Anizing

Place Slide Title Text Here
JOHN R. SCHERMERHORN, JR.

MANAGEMENT
12th Edition
C h a p t e r 11
Fundamentals of
Organizing
©2013 John Wiley & Sons, Inc. All rights reserved. 11-1
Planning Ahead
Place Slide Title — Chapter
Text Here 11 Study Questions
1. What is organizing as a management

function?
2. What are the traditional organization
structures?
3. What are the types of horizontal organization
structures?
4. How are organizational designs changing the
workplace?
Chapter
Place Slide Title 11 Learning
Text Here Dashboard
1. Organizing as a Management Function

1. What is organization structure?
2. Formal structures
3. Informal structures
2. Traditional Organization Structures

1. Functional structures
2. Divisional structures
3. Matrix structures
Chapter
Place Slide Title 11 Learning
Text Here Dashboard
3. Horizontal Organization Structures

1. Team structures
2. Network structures
3. Boundaryless structures
4. Organizational Designs
1. Contingency in organizational design
2. Mechanistic and organic designs
3. Trends in organizational designs
Takeaway
Place 1: Title
Slide Organizing as a Management Function
Text Here
• Organizing as a management function

– Organizing
• Arranges people and resources to work together to
accomplish a goal
– Organization structure
• The system of tasks, reporting relationships, and
communication linkages
Figure 11.1 Organizing viewed in relationship with the
other management functions
Takeaway
Place 1: Title
Text Here
• An organization chart is a diagram describing

reporting relationships and the formal
arrangement of work positions within an
organization. It includes:
The division of Supervisory Communication Levels of

Major subunits
work relationships channels management
Takeaway
Place 1: Title
Text Here
• Informal structures 
– The set of unofficial relationships between
organization members
– Social network analysis
• Identifies informal structures and social
relationships in the organization
PlaceStudy
SlideQuestion 1:Here
Title Text What is organizing as a
management function?
• Informal structures 
– Potential advantages of informal structures:
• Helping people accomplish their work
• Overcoming limits of formal structure
• Gaining access to interpersonal networks
• Informal learning
Takeaway
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Text Here
Potential disadvantages of informal structures:
May work Diversion of

against best May carry May breed work efforts Feeling of
Susceptibility
interests of inaccurate resistance to from alienation by
to rumor
entire information change important outsiders
organization objectives
Takeaway 2:Title
Place Slide Traditional Organization Structures
Text Here
• Traditional organization structures

– Departmentalization
• Groups people with and jobs into work units or formal
teams
• These formal teams are linked to create three major
types of traditional organizational structures
Functional Divisional Matrix
Takeaway 2:Title
Text Here
• Functional structures
– People with similar skills and performing similar
tasks are grouped together into formal work units
– Members work in their functional areas of
expertise
– Are not limited to businesses
– Work well for small organizations producing few
products or services
Figure 11.2 Functional structures in a business, branch
bank, and community hospital
Takeaway 2:Title
Text Here
• Potential advantages of functional structures:

– Economies of scale
– Task assignments consistent with expertise and
training
– High-quality technical problem solving
– In-depth training and skill development
– Clear career paths within functions
Takeaway 2:Title
Text Here
Potential disadvantages of functional structures:
Sense of
Difficulties in Functional cooperation Narrow view of Excessive
pinpointing chimneys and common performance upward referral
responsibilities problem purpose break objectives of decisions
down
Takeaway 2:Title
Text Here
• Divisional structures
– Group together people who work on the same
product or process, serve similar customers,
and/or are located in the same area or
geographical region
– Common in complex organizations
– Avoid problems associated with functional
structures
Figure 11.3 Divisional structures based on product,
geography, customer, and process
Takeaway 2:Title
Text Here
• Potential advantages of divisional structures:

– More flexibility in responding to environmental
changes
– Improved coordination
– Clear points of responsibility
– Expertise focused on specific customers,
products, and regions
– Greater ease in restructuring
Takeaway 2:Title
Text Here
Potential disadvantages of divisional structures:
Duplication of Emphasis on
Competition and
resources and divisional goals at
poor coordination
efforts across expense of
across divisions
divisions organizational goals
Takeaway 2:Title
Text Here
• Matrix structure
– Combines functional and divisional structures to
gain advantages and minimize disadvantages of
each
– Used in:
Service Professional Non-profit Multi-national

