ORGANISING

THE HP WAY
• • • • • HP leading computer company.-(1992) Profitable company compared to competitors No mergers, no joint ventures. New CEO Platt’s Vision-in Digital revolution. Objectives- restructure to improve profitability, Customer satisfaction Enlighten management in company culture. • Reengineering team for to spruce up new products and restructure.

What is Organising?
• Social unit or human grouping deliberately structured for purpose of attaining specific goals. • The process of coordinating and allocating a firm’s resources so that the firm can carry out its plans and achieve its goals
At HP Lewis Platt must decide on pattern of working relationship to capitalize what they know and learned in past. Challenge to build future structure.

PURPOSE OF ORGANISING
• • • • • • • • • Implementation of plans, Strategies. To increase efficiency of work. Personal Identity Determination of responsibility Determination of Authority Coordination. Optimum staff use. Specialization. To study human behavior.

PROCESS OF ORGANISING
Identification of Activities Division of Work

Grouping of Activities

Departmentation

Assigning Activities

Hierarchy

Co-Ordination

Delegation of Authority

Decentralization

PRINCIPLES OF ORGANISING
• • • • • • Objectives Specialization Span of Control Exception Scalar Principle Unity of Command

• • • • •

Delegation Responsibility Authority Efficiency Simplicity

ORGANIZATION DESIGN
AREAS OF IMPORTANCE • Work specialization • Departmentalization • Chain of command • Span of control • Formalization • Decision-making authority

DEPARTMENTATION
The process of grouping jobs together so that similar or associated tasks and activities can be coordinated

Departmentation functional Product Customer Geography Process

1. FUNCTIONAL
PRESIDENT

VICE PRECIDENT Production

VICE PRESIDENT Marketing

VICE PRESIDENT Finance

VICE PRESIDENT HR

Advantages •Development of expertise •Clear career path within function •Simplifies training •Furnishes means of Tight control at top.

Disadvantages •De- emphasizes overall objective. •Narrow view point of key persons •Reduction in co-ordination. •Responsibility of profit at Top •Slow adoption to changes.

2. PRODUCT/MARKET
PRESIDENT

GENERAL MANAGER Pharmaceutical Products

GENERAL MANAGER Customer Products

GENERAL MANAGER Cosmetic Products

Hewlett Packard

Imaging and Printing Group

Personal Systems Group

Enterprise Systems Group

HP Services

HP Financial Services

2. PRODUCT/MARKET
Advantages • More focus on products • Easier to evaluate performance of product • Product responsiveness to market changes • Less burden on the top executive in making operating decisions Disadvantages • Duplication of resources. • Problems for customers purchasing across multiple product groups • Conflicts between product group and corporate objectives • Conflict between product groups

3. GEOGRAPHY/AREA
PRESIDENT

GM NORTH INDIA

GM SOUTH INDIA

GM EAST INDIA

GM WEST INDIA

GM CENTRAL INDIA

Advantages •Responsibility at a lower level. •Emphasis on local market & Problems. •Improves co-ordination in a region. •Better face to face communications. •Take advantages of local economies.

Disadvantages •More persons with manager ability. •Increases problem at top level. •Tends to make maintenance of central services difficult.

4. CUSTOMER
PRESIDENT

VICE PRECIDENT Advantages

•Focus on Customer needs.

Industrial

Disdvantages VICE PRESIDENT Consumer

•Gives customer a feeling that they have an understanding supplier.. •Develops expertness in customer area.

•May be difficult to coordinate operations between competing customer demands. •Requires managers & staff expert in customer problems. •Customer groups may not be always defined

VICE PRESIDENT Military

5. PROCESS
PLANT SUPRITENDENT

SPINNING

DYING

WEAVING

PRINTING

Advantages •Use of heavy and costly machinery equipment in efficient manner. •It follows principle of specialization

Disadvantages •Opportunity for overall development of managerial talent. •Difficult to compare performance.

LINE & STAFF AUTHORITY
PRESIDENT
Assistant

ADMINISTRATION HR LEGAL OFFICERS AUDITORS

VP & GM Division C
ASSISTANT

VP & GM Division D
ASSISTANT

VP & GM Division B
ASSISTANT

VP & GM Division A
ASSISTANT

SPECIALIED STAFF

PERSONAL STAFF

LINE POSITIONS

Li ne Pos iti ons
• directly concerned with producing goods and services and which are directly connected from top to bottom • Typically found in areas such as:
– production – marketing – finance

Staff Positions
• Provide the administrative and support services that line employees need to achieve the firm’s goals • Typically found in areas such as:
– legal counseling – public relations – human resource management

Mechanistic vs. Organic Structure
Structural Characteristic Job specialization Mechanistic High Organic Low Loose

