ORGANIZATION AND

STAFFING

Main Reference:
Management 9th Ed.
by Richard Daft
“The only difference between a
mob and a trained army is
organization”

Calvin Coolidge
ORGANIZING
The deployment of organizational resources to
achieve strategic goals

Strategy defines what to do;

Organizing defines how to do it
Organization design and
structure
ORGANIZING THE VERTICAL STRUCTURE

ORGANIZATION STRUCTURE

The set of formal tasks assigned to individuals and

departments

Formal reporting relationships, including lines of

authority, decision responsibility, number of
hierarchical levels, and span of managers’ control
ORGANIZING THE VERTICAL STRUCTURE

ORGANIZATION STRUCTURE

The design of systems to ensure effective coordination of

employees across departments

(John Child, Organization: A Guide to Problems and Practice, 2nd ed.)

ORGANIZATION CHART EXAMPLE

Source: Daft, Richard L. Management 9th Ed.

ORGANIZING THE VERTICAL STRUCTURE

WORK SPECIALIZATION/DIVISION OF LABOR

The degree to which organizational tasks are subdivided

into separate jobs
ORGANIZING THE VERTICAL STRUCTURE
WORK SPECIALIZATION/DIVISION OF LABOR
ADVANTAGES
Jobs tend to be small, and they can be performed
efficiently
DISADVANTAGES
Employees are isolated and do only a single, boring job.
Too much specialization creates separation and hinders
coordination.
ORGANIZING THE VERTICAL STRUCTURE

CHAIN OF COMMAND

An unbroken line of authority that links all persons in an

organization and shows who reports to whom
ORGANIZING THE VERTICAL STRUCTURE
CHAIN OF COMMAND

UNITY OF COMMAND
Each employee is held accountable to only one
supervisor
SCALAR PRINCIPLE
A clearly defined line of authority in the organization
that includes all employees
ORGANIZING THE VERTICAL STRUCTURE
CHAIN OF COMMAND

AUTHORITY
Formal and legitimate right of a manager to make
decisions, issue orders, and allocate resources to achieve
organizationally desired outcomes
ORGANIZING THE VERTICAL STRUCTURE

AUTHORITY
Authority is vested in organizational positions, not
people.
Authority is accepted by subordinates.
Authority flows down the vertical hierarchy.
ORGANIZING THE VERTICAL STRUCTURE
ORGANIZING THE VERTICAL STRUCTURE

AUTHORITY
Authority is vested in organizational positions, not
people.
Authority is accepted by subordinates.
Authority flows down the vertical hierarchy.
ORGANIZING THE VERTICAL STRUCTURE
CHAIN OF COMMAND

RESPONSIBILITY
The duty to perform the task or activity an employee has
been assigned
DELEGATION
The process managers use to transfer authority and
responsibility to positions below them in the hierarchy
ORGANIZING THE VERTICAL STRUCTURE
CHAIN OF COMMAND
LINE AND STAFF AUTHORITY
Line Departments
Perform tasks that reflect the organization’s primary goal
and mission
Staff Departments
Include all those that provide specialized skills in support
of line departments
ORGANIZING THE VERTICAL STRUCTURE
CHAIN OF COMMAND
LINE AND STAFF AUTHORITY
Line Authority
Means that people in management positions have formal
authority to direct and control immediate subordinates
Staff Authority
Narrower and includes the right to advise, recommend,
and counsel in the staff specialists’ area of expertise
ORGANIZING THE VERTICAL STRUCTURE

SPAN OF MANAGEMENT/SPAN OF CONTROL

The number of employees reporting to a

supervisor.
Determines how closely a supervisor can monitor
subordinates
FACTORS ASSOCIATED WITH LARGER SPAN OF
CONTROL