Manufacturing
industries fields sector corporations
Figure 11.4 Matrix structure in a small, multi-project
business firm
Takeaway 2:Title
Text Here
• Potential advantages of matrix structures:

– Better cooperation across functions
– Improved decision making
– Increased flexibility in restructuring
– Better customer service
– Better performance accountability
– Improved strategic management
Takeaway 2:Title
Text Here
Potential disadvantages of matrix structures:

Two-boss
Two-boss
system can Increased costs
system is Team meetings Team may
create task due to adding
susceptible to are time develop
confusion and team leaders
power consuming “groupitis ”
conflict in work to structure
struggles
priorities
Takeaway
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Horizontal Organization Structures
Text Here
• Team structures
– Extensively use permanent and temporary teams
to solve problems, complete special projects, and
accomplish day-to-day tasks
– Often use cross-functional teams composed of
members from different functional departments
– Project teams are convened for a specific task or
project and disbanded once completed
Figure 11.5 How a team structure uses cross-functional
teams for improved lateral relations
Takeaway
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Text Here
• Potential advantages of team structures:

– Eliminates difficulties with communication and decision
making
– Eliminates barriers between operating departments
– Improved morale
– Greater sense of involvement and identification
– Increased enthusiasm for work
– Improved quality and speed of decision making
Takeaway
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Text Here
Potential disadvantages of team structures:

Effective use of time
depends on quality of
Conflicting loyalties Excessive time spent in
interpersonal relations,
among members meetings
group dynamics, and
team management
Takeaway
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Text Here
Network structures
– Uses information technologies to link with networks
of outside suppliers and service contractors
– Own only core components and use strategic
alliances or outsourcing to provide other
components
Figure 11.6 A network structure for a Web-based
retail business
Takeaway
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Text Here
Potential advantages of network structures:

– Firms can operate with fewer full-time employees
and less complex internal systems
– Reduced overhead costs and increased operating
efficiency
– Permits operations across great distances
Takeaway
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Text Here
Potential disadvantages of network structures:

Control and
coordination Potential loss of Potential lack of Excessively
problems may control over loyalty among aggressive
arise from outsourced infrequently used outsourcing can
network activities contractors be dangerous
complexity
Takeaway
Place Slide3:Title
Text Here
Boundaryless organizations
– Eliminate internal boundaries among subsystems
and external boundaries with the external
environment
– A combination of team and
network structures, with the
addition of “temporariness”
Takeaway
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Text Here
– Key requirements:
• Absence of hierarchy
• Empowerment of team members
• Technology utilization
• Acceptance of
impermanence
Takeaway
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Text Here
– Encourage creativity, quality, timeliness,
flexibility, and efficiency
– Knowledge sharing is both a goal and essential
component
Takeaway
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Text Here
Virtual organization
– A special form of boundaryless organization
– Operates in a shifting network of external
alliances that are
engaged as needed,
using IT and the Internet
Figure 11.7 The boundaryless organization eliminates
internal and external barriers
Place Takeaway
Slide Title 4: Organizational
Text Here Designs
Organizational design
– Process of creating structures that accomplish
mission and objectives
– A problem-solving activity that should be
approached from a contingency perspective
Place Takeaway
Text Here Designs
Bureaucracy
– A form of organization based on logic, order, and
the legitimate use of formal authority
– Bureaucratic designs feature …
• Clear-cut division of labor
• Strict hierarchy of authority
• Formal rules and procedures
• Promotion based on competency
Place Takeaway
Text Here Designs
Contingency perspective on bureaucracy asks

the questions:
– When is a bureaucratic form a good choice for an
organization?
– What alternatives exist when it is not a good
choice?
Place Takeaway
Text Here Designs
Environment determines the most appropriate

design
– Mechanistic designs work in a stable
environment
– Organic designs work in a rapidly changing and
uncertain environment
• Adaptive organizations operate with a minimum of
bureaucratic feature and encourage worker
empowerment and teamwork
Place Takeaway
Text Here Designs
Mechanistic Designs Organic Designs
• Predictable goals • Adaptable goals

