1.04-1.06

Divisional Structure by Units

- By product (for each product or product line, common with consumer products and food companies with multiple product lines) -By process (for each step in production process, common with manufacturing companies) -By territory (for each territory or geographic region, common with large retailers and multinational corps) -By customer type (for each type of customer the organization serves, common with both industrial and consumer customers like banks)

Results of Poor Organizing

- confusion -consequences such as reduced productivity and efficiency, causing frustration -miscommunication, damaged reputation, employee conflict and turnover, and inability to grow will be a loss in efficiency -limited effectiveness towards reaching goals

Disadvantages of Functional Structure

- creates narrow perspectives among managers and employees -separation between departments makes working together on a problem or issue more difficult -suffers from an overall lack of flexibility (difficult to coordinate, change doesn't come quickly)

Stage 1: Intiation

- idea is feasible or worth exploring -statement of work (overview, goals, scope, deliverables, potential risk, stakeholders) -project charter (more formal SOW, more details)

Differences Between Project and Business's Operations

- project is short team, definite beginning and end, rely on lower level managers, outside scope of operations -business operations are permanent, ongoing, depend on traditional management structures, day to day basis ex. automobile company- new car=project, manufacturing=business operations

1. Determine the work needed to accomplish goals

- set goals -break down goals, figure out how to achieve them -divide goals into tasks and activities -ex. market the business, make sales, deliver products -each tasks needs people, time, resources -figure out what those requirements look like

Technology

- standard business tech -comprehensive project management software options for every aspect of a project, easy to project teams to collaborate and communicate digitally

Stage 2: Planning

- work breakdown structure -governance mechanisms -risk analysis

Challenges for Project Managers

-An unqualified project manager -Poorly defined project goals -Inaccurate estimates of needed resources -Difficulty assessing risk -Lack of monetary resources -Lack of human resources—or, lack of qualified human resources -Poor communication among team members and stakeholders -Disagreements among team members and stakeholders -Difficulty monitoring project changes -Project creep—the scope of the project slowly gets bigger and bigger

Benefits of Effective Project Management

-Make more profitable decisions -Evaluate a project's feasibility -Accomplish goals within a specified time frame -Create a framework for defining a successful project -Implement greater quality control -Emphasize teamwork -Communicate effectively with project participants -Improve customer satisfaction -Adapt and be flexible, especially regarding risk -Become more efficient

Types of Projects

-Projects to enhance, add to, or extend existing projects.- more of a small scale -Projects that are a major departure from existing projects- create something entirely new, more resources -Projects that use entirely new technology- risky, can revolutionize entire industries -R&D projects- take on completely new visions or pursuits for a business, research and development of new technology/knowledge/processes, risky, commitment from stakeholders

Categories of Projects

-Resources: needed to complete the project -Schedule: time frame in which it must be completed -Outcome: result of the project

3 Factors of Project

-Scope: what the project's deliverable includes and does not include -Time: projects schedule and deadline -Budget: cost of resources needed to accomplish goals Middle: concept of quality (top priority)

Scalar Principle

-a clearly defined line of authority that connects all employees in the organization. -The relationships between employees and authority should be clear. Entry-level employees should be able to understand how authority flows from the CEO all the way to them.

Lateral Relations

-amount of teamwork included in any type of organizational design, particularly in the form of special projects and tasks forces -lots of teamwork and cooperation despite organizational structure

Stage 3: Execution

-assemble team and acquire resources -complete required tasks -guide team as they complete work

4. Delegate Authority

-chain of command -unity of command -scalar principle -the formally granted influence of an individual to make decisions, pursue goals, and obtain the resources necessary to support those decisions and goals. Authority comes from the top of the organization, so managers have the responsibility to give authority to employees over certain decisions and tasks. For organizations to run smoothly, employees need to know what they are permitted to do, who is in charge, and who reports to whom. A well-defined organizational chart and clear-cut job descriptions are great tools that managers can use to delegate authority.