1. Work performed by subordinates is stable and

routine.
2. Subordinates perform similar work tasks.
3. Subordinates are concentrated in a single
location.
4. Subordinates are highly trained and need little
direction in performing tasks.
 FACTORS ASSOCIATED WITH LARGER SPAN OF
CONTROL
5. Rules and procedures defining task activities are
available.
6. Support systems and personnel are available for
the manager.
7. Little time is required in nonsupervisory activities
such as coordination with other departments or
planning.
8. Managers’ personal preferences and styles favor a
large span.
ORGANIZING THE VERTICAL STRUCTURE
SPAN OF MANAGEMENT/SPAN OF CONTROL
Depending on the span of control, the organization structure
can either be tall or flat
TALL STRUCTURE
Overall narrow span and more hierarchical levels
FLAT STRUCTURE
Wide span, is horizontally dispersed, and has fewer
hierarchical levels
REORGANIZATION TO INCREASE SPAN OF MANAGEMENT (for President
of an International Metals Company)

Source: Daft, Richard L. Management 9th Ed.

ORGANIZING THE VERTICAL STRUCTURE

CENTRALIZATION AND DECENTRALIZATION

CENTRALIZATION
Means that decision authority is located near
the top of the organization

DECENTRALIZATION
Means decision authority is pushed downward
to lower organization levels
 FACTORS THAT INFLUENCE CENTRALIZATION VS.
DECENTRALIZATION

1. Greater change and uncertainty in the environment

are usually associated with decentralization
2. The amount of centralization or decentralization
should fit the firm’s strategy
3. In times of crisis or risk of company failure,
authority may be centralized at the top
DEPARTMENTALIZATION
The basis on which individuals are
grouped into departments and departments into
the total organization.
FIVE APPROACHES TO STRUCTURAL DESIGN

Source: Daft, Richard L. Management 9th Ed.

FIVE APPROACHES TO STRUCTURAL DESIGN

Source: Daft, Richard L. Management 9th Ed.

 VERTICAL FUNCTIONAL APPROACH

WHAT IT IS...
The grouping of positions into
departments based on similar skills, expertise,
work activities, and resource use
 VERTICAL FUNCTIONAL APPROACH

HOW IT WORKS...
Information flows up and down the
vertical hierarchy, and the chain of command
converges at the top of the organization.
VERTICAL FUNCTIONAL APPROACH

Source: Daft, Richard L. Management 9th Ed.

 DIVISIONAL APPROACH

WHAT IT IS...
Occurs when departments are grouped
together based on similar organizational outputs
It is sometimes called product structure,
program structure, or self-contained unit structure
 DIVISIONAL APPROACH

HOW IT WORKS...
In a divisional structure, differences of
opinion among research and development,
marketing, manufacturing, and finance would be
resolved at the divisional level rather than by
the president.
FUNCTIONAL VS. DIVISIONAL STRUCTURES

Source: Daft, Richard L. Management 9th Ed.

 DIVISIONAL APPROACH

GEOGRAPHIC or CUSTOMER BASED DIVISIONS

Grouping company activities by geographic region or

customer group.
 MATRIX APPROACH

WHAT IT IS...
Combines aspects of both functional and
divisional structures simultaneously in the same
part of the organization
One unique feature of the matrix is that it
has dual lines of authority
DUAL-AUTHORITY STRUCTURE IN A MATRIX
ORGANIATION

Source: Daft, Richard L. Management 9th Ed.

GLOBAL MATRIX STRUCTURE

Source: Daft, Richard L. Management 9th Ed.

 TEAM APPROACH

WHAT IT IS...
Structure in which the entire organization
is made up of horizontal teams that coordinate
their activities and work directly with customers
to accomplish the organization’s goals.
 TEAM APPROACH

HOW IT WORKS...
CROSS-FUNCTIONAL TEAMS
Consist of employees from various
functional departments who are responsible to
meet as a team and resolve mutual problems
 TEAM APPROACH

HOW IT WORKS...
CROSS-FUNCTIONAL TEAMS
Used to provide needed horizontal
coordination to complement an existing divisional
or functional structure
 TEAM APPROACH

HOW IT WORKS...
PERMANENT TEAMS
A group of participants from
several functions who are permanently assigned
to solve ongoing problems of common interest
TEAM APPROACH

Source: Daft, Richard L. Management 9th Ed.

