BUS110 Chap 8 - Adapting Organizations to Today’s Markets
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Adapting Organizations to Today’s Markets
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BUS110 Chap 8 - Adapting Organizations to Today’s Markets
- 1. * * Chapter Eight Adapting Organizations to Today’s Markets Copyright © 2010 by the McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin
- 12. TYPICAL ORGANIZATION CHART * * Turning Principles into Organization Design LG2 8-
- 18. FLAT ORGANIZATIONAL STRUCTURE * * Choosing Tall versus Flat Organization Structures LG3 8-
- 23. WAYS to DEPARTMENTALIZE * * Looking at Alternate Ways to Departmentalize LG3 8-
- 24. WAYS to DEPARTMENTALIZE * * Looking at Alternate Ways to Departmentalize LG3 8-
- 29. SAMPLE LINE-and-STAFF ORGANIZATION * * Line-and-Staff Organizations LG4 8-
- 31. SAMPLE MATRIX ORGANIZATION * * Matrix-Style Organizations LG4 8-
- 37. A VIRTUAL CORPORATION * * Transparency and Virtual Organizations LG5 8-
- 39. WHICH JOBS will be OUTSOURCED NEXT? * * Source: USA Today. Transparency and Virtual Organizations LG5 8-
- 43. TRADITIONAL and INVERTED ORGANIZATIONS * * Restructuring for Empowerment LG5 8-
- 50. Review Only
Notas do Editor
- See Learning Goal 1: Outline the basic principles of organization management. Changing economic times require businesses to alter their approach via reorganization. Using organizational principles is an important aspect to this reorganization.
- See Learning Goal 1: Outline the basic principles of organization management.
- See Learning Goal 2: Compare the organizational theories of Fayol and Weber.
- See Learning Goal 2: Compare the organizational theories of Fayol and Weber.
- See Learning Goal 2: Compare the organizational theories of Fayol and Weber.
- See Learning Goal 2: Compare the organizational theories of Fayol and Weber. This slide presents Fayol’s principles of organization. Fayol published General and Industrial Management in 1919. Unity of command and Hierarchy of authority suggest that each employee reports to one and only one boss. Management courses throughout the world teach these principles and organizations are designed accordingly. When these principles become rules, policies, and regulations, they create inflexibility which hampers organizations ability to respond quickly to situations. An example of this inflexibility or a slower response time can be seen in FEMA’s response to Hurricane Katrina.
- See Learning Goal 2: Compare the organizational theories of Fayol and Weber.
- See Learning Goal 2: Compare the organizational theories of Fayol and Weber. Weber, a German sociologist and economist, wrote The Theory of Social and Economic Organizations . Weber’s principles were similar to Fayol’s. He emphasized job descriptions, written rules, consistent policies, regulations, and procedures, and staffing and promotions based on qualifications. Weber was in favor of bureaucracy and believed that these principles were necessary for large organizations’ effective functioning. However, in today’s corporate world, these rules and bureaucracy do not necessarily work. Organizations need to respond to customers and other environmental factors quickly which calls for a creative, flexible, and a quick decision making process contrary to a bureaucratic process.
- See Learning Goal 2: Compare the organizational theories of Fayol and Weber.
- See Learning Goal 2: Compare the organizational theories of Fayol and Weber.
- See Learning Goal 2: Compare the organizational theories of Fayol and Weber.
- See Learning Goal 3: Evaluate the choices managers make in structuring organizations. Centralization can be defined as an organizational structure that focuses on retaining control of authority with higher level managers. One of the disadvantages of this type of management style is slower decisions because of layers of management. Ask the students: What specific problems you see with this type of management? ( Slower decision-making means the company is less responsive to both internal an external customers needs.) Share with the students a simple rule to follow when dealing with centralized authority: Decisions regarding overall company policy and establishment of goals and strategies should be made at the top. Decentralization is an organizational structure that focuses on delegating authority throughout the organization to middle and lower-level managers. The most significant advantage of this form of management style is the empowerment of the employees. Statistics indicate when delegation is practiced in a company, absenteeism, injuries, loyalty and production improve. Share with the students a simple rule to follow when dealing with decentralized authority: The closer an employee interacts with the customer, the more decentralized the decision-making should be. For example, a customer service manager must have the authority to make a decision that will satisfy a customer immediately, not wait until the home office makes a decision.
- See Learning Goal 3: Evaluate the choices managers make in structuring organizations.
- See Learning Goal 3: Evaluate the choices managers make in structuring organizations. Many organizations have moved from tall organizations to flat organizations in an effort to increase nimbleness in the marketplace.
