Friday, February 12, 2010

Six Building Blocks (Organization Design)

1. Organization Design: The process of developing an organization structure is organizational design.

Job Design: Specification of task activities associated with a particular job.
Example: The job iam doing, what is my job description? Should I type, report, or email?
Job Specialization: Degree to which overall task of organization is broken down into smaller components.
Example: In one organization there are 2 departments:
Marketing (Customer relation and developing marketing strategy).
Accounting (Finance, audit and insurance)

Advantages: Job Specialization
 Workers can become proficient at work
 Transfer time between task decrease
Example: Because people are specialized they can complete 15 min work in 5 min
 Specialized equipment can be developed.
Working and working one can become specialist in his or her own field.
 Employee become bore and dissatisfied

Approaches to Job Design
There are Four job design approaches:
Job Simplification: one who has specialized and generalized knowledge about his or her field.

Example: a person alone could make 20 pens a day, while 10 who are specialized could make 48 a day.

Job Rotation: Movement of workers from one specialized job to another.
It has two benefits:
 The work can learn something more work
 People will be motivated

Job Enlargement: Increase the number of tasks performed by a worker
Example: we are increasing the scope of job.

Job Enrichment: upgrading the job task in order to increase significantly potential for growth, achievement, responsibility Job Enlargement, is more jobs.
Job Enrichment, is better jobs.

2. Departmentalization:
The process of grouping jobs according to some logical arrangement.
Example: In one organization there are 3 departments with different jobs.

There are four patterns of departments:
 Functional Departmentalization: Put positions into units based on expertise, skill, and similarity of work e.g. marketing, accounting, Production and operation.
 Product Departmentalization: Grouping of jobs according to the products offered by the organization.
 Geographical Departmentalization: Grouping of jobs by defined locations.
 Customer Departmentalization: Grouping of jobs that meet the unique needs of customers.

3. Establishing Reporting Relationships
Who reports to whom?
Example: Owner manager of small firm hire two new employees, one to handle marketing and one to handle production will marketing manager report to production and production to marketing or will each directly report to the owner manager?

Chain of command
 The continuous line of authority that extends from upper organizational levels to the lowest levels and clarifies who reports to whom.

Unity of Command
 The management principle that no person should report to more than one boss.

Span of control
 The number of subordinates reporting directly to a manager.
 Refers to the number of workers a manager manages.
 Wide spans: larger number of direct reports.
 Narrow spans: fewer numbers of direct reports.

Span of Control (Management)The number of employees reporting to a manager.
 Traditional view, seven subordinates or so per manager.
 Many organizations today, 30 or more per manager.
 Generally if supervisors must be closely involved with employees, span should be small.

4. Different between Line & Staff Position
 A line position has authority and responsibility for achieving organizations major goal
Example: In grocery store line departments might be store operation, pharmacy, and food (directly related to major goal).
 Staff position include all those who provide specialized skills in support of line departments
Example: Staff position might be human resources and consumer affairs (Indirectly related to major goal).

Flat vs. Tall (Structure)
 Tall structure has an overall narrow span of management and more levels in the hierarchy

 Flat structure has a wide span, is horizontally dispersed, and has fewer hierarchical levels

Informal Organization
 Formal authority is the power to take action, make decisions, and direct others.
 Informal authority is the power a leader has over others by charisma or whatever.

5. Distributing Authority:
Manager can distribute his authority through:
 Delegating

6. Coordinating Activities:
The process of linking the activities of various departments of organization.
Example: Customer Complaints will be fulfill through coordinating activities

 Better Coordination, Lesser Complain
 Higher Coordination, Higher Level of Performance
 Higher Coordination, Higher Productivity


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