CH 10
centralization
the process of systematically retaining power in the hands of higher-level managers -decision making power and authority are retained at the higher levels of management
organization structure
the set of elements that can be used to configure an organization
sponsor
top level manager who approves of and supports a project
determining the appropriate span
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alternatives to specialization
-Job Rotation -Job Enlargement (more things to do) -Job Enrichment (autonomy) -job characteristics approach -Work Teams
fixing problems in delegation
1. basic issue is communication 2. subordinates must understand their own responsibility, authority, and accountability, and the manager must come to recognize the value of effective delegation 3. ultimate responsibility for the outcome continues to reside with the manager
establishing reporting relationships
1. chain of command 2. narrow vs. wide spans 3. decentralization and centralization
disadvantages of functional departmentalization
1. decision making tends to become slower and more bureaucractic 2. employees may also begin to concentrate too narrowly their own units and lose sight of the total organization system 3. accountability and performance become increasingly difficult to monitor
authority
-a power that has been legitimized by the organization -normal outgrowth of increasing organizational size
organizational culture
-can be used to create and support innovative activity -well managed culture can communicate a sense of value of innovative thought -occasional failure in the pursuit of new ideas is not only acceptable but even expected
reward systems
-encourages and discourages certain behaviors by employees -includes salaries, bonuses, prerequisites -avoid punishing creativity when it does not result in highly successful innovations -innovative failure occurs at the managerial level you may withhold raises and reduce promotion opportunities
a manager has no clear-cut guidelines to determine whether to centralize or decentralize
-historically, Japanese firms have been highly centralized -recently, many leading Japanese firms have moved toward decentralization
task forces
-may be created when the need for coordination is acute -when interdependence is complex and several units are involved, a single liaison person may not be sufficient -coordination function is this spread across several individuals
tall organization
-narrow span of management -more expensive -fosters more communication problems
integrating departments
-occasionally used for coordination -similar to task forces but are more permanent -has some permanent members as well as members who are assigned temporarily from units that are in need of coordination -usually has more authority than task force and may even be given some budgetary control by the organization -the greater the degree of interdependence, the more attention the organization must devote to coordination -then interdependence is pooled or simple sequential, the managerial hierarchy or rules and procedures are often sufficient -when more complex forms of sequential or simpler forms of reciprocal interdependence exist, liaisons or task forces may be more useful -when reciprocal interdependence is complex, task forces or integrating departments are needed
Managerial Hierarchy
-one manager in charge of interdependent departments or units -to ensure coordination and minimize conflict, one manager is in charge of the whole operation
operative span for lower level managers (Ralph Davis)
-operative spans could approach 30 subordinates -executive spans should be limited to between 3 and 9 (Urwick and Hamilton said limited to 6)
rules and procedures
-routine coordination activities can be handled via rules and standard procedures -as useful as rules and procedure often are in routine situations, they are not particularly effective when coordination problems are complex or unusual
disadvantages of job enlargement
-training costs usually rise -unions have argued that pay should increases because the worker is doing more tasks -the work remains boring and routine even after job enlargement
flat organization emerges
-with wide span of control -led to higher levels of employee morale and productivity -may result in a managers having more administrative responsibility and more supervisory responsibility -may suffer if additional responsibilities become excessive
structural coordination techniques
1- Management Hierarchy 2- Rules and procedures 3- Managerial Liaison Roles 4- Task Forces 5- Integrating Departments 6- Electronic Coordination
reasons for delegation
1. a manager can get more work done 2. subordinate may have more expertise in addressing a particular problem than the manager does 3. helps develop subordinates 4. subordinates learn about overall operations and improve their managerial skills
advantages of product departmentalization
1. activities associated with one product or product group can be easily integrated and coordinated 2. speed and effectiveness of decision making are enhanced 3. performance of individual products or product groups can be assessed more easily and objectively, thereby improving the accountability of departments for the results of their activities
other considerations
1. departments are often called something entirely different -divisions -units -sections -bureaus 2. they represent groups of jobs that have been put together according to some unifying principle 3. almost any organization is likely to employ multiple bases of departmentalization
basic building blocks of organizing
1. designing jobs 2. grouping jobs 3. establishing reporting relationships between jobs 4. distributing authority among jobs 5. coordinating activities between jobs 6. differentiating between positions
advantages of functional departmentalizaton
1. each department can be staffed by experts in that functional area 2. supervision is also facilitated because an individual manager needs to be familiar with only a relatively narrow set of skills 3. coordinating activities inside each department is easier
failure to innovate is due to
1. lack of resources 2. failure to recognize opportunities 3. resistance to change
differences between line and staff positions
1. line managers work directly toward organizational goals, whereas staff managers advise and assists 2. line authority is generally though as of the formal or legitimate authority created by the organizational hierarchy 3. staff authority is less concrete and may take a variety of forms 4. another form of staff authoruty is called compulsory advice - most important form is functional authority
pooled interdependence
1. lowest level of interdependence 2. when units operate with little interaction, their output is simply pooled
parts of the delegation process
1. manager assigns responsibility, or gives the subordinate a job to do 2. individual is also given the authority to do the job 3. the manager establishes the subordinates accountability
disadvantages of product departmentalization
1. managers in each department may focus in their own product or product group to the exclusion of the rest of the organization 2. administrative costs rise because each department must have its own functional specialist for things like marketing research and financial analysis
negative consequences of specialization
1. may become bored and unsatisfied 2. no challenge or stimulation 3. absenteeism rises 4. quality of work suffers - specialism should not be carried to extremes
sequential interdependence
1. moderate level of interdependence 2. when the output of one unit becomes the input of another in sequential fashion
reciprocal interdependence
1. most common complex form 2. when activities flow both ways between units
factors that determine an organizations position on decentralization-centralization
