I Everyone s Reorganizing the key to success is remaining flexible enough to adapt to the changing times A Building an Organization from the Bottom Up cid 127 organizing or structuring begins with determining what needs to be done and dividing the tasks division of labor cid 127 job specialization dividing tasks into smaller jobs cid 127 departmentalization the process of setting up individual departments to do specialized tasks cid 127 structuring consists of devising a division of labor setting up teams departments and assigning responsibility authority cid 127 organization chart shows relationships among people who is accountable and who reports to who much change is due to the evolving business environment more global competition declining economy faster technological change pressure to preserve the II The Changing Organization natural environment bureaucracy reliance on rules A The Development of Organization Design mass production methods for efficiently producing large quantities of goods economies of scale the situation in which companies can reduce their production costs if they can purchase raw materials in bulk the average cost of goods Subordination of individual interests to the general interest workers are to think of themselves as a coordinated team cid 127 Max Weber and Organizational Theory put great trust in managers and felt firm would do well if employees did what they were told goes down as production levels increase cid 127 Fayol s Principles of Organization Unity of command worker reports to only one boss Hierarchy of authority workers know who they report to Division of labor Authority Degree of centralization Clear communication channels Order Equity Esprit de corps spirit of pride and loyalty emphasized job descriptions written rules decision guidelines and detailed records consistent procedures regulations and policies staffing and promotion based qualifications in favor of bureaucracy B Turning Principles into Organization Design responsible to that person III Decisions To Make In Structuring Organizations 1 Centralization vs Decentralization 2 Span of control 3 Tall vs Flat organization structure 4 Departmentalization A Choosing Centralized or Decentralized Authority hierarchy a system in which one person is at the top of the organization and there is a ranked or sequential ordering from the top down of managers who are chain of command the line of authority that ives from the top of a hierarchy to the lowest level bureaucracy an organization with many layers of managers who set rules and regulations and oversee all decisions centralized authority an organization structure in which decision making authority is maintained at the top level of management decentralized authority an organization structure in which decision making authority is delegated to lower level managers more familiar with local conditions than headquarters management could be B Choosing the Appropriate Span of Control span of control the optimal number of subordinates a manager supervises or should supervise the appropriate span generally narrows at higher levels of the organization b c work is less standardized managers need more face to face communication C Choosing between Tall and Flat Organization Structures management tall organization structures an organizational structure in which the pyramidal organization chart would be quite tall because of the various levels of flat organization structures an organization structure that has few layers of management and a broad span of control the flatter organizations become the broader their spans of control D Weighing the Advantages and Disadvantages of Departmentalization departmentalization the dividing of organizational functions into separate units Advantages cid 127 Employees can develop skills in depth and progress within a department cid 127 the company can achieve economies of scale by centralizing all the resources it needs and locate various experts cid 127 Employees can coordinate work w in the function and top management can easily direct control activities Disadvantages cid 127 Departments may not communicate well tunnel vision cid 127 Employees may identify with their department s goals rather than the organization s cid 127 Company s response to external change may be slow cid 127 People may not be trained to take different managerial responsibilities they become narrow specialists cid 127 Department members may engage in groupthink and may need outside input to be more creative Looking at Alternative Ways to Departmentalize By product customer group geographic location process hybrid forms use a combination of departmentalization techniques IV Organizational Models 1 Line organizations 2 Line and staff organizations 3 Matrix style organizations 4 Cross functional self managed teams line organization an organization that has direct two way lines of responsibility authority and communication running from the top to the bottom of the A Line Organizations organization with all people reporting to only one supervisor unable to handle complex decisions line personnel employees who are part of the chain of command that is responsible for achieving organizational goals production workers distribution people staff personnel employees who advise and assist line personnel in meeting their goals those in marketing research legal advising information technology and line personnel have formal authority to make policy decisions staff personnel have authority to advise line personnel and influence their decisions but they can t B Line and Staff Organizations and marketing personnel human resource management make policy changes C Matrix Style Organizations part of a line and staff structure Advantages cid 127 It gives managers flexibility in assigning people to projects matrix organization an organization in which specialists from different parts of the organization are brought together to work on specific projects but still remain cid 127 It encourages inter organizational cooperation teamwork cid 127 It can produce creative solutions to product development problems cid 127 It makes efficient use of organizational resources Disadvantages cid 127 Costly complex cid 127 Can confuse employees about where their loyalty belongs project manager or their functional unit cid 127 requires good interpersonal skills as well as cooperative employees and managers to avoid communication problems cid 127 may be only a temporary solution to a long