 VIRTUAL NETWORK APPROACH

WHAT IT IS...
An organization structure that
disaggregates major functions to separate
companies that are brokered by a small
headquarters organization.
 VIRTUAL NETWORK APPROACH

HOW IT WORKS...
The different organizational parts may be
spread all over the world. They are drawn
together contractually and coordinated
electronically, creating a new form of
organization.
NETWORK APPROACH TO
DEPARTMENTALIZATION

Source: Daft, Richard L. Management 9th Ed.

STRUCTUAL ADVANTAGES AND DISADVANTAGES

Source: Daft, Richard L. Management 9th Ed.

ORGANIZING FOR HORIZONTAL COORDINATION

The Need for Coordination...

COORDINATION
Refers to the quality of collaboration across
departments
Without coordination a company’s left hand
will not act in concert with the right hand, causing
problems and conflicts
EVOLUTION OF ORGANIZATION STRUCTURES

Source: Daft, Richard L. Management 9th Ed.

ORGANIZING FOR HORIZONTAL COORDINATION

Task Forces, Teams, and Project Management

TASK FORCE
A temporary team or committee
designed to solve a short-term problem involving
several departments
ORGANIZING FOR HORIZONTAL COORDINATION

Task Forces, Teams, and Project Management

PROJECT MANAGER
A person who is responsible for
coordinating the activities of several departments for
the completion of a specific project
PROJECT MANAGER RELATIONSHIPS TO OTHER
DEPARTMENTS

Source: Daft, Richard L. Management 9th Ed.

ORGANIZING FOR HORIZONTAL COORDINATION

REENGINEERING
The radical redesign of business
processes to achieve dramatic improvements in
cost, quality, service, and speed
REENGINEERING MANUFACTURING
 STRUCTURE FOLLOWS STRATEGY

MECHANISTIC
This type of organization typically has a
rigid, vertical, centralized structure, with most
decisions made at the top.
ORGANIC
The structure is more horizontal, and
decision-making authority is decentralized.
RELATIONSHIP OF STRUCTURAL APPROACH TO STRATEGY AND THE
ENVIRONMENT

Source: Daft, Richard L. Management 9th Ed.

Designing a Modern Organization
TRADITIONAL ORGANIZATION
MODERN ORGANIZATION

Generally the meaning of organization is an entity

comprising multiple people, such as an institution or
an association that has a collective goal and is linked
to an external environment.
 TRADITIONAL ORGANIZATION
TRADITIONAL ORGANIZATION
represent the organizational structure in a
business as hierarchical

 power flows vertically and upward

 employees are departmentalized
 all employees follow a chain of command
 MODERN ORGANIZATION

MODERN ORGANIZATION
means a boundaryless organization which are networking
together and collaborating more than ever before

 well-suited for rapid innovation

 ideal for companies in the growing technology industry
 diversify its activities and connectivity
 can accept new challenges and can set a goal frequently.
MODERN ORGANIZATION

RELATIONSHIPS
LISTENING
UNDERSTANDING
TRADITIONAL VS. MODERN ORGANIZATION
STABILITY
TO: stable in their activities and progress
MO: more dynamic with its multiple business strategy

FLEXIBILITY
TO: are fixed, inflexible and planned
MO: always flexible to change their workflow, focuses as well as
connectivity
TRADITIONAL VS. MODERN ORGANIZATION

HIERARCHY
TO: flow “Tall Hierarchy”
MO: flow “Flat Hierarchy”

TEAMWORK
TO: follows a chain of command where every employee should
be obeyed to his superior
MO: main concept is team work
TRADITIONAL VS. MODERN ORGANIZATION

EMPLOYEE MORALE
TO: a job oriented organization so you are not sure about the matter of
employee morale
MO: get more freedom and flexibility to exchange his or her assessment

RISK MANAGEMENT
TO: maintain a specific policy to protect any kind of risk that would be
hampered for the organization or its employees
MO: always ready to take new challenges so everyone here prepared to
face any risk instantly
TRADITIONAL VS. MODERN ORGANIZATION

DIVERSIFICATION
TO: slightly conservative and they try to follow traditional rules
and regulation
MO: does modification, rescheduling, flexible entity management
and dynamic business strategy

TECHNOLOGY
TO: centralized and backward to accept advanced technology
MO: more technology based and boundaryless
INNOVATION AND THE CHANGING
WORKPLACE
INNOVATION AND CHANGING WORKPLACE

