Chapter 11: Basic Elements of
Organizing
Elements of Organizing
Organization
Organizing
structure
Deciding how The set of
best to group elements that
organizational can be used to
activities and configure an
resources. organization.
Elements of Organizing
Establishing
Designing
Grouping jobs reporting
jobs
relationships
Differentiating
Distributing Coordinating
among
authority activities
positions
There are six basic building blocks managers use in
constructing an organization.
Designing Jobs
• Job design
• is the determination of an individual’s work-related responsibilities.
• Job specialization
• is the degree to which the overall task of the organization is broken down and
divided into smaller component parts.
Designing Jobs
Limitations of specialization
Benefits of specialization
• Workers become proficient at • Worker boredom and
task. dissatisfaction.
• Transfer time between tasks • Can lead to higher absenteeism
and lower quality of work.
decreases.
• The narrow job definition allows • Anticipated benefits do not
for specialized equipment. always occur.
• Training costs are relatively low. • Managers should avoid extreme
specialization.
Designing Jobs
Alternatives to Specialization
Job characteristics approach Work teams
Job
Job rotation Job enrichment
enlargement
Due to drawbacks of specialization, many firms
sought alternative approaches to job design.
Alternatives to Specialization
• Job rotation
• involves systematically moving employees from one job to another.
• Can increase flexibility and lower costs but jobs are still boring,
and satisfaction quickly wanes.
• Job enlargement
• increases the total number of tasks workers perform.
• Though positive consequences happen, training costs increase,
unions argue for more pay, and work remains boring.
Alternatives to Specialization
• Job enrichment
• increases both the number of tasks and the control the worker has
over the job.
• Needed changes not usually made for successful
implementation.
• Work teams
• allows an entire group to design the work system it will use to
perform an interrelated set of tasks.
Alternatives to Specialization
• The job characteristics approach
• suggests jobs 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 the worker does a complete or
identifiable portion of the total job.
• Task significance, the perceived importance of the task.
• Autonomy, the degree of control the worker has over how the work is
performed.
• Feedback, the extent to which the worker knows how well the job is
being performed.
Grouping Jobs
• Departmentalization
• is the process of grouping jobs according to some logical
arrangement.
• The rationale is linked to size.
• As growth occurs, the owner-manager can no longer oversee all
workers.
• New managerial positions oversee workers grouped according to
some plan.
• The logic in such a plan is the basis for all departmentalization.
Common Bases for Departmentalization
• Functional departmentalization
• groups jobs by the same or similar activities.
• Most common in smaller organizations.
• Advantages include:
• Each department is staffed by experts.
• Facilitates supervision – narrow set of skills.
• Ease of coordinating activities inside departments.
• With growth, disadvantages emerge.
• Decision making slows and becomes bureaucratic.
• Employees lose sight of the organization as a system.
• Accountability and performance are difficult to monitor.
Common Bases for Departmentalization
• Product departmentalization
• groups activities by products or product groups.
• Larger businesses adopt this form.
• Three major advantages
• Activities across products are integrated and coordinated.
• Enhances speed and effectiveness of decision making.
• Improves department accountability.
• Two major disadvantages
• Managers may lose focus of the organization as a whole.
• Raises administrative costs.
Common Bases for Departmentalization
• Customer departmentalization
• groups activities to respond to and interact with specific customers
or customer groups.
• The basic advantage is the organization’s ability to use skilled
specialists to deal with unique customers.
• One set of skills evaluates business loans, another evaluates
car loans.
• A large administrative staff is required to integrate activities of
various departments.
Common Bases for Departmentalization
• Location departmentalization
• groups jobs based on geography.
• Primary advantage
• An organization’s can easily respond to unique customer and
environmental characteristics in various regions.
• Primary disadvantage
• A larger administrative staff is required to keep track of units
in scattered locations.
• Other forms of departmentalization include time and sequence.
Grouping Jobs
• Other considerations about job grouping
• Common synonyms for department include:
• divisions, units, sections, or bureaus.
• Any organization may employ multiple bases of departmentalization,
depending on level.
• The role of social media is beginning to impact departmentalization.
Bases for Departmentalization
Product
Product
Function
Function
Customer
Customer
Location
Location
The four most common bases are; function, product, customer, and location.
Establishing Reporting Relationships
The basic issues in establishing reporting
relationships:
Clarifying the
The span of
chain of
management
command
Establishing Reporting Relationships
Chain of command
A clear and distinct line of authority among
positions in the organization.
Comprised of two components:
Unity of command Scalar principle
Each person has a clear A clear and unbroken line
reporting relationship to of authority from lowest to
one boss. highest position.
Narrow Versus Wide Spans
• Span of management (also span of control)
• is the number of people who report to a particular manager.
• A. V. Graicunas quantified span of management.
• Managers deal with three kinds of interactions:
• Direct – manager’s one-to-one relationship with workers.
• Cross – subordinates' relationship among themselves.
• Group – relationships between groups of subordinates.
• I = N(2N/2 + N – 1)
• I is the number of interactions with and among subordinates and N
is the number of subordinates.
• Each additional subordinate adds more complexity than the previous
one.
Narrow Versus Wide Span
• Ralph C. Davis described two spans:
• An operative span – up to 30 subordinates
• For lower-level managers
• An executive span, limited to nine
• For middle and top managers
• Lyndall F. Urwick and General Ian Hamilton
• concluded the executive span should never exceed six subordinates.
Tall versus Flat Organizations
Factors Influencing the Span of Management
1. Competence of supervisor and subordinates
(the greater the competence, the wider the potential span)
2. Physical dispersion of subordinates
(the greater the dispersion, the narrower the potential span)
3. Extent of nonsupervisory work in manager’s job
(the more nonsupervisory work, the narrower the potential span)
4. Degree of required interaction
(the less required interaction, the wider the potential span)
5. Extent of standardized procedures
(the more procedures, the wider the potential span)
6. Similarity of tasks being supervised
(the more similar the tasks, the wider the potential span)
7. Frequency of new problems
(the higher the frequency, the narrower the potential span)
8. Preferences of supervisors and subordinates