Why is organizational design important?

-creates clear lines of authority -improves communication within the organization -encourages innovation -increases productivity -allows a business to better compete

Disadvantages of Divisional Structure

-difficult to allocate support staff -competition and rivalries between divisions -some efforts may be duplicated -element of unpredictability -managers must wear many hats (broad based abilities and knowledge)

Advantages of Functional Structure

-employees more skills in their areas of expertise -reduces duplication of certain activities -chain of command is easily identified -decisions can be made faster

Job Specialization

-employees specialize in certain tasks -perform jobs more efficiently

Advantages of Matrix Structure

-encourages flexibility, teamwork, and communication -allows organization to make best use of talent and resources by placing employees in appropriate departments and teams -increased opportunities for personal and professional development -stronger feelings of commitment and ownership in their work -balance conflicting organizational objs (special teams in same environment as traditional departments)

2. Group tasks into structures

-group related tasks into departments or teams -organizational structure -organizational chart -departmentalization -divisional structure -functional structure -matrix structure -span of control

Organizational chart

-illustrate structure once managers decide the most effective way to organize -graphical representation of the flow of authority within the organization.

Principles of Organizational Design

-importance of company objectives ("form follows function"- design must fit with objs) -the concept of authority (line, staff, responsibility, delegation) -division of labor -unity of command -scalar principle (chain/line of command) -span of control

Pros of Organizing

-improves efficiency and reduces waste -unites goals with the mission -keeps businesses cohesive and coordinated -provides a sense of security for employees -allows for tracking, accountability, and growth -creates a clear chain of command that clarifies authority

6. Coordinate Activities

-integrate work of employees and teams to achieve goals -The manager is in charge of facilitating this coordination by clearly communicating with employees, making connections among departments, and demonstrating the relationships among work tasks. Managers should compile and share organizational charts, chains of command, workflow processes, and other documents and graphics so employees can see how activities come together.

Stage 4: Monitoring and Controlling

-keeps project on track -updates and modifies project plan -maintains ongoing communication -monitors risks -ensures quality control -keeps track of all project reecord -assesses and reviews project progress

Stage 5: Closing

-lessons learned document -tie up any loose ends -recognizes any team members for their hard work

Advantages of Divisional Structure

-more flexible than functional -decision making is improved (managers closer to issues) -encourages creativity -specific focus can create better experiences for customers

Departmentalization

-organizational structures vary depending on ____ -the way departments are defined and arranged -two main types: functional and divisional

Matrix Structure

-rarer form of departmentalization -combines functional and divisional -Employees answer to a functional manager and to another cross-functional team. For example, an accountant might report to the chief financial officer, but when she is assigned to create a budget for a particular product line, she might report to the head of that product line for that assignment. Matrix structures are more complicated but allow employees to collaborate with one another across departments.

Staff Authority

-refers to advisory authority -doesn't include the right to actually make decisions to take action -make useful recommendations to managers and employees

Factors Affecting Organizational Decision-Making

-size of the organization -managerial abilities -competence of employees -the business environment -the business life cycle -the business strategy

Disadvantages of Matrix Structure

-violates unity of command principle (more manager to answer to) -create power struggled between department and team managers -costly to implement -decision making can be slow

R&D project

A business endeavor that involves the research and development of new knowledge, new processes, new technologies, etc.

Work breakdown structure (WBS)

A document that details the division of a project workload into smaller, more manageable parts

Statement of work (SOW)

A dynamic document that serves as the foundation of a project; includes goals, scope, deliverables, etc.

Project charter

A formal document that officially authorizes a project to get underway

the size of the organization

A manager of a three-person family business is not going to make the same organizational decisions as a manager of a large international corporation. Larger companies tend to have more complicated structures and need more formalized organization. On the other hand, smaller companies might not need a complex, structured organizational process.

