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Chapter Eight

Chapter Eight. Organizing a Customer-Driven Business. Workers in Large* Companies During the Last 5 Years Have Undergone. *500+ Employees. Source: Gallup for Carlson Marketing Group. Organizational Charts. CEO, Comptroller, Vice Pres. Top. Sales Mgrs Plant Mgrs. Mid-Level. Supervisors

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Chapter Eight

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  1. Chapter Eight Organizing a Customer-Driven Business

  2. Workers in Large* Companies During the Last 5 YearsHave Undergone... *500+ Employees Source: Gallup for Carlson Marketing Group

  3. Organizational Charts CEO, Comptroller, Vice Pres. Top Sales Mgrs Plant Mgrs. Mid-Level Supervisors Foremen Front Line/Supervisory

  4. Show the activities of the organization Highlight subdivisions of the organization Identify different types of work performed Provide information about different management levels Show the lines of authority in the organization and the flow of organizational communications 1. Purpose

  5. Organization Division Department Group Individual 2. Design

  6. One Boss Hierarchy of Authority Division of Labor Subordination of Individual Interest Authority Degree of Centralization Communication Channels Order Equity Esprit de Corps Fayol’s Principles

  7. Weber’s additions • Job Descriptions • Written Rules • Procedures, Regulations, Policies • Staffing/Promotions based on Qualifications

  8. Tall Organizations Many Layers of Mgmt. Cost of Mgmt.=High Flat Organizations Current Trend Creation of Teams Organizational Issues: 1. Structures

  9. Capabilities of Subordinates & Manager Complexity of Job Geographically Closer + Functional Similarity + More Need for Coordination - Greater Planning Demands - More Functional Complexity - 2. Span of Control Optimum number of subordinates

  10. Chain of Command from top down Rules & Regulations Set Up by Function Communication = Minimal Organization Types: 1. Bureaucracy Not responsive to customers

  11. Advantages Skill Development Economies of Scale Good Coordination

  12. Disadvantages • Lack of Communication • Employees Identify with Department • Slow Response to External Demands • Narrow Specialists

  13. Product type Function in company Customer group Geographic Location Production Process Different ways to Departmentalize

  14. Advantages Increased Uniformity Less Duplication Maximum Control Disadvantages Lots of Policies & Procedures Many Layers/Slower 2. Centralization(No Delegation to Managers)

  15. Advantages Informed Decisions Worker Responsibility Few Layers/Faster Disadvantages Loss of Control Possible Duplication 3. Decentralization (Delegating Authority)

  16. Line Personnel Perform Functions Contribute Directly to Organizational Goals Staff Personnel Advise Assist Line Personnel Organizational Models: a. Line Organizations

  17. Advantages Clear Authority & Responsibility Easy to Understand One Supervisor per Employee Disadvantages Inflexible Few Specialists for Advice Long Line of Communication Difficult to Handle Complex Decisions

  18. Advantages Flexibility Cooperation & Teamwork Creativity More Efficient Use of Resources Disadvantages Costly/Complex Confusion in Loyalty Requires Good Interpersonal Skills & Cooperation Not Permanent b. Matrix Organizations Specialist from different parts of the organization for specific projects

  19. c. Networking & ‘Nets like Matrix • Networking • Real Time • Transparency • ‘Nets • Extranet • Intranet Teleconference

  20. d. Virtual Corporation (Figure 8.7) Production Firm Distribution Firm Accounting Firm Core Firm Legal Firm Advertising Agency Design Firm No permanent ties to core firm

  21. How to ImproveOrganizational Structure • Break business into smaller units • Build teamwork • Impose autonomy • Create meaningful incentives • Outsource non-operating activities • Share business capabilities across units

  22. Time to focus on company’s primary function Increased level of expertise Cost effectiveness Decreased overhead Risk reduction Flexibility Technology Less personal approach Less control by owner in planning, implementing & carrying out company’s future Potential for competing for the outsourcing firm’s time Outsourcing Benefits Downside Assigning various functions to outside organizations – legal, accounting

  23. Informal Groups • Relationships that form spontaneously within groups with similar goals • Learn who the important people are. • Work with the group.

  24. Examples ofInformal Group Norms • Do your job but don’t produce more than the rest of the group. • Don’t tell off-color jokes or use profane language among group members. • Listen to the boss and use his/her expertise but don’t trust him/her. • Everyone is to be clean/organized at the workstation.

  25. Examples ofInformal Group Norms(cont’d) • Never side with managers in a dispute involving group members. • Respect/help your fellow group members on the job. • Criticize the organization only among group members- never among strangers. • Drinking is done off-the-job. Never at work!

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