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ORGANIZATIONORGANIZATION
A formal intentional structure A formal intentional structure of positions, roles and of positions, roles and
functionsfunctions
ORGANIZATION STRUCTUREORGANIZATION STRUCTURE
A framework of an organization expressed A framework of an organization expressed by its degree of complexity, formalization by its degree of complexity, formalization and centralizationand centralization
ORGANIZATION DESIGNORGANIZATION DESIGN
The development or changing The development or changing of an organization structureof an organization structure
FORMALIZATIONFORMALIZATION
The degree to which an The degree to which an organization relies on rules and organization relies on rules and procedures to direct the behavior procedures to direct the behavior of its employeesof its employees
CENTERALIZATIOCENTERALIZATIONN
The concentration of decision –The concentration of decision –making authority in upper making authority in upper managementmanagement
DECENTERALIZATIONDECENTERALIZATION
The handing down of decision – The handing down of decision – making authority to lower levels in making authority to lower levels in an organizationan organization
PURPOSES OF ORGANIZINGPURPOSES OF ORGANIZING
Divide work to be done into specific jobs & departmentsDivide work to be done into specific jobs & departments
Assign tasks and responsibilities associated with Assign tasks and responsibilities associated with individual jobsindividual jobs
Coordinate diverse organizational tasks Coordinate diverse organizational tasks
Clusters jobs into unitsClusters jobs into units
Establish relationships among individuals , groups and Establish relationships among individuals , groups and departmentsdepartments
Establish formal lines of authority Establish formal lines of authority
Allocate and deploys organizational resources.Allocate and deploys organizational resources.
ORGANIZATION DIMENTIONSORGANIZATION DIMENTIONS
VerticalVertical
horizontalhorizontal
ASPECTS OF VERTICAL ASPECTS OF VERTICAL DIMENTIONDIMENTION
Unity of commandUnity of command
Authority & responsibilityAuthority & responsibility
ASPECTS OF HORIZONTAL ASPECTS OF HORIZONTAL DIMENSIONDIMENSION
DepartmentalizationDepartmentalization
Division of laborDivision of labor
UNITY OF COMMANDUNITY OF COMMAND
The principle that subordinate should have The principle that subordinate should have one and only one superior to whom he (or one and only one superior to whom he (or she) is directly responsible.she) is directly responsible.
CHAIN OF COMMANDCHAIN OF COMMAND
The flow of authority from the top to the The flow of authority from the top to the bottom of an organization bottom of an organization
DEPARTMENTALIZATIONDEPARTMENTALIZATION
The process of grouping individuals into The process of grouping individuals into separate units or departments to separate units or departments to accomplish organizational objectivesaccomplish organizational objectives
DEPARTMENDEPARTMENTT
Department designates a distinct area, Department designates a distinct area, division or branch of an organization over division or branch of an organization over which a manager has authority for the which a manager has authority for the performance of specified activities performance of specified activities
DIVISION OF LABOURDIVISION OF LABOUR
The break down of jobs in narrow, The break down of jobs in narrow, respective tasks.respective tasks.
PROCESS OF ORGANIZATIONPROCESS OF ORGANIZATION
STEPSSTEPS1.1. Establishing objectiveEstablishing objective2.2. Formulating supporting plans& policiesFormulating supporting plans& policies3.3. Identifying activities necessary to accomplish these Identifying activities necessary to accomplish these
(1&2 above)(1&2 above)4.4. Grouping these activities in the light of human and Grouping these activities in the light of human and
material resources available and to the best way of material resources available and to the best way of using themusing them
5.5. Delegating to the head of each group the authority Delegating to the head of each group the authority necessary to perform the activitiesnecessary to perform the activities
6.6. Tying the groups together vertically and horizontally Tying the groups together vertically and horizontally through chain of command and flow of communication through chain of command and flow of communication
SPAN OF MANAGEMENTSPAN OF MANAGEMENT
The number of subordinates a manager can The number of subordinates a manager can supervise effectively and efficientlysupervise effectively and efficiently
Narrow (or vertical)Narrow (or vertical)
Wide (or horizontal)Wide (or horizontal)
NARROW SPANNARROW SPAN
No of subordinates four or less than four
NARROW SPANNARROW SPAN
AdvantagesAdvantagesClose supervisionClose supervisionClose controlClose controlFast communicationFast communication
DisadvantagesDisadvantagesMany level of managementMany level of managementExcessive distance between the top &lowest levelExcessive distance between the top &lowest levelSuperior tend to get too involved in subordinates workSuperior tend to get too involved in subordinates workHigh cost due to many levelsHigh cost due to many levels
WIDE SPANWIDE SPAN
No of subordinate six or more than six
WIDE SPANWIDE SPAN
AdvantagesAdvantagesSuperiors are obliged to delegateSuperiors are obliged to delegate
Clear policies are madeClear policies are made
Subordinates are carefully selectedSubordinates are carefully selected
DisadvantagesDisadvantagesOverloaded superiors become decision Overloaded superiors become decision bottlenecksbottlenecks
Superiors may lose controlSuperiors may lose control
Require exceptional quality of managersRequire exceptional quality of managers
FACTORS AFFECTING FACTORS AFFECTING SPANSPAN
Training of subordinatesTraining of subordinates
Clarity of delegation of authorityClarity of delegation of authority
Clarity of plansClarity of plans
Use of objective standardsUse of objective standards
Rate of changeRate of change
Communication techniquesCommunication techniques
Amount of personal contact neededAmount of personal contact needed
DEPARTMENTATIONDEPARTMENTATION
The process of grouping individuals into The process of grouping individuals into separate units or departments to separate units or departments to accomplish organizational objectivesaccomplish organizational objectives
DEPARTMENTATIONDEPARTMENTATION
By timeBy time
By functionBy function
By territoryBy territory
By productBy product
By process of manufacturingBy process of manufacturing
By customer’s interestBy customer’s interest
Departmentation by TimeDepartmentation by Time
Grouping activities on the basis of time, Grouping activities on the basis of time, generally at lower levels.generally at lower levels.