ORGANIZATIONAL CHANGE
the adoption of a new idea or behavior by an organization

Successful change requires that organizations be capable

of both creating and implementing ideas, which means the
organization must learn to be ambidextrous.
INNOVATION AND CHANGING WORKPLACE

An ambidextrous approach means incorporating

structures and processes that are appropriate for both the
creative impulse and for the systematic implementation of
innovations
 encourage flexibility
 freedom to innovate
 propose new ideas with creative departments
 venture teams
new products and
technology
 NEW PRODUCTS AND TECHNOLOGY

PRODUCT CHANGE
is a change in the organization’s product or service outputs.
Product and service innovation is the primary way in which
organizations adapt to changes in markets, technology, and
competition
 NEW PRODUCTS AND TECHNOLOGY

TECHNOLOGY CHANGE
is a change in the organization’s production process—
how the organization does its work. Technology
changes are designed to make the production of a
product or service more effi cient.
THREE INNOVATIVE STRATEGIES FOR NEW PRODUCTS AND TECHNOLOGIES
 EXPLORATION

EXPLORATION
is the stage where ideas for new products and technologies
are born

Creativity, which refers to the generation of novel ideas

that might meet perceived needs or respond to opportunities
for the organization, is the essential first step in innovation.
CHARACTERISTICS OF CREATIVE PEOPLE AND ORGANIZATIONS
 EXPLORATION

IDEA INCUBATOR
provides a safe harbor where ideas from
employees throughout the company can be
developed without interference from company
bureaucracy or politics
 COOPERATION

INTERNAL CORDINATION
EXTERNAL COORDINATION
 COOPERATION

INTERNAL COORDINATION
Successful innovation requires expertise from several
departments simultaneously, and failed innovation is often
the result of failed cooperation
 COOPERATION

1. People in marketing have a good understanding of customer needs

2. Technical specialists are aware of recent technological
developments and make effective use of new technology.
3. Members from key departments—research, manufacturing,
marketing—cooperate in the development of the new product or
service
 COOPERATION

HORIZONTAL LINKAGE MODEL

An approach to product change that emphasizes shared
development of innovations among several
departments.
COORDINATION MODEL FOR INNOVATION
 COOPERATION

FAST-CYCLE TEAM
is a multifunctional, and sometimes multinational, team
that works under stringent timelines and is provided
with high levels of resources and empowerment to
accomplish an accelerated product development project
Even as a new manager, you can make sure people are
communicating and cooperating across organizational
boundaries. Implement mechanisms to help your team
or department members stay in touch with what’s
happening in other departments and in the
marketplace.
 COOPERATION

EXTERNAL COORDINATION
organizations look outside their boundaries to
find and develop new ideas
COORDINATION MODEL FOR INNOVATION
 COOPERATION
EXTERNAL COORDINATION

OPEN INNOVATION
Extending the search for and commercialization
of new ideas beyond the boundaries of the
organization.
 ENTREPRENEURSHIP
ENTREPRENEURSHIP
creating mechanisms to make sure new ideas are carried
forward, accepted, and implemented.

Managers can directly influence whether entrepreneurship

flourishes in the organization by expressing support of
entrepreneurial activities, giving employees a degree of
autonomy, and rewarding learning and risk-taking
 ENTREPRENEURSHIP

IDEA CHAMPION is a person who sees the

need for and champions productive change within the
organization.

Remember: Change does not occur by itself. Personal energy and effort are
required to successfully promote a new idea.
FOUR ROLES IN ORGANIZATIONAL CHANGE
 ENTREPRENEURSHIP
A NEW-VENTURE TEAM
A new-venture team is a unit separate from the rest of the organization
that is responsible for developing and initiating a major innovation

SKUNKWORKS
Skunkworks is a separate small, informal, highly autonomous, and often
secretive group that focuses on breakthrough ideas for the business

NEW-VENTURE FUND, which provides resources from which

individuals and groups can draw to develop new ideas, products, or
businesses
 CHANGING PEOPLE AND CULTURE
PEOPLE CHANGE
concerns just a few employees, such as sending a handful of middle managers
to a training course to improve their leadership skills

CULTURE CHANGE
pertains to the organization as a whole, such as when the IRS shifted its basic
mind-set from an organization focused on collection and compliance to one
dedicated to informing, educating, and serving customers (taxpayers)
Two specific tools that can smooth the process are
 training and development programs
 organization development (OD)
 TRAINING AND DEVELOPMENT

TRAINING
is one of the most frequently used approaches to changing people’s
mindsets.