Stakeholder

A person who has an interest or investment in a project's outcome

Project creep

A problem wherein the scope of a project keeps getting bigger and bigger

Project champion

A project's sponsor; a person who has the ability and authority to assist the project manager in getting the job done

Lessons-learned document

A project-end summary of what went well, what didn't go well, and how to improve in the future

Project

A short-term undertaking that creates a unique good or service

3. Assign Tasks

After the organizational structure has been set and employees have been organized, managers need to organize the work itself. In other words, they must figure out who should be in charge of which tasks. During this stage, managers design job roles and responsibilities. Managers must figure out the most efficient way to divide work and use human resources. Ex.. A small handcrafted furniture manufacturer has four employees. Each person could do a little of everything. Or, as an alternative, one employee could specialize in purchasing, one in construction, one in retail display, and one in selling. Each of these employees could become experts in their area, rather than trying to excel at so many different tasks. -division of labor -specialization

Risk analysis

An assessment of a project's potential risks and challenges, performed by project managers to better prepare for minimizing the effects

Dynamic

Changeable -due to globalized economy, increased competition, and constant technological advances -to maintain flexibility so that they can take advantage of new opportunities quickly and effectively

Pros and Cons of Organization

Each type of organization has its own advantages and disadvantages. Managers need to balance the span of control appropriately based on the size of the organization, the managers' and employees' abilities, and the nature of the work. It's important to make sure no manager has too few or too many direct reports. Having too many direct reports makes it difficult for a manager to give each person and task enough time. A manager with too few direct reports is not using resources as efficiently as possible. Other cons: reduced productivity and efficiency, miscommunication, damaged reputation, employee conflict and turnover, and inability to grow or reach goals.

5. Allocate Resources

Employees can't accomplish taks without resources (not unlimited) Managers must decide how to best divide resources among employees to make sure work is accomplished. This step includes: Arranging facilities in an efficient, safe way Providing the necessary tools and equipment to accomplish tasks Making working conditions comfortable and pleasant Helping employees structure their work hours efficiently Organizing departmental budgets and allocating funds among team

Competence of Employees

Employees' abilities, strengths, and weaknesses need to be taken into account when determining departments, assigning tasks, and allocating resources. One employee might be independent and capable of working without supervision, while another requires more frequent assistance and support. Employees might be great at certain tasks but not as proficient in others. When structuring the organization and delegating work, managers need to consider these differences in ability.

Derivative Projects

Extend or replace existing projects; very similar to the existing projects

Unity of Command

First, each employee should only report to one supervisor. This is called the _____. Employees with more than one supervisor might receive conflicting instructions, which is confusing and challenging. In certain situations, such as projects or temporary work, employees might report to a team leader and a supervisor, but in general, employees should only have one manager at a time.

Breakthrough Projects

Involve the use of newer technology than platform projects

The business's life cycle

Is the company new, expanding, or mature? The stability of the company also affects the organizing process. A new company that is constantly changing might have more flexible job roles and authority than an established organization, for example. As a company grows, the need for organizing grows with it. The more established a company is, the more it can work to maximize efficiency through organizing.

Platform Projects

Major departures from existing projects; represent a new good/service, a new process, or both

Project manager

Person responsible for overseeing all of the activities that are part of a project Roles: define and control scope, develop and maintain schedule, allocate resources, manage budget, manage and motivate team, asses progress, keep track of all communication, identify and plan for risks, plan and manage changes, ensure quality

Feasible

Reasonable; achievable

Governance mechanism

Rule or regulation used to ensure that a project stays on track and meets its requirements

Business operations

The day-to-day activities needed for continued business functioning

The Business Environment

The external environment has significant impact on managerial organizing. Changes in consumer behavior, the industry, the economy, and technology can drastically change a business's goals, outlook, and mission. If an industry is changing, managers need to be prepared to adapt. A manufacturing company that once had a large staff of specialized factory workers, for example, might need to change job roles so employees can learn new tasks and collaborate more.

