Organizational Structure or organizational design Work Specialization

1. Presenters
1. Muhammad Tayyab
2. Ali Fahad
3. Khizer Javaid
4. Adeel Khan
12/3/2013 10:19 AM
(2011-ME-339)
(2011-ME-337)
(2011-ME-336)
(2011-ME-338)
1

2. Work Specializtion
Do what you excel
12/3/2013 10:19 AM
Decision Making/ Ali Fahad
2

3. Organizational design
 An organizational design is the outline of a
company’s framework and guidelines for
managing business operations.
 Is
or
12/3/2013 10:19 AM
engaged when managers develop
change an organization's structure.
3

4. Six Elements
•
•
•
•
•
•
12/3/2013 10:19 AM
Work specialization
Authority and responsibility
Centralization versus decentralization
Chain of command
Span of control
Departmentalization
4

5. Specialization
• Specialization is the term used to
describe when someone gets really
good at a particular work task.
• One task can be done very well and
quickly.
• Workers end up with very specific
skills
12/3/2013 10:19 AM
Decision Making/ Ali Fahad
5

6. Work Specialization
Work specialization is a component of
organization structure that involves
having each discrete step of a job done
by a different individual rather than
having one individual do the whole job.
12/3/2013 10:19 AM
6

7. Key Features
• The entire job is broken down into
steps, each step completed by a
separate individual.
• Individual workers specialize in
doing part of an activity.
• Involves repetitive performance of
a few skills.
12/3/2013 10:19 AM
7

8. Key Features
• Can be viewed as a means to make
the most efficient use of employee's
skills
• Some task requires highly developed
skills
• Others can be performed by the
untrained
12/3/2013 10:19 AM
Work Specialization/ Ali Fahad
8

9. Productivity
High
Impact from
economies of
specialization
Low
Impact from
human
diseconomies
High
Work Specialization
12/3/2013 10:19 AM
Work Specialization/ Ali Fahad
9

10. Advantages
• Efficiency:
A person who spends his or her time
performing one relatively simple task
becomes very efficient at that particular
task.
• Time Saving:
No time wasted on in moving from
one job to another. Transfer time between
tasks is decreased.
12/3/2013 10:19 AM
10

11. Advantages
• Equipment:
The savings on equipment. If workers
specialize, they will not need to have a full
set of tools or other equipment.
• Training:
There is a saving time on training of
operatives. An employee could be easily
trained for a particular task he or she
specializes in, in a short period.
12/3/2013 10:19 AM
Decision Making/ Ali Fahad
11

12. Advantages
• Employee replacement becomes easier.
• Efficiency:Practice make perfect, there fore
the work within particular skills will develop
skills and efficiency through repetition of the
job.Work specialization creates efficiency and
productivity
• Job specialization is job security and you could
also get higher pay for being specialized in a
certain area.
12/3/2013 10:19 AM
Decision Making/ Ali Fahad
12

13. Advantages
• Reduce Cost of Production:
In the particular activities the specialized
person will be effectively handling it out
as a result there be no need giving cost of
repeating the same job.
12/3/2013 10:19 AM
Decision Making/ Ali Fahad
13

14. Disadvantages
• Loss of flexibility:
If workers specialize too much it may
be difficult for them to performing other
tasks when there is a need to cover for
workers who are not present.
• Monotony:
Workers can get bored performing
the same tasks everyday. This may result in
them making mistakes and may result in
absenteeism or even labor turnover.
12/3/2013 10:19 AM
Decision Making/ Ali Fahad
14

15. Disadvantages
• Loss of skills:
Some claim that by breaking
production into a series of separate, simple
and often mechanized tasks, workers are
not challenged and are not able to gain
sufficient job satisfaction.
12/3/2013 10:19 AM
Decision Making/ Ali Fahad
15

16. Disadvantages
• Increased risk of unemployment:
Specialization means that workers
may not have a wide range of skills. When
demand or supply conditions change their
particular skills may no longer be needed.
You could also have a hard time
finding a new job if your set of skills is
specialized in one area.
12/3/2013 10:19 AM
Decision Making/ Ali Fahad
16

17. Alternatives
• To promote career
development, alternatives include job
rotation, job enlargement and job
enrichment activities
• You can enable employees to develop
and expand their abilities in a few
ways. Broaden the job
characteristics, such as the number of
tasks a person performs.
12/3/2013 10:19 AM
Decision Making/ Ali Fahad
17

18. Alternatives
• Job Rotation



12/3/2013 10:19 AM
Systematically moving employees from
one job to another.
This reduces employee boredom.
It also enables you to ensure that you
have trained employees ready to perform
all the different types of tasks required to
produce a product or service.
Decision Making/ Ali Fahad
18