A company might offer training programs to large blocks of

employees on subjects such as teamwork, diversity, emotional
intelligence, quality circles, communication skills, or participative
management.
 ORGANIZATIONAL DEVELOPMENT

ORGANIZATIONAL DEVELOPMENT (OD)

is a planned, systematic process of change that uses behavioral
science knowledge and techniques to improve an organization’s
health and effectiveness through its ability to adapt to the
environment, improve internal relationships, and increase
learning and problem-solving capabilities.
 ORGANIZATIONAL DEVELOPMENT

MERGER/ ACQUISITIONS
ORGANIZATIONAL DECLINE/REVITALIZATION
CONFLICT MANAGEMENT
 ORGANIZATIONAL DEVELOPMENT
MERGER/ ACQUISITIONS
The disappointing financial results of many mergers and acquisitions are
caused by the failure of executives to determine whether the administrative
style and corporate culture of the two companies fit.
ORGANIZATIONAL DECLINE/REVITALIZATION
Organizations undergoing a period of decline and revitalization
experience a variety of problems, including a low level of trust, lack of
innovation, high turnover, and high levels of confl ict and stress.
CONFLICT MANAGEMENT
Conflict can occur at any time and place within a healthy organization
ORGANIZATIONAL DEVELOPMENT

OD ACTIVITIES

TEAM-BUILDING ACTIVITIES
SURVEY-FEEDBACK ACTIVITIES
LARGE-GROUP INTERVENTIONS
 ORGANIZATIONAL DEVELOPMENT
TEAM-BUILDING ACTIVITIES
Team building enhances the cohesiveness and success of organizational
groups and teams.
SURVEY-FEEDBACK ACTIVITIES
Survey feedback begins with a questionnaire distributed to employees on
values, climate, participation, leadership, and group cohesion within their
organization
LARGE-GROUP INTERVENTIONS
Brings together participants from all parts of the organization—often
including key stakeholders from outside the organization as well—to
discuss problems or opportunities and plan for change
 ORGANIZATIONAL DEVELOPMENT

ORGANIZATIONAL DEVELOPMENT STEPS

Three distinct stages for achieving behavioral and
attitudinal change:
 Unfreezing
 Changing
 Refreezing
 ORGANIZATIONAL DEVELOPMENT
UNFREEZING
means that people throughout the organization are made aware of
problems and the need for change
CHANGING
occurs when individuals experiment with new behavior and learn new skills
to be used in the workplace
successful change involves using emotion as well as logic to persuade people and
empowering employees to act on the plan and accomplish the desired changes

REFREEZING
occurs when individuals acquire new attitudes or values and are rewarded
for them by the organization
 IMPLEMENTING CHANGE
IMPLEMENTATION

NEED FOR CHANGE

PERFORMANCE GAP
a disparity between existing and desired performance levels

RESISTANCE TO CHANGE
 RESISTANCE TO CHANGE
SELF-INTEREST
People typically resist a change they believe confl icts with their self-
interests. The fear of personal loss is perhaps the biggest obstacle to
organizational change

LACK OF UNDERSTANDING AND TRUST

Employees often distrust the intentions behind a change or do not
understand the intended purpose of a change. If previous working
relationships with an idea champion have been negative, resistance may
occur.
 RESISTANCE TO CHANGE

UNCERTAINTY
Uncertainty is the lack of information about future events. It represents a
fear of the unknown.

