organization structures. understand the basic principles of organization management what is an...

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Week Five – Part One Organization Structures

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Page 1: Organization Structures.  Understand the basic principles of organization management  What is an organization chart, and types of organization structures

Week Five – Part OneOrganization Structures

Page 2: Organization Structures.  Understand the basic principles of organization management  What is an organization chart, and types of organization structures

Understand the basic principles of organization management

What is an organization chart, and types of organization structures

Understand the relationship between organization structure, culture and the environment

Understand the importance of cooperation and coordination

Learning Objectives

Page 3: Organization Structures.  Understand the basic principles of organization management  What is an organization chart, and types of organization structures

Structuring an organization Setting up teams or departments Assigning responsibility and authority Establishing procedures for accomplishing the

organization objectives Allocating resources of the organization

Basic principles of organization management

Page 4: Organization Structures.  Understand the basic principles of organization management  What is an organization chart, and types of organization structures

Is a visual device that shows relationships among people and divides the organization’s work; it shows who reports to whom.

What is an organization chart?

Page 5: Organization Structures.  Understand the basic principles of organization management  What is an organization chart, and types of organization structures

Example of Organization Chart

Page 6: Organization Structures.  Understand the basic principles of organization management  What is an organization chart, and types of organization structures

Example of Organization Chart

Page 7: Organization Structures.  Understand the basic principles of organization management  What is an organization chart, and types of organization structures

Tall Organization Structure Definition: In which the pyramidal organization chart

would be quite tall because of the various levels of management

Flat Organization Structure Definition: In which an organization structure that has

few layers of management and a broad span of control.

Types of Organization Structures

Page 8: Organization Structures.  Understand the basic principles of organization management  What is an organization chart, and types of organization structures

In its simplest form, a tall structure results in one long chain of command similar to the military.

As an organization grows, the number of management levels increases and the structure grows taller.

In a tall structure, managers form many ranks and each has a small area of control.

Tall structures have more management levels than flat structures

Tall Organization Structure

Page 9: Organization Structures.  Understand the basic principles of organization management  What is an organization chart, and types of organization structures

Flat organizations focus on empowering employees rather than adhering to the chain of command.

By encouraging autonomy and self-direction, flat structures attempt to tap into employees’ creative talents and to solve problems by collaboration.

Flat Organization Structure

Page 10: Organization Structures.  Understand the basic principles of organization management  What is an organization chart, and types of organization structures

Example of Tall Organization Structure

Page 11: Organization Structures.  Understand the basic principles of organization management  What is an organization chart, and types of organization structures

Example of Flat Organization Structure

Page 12: Organization Structures.  Understand the basic principles of organization management  What is an organization chart, and types of organization structures

The pros of tall structures lie in clarity and managerial control. The narrow span of control allows for close supervision of employees.

Tall structures provide a clear, distinct layers with obvious lines of responsibility and control and a clear promotion structure.

Challenges begin when a structure gets too tall. Communication begins to take too long to travel through all the levels. These communication problems hamper decision-making and hinder progress.

Pros & Cons of Tall Organization

Page 13: Organization Structures.  Understand the basic principles of organization management  What is an organization chart, and types of organization structures

Flat organizations offer more opportunities for employees to excel while promoting the larger business vision. That is, there are more people at the “top” of each level.

For flat structures to work, leaders must share research and information instead of hoarding it. If they can manage to be open, tolerant and even vulnerable, leaders excel in this environment.

Flatter structures are flexible and better able to adapt to changes. Faster communication makes for quicker decisions, but managers may end up with a heavier workload. Instead of the military style of tall structures, flat organizations lean toward a more democratic style.

Pros & Cons of Flat Organization

Page 14: Organization Structures.  Understand the basic principles of organization management  What is an organization chart, and types of organization structures

The heavy managerial workload and large number of employees reporting to each boss sometimes results in confusion over roles.

Bosses must be team leaders who generate ideas and help others make decisions. When too many people report to a single manager, his job becomes impossible.

Employees often worry that others manipulate the system behind their backs by reporting to the boss; in a flat organization, that means more employees distrusting higher levels of authority.