- See Learning Goal 3: Evaluate the choices managers make in structuring organizations. Many organizations have moved from tall organizations to flat organizations in an effort to increase nimbleness in the marketplace.
- See Learning Goal 3: Evaluate the choices managers make in structuring organizations.
- See Learning Goal 3: Evaluate the choices managers make in structuring organizations. Many organizations have moved from tall organizations to flat organizations in an effort to increase nimbleness in the marketplace.
- See Learning Goal 3: Evaluate the choices managers make in structuring organizations.
- See Learning Goal 3: Evaluate the choices managers make in structuring organizations.
- See Learning Goal 3: Evaluate the choices managers make in structuring organizations.
- See Learning Goal 3: Evaluate the choices managers make in structuring organizations.
- See Learning Goal 3: Evaluate the choices managers make in structuring organizations.
- See Learning Goal 4: Contrast the various organizational models. Traditional business models such as line organizations and line-and-staff organizations are giving way to new structures.
- See Learning Goal 4: Contrast the various organizational models.
- See Learning Goal 4: Contrast the various organizational models.
- See Learning Goal 4: Contrast the various organizational models.
- See Learning Goal 4: Contrast the various organizational models.
- See Learning Goal 4: Contrast the various organizational models. The creation of matrix organizations was in response to the inflexibility of other more traditional organizational structures. This structure brings specialists from different parts of the organization to work together temporarily on specific projects.
- See Learning Goal 4: Contrast the various organizational models.
- See Learning Goal 3: Evaluate the choices managers make in structuring organizations. Many organizations have moved from tall organizations to flat organizations in an effort to increase nimbleness in the marketplace.
- See Learning Goal 4: Contrast the various organizational models.
- See Learning Goal 4: Contrast the various organizational models. Important For Small Teams This slide presents five important conditions for garnering the maximum benefits of small teams, according to Jon Katzenbach, co-author of The Wisdom of Teams . Ask the students: Which of these five conditions do you believe would be most important in your team experience? Why? (The most critical factor of these five conditions, according to Katzenbach, is a clear performance purpose for the team.)
- See Learning Goal 5: Identify the benefits of inter-firm cooperation and coordination.
- See Learning Goal 5: Identify the benefits of inter-firm cooperation and coordination.
- See Learning Goal 5: Identify the benefits of inter-firm cooperation and coordination. A Virtual Corporation This slide illustrates the concept of a virtual corporation as an organizational model that could propel American businesses into the next century. The theory behind the virtual corporation can be understood by picturing a company stripped to its core competencies. All other business functions will be accomplished by: Forming joint ventures Forming temporary alliances with other virtual companies with different areas of expertise Hiring consulting services Outsourcing or subcontracting of services Share with the students some other interesting concepts of a virtual corporation: On-demand knowledge workers who operate independently Skill-selling professionals such as engineers, accountants, human resource experts who manage your projects from their homes through worldwide telecommunications Team-building will change as companies hire individuals with expertise in various areas to solve business problems. As a solution is identified, the team will cease to exist.
- See Learning Goal 5: Identify the benefits of inter-firm cooperation and coordination. Benefits and Concerns of Healthcare Outsourcing This slide identifies the benefits and concerns of healthcare outsourcing. Have the students identify the possible countries to which healthcare can be outsourced. (India is used by many hospitals and healthcare organizations due to availability of knowledge workers.) Ask students: Why do you think these countries represent a threat to U.S. jobs? ( Lower wages will result in lower costs) Ask the students about another country: What could be outsourced to South Africa? Why? ( South Africa is considered a good choice for customer service centers for French, English, and German speaking customers. Work force is trained to speak several different languages while wages are low. As a global company dealing with consumer inquiries, the central location of a call center may reduce cost significantly.)
- See Learning Goal 5: Identify the benefits of inter-firm cooperation and coordination. Which Jobs Will Be Outsourced Next? This slide supports the previous discussion of outsourcing by identifying the most common functional areas for which U.S. companies plan on hiring outside organizations. The results are from the TEC International’s survey of 1,091 CEOs. As mentioned in previous discussion, the number-one reason companies outsource is to reduce cost. This slide shows Manufacturing, Information Technology and Customer Support/Sales as the largest planned outsourced business categories. Ask the students: Why do you think these categories are outsourced more often? (Manufacturing can be done a lot cheaper in a country with lower wages, IT and customer support represent functional areas that provide basic or routine types of job performance; unlike sales and marketing, where specific strategies are closely aligned to meet specific customer needs. In general, the farther removed from the customer your function is, the more likely that function may be performed outside the company.)
