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8/13/2019 1 Org Theory Session 1 [Compatibility Mode]
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Organizing is a subset of larger activity of managing. It is theprocess by which the structure of an organization is createdand maintained. The process includes
The determination of the specific activities to
accomplish the objectives
The grouping of activities and assigning these tospecified positions/ persons
e crea on o ne wor o pos ons persons or epurpose of planning, motivation, communication,coordination & control
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Bureaucracy - Max Weber
Rules and regulation
Hierarchy
Paper work
Professional qualifications and Expert Training
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Administrative Theory - Henri Fayol 1916 French Industrialist
1. Division of Work2. Authority & Responsibility
3. Discipline
4. Unity of Command
5. Unity of Direction
6. Subordination of Individual Interest to General Interest
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8. Centralization
9. Scalar Chain
10.Order
11.Equity
12.Stability of tenure of personnel
13.Initiative
14.Espirit de corps Union is strength
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Scientific Management F W Taylor 1900 Micro
Four Principles of Scientific Management
1. Develop science for each element of mans work which
replaces the old rule-of-thumb approach
2. Scientifically select and then train, teach and develop the
workman (where as earlier he decided)
3. Management should heartily cooperate with the workers so as
to ensure all the work being done in accordance with theprinciples of scientific management
4. There is almost equal division of work between management
and workmen. Management should take over the work for
which they are better suited.
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Neo Classical Viewpoint Human Relations Theory
Hawthorne experiments at Western Electric Company by Elton
Mayo 1924 to 1932
1924 to 27 variation in illumination productivity raised
1927 to30 Telephone operator work conditions
Social interaction amongst employee supervisor influenced
productivity
1931 study How group norms affect group efforts and output
IMPORTANT: Neo classical theory does not replace classicalview
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ORGANIZATION STRUCTURE & DESIGN
need an effective structure to achieve org.
goals/plans/strategies
org. structure formal framework for jobs,
tasks to be divided, grouped and coordinatedorg. design process that involves decisions
about
- work specialization- departmentalization
- chain of command
- span of control- centralization and decentralization
- formalization
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WORK SPECIALIZATION
Early in 2oth century, Henry Ford divisionof labor concept in his assembly line, workersassigned specific, repetitive task-helpedincrease productivity
Today Work specialization means degree towhich tasks in an organization are dividedinto separate jobs
too specialized offset the advantages boredom, fatigue, stress, poor quality Managers see it as important organizingmechanism but not source of ever-increasingproductivity Broaden job scope, teamwork and reducedwork specialization
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DEPARTMENTALIZATION
process of grouping together jobs and people into
separate units to accomplish org. goals. 5 common forms
functional departmentalization(group by functions performed)
geographic departmentalization(basis of territorial area)
departmentalization
customer departmentalization(on the basis of common customers)
process departmentalization
(group on basis of product process or customer flow)
customer departmentalization used to better monitorcustomer needscross functional teams flexible interdisciplinary teams
replaced traditional functional groupings
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NEW DEVELOPMENTS Authority, responsibility, chain of command less relevantbecause of IT and employee empowerment
Employees can access info that used to be available tomanagers
Also using computers employees can communicate directlywithout going through chain of command
Employees empowered to make decisions managementuse self-managed teams
New organization designs with multiple bosses continue tobe implemented, therefore traditional concepts of authority,
responsibility and chain of command becoming irrelevant
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SPAN OF CONTROL no. of employees a manager can supervise effectively and efficiently.
Classical view not more than 6 (small span) Helps determine no. of levels and managers
1
2
3
4
1
8
64
512
new (contemporary) viewpoint span of control increasing flatter organization
less direct supervision, well trained and experienced staff
new (contemporary) viewpoint span of control increasing flatter organization less direct supervision, well trained and experienced staff
5 4096
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CENTRALIZATION AND DECENTRALIZATION
how much decision making authority has beendelegated lower levels classical centralized decision-making
as org. become more complex and dynamic decentralize decision making decisions should be made by those who have best
empowerment is a managerial approach in whichemployees are given substantial authority and say tomake decisions on their own
- involve business decisions- design & prod. Of products- front line/desk service counters
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FORMALIZATION
Degree to which jobs within org. are
standardized
Extent to which employed behavior guided
y ru es an proce ures
Explicit job descriptions, clearly defined
procedures covering work processes
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ORGANIZATIONAL DESIGN DECISIONSmechanistic org.- rigid, tightly controlled
organic highly adaptive and flexible
Mechanistic Organic
High specialization Cross-functional Teams
Rigid Departmentalization Cross-Hierarchical Teams
Clear Chain of Command Free Flow of Info.
Narrow Spans of Control Wide Spans of Control
Centralization Decentralization
High Formalization Low Formalization
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Contingency Factors Deciding Org. Design
Strategy and Structure innovators need flexibility, costminimizes seek efficiency, tight controls of mechanisticstructure
Size and Structure large (2000 employees) more
specialize, departments > mechanistic whereas Small co. organic, loose, flexible
Technolo and Structure Batch or unit roduction
organic, Mass production mechanistic, and Continuousprocess production organic
Environmental Uncertainty and Structure mechanisticstructure suitable for stable simple environment. Global
competition, accelerated product innovation bycompetitors, increased demands for high quality and fastdelivery are dynamic environmental forces. Need lean, fastflexible
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