Continuous round the clockContinuous round the clock
ShiftsShifts
AdvantagesAdvantages
Service available 24 / 7Service available 24 / 7
Processes work uninterruptedProcesses work uninterrupted
Utilization of equipmentUtilization of equipment
Helping people utilize available timeHelping people utilize available time
Lack of supervision especially at nightLack of supervision especially at night
Problem of coordination & communicationProblem of coordination & communication
Cost of overtimeCost of overtime
Fatigue factorFatigue factor
DisadvantagesDisadvantages
DEPARTMENTATION BY DEPARTMENTATION BY FUNCTIONFUNCTION
MD
MARKETING ENGINEERRING PRODUCTION FINANCE
MARKETING`
PLANNING
SALES
ADMIN
DESIGN
QULITYCONTROL
PLANNING
PURCHASING
GENPRODUCTION
PLANNING
BUDGETING
ACCOUNTING
AdvantagesAdvantagesIs Logical reflection of functionsIs Logical reflection of functionsMaintains power and prestige of major functionsMaintains power and prestige of major functionsFollows principle of occupational specializationFollows principle of occupational specializationSimplifies trainingSimplifies trainingFurnishes means of tight control at topFurnishes means of tight control at top
Deemphasis of overall company objectiveDeemphasis of overall company objectiveOverspecializes and narrows viewpoint of key personnelOverspecializes and narrows viewpoint of key personnelReduces coordination between functionsReduces coordination between functionsResponsibility for profits is at the top onlyResponsibility for profits is at the top onlySlow adaptation to changes in environmentSlow adaptation to changes in environmentLimits development of general managersLimits development of general managers
DisadvantagesDisadvantages
DEPARTMENTATION BY DEPARTMENTATION BY TERRITORYTERRITORY
MD
WESTERNREIGON
CENTERAL SOUTHERNNORTHERNESTERNREGION
(HQ)
AdvantagesAdvantagesPlaces responsibility at a lower levelPlaces responsibility at a lower levelPlaces emphasis on local markets and problemsPlaces emphasis on local markets and problemsImproves coordination in a regionImproves coordination in a regionTakes advantage of economies of local operationsTakes advantage of economies of local operationsBetter face-to-face communication with local interestsBetter face-to-face communication with local interestsFurnishes measurable training ground for general Furnishes measurable training ground for general managersmanagers
Requires more persons with general manager abilitiesRequires more persons with general manager abilitiesTend to make maintenance of economical central Tend to make maintenance of economical central services difficult and may require services such as services difficult and may require services such as personnel or purchasing at the regional levelpersonnel or purchasing at the regional levelIncreases problem of top management controlIncreases problem of top management control
DisadvantagesDisadvantages
DEPARTMENTATION BY DEPARTMENTATION BY PRODUCTPRODUCT
MD
HEAVY ELECTRICAL
TELEPHONE/MOBILE
KITCHENAPPLIANCE
RADIO/TV/VCR
AdvantagesAdvantagesPlaces attention and effort on product linePlaces attention and effort on product lineFacilitates use of specialized capital, facilities, skills, and Facilitates use of specialized capital, facilities, skills, and knowledgeknowledgePermits growth and diversity of products and servicesPermits growth and diversity of products and servicesImproves coordination of functional activitiesImproves coordination of functional activitiesPlaces responsibility for profits at the division levelPlaces responsibility for profits at the division levelFurnishes measurable training ground for general managersFurnishes measurable training ground for general managers
Requires more persons with general managers abilitiesRequires more persons with general managers abilitiesTends to make maintenance of economical central Tends to make maintenance of economical central services difficultservices difficultPresents increased problem of top management controlPresents increased problem of top management control
DisadvantagesDisadvantages
DEPARTMENTATION BY DEPARTMENTATION BY MANUFACTURING PROCESSMANUFACTURING PROCESS
MD
FOUNDRYNICKLE
PLATINGPAINTING
CASTING/FORGING
AdvantagesAdvantagesAchieves economic advantageAchieves economic advantageUses specialized technologyUses specialized technologyUtilizes special skillsUtilizes special skillsSimplifies trainingSimplifies training
