Chapter 5 Organizing

1. Chapter 5Organizing

2. Managing Engineering and Technology Management Functions Managing Technology Personal Technology Planning Research Time Management Design Ethics Decision Making Production Career Organizing Quality Leading Marketing Controlling Project Management Advanced Organizer

3. Chapter Objectives • Analyze the different forms of an organization • Explain different organizational structures • Describe the differences in line and staff relationships • Describe the use and value of teams

4. Legal Forms of Organization • Sole Proprietorship • Partnership • Corporations • S-Corporation • Limited Liability Companies • Cooperatives

5. Sole Proprietorship Ownership:1 person Legal Restrictions: few Duration: Life of the Proprietor Taxation: Through personal tax Advantages • Simple to operate • Owner is free to make all decisions Disadvantages • Owner faces unlimited liability • Difficult to raise capital

6. Partnership Ownership: 2 or More Legal Restrictions: Few Duration: Taxation: Through personal tax Advantages • Pooling of management skills, financial strength Disadvantages • Divided decision-making authority • Partners face unlimited liability

7. Corporations Ownership: Shareholders Legal Restrictions: many Duration: Perpetual Taxation: Double taxes Advantages • Easy to raise capital, • Easy to transfer ownership, and change mgmt. Disadvantages • Difficult to organize • Double taxes

8. S-Corporation Ownership: Shareholders Legal Restrictions: many Duration: No perpetual life Taxation: Through personal tax Restrictions • No more than 75 owners • Only one class of stock • No retained earnings

9. Limited Liability Companies (LLC) Ownership: Members Duration: Perpetual (in most of states) Taxation: Through personal tax Advantages • Limited liabilities • No limitation on the number of members • May issue more than one class of stock

10. Cooperatives Ownership: Users Legal Restrictions: Duration: Taxation: Tax-free Advantages Disadvantages

11. Organizing: • Identification and classification of required activities • Grouping of activities necessary to attain objectives • Assignment of each grouping to a manager with authority • Provision for coordination horizontally and vertically

12. Purpose of Organizing “Organizations are not built to serve customers; they are built to preserve internal order. To customers, the internal structure may not only mean very little; it may serve as a barrier. “Organizational charts are vertical and serving the customers is horizontal.” George Fisher, CEO, Motorola

13. Patterns of Departmentation • Function • Product • Geographic location • Type of customers • Process or equipment • Shift or time • Numbers

14. Span of Control Number of people reporting directly to each manager • Number of relationships: n [2(n-1) + n – 1] • Subordinate training • Nature of job supervised • Rate of change of activities and personnel • Clarity of instruction and delegation • Staff assistance

15. Line & Staff Relationships Line functions: those accomplish the main mission of the organization, e.g. production, sales, finance, etc Staff functions: those help the line accomplish the objectives by providing some sort of advice or service • Personal staff • Specialized staff: serve the entire organization, e.g., personnel, procurement, legal counsel, market research

16. Line & Staff Relationships • Line relationships: Superior-subordinate relationships (chain of command) typically represented vertically in organizational charts • Staff relationships: Advisory in nature, degree of influence may vary • Provide advice on request • Recommendations when appropriate • Must be consulted by line but have no direct authority • Concurring authority - veto authority over line

17. Line and Staff Relationships • Service: Centralized support functions • Custodial • Security • Medical

18. Line and Staff Relationships

19. Modern Organization Structures • Project and Other Temporary Organizations • Impact of Information Revolution

20. Project and Other Temporary Organizations • Matrix management • Team Organization

21. Teams • Small group of people • Serve interests of its members • Exchange ideas freely and clearly • Have common goals • Committed to achieving goals • Each team member treated equally

22. Impact of Information Revolution • Computer • Internet • Intranet

23. Computer Technology’s Impact on the Work Force • Factory workers will require a higher level of skills • Visualization • Conceptual thinking • Knowledge of production process • Statistical inference • Oral and visual communication • Attentiveness • Individual responsibility

24. Impact of Information Revolution • Disappearance of job security • Shared responsibility of employers (providing opportunity) and employees (self-improving) • Increasing demand for professional & technical workers • Decreasing demand for operators, laborers, craftsmen, clerical staff, and farm workers. • Reduced real wages • Continuing downsizing of staff, longer working hours under high stress. • Increases in part-time, contract, and self-employed workers.