pre-existing conditions.
HUMAN RESOURCE PLANNING
• A type of training
Talent in which an
Manage
perform
•An inhouse training and education facility that offers broad-based learning opportunities for employees.
OTIO
N
FROM
•Promotions provide more challenging assignments, prescribe new responsibilities, and help employees grow by expanding and
developing their abilities
WITHI
N
MENTORING & COACHING
Mentoring - when an experienced employee guides and supports a less
experienced employee
Coaching - a method of directing, instructing, and training a person with the
goal to develop specific management skills
HUMAN RESOURCE PLANNING
PERFORMANCE APPRAISAL
The process of observing and evaluating an employee’s
performance, recording the assessment, and providing
feedback to the employee.
• A Manage
process that uses multiple
Talent
raters, including self-rating,
Training
360- •A
Development
degree tomanager
appraise evaluates
Appraisal
employeehis or
Feedba her direct reports
performance relative to
and guide
ck one another and categorizes
development
Performa
each on a scale, such as:
nce A = outstanding performance
Review
Ranking
(20 percent), B = high-middle
System performance (70 percent), or
C = in need of improvement
(10 percent)
MAINTAINING AN EFFECTIVE WORKFORCE
üCOMPENSATION
Wage and Salary Systems
Compensation Equity
Pay for Performance
üBENEFITS
üTERMINATION
HR ISSUES IN THE NEW WORKPLACE
CONTINGENT WORKERS
people who work for an organization, but not on a
permanent or full-time basis including temporary
placements, contracted professionals and leased
employees
USING TEMPORARY EMPLOYEES
VIRTUAL TEAMS
- geographically or organizationally dispersed
- rarely meet face to face
- do their work using advance information technologies
WORK/LIFE BALANCE