Management 12e richard draft chapter 10
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Chapter 10
Designing Adaptive Organizations
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Organizing
All organizations wrestle with structural design and reorganization
The deployment of organizational resources to achieve strategic
goals
Division of labor
Lines of authority
Coordination
Organizing is important because it follows from strategy
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Organizing the Vertical Structure
Organizing structure defines:
The set of formal tasks assigned to individuals and departments
Formal reporting relationships
The design of the systems to ensure effective coordination
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10.1 Sample Organization Chart
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Organizing Concepts
Work Specialization is the degree to which organizational tasks are
subdivided into individual jobs; also called division of labor
Chain of Command is an unbroken line of authority that links all
individuals in the organization and specifies who reports to whom
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Authority, Responsibility,
and Delegation
Authority is vested in organizational positions, not people
Authority flows down the vertical hierarchy
Authority is accepted by subordinates
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Authority, Responsibility,
and Delegation
Responsibility is the duty to perform the task or activity as assigned
Accountability is the mechanism through which authority and
responsibility are aligned
Delegation is the process managers use to transfer authority and
responsibility down the chain
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Line and Staff Authority
Line departments perform primary business tasks
Sales
Production
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Line and Staff Authority
Staff departments support line departments
Marketing
Labor relations
Research
Accounting
Human Resources
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Line and Staff Authority
Line authority means that people in management positions have
formal authority to direct and control immediate subordinates
Staff authority is narrower and includes the right to advise,
recommend, counsel in the staff specialists’ area of expertise
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Span of Management
The number of employees reporting to a supervisor
Less supervision/larger spans of control
Work is stable and routine
Subordinates perform similar work
Subordinates are in one location
Highly trained/require little direction
Rules and procedures are defined
Few planning or nonsupervisory activities
Manager’s preference
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Span of Management
Tall structure have more levels and narrow span
Flat structure have a wide span and fewer levels
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10.2 Reorganization and
Span of Management
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Centralization and Decentralization
Centralization – decision authority is located near the top of the
organization
Decentralization – decision authority is pushed downward to all levels
Factors that influence centralization versus decentralization:
Change and uncertainty are usually associated with decentralization
Strategic fit
Crisis requires centralization
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Departmentalization:
Functional and Divisional
Basis for grouping positions into departments and departments into
the total organization
Vertical functional approach
Grouping of positions into departments based on skills, expertise, work
activities, and resource use
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10.3 Five Approaches to Structural Design
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10.3 Five Approaches to Structural Design
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10.3 Five Approaches to Structural Design
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© 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
10.3 Five Approaches to Structural Design
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© 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
10.3 Five Approaches to Structural Design
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Departmentalization:
Functional and Divisional
Divisional approach
Grouping based on organizational output
Product, program, business
Geographic or Customer-based divisions group activities by geography
or customer
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10.4 Functional vs. Divisional Structure
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10.5 Geographic-Based Global Organization
Structure
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Departmentalization:
Matrix and Team Approach
Matrix approach combines functional and divisional approaches
Improve coordination and information
Dual lines of authority
Team approach is a very widespread trend
Allows managers to delegate authority
Flexible, responsive
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10.6 Dual-Authority Structure in a Matrix
Organization
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