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Organization
An Organizational Perspective on Work
Organization
A consciously coordinated social unit, composed of two or more people, that functions on a relatively continuous basis to achieve a common goal or set of goals.
Groups of people who work interdependently toward some purpose.
A managed system designed and operated to achieve a specific set of objectives.
Organizational Structure
Defines how job tasks are formally divided, grouped and coordinated.
The division of labor as well as the patterns of coordination, communication, work flow, and formal power that direct organizational activities.
Reflects its culture and power relationships (McShane & Glinow, 2000).
Fundamental requirements of
organizational structures The division of labor into distinct
tasks. The coordination of that labor so
employees are able to accomplish common goals.
Fundamental Concepts
Differentiation Integration
Differentiation
Internal environment created by job specialization and the division of labor.– the work of the organization is subdivided into
smaller tasks. – different people or groups often perform
specific parts of the entire task.
Integration
Differentiated units are put back together so that work is coordinated into an overall product.
Coordination would link the various parts of the organization to achieve the organization’s overall mission.
Elements of Organizational Structure
Vertical Structure
authority in organizations
hierarchical levels
span of control
delegation
decentralization
Elements of Organizational Structure
Horizontal structure (departmentalization)
functional
divisional
matrix organizations
The vertical structure
Authority in organizationsThe legitimate right to make decisions and to tell other people
what to do. Authority resides in positions rather than in people Top to bottom
The vertical structure
Span of control Number of people reporting directly to the
next level in the hierarchy Narrow spans build a tall organization Wide spans create a flat organization
The vertical structure
Delegation Assignment of authority and responsibility to a
subordinate at a lower level. Responsibility means the assignment of a task that
an employee is supposed to carry out Accountability means the expectation that
employees perform a job, take corrective action when necessary, and report upward on the status and quality of their performance.
The vertical structure
Decentralization The delegation of responsibility and
authority In a centralized organization,
important decisions usually are made at the top.
In decentralized organizations, more decisions are made at lower levels.
The horizontal structure
As the tasks of organizations become increasingly complex, the organization inevitably must be subdivided or departmentalized.
Departmentalization specifies how employees and their activities are grouped together, such as by function, product, geographic location, or some combination.
The horizontal structure
Functional structure Jobs and departments are specialized
and grouped according to business functions and the skills they require : production, marketing, human resources, research and development, finance, accounting and so forth.
Organizations with functional structures are typically centralized to coordinate their activities effectively.
The Functional Structure
General manager
FinanceSales and Marketing Production
InternalAccounts
Collections
The horizontal structure
Divisional structure Type of departmentalization that groups
employees around outputs, clients or geographic areas.
Divisional structures are sometimes called strategic business units because they are normally more autonomous than functional structures and may operate as subsidiaries rather than as departments of the enterprise.
The Divisional Structure
IPS Industries
Food andBeverages
Detergents Cosmetics
Household Industrial
The horizontal structure
Matrix Structure Matrix structures usually optimize the use
of resources and expertise, making them ideal for project-based organizations with fluctuating workloads.
Matrix structures focus technical specialists on the goals of serving clients and creating marketable products.
The Matrix Structure
President
Finance Marketing Production
Central
Southern
Northern
Max Weber Bureaucracy
1. A formal hierarchical structure Formal hierarchy as the basis of central planning and centralized decision making.
2. Management by rules Ensuring decisions made at high levels are executed consistently at lower levels.
3. Organization by functional specialtyDifferentiation of work
4. An "up-focused" or "in-focused" mission Up-focused mission serves stockholders, the board, or empowering agency. In-focused mission set to meet organizational goals
5. Purposely impersonalEqual treatment of employees and clients
6. Employment based on technical qualifications Work done by suitably competent personnelProtection from arbitrary dismissal