DIFFERENT ASSESMENT AND GOALS

People who will be affected by an innovation may assess the situation
differently from an idea champion or new-venture group. Managers in
each department pursue different goals, and an innovation may detract
from performance and goal achievement for some departments.
STRATEGIES FOR OVERCOMING RESISTANCE TO CHANGE

FORCE-FIELD ANALYSIS
SELECTIVE IMPLEMENTATION TACTICS
STRATEGIES FOR OVERCOMING RESISTANCE TO CHANGE

FORCE-FIELD ANALYSIS
Force-field analysis grew from the work of Kurt Lewin, who
proposed that change was a result of the competition between
driving and restraining forces.
DRIVING FORCES
can be thought of as problems or opportunities that provide motivation
for change within the organization.
RESTRAINING FORCES
are the various barriers to change, such as a lack
of resources, resistance from middle managers, or inadequate employee
skills.
FORCE-FIELD ANALYSIS TO CHANGE FROM TRADITIONAL TO JIT INVENTORY SYSTEM
 FORCE-FIELD ANALYSIS
JUST-IN-TIME (JIT) INVENTORY CONTROL SYSTEMS
schedule materials to arrive at a company just as they are needed on the
production line.

Management’s analysis showed that the driving forces (opportunities) associated

with the implementation of JIT were:
(1) the large cost savings from reduced inventories
(2) savings from needing fewer workers to handle the inventory
(3) a quicker, more competitive market response for the company
 FORCE-FIELD ANALYSIS
JUST-IN-TIME (JIT) INVENTORY CONTROL SYSTEMS
Restraining forces (barriers) discovered by managers were:
(1) a freight system that was too slow to deliver inventory on time,
(2) a facility layout that emphasized inventory maintenance over new
deliveries,
(3) worker skills inappropriate for handling rapid inventory deployment
(4) union resistance to loss of jobs. The driving forces were not
sufficient to overcome the restraining forces.
STRATEGIES FOR OVERCOMING RESISTANCE TO CHANGE

IMPLEMENTATION TACTICS
The other approach to managing implementation is to
adopt specific tactics to overcome resistance.
TACTICS FOR OVERCOMING RESISTANCE TO CHANGE
 IMPLEMENTATION TACTICS

COMMUNICATION AND EDUCATION

used when solid information about the change is needed by users and others
who may resist implementation
PARTICIPATION
involves users and potential resisters in designing the change
NEGOTIATION
more formal means of achieving cooperation. Negotiation uses formal
bargaining to win acceptance and approval of a desired change.
 IMPLEMENTATION TACTICS

COERCION
Coercion means that managers use formal power to force employees to
change. Resisters are told to accept the change or lose rewards or even their
jobs.

TOP MANAGEMENT SUPPORT

Top management support symbolizes to all employees that the change is
important for the organization.
Power and Distribution of Authority
 OBJECTIVES

 Define power, influence and authority and explain their importance

 Distinguish between the “classical” and the “acceptance” views of formal
authority
 Identify and describe the sources of managerial power and informal power
in organizations
 Distinguish between line and staff authority and describe functional staff
 Explain the importance of delegation and how it can be effective
 Identify and describe the factors that influence the amount of centralization
and decentralization in organizations
 DEFINITIONS
INFLUENCE
actions or examples that, either directly or indirectly, cause a change in
behavior or attitude of another person or group

POWER
ability to exert influence

FORMAL AUTHORITY
type of power, based on the recognition of legitimacy or lawfulness of
the attempt to exert influence
 BASIS OF FORMAL AUTHORITY
CLASSICAL VIEW
top-down authority
 BASIS OF FORMAL AUTHORITY

ACCEPTANCE VIEW
• bottom-up authority
• formulated by Mary Parker Follett
• popularized by Chester Barnard
FIVE SOURCES OF POWER

LEGITIMATE POWER

EXPERT POWER

COERCIVE POWER
REWARD POWER
REFERENT POWER
 SOURCES OF POWER
LEGITIMATE POWER
A person has the formal right to make demands and to expect others to
be compliant and obedient
EXPERT POWER
A person’s high level of skill and knowledge
COERCIVE POWER
A person can punish others for noncompliance
REWARD POWER
One person's ability to compensate another for compliance
REFERENT POWER
A person's perceived attractiveness, worthiness and right to others'
respect
 POWER IN ORGANIZATIONS