Project close

The fifth stage of the project management process; includes wrapping up the project, delivering the end product, and documenting lessons learned

Project initiation

The first stage of the project management process; includes all of the activities required for starting up a new project, such as creating a statement of work and a project charter

Project monitoring and controlling

The fourth stage of the project management process; includes making sure the project stays on track and making the appropriate corrective measures if it doesn't

Deliverable

The result a project is created to achieve

Project planning

The second stage of the project management process; includes determining how all parts of the project will be accomplished, including creating the work breakdown structure

Project management

The skills, tools, and processes used to plan, execute, and control the elements of a project

Project execution

The third stage of the project management process; includes carrying out the actual project work

R&D Projects

Visionary, representing new directions or pursuits for a business

Scope

What a project will and will not include

The business's strategy

What are the company's goals? If it's aiming to grow, managers might design its organizational structure to accommodate new employees. If it wants to gain market share or position itself a certain way in the market, the organizational structure needs to align with and support the strategy.

Managerial Abilities

When determining a manager's responsibilities, it is important to consider the manager's experience level. A veteran manager might be able to take on a larger staff, whereas a newer manager might need to start slow with only a couple of direct reports.

Specialization

When employees are specialized, they are experts in one particular area or task that aligns with their skills and experiences. Their jobs focus on work related to an area of expertise. Therefore, the organization can be more efficient because the work is divided and shared to take advantage of employees' skills.

Chain of Command

_____ is the flow of authority within an organization. For the chain of command to be effective, it must include two principles. First, each employee should only report to one supervisor (unity of command)

Divisional Structure

an organizational design in which the firm is broken down into units according to factors such as product, process, territory, customer type, etc. Each division contains its own business functions that it needs to succeed. For example, a retailer might have four divisions: Northeast, South, Midwest, and West. Each of these regions has its own departments (marketing, IT, sales, product development, etc.) and operates as its own unit. This type of structure is appropriate for large national or international companies.

Functional Structure

an organizational design in which the firm is broken into traditional departments, each with its own set of responsibilities and activities (marketing, operations, sales, IT, etc.). In this case, employees are grouped with those who share the same work tasks and skills, rather than by the product they work on or where they are located. In a functional structure, communication occurs within the department and then across departments by the head of the departments. Many small- and medium-sized businesses use this type of structure.

Delegation

assigning tasks to subordinates (employees working under his/her authority)

Responsibility

duty to get a job done -more authority, more responsibility

Line Authority

formal, direct authority that affects a business's day to day operations

Authority

formally granted influence of an individual to make decisions, pursue goals, and obtain the resources necessary to support those decisions and goals.

7. Evaluate Results

important to periodically evaluate the results of the organizing process.- What went well, and what didn't? What issues have occurred? Is the organizational structure working effectively, or should it be rearranged? Do employees have enough authority, and do they understand to whom they are supposed to report? Are employees using resources efficiently? If the organizing process wasn't effective, managers should discuss the issues with their employees and make changes to improve in the future.

Division of Labor

separating a big job into several smaller tasks

Organizational Structure

the company's configuration of employees for accomplishing specific business tasks. It is the foundation of how the business is organized. Depending on the size of the organization, departments or teams could be as small as one person to as large as a hundred people—or even more! It is a manager's job to figure out what teams are needed and which tasks fall to which teams. -structing a business's people, info, and tech to allow business to achieve goals and be successful AKA organizational design -Purpose: to match form as closely to purpose

Span of Control

the measurement of how many workers are supervised by one manager. An organization with a wide span of control has few managers overseeing a large number of employees. These tend to be horizontal or "flat" organizations in which there aren't many middle managers. Instead, employees report to the top leaders and have a lot more control and authority. On the other hand, an organization with a narrow span of control has more managers with fewer staff members. These organizations tend to be vertical or "tall" organizations that have a large number of middle managers in between the top leadership and the employees.

Division of Labor

the process of dividing a large job into units, or job tasks, and assigning an individual to do each of the tasks. _____ allows for specialization.