Management, 11th Edition (Richard Daft) Chapter 10 Notes PDF

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Notes from Management, 11th Edition (Richard Daft) Chapter 10. Teacher: Robert Waris...

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Chapter 10: Designing Adaptive Organizations Learning Objectives  Discuss the fundamental characteristics of organizing  Explain work specialization, chain of command, span of management, and centralization vs. decentralization  Describe functional and divisional approaches to structure  Explain the matrix approach to structure and its application to both domestic and international organizations  Describe team and virtual network structures and reasons why more organizations are adopting these two approaches  Explain why organizations can achieve and need coordination across departments and hierarchical levels  Identify how structure can be used to achieve organizational goals  Define production technology and explain how it influences organizational structure  Define services technology and explain how it influences organizational structure. Class Notes  Organizing o The development of organizational resources to achieve strategic goals o Organizing is important because it follows from strategy o A strategy’s success often is determined by fit with organizational structure  Organizing the Vertical Structure o The set of formal tasks assigned to individuals and departments  Work specialization o Formal reporting relationships  Chain of command  Top-down “scalar chain” management o Changing today o Authority up top and less as goes down o The design of the systems to ensure effective coordination  Coalition management  Get everyone on the same page  Ensure proper coordination  Bring people from different backgrounds together to work toward a common goal

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Authority o Authority is vested in organizational positions, not people o Authority flows down the vertical hierarchy o Authority is accepted by subordinates Responsibility, Accountability, and Delegation o Responsibility is the duty to perform the task or activity as assigned o Accountability is the mechanism through which authority and responsibility are aligned. o Delegation is the process managers use to transfer authority and responsibility down the chain  Empowerment Line and Staff Authority o Line Departments  Perform primary business tasks  Have formal authority to direct and control immediate subordinates o Staff Departments  Support the departments  Narrower and includes the right to advise, recommend, and counsel in area of expertise Span of Management o The number of employees reporting to a supervisor o Less supervision/larger spans of control

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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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Centralization and Decentralization o Centralization: decision authority is located near the top of the organization o Decentralization: decision authority is pushed downward to all levels o Factors that influence centralization versus decentralization  Change and uncertainty are usually associated with decentralization  Should have a strategic fit  Crisis tends to require centralization Departmentalization o A fundamental characteristic of organization structure o Basis for grouping positions into departments and departments into the total organization o Various approaches  Functional  Divisional  Matrix

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Team-based Virtual/network

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Organizing for Horizontal Coordination o Companies need more flexibility than vertical structure can offer  Meet fast-shifting business environment  Break down barriers and tie departments together  Needs integration and coordination

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Structure Fits with Manufacturing o Knowledge, tools, techniques, and activities should match production activities o Manufacturing firms can be categorized according to types of production technology:  Small-batch and unit production  Large=batch and mass production  Continuous process production o The technical complexity of each type of firm differs Structure Fits with Service Technology o Distinct feature is the need to be close to customers o Intangible outputs o Direct contact with customers...