TWO FACES OF
POWER
• Two faces of
power by David
POSITIVE
McClelland NEGATIVE
FACE OF POWER FACE OF POWER
LINE AND STAFF Authority
 LINE AND STAFFING AUTHORITY

LINE POSITIONS
People in the organization who are directly responsible
for achieving organizational goals
 LINE AND STAFFING AUTHORITY

STAFF POSITIONS
Primary purpose is providing specialized expertise and
assistance to line positions
LINE AND STAFF AUTHORITY
 LINE AND STAFF AUTHORITY

FUNCTIONAL AUTHORITY
Authority over others in the organization in matters
related directly to their respective functions
 LINE AND STAFF AUTHORITY

DELEGATION
Administrative process of getting things done by
others by giving them responsibility
CLASSICAL GUIDELINES FOR EFFECTIVE DELEGATION

 RESPONSIBILITY, AUTHORITY and ACCOUNTABILITY

 THE SCALAR PRINCIPLE
clear chain of command
 UNITY OF COMMAND
employees report to only one leader
DECENTRALIZATION VS. CENTRALIZATION
DECENTRALIZATION
refers to the extent to which authority has been passed
down to lower levels
CENTRALIZATION
authority has been retained at the top of the organization
FACTORS INFLUENCING DECENTRALIZATION

 Strategy and Organization’s Environment

 Size and Rate of Growth
 Characteristics of the Organization
– Costlines of given decisions
– Top management preferences
– Organization’s culture
– Abilities of lower-level manager
Managing human resources
 MANAGING HUMAN RESOURCES

HUMAN RESOURCE MANAGEMENT (HRM)

The design and application of formal systems in an
organization to ensure the effective and efficient use of
human talent to accomplish organizational goals (Richard
Daft, 2009).
IMPORTANCE OF HUMAN RESOURCE MANAGEMENT

• Necessary part of the organizing function of management

Selecting, training, and evaluating the work force
• As an important strategic tool
HRM helps establish an organization’s sustainable competitive
advantage
• Adds value to the firm
High performance work practices lead to both high individual and high
organizational performance
HUMAN RESOURCE MANAGEMENT

1 All managers are involved in human

resource management

2 Employees are viewed as assets

Human resource management is a matching
3 process, integrating the organization’s strategy
and goals with the correct approach to managing
human capital.
HUMAN RESOURCE MANAGEMENT GOALS
COMPANY
HRM ENVIRONMENT STRATEGY
Legislation
Trends in Society
International Events Finding the Right People
HRM Planning
Changing Technology Job Analysis
Forecasting
Recruiting
Selecting

Maintain an Effective Work

Wages and Salary Manage Talent
Benefits Training
Labor Relations Development
Terminations Appraisal
ATTRACTING AN EFFECTIVE WORKFORCE
Manage
Choose
Talent
Select the Welcome
HR Planning Recruiting
Training
Development Candidate New
Retirement Sources
Appraisal Application Employee
Growth
Want ads Interview
Resignations
Headhunters Tests
Internet

Matching Model
Company’s Needs
Employee Contributions
Strategic goals Match with
Ability
Current and future competencies
Education and experience
Market changes
Creativity
Employee turnover
Company Inducements Commitment
Corporate culture Employee’s Needs
Pay and benefits Match with Expertise and
knowledge Stage of career
Meaningful work
Personal values
Advancement
Promotion aspirations
Training
Outside
interests
 HUMAN RESOURCE PLANNING
Forecasting of human resource needs and
the projected matching of individuals
with expected job vacancies

? = New ? = Volume of the ? = Turnover rate,

Technologies business likely how much is
emerging next 5-10 years avoidable, if any
 HUMAN RESOURCE PLANNING

RECRUITING
The activities or practices that define the desired characteristics of
applicants for specific jobs

INTERNAL – Promote-from-within policies used by

many to fill high-level positions
EXTERNAL – Recruiting newcomers from the outside
 HUMAN RESOURCE PLANNING

E-CRUITING
-Recruiting employees through the internet

-Fastest-growing approach to recruiting

JOB ANALYSIS
• The systematic process of gathering and
interpreting information about the
JOB duties, tasks, and responsibilities
essential
DESCRIPTION
• of a job.and concise summary of the
A clear
JOBtasks, duties and responsibilities.
specific
SPECIFICATIO
N of the knowledge, skills,
• An outline
education, and physical abilities needed to
adequately perform a job.
HUMAN RESOURCE PLANNING