Pros & Cons of Flat Organization

Page 15: Organization Structures.  Understand the basic principles of organization management  What is an organization chart, and types of organization structures

Definition: The dividing of organizational functions into separate units.

The advantages include the following:1) Employees can develop skills in depth and progress

within a department as they master more skills.2) The company can achieve economies of scale by

centralizing all the resources it needs and locate various experts in that area.

3) Employees can coordinate work within the function, and top management can easily direct and control various departments’activities.

Departmentalization

Page 16: Organization Structures.  Understand the basic principles of organization management  What is an organization chart, and types of organization structures

The disadvantages may include the following:1) Departments may not communicate well. 2) Employees may identify with their department’s goals

rather than the organization’s.3) The company’s response to external changes may be slow4) People may not trained to take different managerial

responsibilities; rather, they tend to become narrow specialist

5) Department members may engage to group think(they think alike), it may need input from outside to become more creative

Departmentalization

Page 17: Organization Structures.  Understand the basic principles of organization management  What is an organization chart, and types of organization structures

Draw out your own company organization chart each student.

(a) Flat organization Structure (b) Tall organization Structure

Activity

Page 18: Organization Structures.  Understand the basic principles of organization management  What is an organization chart, and types of organization structures

1. Centralization versus Decentralization2. Breath of span of control3. Tall organization structure versus Flat

organization structure4. Type of departmentalization- By Product- By Customer Group- By Geographic - By Process- By Hybrid forms

Major Choices in structuring organizations

Page 19: Organization Structures.  Understand the basic principles of organization management  What is an organization chart, and types of organization structures

Definition: Comparing an organization’s practices, processes, and products against the world’s best.

As we’ve noted, today’s organizations look to other organizations for help in areas where ( any of their departments in an organization) do not generate world-class quality

For example, Olympia College is a ISO 9001 private institute in Malaysia.

Benchmarking

Page 20: Organization Structures.  Understand the basic principles of organization management  What is an organization chart, and types of organization structures

Networking uses communications technology and other means to link organizations and allow them to work together on common objectives.

Benchmarking tells firms how their performance measures up to that of their competitors in specific functions. The company may then outsource to companies that perform its weaker functions more effectively and efficiently.

What are the major concepts an organization involved in interfirm communications?

Page 21: Organization Structures.  Understand the basic principles of organization management  What is an organization chart, and types of organization structures

Definition: An organization that has contact people at the top and the chief executive officer (CEO) at the bottom of the organization chart.

It means that Management layers are few, and the manager’s job is to assist and support frontline people, not boss around. It is different from the traditional organizational structure

Inverted Organization

Page 22: Organization Structures.  Understand the basic principles of organization management  What is an organization chart, and types of organization structures

Definition:Widely shared values within an organization that provide unity and cooperation to achieve common goals

For Example:McDonald’s restaurant has the same feel, look and atmosphere; in short, it is same organizational culture. McDonald’s that the culture emphasizes that quality, service, cleanliness and value

Organizational Culture

Page 23: Organization Structures.  Understand the basic principles of organization management  What is an organization chart, and types of organization structures

Formal Organization The structure that details lines of responsibility,

authority, and position; that is, the structure shown on organization charts.

Informal OrganizationThe system that develops spontaneously as employees meet and form cliques, relationships, and lines of authority outside the formal organization

There are two organizational system

Page 24: Organization Structures.  Understand the basic principles of organization management  What is an organization chart, and types of organization structures

ATTENTION!!! Important question as below!!!It may come out in your FINAL EXAM!!!

Please copy down in your note book, thank you!

Page 25: Organization Structures.  Understand the basic principles of organization management  What is an organization chart, and types of organization structures

1) What are the principles of organization management?2) What are the four major choices in structuring

organizations?3) The advantages and disadvantages of

Departmentalization? (any three of each)4) (a) What is an organization chart?

(b) Types of organization structure and explain it

Important Questions!!!

Page 26: Organization Structures.  Understand the basic principles of organization management  What is an organization chart, and types of organization structures

5) Definition of inverted organization6) Definition of benchmarking7) What are the major concepts involved in interfirm

communications?8) (a) What is organizational culture? (b) What is the difference between the formal and

informal organization of a firm?

Important Questions!!!