Chapter 8 Bus 101
Matrix Structure disvantages
-It costly and complex -It can confuse employees about where their loyalty belongs -with the project manager or with their functional unit -It requires good interpersonal skills as well as cooperative employees and managers to avoid communication problems -It may be only a temporary solution to a long-term problem
Matrix Structure advantages
-It gives managers flexibility in assignment people to projects -It encourages interorganizational cooperation and teamwork -It can produces creative solutions to product dvelopment problems -It makes effiencient use of organzational resources
Webers principles
-Job description -Written Rules, decision guidelines, and detailed records -Consistent Procedures regulations and polices -Staffing and promotion based on qualifications
Henri Foyal French economic Theoretician introduced such principles
-Unity of command Each worker is to report to one and only one boss -Hierarchy of authority All workers should known whom they report - Division of labor functions are to be divided into areas of specialization such as production, marketing, and finance -Subordination of individual interest to the general interest workers are to think of themselves as a coordinated team -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 circumstance -Clear communication channels- All workers should be able to reach others in the organization 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
When designing responsive organizations firms have to make decisions about several organizational issues
1. Centralization 2.Span of control 3. Tall Versus flat organizational structures 4. Departmentalization
Benchmarketing
Compares an organization practices and products against the worlds best.
Managing change has become a
Critical managerial function which includes changing the whole organizational structure
Disadvanatges of departmentalization
1. Departments may not communicate well 2.Employees may identify with their departments goals rather than the organizations 3. The companys response to external changes may be slow 4.People may not be trained to take different managerial responibilties; rather they rend to become narrow specialist 5. Department members may engage in groupthink and may need input from outside to become more creative
Advantages of Departmentalization
1. Employees can develop skills in depth and progress within a department as they master more skills 2.The company can achieve economies of scale by centralizing all the resources it needs and locate various experts in that area 3.Employees can coordinate work within the function, and the top management can easily direct and control various departments activities
Organzational Design
1. line organization 2. line and staff organizations 3. matrix- style organizations 4. cross functional self managed
Companies that are most successful in adapting to change have these common traits
1. they listen to customers 2. they have inspirational managers who drive new ideas throughout organization 3. They often have had close call with going out of business
Mass production was introduced
1900
Span of control
Describes the optimal number of employees a manager supervises or should supervise
Formal Organization
Details lines of responsibility, authority, and position
Departmentalization
Divides organizations into separate units
Chain of command
Is a the line of authority that moves from the top of the hierarchy to the lowest level
Organization Chart
Is a visual device that shows relationships among people and divides the organizations work; it shows who reports to whom
Mass productions
Methods for efficiently producing large quantities of goods
Change is to the evolving business environment
More global competition, faster technology change, and pressure to persevere the natural environment
Transparency
Occurs when a company is so open to other companies that electronic info is shared as if the companies were one
line organzation disadvantage
Of being too inflexible, of having few specialist or experts to advise people along the line and having lenghty lines of communication
Bureaucracy became to be the term
Organization with many layers of managers
Favor some decentralization and this more delegation authority
Rapidly changing markets added to global differences
Bureaucracy
Reliance on Rules
Departmentalization groups workers based on their
Skills, expertise, or resource use do they can specialize and work together more effectively
Matrix organization
Specialist from different parts of organization work together temporarily on specific projects, but still remain part of line and staff structure
A potential real problem with matrix management
The project teams are not permanent They form to solve a problem and then break up
Informal organization
The system that develops spontaneously as employees meet and form cliques, relationship, and lines of authority separate from the formal organization
Economies scale
The term refers to the fact that companies can reduce their production costs by purchasing raw materials in bulk
Max Weber
The theory of social and economic organizations. Appeared 1940's promoted the pyramid shaped organizational structure that is popular in large firms
cross-functional team works best when
The voice of the customer is brought in, especially in product development tasks
Digital natives
Younger people today are called this because they grew up with the internent and cell phones
staff personnel
advise and assist line personnel in meeting their goals and include those in marketing research, legal advising, information tech, and human resource
Cross- functional self managed teams
are groups of employees from different departments who work together on a long term basis
Line personnel
are responsible for directly achieveing organizational goals and include production workers, distrubtion people, and marketing personnel.
One of the biggest difference between line and staff personnel is
authority Staff personal have authority to advise line personnel and influence their decisions but cant make policy changes The line manager may seek or ignore the advice of staff personnel
Informal organization is too
emotional to allow careful reasoned decision making on critical manners but effective in generating creative solutions to short term problems and creating comaraderie and teamwork among employees
Cross functional teams should be
empowered and collaborative
Many orginzations benefit from
expert advice on safety, legal issues, quality control, database management, motivation, and investing.
Line and line and staff organizational structures allow
for established lines of authority and communication and work well in organizations with stable environments and slow product development
No organization can work effectively without both types
formal organization and informal organization
The traditional way to departmentalize is by
function, design, production, marketing, and accounting
Companies designed many rules and regulations to
give managers control over employees
Inverted organization
has contact people at the top and top management at the bottom
Hierarchy
is 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 and others who are responsible to that person
Restructuring
is redseigning an organization so it can more effeciently serve customers
Organizational culture is the widely shared values within an organization that foster unity and cooperation to achieve common goals
is the widely shared values within an organization that foster unity and cooperation to achieve common goals
Line managers can
issue orders, enforce discipline and adjust the organization as conditions change
Line organizations dont have
legal department, accounting department, human resource department, or info technology department Follows all Fayol rules
Information technology also allows
managers to handle more information. so the span can be broader still.
Self managed
means that they are empowered to make decisions without management approval
Centralized authority
occurs when decision making is concentrated at the top level of management limits the flexibility to immediately respond to regional or local market changes and trends
Th average cost of goods decreases as
production levels rise
Real time
simply means present moment or the actual time in which an event takes place
grapevine
the system through which unofficial information flows between and among managers and employees
Core competencies
those functions it can do as well as or better than any other organization in the world
Bureaucrat
to describe a middle manager whose function was to implement top management orders
Large organization use flat line structures to try
to match the friendliness of small firms
Networking
uses communication technology to link organizations and allow them to work together on common objectives
Matrix Organization
violate some traditional managerial principles
Flat organizational structures
Fewer layers of management and board span of control compared to Tall organizational structures
Intverted organiztion has support
Frontline personnel with interneal and externeal data bases, advanced communication systems, and professional assistance frontline peopple have to be better educated better trained, better paid than in the past
Line Organizations
Has two way lines of responsibility, authority and communication running the top to the bottom of the organization with everybody reporting to the same supervisor
Consumers today expect
High quality products and friendly service at a reasonable price
Business growth led to
Econmies scale
One solution to the temporary nature of matrix teams is to
Establish long lived teams and empower them to work closely with suppliers, customers, and others to quickly and effciently bring out new high quaility products while giving great service