notes for topic 6 Basic Organization Design

1. PRINCIPLES OF MANAGEMENT

2. TOPIC 6 : BASIC ORGANIZATION DESIGNS
6.1 Elements of organizational structure
6.2 Work Specialization
6.3 Chain of Command
6.4 Span of Control
6.5 Centralization & Decentralization
6.6 Departmentalization

3. 5 ELEMENTS OF ORGANIZATION STRUCTURE
• Organization design – Process which manager developing/changing their org. structure
• Organization structure- Type of framework that a company uses to distinguish power and authority, roles and responsibilities
Work SpecializationWork Specialization
Centralization andCentralization and
DecentralizationDecentralization
DepartmentalizationDepartmentalization
Chain of CommandChain of Command
Span of ControlSpan of Control

4. Job Description:
Written statement of WHAT jobholder does HOW it is done WHY it is done.
Provides description of what each employee is supposed to be doing
Used in performance appraisal
Compare actual performance to desired performance
Helps employee learn their job duties and clarifies the results that you
expect them to achieve
WHY???
* Delegation - way to accomplish job tasks with each person taking a part of the work and responsibility which best uses and extends the skills

5. 6.4 Departmentalization
Grouping departments based on function, product, customer, geographic/process
FunctionFunctionFunctionFunction
ProductProductProductProduct CustomerCustomerCustomerCustomer
GeographicGeographicGeographicGeographic
ProcessProcessProcessProcess
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6. 6.2 Work Specialization
Advantages:
Expert in their specific tasks
Higher level of productivity
Work completed faster and more efficiently
Lower quality control costs
Job security
Higher profit potential
Disadvantages:
Limit ability to multitask
Smaller skill set (exist only when employees working)
employee rarely challenged (do same thing)
Limit amount of work
Limited cooperation & communication
among employees
Isolated/limited employee
• Also known as “Division of labor”
• Divides individual task to separate jobs
To see more click the click below >>
http://education-portal.com/academy/lesson/work-specialization-in-
organizations.html
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7. 6.3 Chain Of Command
• Continuous authority from highest to lowest level
• Unity of command (Management principle)
 subordinates should report to one superior only
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8. Number of subordinate that a superior can manage effectively and efficiently
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9. 6.3 Centralization and Decentralization
Centralization
 Requiring higher level to make decisions
 Problems/decision making flow up to senior executives
 Push down of decision making to lowest level of organization
 People closest to the problems make decision
Decentralization
For more information >>
http://education-portal.com/academy/lesson/authority-in-centralized-decentralized-
organizations.html
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10. • Grouping activities by product produced
Product
Example:
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11. Group activities by territory
Geographic
Advantage:
Puts decision-making authority close to
where the work is being done
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12.  Group activities by common customers
Customer
Example: Setting up department to meet special requirement from customers
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13.  Group activities by work or customer flow
Process
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14.  Group activities by work being done/functions performed
Function
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