Coordination of departments is difficultCoordination of departments is difficultResponsibility for profit is at the topResponsibility for profit is at the topIs unsuitable for developing general managersIs unsuitable for developing general managers
DisadvantagesDisadvantages
DEPARTMENTATION BY DEPARTMENTATION BY CUSTOMERSCUSTOMERS
MD
HIRE-PERCHASE HIGH END PRODUCTS
BOUTIQUEBUDGET ITEM
AdvantagesAdvantagesEncourages concentration on customer needsEncourages concentration on customer needsGives customers feeling that they have an understanding Gives customers feeling that they have an understanding suppliersupplierDevelops expertness in customer areaDevelops expertness in customer area
May be difficult to coordinate operations between May be difficult to coordinate operations between competing customer demandscompeting customer demandsRequires managers and staff expert in customers Requires managers and staff expert in customers problemsproblemsCustomer groups may not always be clearly defined (For Customer groups may not always be clearly defined (For Example, large corporate firms vs. other corporate Example, large corporate firms vs. other corporate businesses)businesses)
DisadvantagesDisadvantages
TYPES OF ORGANIZATIONSTYPES OF ORGANIZATIONS
Mechanistic ( or bureaucratic )Mechanistic ( or bureaucratic )
Organic ( or adhocracy)Organic ( or adhocracy)
Team-basedTeam-based
Boundary-lessBoundary-less
MatrixMatrix
MECHANISTIC ORGANIZATIONMECHANISTIC ORGANIZATION(Bureaucracy)(Bureaucracy)
A structure that is high in complexity, A structure that is high in complexity, formalization and centralizationformalization and centralization
PermanentPermanent
Shared responsibilityShared responsibility
Work by the bookWork by the book
ORGANIC ORGANIZATIONORGANIC ORGANIZATION (Adhocracy)(Adhocracy)
A structure that is low in complexity , A structure that is low in complexity , formalization and centralization .formalization and centralization .
TransientTransient
AdhocismAdhocism
creativecreative
TEAM-BASED ORGANIZATIONTEAM-BASED ORGANIZATION
An organization made of work groups or An organization made of work groups or teams that perform organization’s workteams that perform organization’s work
BOUNDARY – LESS BOUNDARY – LESS ORGANIZATIONORGANIZATION
An organization whose design is not defined An organization whose design is not defined or limited to the boundaries imposed by a or limited to the boundaries imposed by a pre-defined structurepre-defined structure
[ Also knows as Network org, modular ,or [ Also knows as Network org, modular ,or virtual corporation]virtual corporation]
MECHANISTIC Vrs ORGANIC MECHANISTIC Vrs ORGANIC ORGANIZATIONORGANIZATION
Rigid hierarchical Rigid hierarchical relationshiprelationship
Fixed dutiesFixed duties
High formalizationHigh formalization
Formalized Formalized communication communication channels channels
centralizedcentralized
Collaborative/flexible Collaborative/flexible (both vertical (both vertical horizontal)horizontal)
Adaptable dutiesAdaptable duties
low formalizationlow formalization
Informal Informal communicationcommunication
decentralized decentralized
MECHANISTICMECHANISTIC OrganicOrganic
MATRIX ORGANIZATIONMATRIX ORGANIZATION
An organization that assigns specialists from An organization that assigns specialists from different functional departments to work on different functional departments to work on one or more projects that are led by a one or more projects that are led by a project manager project manager
MATRIX ORGANIZATION MATRIX ORGANIZATION WORKINGWORKING
Define objectives of the project or taskDefine objectives of the project or taskClarify roles , authority and responsibility Clarify roles , authority and responsibility of managers and team members based of managers and team members based on knowledge &experience rather than on knowledge &experience rather than rankrankBalance power of functional and project Balance power of functional and project managersmanagersInstall appropriate cost , time and quality Install appropriate cost , time and quality controlcontrol
STRATEGIC BUSINESS UNITSTRATEGIC BUSINESS UNIT(SBU)(SBU)
A single business that is independent of main A single business that is independent of main organization and formulates its own strategy.organization and formulates its own strategy.
It will have its own:It will have its own:
Unique missionUnique mission
CompetitorsCompetitors
PlansPlans
Organization/setupOrganization/setup
recoursesrecourses