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Principles of Management

Designing the Organization

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Lecture 7Lecture 7

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Organizing

Deciding how best to group organizationalactivities and resources. To perform thiseffectively it is necessary to set organizationstructure.

Organization StructureThe set of elements that can be used toconfigure an organization.

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Elements of Organizing

Designing JobsGrouping JobsEstablishing reporting relationshipDistributing authorityCoordinating activitiesDifferentiating among positions

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Designing JobsDetermination of individual’s job related responsibilities.That means - Identifies and select what are the works an individual is

doing or to be done.- What is the expectation of performance standard.

By job designing an individual to be perform specific set ofduties which is prescribed. So he/she to be specialized atthose duties. So, the basic or starting point of designing jobis determining the level of desired specialization.

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Designing Job (cont….)

Job SpecializationThe degree to which the overall task of the organization isbroken down and divided into smaller component parts.Each part is performed by individual worker who isexpert/specialized or become specialized on that work. Division of laborJob specialization evolved from the concept division oflabor. The overall task is divided into several unit and eachworker perform each unit of job.

Example : Production line (Electronics, automobile etc.)

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Job Specialization Designing Job (cont….)

Benefits Performing specific task, become very proficient. Transfer time between jobs decrease. Easy to develop equipments to assist with the job When employee absent or resign, train new one at

relatively low cost.Limitations Same job regularly. Become bored and

dissatisfied, absenteeism rises. Quality may suffer.

Anticipated benefits may do not always occur.

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Alternative to Specialization Designing Job (cont….)

Job Rotation : Systematically moves employees from one job to another.

Job Enlargement : Increase the number of tasks workers perform. Giving the employee more task to perform.

Job Enrichment : Increase the number of tasks as well as give control over the jobs. Delegate more authority which increase sense of responsibility.

Job Characteristic Approach : Take into account the work system and employee preferences.

Work Team : Work in a group. The group is responsible for overall tasks.

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Alternative to Specialization Designing Job (cont….)

Job Characteristic Approach suggest that jobs should be diagnosed and improved along five core dimensions :

Skill variety : Number of things a person does in a job.

Task identity : the extent to which worker does a complete or identifiable portion of total job.

Task significance : The perceived importance of the task.

Autonomy : The degree of control over how the work is performed.

Feedback : The extent to which the worker knows how well the job is being performed.

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Alternative to Specialization Designing Job (cont….)

Job Characteristic Approach

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Core job dimension

Critical Psychologicalstate

Personal andWork outcome

*Skill variety*task identity*Task significance

*Autonomy

*Feedback

ExperiencedMeaningfulness of the work

ExperiencedResponsibilityFor outcomesOf the work

Knowledge of theActual result ofWork activities

EmployeeGrowth-needstrength

*High internal Work motivation

*High quality work Performance

*High satisfactionWith the work

Low absenteeism and turnover

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Grouping Jobs : Departmentalization

Functional Departmentalization : Group together same or similar activities. Example : Finance dept., Marketing dept. etc.

Product Departmentalization : Grouping activities around product or product groups. Example : Unilever – Brand development division- Lux.

Customer Departmentalization : Grouping activities to respond to and interact with specific customer or customer groups. Example : Sales division –Industrial, Sales division – consumer.

Location Departmentalization : Grouping jobs on the basis of geographical sites or areas. Example : Square pharma – Chittagong branch, Comilla branch.

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Establishing Reporting Relationship

Develop the system of reporting relationship – who reports to whom.

Chain of CommandClear and distinct lines of authority need to be established among allposition in an organization. Consists of two components -

Unity of Command : Each person in an organization must have aclear reporting relationship to one and only one boss.

Scalar principle : Clear and unbroken line of authority that extendsFrom the lower to the highest position in the organization.

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Establishing Reporting Relationship

Span of ControlDetermining how many people report to each manager. Also known asSpan of management.

Narrow spans : Few subordinates per manager.Wide spans : Many subordinates per manager.

According to Graicunas – Manager must deal with three kinds ofinteractions with and among subordinates.

Direct : Manager’s one to one relationship with each subordinate.

Cross : Relationship among the subordinates themselves.

Group : Relationship between groups of subordinates.

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Establishing Reporting Relationship

Graicunas formula of interaction :Number of possible interactions between amanager and subordinates can bedetermine by :

I = N(2N/2 + N - 1)

I = Total number of interactionsN = Number of subordinates

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Distributing Authority

Delegation Process

Managers assign a portion of their workload

to others.Manager gives the subordinate a job to

do.Manager also gives the authority to the

subordinate to do the job.Manager establishes the subordinate’s

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Distributing Authority

Delegation Process

Step 1 Step 2 Step 3

Assigning responsibility Granting authority Creating accountability

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Manager

Subordinate

Manager

Subordinate

Manager

Subordinate

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Distributing Authority

Delegation ProcessProblems in Delegation : Managers may be reluctant to delegate. Manager may disorganized, unable to plan work in

advance. Manager may worry that subordinates will do well. Manager not trust subordinates. Subordinates may be afraid of failure. No reward for additional responsibility. Prefer to avoid risk, want their boss to take

responsibility.

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Distributing Authority

Decentralization : Systematically

Delegating power and authority throughout

the organization to middle and lower level

managers.

Centralization : Systematically retain power

and authority in the hands of higher level

managers.

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Coordinating Activities

The process of linking the activities of the various departments of theorganization. Departments are interdependent to each other forinformation and resources To perform their respective activities.

Three major forms of interdependence :

Pooled interdependence : Units operate with little interactions.Example : Stores of ‘Cats Eye’ in Dhaka city.

Sequential interdependence : Output of one unit becomes the inputfor another unit. Example – production assembly line.

Reciprocal interdependence : Activities flow both way between units.Example – Reservation dept., Check in desk, house keeping of a hotel.

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Differentiating between PositionLine position : Position in the direct chain ofcommand that is responsible for the achievementof an organizational goals. Line managers workdirectly towards organizational goals.

Staff position : Position intended to provideexpertise, advice and support for the line19position.

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