Organizing and StaffingJoanne Elim Ruth P. AbordoMMBM1

Foundations of Management -------------------------------------• Managing•The External Environment and Organizational Culture•Managerial Decision Making

Planning: Delivering Strategic Value-------------------------------------• Planning and Strategic Management• Ethics and Corporate Responsibility•International Management•Entrepreneurship

Controlling:Learning and Changing-------------------------------------•Managerial Control•Managing technology and Innovation•Creating and Managing Change

Leading:Mobilizing People-------------------------------------•Leadership•Motivating for Performance•Teamwork•Communicating

Organizing: Building aDynamic Organization -------------------------------------•Organizational Structure•Organizational Agility•Human Resources Management•Managing the Diverse Workforce

Fundamentals of Organizing

• Organizational Chart – The reporting structure and division of labor in an organization.

• Differentiation – An aspect of the organization’s internal environment created by job specialization and the division of labor.

• Integration – The degree to which differentiated work units work together and coordinate their efforts.

• Division of labor – The assignment of different tasks to different people or groups.

• Specialization – A process in which different individuals and units perform different tasks.

• Coordination – The procedures that link the various parts of an organization for the purpose of achieving the organization’s overall mission.

A Conventional Organization Chart

The Vertical Structure

• Authority – The legitimate right to make decisions and to tell other people what to do.

• Board of Directors – oversee the organization

1. Select, assess, reward and perhaps replace the CEO

2. Determine the firm’s strategic direction and review

3. Ensure ethical, socially responsible and legal conduct.

• CEO – Chief Executive Officer– Where the authority vested in the board of

directors is assigned

• Top Management Team:– Typically are composed of the CEO,

President, COO, CFO and other key executives.

• Hierarchy – The authority levels of the organizational pyramid.

• Corporate Governance – The role of a corporation’s executive staff and board of directors in ensuring that that the firm’s activities meet the goals of the firm’s stakeholders.

Famous CEOs:

• Subunits – Subdivision of an organization

• Span of Control – The number of subordinates who report directly to an executive or supervisor

• Delegation – The assignment of new or additional responsibilities to a subordinate.

• Responsibility – The assignment of a task that an employee is supposed to carry out.

• Accountability - The expectation that employees will perform a job, take corrective action when necessary, and report upward on the status and quality of their performance.

Effective delegation raises the quality of subordinates and the service they provide to customers or coworkers.

The Steps in Effective Delegation:

Decentralization:

• Centralized organization – An organization in which high-level executives make the most decisions and pass them down to lower levels for implementation.

• Decentralized organization – An organization in which lower-level managers make important decisions.

• Often speeds decision making.

The Horizontal Structure

• Line departments – Units that deal directly with the organization’s primary good and services.

• Staff departments – Units that support line departments.

• Departmentalization – Subdividing an organization into smaller subunits.

3 Basic Approaches to Departmentalization:

1. The Functional Organization – Departmentalization around specialized activities; Jobs and departments are specialized and group according to business functions and the skills they require.

Functional Organization

Metrobank’s Organizational Chart

2. Divisional Organization – Departmentalization that group units around products, customers, or geographic regions.

Divisional Organization

• References\Organizing\CitiGroup corp_struct.pdf

• References\Organizing\Executive Leadership of AVON.doc

• References\Organizing\Organizational Flowchart of Mandarin Oriental Group Limited Inc.doc

Examples of Functional and Divisional Organization

• Functional Organization: A central purchasing

department. Separate companywide

marketing, production, design and engineering departments.

A central-city health department.

Plantwide inpection, maintenance, and supply departments.

A university statistics department teaches statistics for the entire university

• Divisional Organization: Each division has its own

purchasing unit. Each product group has

experts in marketing, design, production, and engineering.

The school district and the prison have thier own health units.

Production Team Y does its own inspection, maintenance and supply.

Each department hires statisticians to teach its own students.