- See Learning Goal 5: Identify the benefits of inter-firm cooperation and coordination.
- See Learning Goal 5: Identify the benefits of inter-firm cooperation and coordination.
- See Learning Goal 5: Identify the benefits of inter-firm cooperation and coordination.
- See Learning Goal 5: Identify the benefits of inter-firm cooperation and coordination. The inverted organization structure is an alternate to the traditional management layers. The critical idea behind the inverted organization structure is that the managers’ job is to support and facilitate the job of the frontline people, not boss them around. Ask the students – What type of organization structure would they prefer to work under: traditional or inverted? Why?
- See Learning Goal 6: Explain how organizational culture can help businesses adapt to change. When you search for a job, make sure the organizational culture is one you can thrive in.
- See Learning Goal 6: Explain how organizational culture can help businesses adapt to change.
- See Learning Goal 6: Explain how organizational culture can help businesses adapt to change.
- See Learning Goal 6: Explain how organizational culture can help businesses adapt to change.
- See Learning Goal 6: Explain how organizational culture can help businesses adapt to change. Examples of Informal Group Norms Group norms are an interesting topic to discuss in teaching organizational structure. This slide illustrates some informal group norms. Ask students: Have you ever felt pressure to conform to such informal norms? If you gave in to group pressure not to produce more than the rest of the group, did you feel good about yourself? (Focus on the self-gratification feeling of a job well-done and the corresponding compensation.) Discuss the importance of informal groups in an organization that become somewhat formal themselves (i.e. labor unions).
- See Learning Goal 6: Explain how organizational culture can help businesses adapt to change.
- What’s an inverted organization? Some service-oriented organizations have elected to turn the traditional organizational structure upside down. An inverted organization has employees who come into contact with customers at the top of the organization and the chief executive officer at the bottom. A manager’s job is to assist and support frontline people, not tell them what to do. Why do organizations outsource functions? In the past organizations have often tried to do all functions themselves, maintaining departments for each function including: accounting, finance, marketing, and production. If an organization is not able to efficiently perform the function themselves they will outsource the function. Outsourcing is the process of assigning various functions, such as accounting, production, security, maintenance, and legal work, to an outside firm. The goal is to retain the functions that the organization considers its core competencies. What’s organizational culture? Organizational or corporate culture is the widely shared values within an organization that create unity and cooperation. Usually the culture of an organization is passed to employees via stories, traditions, and myths.
- Why are organizations becoming flatter? Over the last 25 years businesses have adopted flatter organizations with fewer layers of management and a broader span of control in order to quickly respond to customer demands. A flatter organization gives lower-level employees the authority and responsibility to make decisions directly affecting customers. What are some reasons for having a narrow span of control in an organization? Span of control refers to the number of subordinates a manager supervises. Generally, the span of control narrows at higher levels of the organization, because work becomes less standardized and managers need more face-to face communication. What are the advantages and disadvantages of departmentalization? The advantages of departmentalization include: Departmentalization may reduce costs, since employees should be more efficient, employees can develop skills in depth and progress within a department as they master more skills; the company can achieve economies of scale by centralizing all the resources it needs and locating various experts in that particular area; employees can coordinate work within the function, and top management can easily direct and control various departments’ activities. The disadvantages of departmentalization include: Communication is inhibited; employee’s may identify with their department’s goals rather than the organization’s; t he company’s response may be slowed by departmentalization; employee’s tend to be narrow specialists; department members may engage in groupthink and may need input from the outside to become more competitive. 4. What are the various ways a firm can departmentalize? An organization can elect to departmentalize in the following ways: customer group, product, functional, geographic, process, and hybrid.
- What’s the difference between line and staff personnel? Line personnel are responsible for directly achieving organizational goals. Line personnel include production workers, distribution people, and marketing personnel. Staff personnel advise and assist line personnel in meeting their goals. What management principle does a matrix-style organization challenge? The flexibility inherent in the matrix-style organization directly challenge the rigid line and line-and-staff organization structures. What’s the main difference between a matrix-style organization’s structure and the use of cross-functional teams? The main difference between matrix-style organization and cross-functional teams is that cross-functional teams tend to be long-lived as compared to the temporary and fluid nature of teams in a matrix-style organization.
- See Learning Goal 1: Outline the basic principles of organization management.
- See Learning Goal 1: Outline the basic principles of organization management.
- See Learning Goal 4: Contrast the various organizational models.
- See Learning Goal 5: Identify the benefits of inter-firm cooperation and coordination. Keep in Touch Information technology has allowed companies like Amazon to better understand customer needs. Use the three questions on this slide to start a discussion with students in class.