• Centralized authority • Decentralized authority
• Many rules and • Few rules and procedures
procedures • Wide spans of control
• Narrow spans of control • Shared tasks
• Specialized tasks • Many teams and task
• Few teams and task forces forces
• Formal and impersonal • Informal and personal
means of coordination means of coordination
Figure 11.8 A continuum of organizational design
alternatives: from bureaucratic to adaptive organizations
Place Takeaway
Text Here Designs
Contemporary organizing trends include:

– Fewer levels of management
• Shorter chains of command
• Less unity of command
– Wider spans of control
– More delegation and empowerment
– Decentralization with centralization
– Reduced use of staff
Place Takeaway
Text Here Designs
Shorter chains of command

• The line of authority that vertically links all persons
with successively higher levels of management
Organizing trend:
• Organizations are being “streamlined” by cutting
unnecessary levels of management
• Flatter structures are viewed as a competitive
advantage
Place Takeaway
Text Here Designs
Less unity of command

• Each person in an organization should report to one and only
one supervisor
Organizing trend:
• Organizations are using more cross-functional teams, task
forces, and horizontal structures
• Organizations are becoming more customer conscious
• Employees often find themselves working for more than one
boss
Place Takeaway
Text Here Designs
Wider spans of control

• The number of persons directly reporting to a manager
Organizing trend:
• Many organizations are shifting to wider spans of
control as levels of management are eliminated
• Managers have responsibility for a larger number of
subordinates who operate with less direct supervision
Place Takeaway
Text Here Designs
More delegation and empowerment

• A common management failure is unwillingness to
delegate
• Delegation leads to empowerment
Organizing trend:
• Managers are delegating more and finding more
ways to empower people at all levels
Place Takeaway
Text Here Designs
• More delegation and empowerment

– Delegation is the process distributing and
entrusting work to other persons
– The manager assigns responsibility, grants
authority to act, and creates accountability
– Authority should be commensurate with
responsibility
Place Takeaway
Text Here Designs
Three Steps in Delegation:
Create accountability
Assign responsibility Grant authority –
– require others to
– explain task and allow others to make
report back on
expectations decisions and act
results
Place Takeaway
Text Here Designs
Decentralization with centralization
Centralization is the
concentration of
authority for making Decentralization is the
most decisions at the top dispersion of authority to
levels of the organization make decisions throughout all
levels of the organization
Place Takeaway
Text Here Designs
Decentralization with centralization

• Centralization and decentralization not an “either/or”
choice
Organizing trend:
• Delegation, empowerment, and horizontal structures
contribute to more decentralization in organizations
• Advances in information technology allow for the
retention of centralized control
Place Takeaway
Text Here Designs
Reduced use of staff

• Staff positions provide technical expertise for other parts of the
organization
• Line and staff managers may disagree over staff authority
• Advisory authority
• Functional authority
• No one best solution for dividing line-staff responsibilities
Organizing trend:
• Organizations are reducing staff size
• Organizations are seeking increased operating efficiency by
employing fewer staff personnel and smaller staff units

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Place Slide Title Text Here

JOHN R. SCHERMERHORN, JR.

1. What is organizing as a management

1. Organizing as a Management Function

2. Traditional Organization Structures

3. Horizontal Organization Structures

• Organizing as a management function

• An organization chart is a diagram describing

The division of Supervisory Communication Levels of

Potential disadvantages of informal structures:

May work Diversion of

• Traditional organization structures

Functional Divisional Matrix

• Potential advantages of functional structures:

Potential disadvantages of functional structures:

• Potential advantages of divisional structures:

Potential disadvantages of divisional structures:

Service Professional Non-profit Multi-national

• Potential advantages of matrix structures:

Potential disadvantages of matrix structures:

• Potential advantages of team structures:

Potential disadvantages of team structures:

Potential advantages of network structures:

Potential disadvantages of network structures:

Contingency perspective on bureaucracy asks

Environment determines the most appropriate

Mechanistic Designs Organic Designs

• Predictable goals • Adaptable goals

Contemporary organizing trends include:

Shorter chains of command

Less unity of command

Wider spans of control

More delegation and empowerment

• More delegation and empowerment

Three Steps in Delegation:

Decentralization with centralization

Decentralization with centralization

Reduced use of staff

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