3. Matrix Organization - An organization composed of dual reporting relationships in which some managers report to two superiors – a functional manager and a divisional manager.

Matrix Organization

Matrix Design

Decision making is decentralized to a level where information is processed properly and relevant knowledge is applied.

Extensive communications networks help process large amounts if information.

With decisions delegated to appropriate levels, higher management levels are not overloaded with operational decisions.

Resource utilization is efficient because key resources are shared across several important programs or products at the same time.

Employees learn the collaborative skills needed to function in an environment characterized by frequent meetings and more informal interactions.

Dual career ladders are elaborated as more career options become available on both sides of the organization.

• ADVANTAGES:

• DISADVANTAGES: Confusion can arise because people do not have a single

superior to whom they feel primary responsibility. The design encourages managers who share subordinates to

jockey for power. The mistaken belief can arise that matrix management is the

same thing as group decision making – in other words, everyone must be consulted for every decision.

Too much democracy can lead to not enough action.

The Network Organization

• Network organization – a collection of independent, mostly single function firms that collaborate on a good or service.

• Dynamic network – Temporary arrangements among partners that can be assembled and reassembled to adapt to the environment.

• Broker – A person who assembles and coordinates participants in a network.

Networks can improve cost, quality, service, speed and innovation.

A Network Organization

Organizational Integration

• Standardization – establishing common routines and procedures that apply uniformly to everyone.

• Banks are the most standardized of organizations...

• Formalization – the presence of rules and regularizations governing how people in the organization interact.

• Coordination by plan – interdependent units are required to meet deadlines and objectives that contribute to a common goal.

• Coordination by Mutual Adjustment – Units interact with one another to make accommodations to achieve flexible coordination.

Coordination and Communication

• Option 1 : Reduce the Need for Information• Option 2 : Increase Information-Processing

Capability

Bottom line: Cross-unit coordination can lead to effective problem solutions.

A structure with fewer horizontal layers saves time and money.

Do you know your Company’s Organizational Structure?

RX QUEEN PHARMACY

SPEED IS VITAL TO AN ORGANIZATION’S

SURVIVAL

ORGANIZATIONAL AGILITY

THE RESPONSIVE ORGANIZATION

The formal structure is put in place to control people, decisions, actions. But in today’s fat changing business environment, responsiveness --- quickness, agility, the ability to adapt to changing demands --- is more vital than ever to a firm’s survival.

• Mechanistic Organization – A form of organization that seeks to maximize internal efficiency.

• Organic Structure – an organizational form that emphasizes flexibility.

Strategy and Organizational Agility

• Organizing around Core CompetenceCore competence – is the capability –

knowledge, expertise, skill that underlies a company’s ability to be a leader in providing a range of specific goods or services.

Strategic Alliance – A formal relationship created among independent organizations with the purpose of joint pursuit of mutual goals.

Alliances can increase speed and innovation and lower costs.

• Learning Organization – An organization skilled at creating, acquiring and transferring knowledge, and at modifying its behavior to reflect new knowledge and insights.

• High-involvement organization – A type of organization in which top management ensures that there is consensus about the direction in which the business is heading.

The best alliances are true partnerships that meet these criteria:

1. Individual excellence: Both partners add value, and their motives are positive (pursue opportunity) rather than negative (mask weaknesses)

2. Importance: Both partners want the relationship to work because it helps them meet long-term strategic objectives.

3. Interdependence: Both partners need each other, each helps the other reach its goal.

4. Investment : The partners devote financial and other resources to the relationship.

5. Information : The partners communicate openly about goals, technical data, problems, and changing situations.

6. Integration : The partners develop shared ways of operating; they teach each other and learn from each other.

7. Institutionalization : The relationship has formal status with clear responsibilities.

8. Integrity : Both partners are trustworthy and honorable.

Organizational Size and Agility

BEING BIG AND SMALL

• Economies of Scope – Economies in which materials and processes employed in one product can be used to make other, related products.

Large size often leads to scale economies.