1. organizations external environment: the greater the complexity and uncertainty of the environment, the greater the tendency to decentralize 2. history of the organization: there is likely to be some relationship between what an organization did in its early history and what it chooses to do today 3. the costlier and riskier the decision, the more pressure there is to centralize 4. the abilities of lower-level managers (if well qualified, top management can take advantage of their talents by decentralizing)
coordinating activities
1. pooled interdependence 2. sequential interdependence 3. reciprocal interdependence
problems in delegation - managers
1. reluctant to delegate 2. some are so disorganized that they are unable to plan work in advance and cannot delegate appropriately 3. managers worry about subordinates outperforming them 4. managers may not trust the subordinate to do the job well
promoting innovation within organization
1. reward systems 2. organizational culture
five core job characteristics
1. skill variety 2. task identity 3. task significance 4. autonomy 5. feedback
problems in delegation - subordinates
1. some subordinates are reluctant to accept delegation 2. afraid that failure will result in a reprimand 3. might perceive that there are no rewards for accepting additional responsibilities
narrow vs. wide spans
1. span of management 2. I = N(2^N/2 + N-1) 3. each additional subordinate adds more complexity than the previous one did
benefits of specialization
1. workers performing small, simple tasks will become very proficient at that task 2. transfer time between tasks decreases 3. the more narrowly defined a job is, the easier it is to develop specialized equipment to assist with that job 4. when an employee who performs a highly specialized job is absent or resigns, the manager is able to train someone new at relatively low costs
job characteristics approach
An alternative to job specialization that suggests that jobs should be diagnosed and improved along five core dimensions, taking into account both the work system and employee preferences -employees reach various psychological states which leads to high motivation, quality performance, satisfaction, low turnover and absenteeism -growth need strength affects how the model works
customer departmentalization
Grouping activities to respond to and interact with specific customers or customer groups -coordination is necessary to make user that the organization does not overcoat itself in any one area and to handle collections on delinquent accounts from a diverse set of customers
decentralization
The process of systematically delegating power and authority throughout the organization to middle and lower-level managers -decision making and authority are delegated as far down the chain as possible
chain of command
a clear and distinct line of authority among the positions in an organization
work teams
an alternative to job specialization that allows an entire group to design the work system it will use to perform an interrelated set of tasks -each group itself decides how jobs will be allocated
job rotation
an alternative to job specialization that involve systematically moving employees from one job to another -relatively standard and routine jobs -most often used today as training device to improve worker skills and flexibility
job enlargement
an alternative to job specialization that involves giving the employee more tasks to perform -workers perform more tasks presumable reduces level of job dissatisfaction
job enrichment
an alternative to job specialization that involves increasing both the number of tasks the worker does and the control the worker has over the job -increases subordinate sense of responsibility -continually assign new and challenging tasks, thereby increasing employees opportunity for growth and advancement
staff position
intended to provide expertise, advice, support for line positions
organizing
deciding how best to group organizational activities and resources
job design
determination of an individuals work-related responsibilities -starting point for designing jobs is determining the level of desired specialization
unity of command
each person within an organization must have a clear reporting relationship to one and only one boss -someone in the organization must be ultimately responsible for every decision
advantages of location departmentalization
enables the organization to respond easily to unique customer and environmental characteristics in the various regions
task identity
extent to which the worker does a complete or identifiable portion of the total job
compulsory advice
form of staff authority to which must consider advice from the staff ban can choose to use or ignore it
functional authority
formal or legitimate authority over activities related to the staff members specialty -takes advantage of expertise but remains chain of command
functional departmentalization
grouping jobs involving the same or similar activities (the word function is used here to mean organizational functions such as finance and production) -most common in smaller groups
location departmentalization
grouping jobs on the basis of defined geographic sites or areas
role of intrapreneurship in larger organizations
intrapreneurs are similar to entrepreneurs except that they develop a new business in the context of a large organization 1. inventor 2. product champion 3. sponsor
product departmentalization
involves grouping and arranging activities around products or product groups -most larger businesses adopt this form of departmentalization for grouping activities at the business and corporate level
disadvantages of customer departmentalization
large administrative staff is required to integrate the activities of the various departments
disadvantages of location departmentalization
larger administrative staff may be required if the organization must keep track of units in scattered locations
advise authority
line manager can choose to seek out advice/input from staff if they decide they want to
liaison rules
manage coordinates interdependent units by acting as a common point of contact
job enrichment implementation
managers must remove some controls from the job, delegate more authority to employees, and structure the work in complete natural units
product champion
middle manager who learns about the project and becomes committed to it
skill variety
number of things a person does in a job
advantages of customer departmentalization
organization is able to use skilled specialist to deal with unique customers or customer groups
task significance
perceived importance of the task
inventor
person who actually conceives of an develops the new idea, product, or service by means of creative process
rationale for departmentalization
personally supervising employees by the manager is harder as an organization grows
line position
position in the direct chain of command that is responsible for the achievements of an organizations goals
scalar pronciple
suggests that there must be a clear and unbroken line of authority that extends from the lowest to the highest position in the organization
autonomy
the degree of control the worker has over how the work is performed
administrative intensity
the degree to which managerial positions are concentrated in staff positions 1. high administrative intensity is one with many staff positions relative to the number of line positions 2. low administrative intensity reflects relatively more line positions -surplus of staff positions represents a drain on an organizations crash and an inefficient use of resources
job specialization
the degree to which the overall task of the organization is broken down and divided into smaller component parts 1. division of labor 2. normal extension of organizational growth 3. as growth continued, so too did specialization
feedback
the extent to which the worker knows how well the job is being performed
span of management
the number of people who report to a particular manager
delegation
the process by which managers assign a portion of their total workload to others
departmentalization
the process of grouping jobs according to some logical arrangement