Departmentalization Rigid

Management Tall (many Short (few hierarchy levels) levels) Span of control Narrow Wide Matrix Organization LINE ORGANISATIONS Decision making Centralized Decentralized Horizontal Organization BUROCREACY authority Virtual Organization Chain of command Long Short

MATRIX ORGANISATION
General Manager
Arrows denote reporting channels
Business/ Project/ Venture Manager 1 Business/ Project/ Venture Manager 2 Business/ Project/ Venture Manager 3 Business/ Project/ Venture Manager 4 Head of R&D and Engineering

Head of Manufactur ing Production Specialists Production Specialists Production Specialists Production Specialists

Head of Marketing Marketing Specialists Marketing Specialists Marketing Specialists Marketing Specialists

Head of Finance Finance Specialists Finance Specialists Finance Specialists Finance Specialists

Engineering/R& D Specialists

Engineering/R& D Specialists

Engineering/R& D Specialists

Engineering/R& D Specialists

• Advantages – teamwork – efficient use of resources – flexibility – ability to balance conflicting objectives – higher performance – opportunities for personal and professional growth • Disadvantages – power struggles – confusion among team members – lack of cohesiveness

MATRIX ORGANISATION

DELEGATION OF AUTHORITY
• Power & Authority. Process • Assigning Responsibility. • Granting Authority. • Creating Accountability.

DELEGATION OF AUTHORITY
ADVANTAGES Maximum effectiveness of Organization. Improvement of self confidence & high morale. willingness to take initiative. Better & Speedy decisions Simplifies problem of management succession

DECENTRALISATION
The process of pushing decision-making authority down the organizational hierarchy, giving lower-level workers more responsibility
•History of organization •Philosophy of organization •Availability of competent subordinates •Dispersal of operations (Geographically). •Size of organization. •Degree of diversification.

DECENTRALISATION

DEGREE OF CENTRALIZATION

DEGREE OF DECENTRALIZATION

Judging by the size of the desk, where do decisions get made? Which organization looks more appealing to you?

DECENTRALISATION
Disadvantages: •Problems of Co-Ordination. •Increase in Administrative Cost. •Scope of unhealthy Competition. •Communication Gap between levels.

SPAN OF MANAGEMENT
•SPAN OF CONTROL is the number of people who report to one manager.
•Ability of Subordinates. •Nature of Work •Degree of team work. •Faith & trust in Subordinates

Factors Determining Effective Spans
Number of relationships with n subordinates

Relationships

n 2(n-1)+n-1

[

]

300000 250000 200000 150000 100000 50000 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Number of Subordinates

For n=1, 1 relationship n=2, 6 relationships n=3, 18 relationships

TALL ORGANIZATION NARROW SPAN

FLAT ORGANIZATION WIDE SPAN

Competitive scenario No long chain of command-Cant afford to take months for decisions. HP-computers and scientific instruments each with own sales force. Downsizing

Contrasting Spans of Control
(Highest)

Assuming Span of 4
1 4 16 64 256 1,024 4,096

Assuming Span of 8
1 8 64 512 4,096

Organization Level

1 2 3 4 5 6 7

Span of 4: 4,096 Operatives. 1,365 Managers

Span of 8: 4,096 Operatives. Only 585 Managers!

Which organization looks more appealing to you?

Current Trends in Spans
To increase the spans of control (decreases number of organizational levels)

Results of Wider Spans
1. Significant reduction of administrative costs 2. More effective and efficient organization communication 3. Faster Decisions and closer interaction between levels 4. Requirement for more personnel training for all levels 5. Better leadership at all levels

FORMAL & INFORMAL ORGANISATION
FORMAL

INFORMAL

INFORMAL ORGANISATION
• The network of connections and channels of communication based on the informal relationships of individuals inside an organization

FUNCTION • Friendships and social contact • Information and sense of control over their work • Source of status and recognition

COORDINATION

2. INCREASE COORDINATION POTENTIAL f. Vertical Information System. Lateral Relationships.

1.BASIC MANAGEMENT TECHNIQUE d. Management Hierarchy. f. Rules & Procedure. h. Plans & Goals.

i.

3. REDUCE NEED FOR COORDINATION f. Slack Resources Independent Units.

1.MBWA 2.BOUNDRY SPANNING ROLE

h.

TRENDS IN ORGANISATION
• Virtual corporation
– technology – opportunism – excellence – trust – no borders

• Structural issues for global mergers
Partnership with AT & T and accelerate the project Platt “ We cant do it all Ourselves.” Citizen Watch co. of Japan to on disk drives

AMIT M. RAMPURE (5) NAMRATA BAHULE (7)