Small Size may improve speed.

• Downsizing – The planned elimination of positions or jobs.

• Rightsizing – A successful effort to achieve an appropriate size at which the company performs most efficiently.

• Survivor’s Syndrome – Loss of productivity and morale in employees who remain after a downsizing.

Customers and the Responsive Organization

Today’s customers demand excellent service and new high

• Customer Relationship Management– A multifaceted process focusing on creating two-way

exchanges with customers to foster intimate knowledge of their needs and wants, and buying patterns.

• Value Chain– The sequence of activities that flow from raw

materials to the delivery of a good or service, with additional value created at each step.

Generic Value Chain

Technology development

Procurement

Research & Development

Inboundlogistics

Operations Outbound logistics

MarketingandSales

Service

Mar

gin

Margin

Primary Activities

Suppor t ing

Activities

• Total Quality Management (TQM)– An Integrative approach to management that

supports the attainment of customer satisfaction through a wide variety of tools and techniques that result in high-quality goods and services.

– One of the founders was W. Edwards DemingHigh quality requires organizationwide

commitment.

Deming’s “14 Points” of TQM

1. Create Constancy of Purpose – strive for long-term improvement rather than short-term profits.

2. Adopt the new philosophy – don’t tolerate delays and mistakes.

3. Cease dependence on mass inspection – build quality into the process on the front end.

4. End the practice of awarding business on price tag alone – build long term relationships.

5. Improve constantly and forever the system of production and service – at each stage.

6. Institute training and retraining – continually update methods and thinking.

7. Institute leadership – provide the resources needed for effectiveness.

8. Drive out fear – people must believe it is safe to report problems or ask for help.

9. Break down barriers among departments – promote teamwork.

10. Eliminate slogans, exhortations, and arbitrary targets – supply methods, not buzzwords.

11. Eliminate numerical quotas – they are contrary to the idea of continuous improvement.

12. Remove barriers to pride in workmanship – allow autonomy and spontaneity.

13. Institute a vigorous program if education and retraining – people are assets, not commodities.

14. Take action to accomplish the transformation – provide a structure that enables quality.

ISO 9001

• ISO 9001 – A series of quality standards developed by a committee working under the International Organization for Standardization to improve total quality in all businesses for the benefit of producers and consumers.

• Reengineering – effective reengineering can cut costs significantly.

INFORMATION TECHNOLOGY AND BUSINESS ARE BECOMING INEXTRICABLY INTERWOVEN. I DON’T THINK ANYONE CAN TALK MEANINGFULLY ABOUT ONE

WITHOUT TALKING ABOUT THE OTHER.

TECHNOLOGY AND ORGANIZATIONAL AGILITY

• Technology – The systematic application of scientific knowledge to a new product, process or service.

Types of Technology Configurations:

1. Small Batch Technologies– Produce goods and services in low volume.

2. Large Batch Technologies– Produce goods and services in high volume.

3. Continuous Process Technologies– Highly automated and has a continuous production

flow.

Organizing for Flexible Manufacturing

Mass Customization – Production of varied, individually customized products at the low cost of standardized, mass-produced products.

1. Computer-Integrated Manufacturing (CIM) – The use of computer-aided design and computer-aided manufacturing to sequence and optimize a number of production processes.

2. Flexible Factories – Manufacturing plants that have short production runs, are organized around products, and use decentralized scheduling.

3. Lean Manufacturing – Strives to achieve the highest possible productivity and total quality, cost effectively, by eliminating unnecessary steps in the production process and continually striving for improvement.

Organizing for Speed: Time Based Competition

• Time Based Competition – Strategies aimed at reducing the total time it takes to deliver a good or service.

• Logistics – The movement of the right goods in the right amount to the right place at the right time.

• Just-In-Time (JIT) Operations – A system that calls for subassemblies and components to be manufactured in very small lots and delivered to the next stage of the production process just as they are needed.

Time-based competition brings speed to all

organization processes.