JOB ANALYSIS

JOB DESCRIPTION JOB SPECIFICATION

Job Title Qualifications
Job Locations Experience
Job Summary Training
Reporting To Skills
Working Conditions Responsibilities
Duties Emotional Characteristics
Machines to be used Sensory Demands
Hazards
 HUMAN RESOURCE PLANNING

REALISTIC JOB PREVIEWS

A recruiting approach that gives applicants all pertinent
and realistic information about the job and the
organization
 HUMAN RESOURCE PLANNING

LEGAL CONSIDERATIONS
Recruiting practices conform to the law

AFFIRMATIVE ACTION – the use of goals,

timetables or other methods in recruiting to promote
the hiring, development and retention of protected
groups
 HUMAN RESOURCE PLANNING

SELECTION
the process of screening job applicants to ensure that
the most appropriate candidates are hired.
SELECTION DECISION OUTCOMES
 SELECTION TOOLS

 Application Form
 Interview
 Employment Test
 Assessment Center
 OTHER SELECTION APPROACHES
• BACKGROUND INVESTIGATIONS
Verification of application data
Reference checks:
Lack validity because self-selection of references ensures only positive
outcomes.
• PHYSICAL EXAMINATIONS
Useful for physical requirements and for insurance purposes
related to pre-existing conditions.
 HUMAN RESOURCE PLANNING

TRAINING AND DEVELOPMENT

a planned effort by an organization to facilitate
employees’ learning of job-related skills and behaviors.
 ON-THE JOB TRAINING
Manage
• A type of training Talent
in which an
experienced employee “adopts” a new
Training
Development
Appraisal
employee to
CORPORATE UNIVERSITY
teach him or her how to
perform job duties.
• An inhouse training and education facility that offers broad-based
learning opportunities for employees.

PROMOTION FROM
WITHIN
• Promotions provide more challenging assignments, prescribe new
responsibilities, and help employees grow by expanding and developing
their abilities

MENTORING & COACHING

Mentoring - when an experienced employee guides and supports a less
experienced employee
Coaching - a method of directing, instructing, and training a person with the
goal to develop specific management skills
 HUMAN RESOURCE PLANNING

PERFORMANCE APPRAISAL
The process of observing and evaluating an employee’s
performance, recording the assessment, and providing
feedback to the employee.
 • A process
Manage that uses multiple
Talent
360-
raters, including
Training self-rating, to
Development

degree appraise employee

Appraisal

• performance
A manager evaluates
and his or
guide
Feedbac
k
her direct
development reports relative to
one another and categorizes
each on a scale, such as:
Performan
ce Review
A = outstanding performance
Ranking (20 percent), B = high-middle
System performance (70 percent), or
C = in need of improvement
(10 percent)
MAINTAINING AN EFFECTIVE WORKFORCE

COMPENSATION
Wage and Salary Systems
Compensation Equity
Pay for Performance
BENEFITS
TERMINATION
HR ISSUES IN THE NEW WORKPLACE

 Using Temporary Employees

 Work-Life Balance
 Downsizing
 USING TEMPORARY EMPLOYEES

CONTINGENT WORKERS
people who work for an organization, but not on a
permanent or full-time basis including temporary
placements, contracted professionals and leased
employees
 USING TEMPORARY EMPLOYEES

VIRTUAL TEAMS
- geographically or organizationally dispersed
- rarely meet face to face
- do their work using advance information technologies
 WORK/LIFE BALANCE

 Telecommunicating – using computers and

telecommunications equipment to do work without going
to office
 Flexible Scheduling
 Broad Work-Life Balance Initiatives - on-site gym, child
care, vacation leave, maternity & sabbatical
 DOWNSIZING
 Intentional, planned reduction in the size of a company’s
workforce
 Managers can smooth the downsizing process
- regularly communication with employees
- providing with as much information as possible
- providing assistance to workers who will lose their jobs
- using training and development for remaining employees