19. Alternative
• Job Enlargement:


12/3/2013 10:19 AM
An increase in the total number of
tasks performed.
Increases training costs, unions want
workers paid more pay for doing more
tasks, and work may still be dull and
routine.
This can make employees feel more
valuable to the organization and reduce
absenteeism due to low morale and
boredom with a single task.
Decision Making/ Ali Fahad
19

20. Alternative
• Job Enrichment:




12/3/2013 10:19 AM
Increasing both the number of tasks the
worker does and the control the worker has
over the job.
It is more comprehensive than job rotation
or job enlargement
When workers have a high degree of
autonomy, they tend to take more interest
in their work.
This motivates them to produce products
and services of high quality.
Decision Making/ Ali Fahad
20

21. Alternative
• Job characteristics approach
• The job characteristics approach is an
alternative to job specialization that
suggests that jobs should be diagnosed
and improved along five core
dimensions, taking into account both the
work system and employee preferences.
The five dimensions are as follows:
12/3/2013 10:19 AM
Decision Making/ Ali Fahad
21

22. Alternatives
Core Dimensions
• Skill variety—the number of tasks a person does
in a job.
• Task identity—the extent to which the worker
does a complete or identifiable portion of the
total job.
• Task significance—the perceived importance of
the task.
• Autonomy—the degree of control the worker
has over how the work is performed.
• Feedback— the extent to which the worker
knows how well the job is being performed.
12/3/2013 10:19 AM
Decision Making/ Ali Fahad
22

23. Alternatives
• Work Team
– An alternative to job specialization that allows
the entire group to design the work system it
will use to perform an interrelated set of tasks.

24. Centralized Design
Centralized organizational structures rely on
one individual to make decisions and provide
direction for the company.
 Small businesses
Owner Responsible
12/3/2013 10:19 AM
Work Specialization/ Ali Fahad
24

25. Advantages
Efficient regarding Business Decision.
Business owners typically develop the
company’s mission and vision.
Employees follow clear cut commands.
12/3/2013 10:19 AM
Work Specialization/ Ali Fahad
25

26. Disadvantages
Negative Effect from Bureaucracy.
Sluggish Business Decision.
12/3/2013 10:19 AM
Work Specialization/ Ali Fahad
26

27. Decentralized Design
Several Individuals responsible for decision
making and running of business.
“Run their department as they see fit.”
Rely on Team Environment.
Individuals have certain level authority.
12/3/2013 10:19 AM
Work Specialization/ Ali Fahad
27

28. Advantages
Innovation
Variety of expertise and knowledge for
running of business.
Broad-based management team.
12/3/2013 10:19 AM
Work Specialization/ Ali Fahad
28

29. Disadvantages
Everyone has different opinion.
Difficult in gathering everyone on same
business page.
12/3/2013 10:19 AM
Work Specialization/ Ali Fahad
29

30. Authority and Responsibility
Authority: It is the power that has been
legitimized by the organization.
Responsibility: It is an obligation to perform
the assigned activities.
12/3/2013 10:19 AM
Work Specialization/ Ali Fahad
30

31. Delegation
 The process by which managers assign a
portion of their total workload to others.
Reasons:
 To enable the manager to get more work done by utilizing
the skills and talents of subordinates.
 To foster the development of subordinates by having them
participate in decision making and problem solving.
12/3/2013 10:19 AM
Work Specialization/ Ali Fahad
31

32. Line Authority and Staff Authority
• Line authority entitles manager to direct the
work of an employer. A manager with the line
authority has the right to direct the work f
employees and make certain decisions
without consulting anyone.
• The staff authority is used to support, assist
and advise the holder of line authority.
e.g., organization policy enforcement
12/3/2013 10:19 AM
32

33. Line authority
Executive
Director
Assistant to the
Executive Director
Staff authority
Director of
Human
Resources
Director of
Operations
Director of
Purchasing
Unit 1
Manager
Other
Human
Operations Purchasing
resources
Other
directors
Unit 2
Manager
Other
Human
Operations Purchasing
resources
Line Versus Staff Authority

34. Departmentalization
Departmentalization is the
grouping of jobs according to some
logical arrangement. As the
organization grows in size and
complexity, it is no longer possible for
one manager to oversee all of the
workers, so workers are assigned to
new managers based on some overall
plan.
12/3/2013 10:19 AM
Decision Making/ Ali Fahad
34

35. Types of Departmentalization
•
•
•
•
•
Functional Departmentalization:
Product Departmentalization:
Customer Departmentalization:
Process Departmentalization:
Location Departmentalization:
12/3/2013 10:19 AM
Decision Making/ Ali Fahad
35

36. Functional Departmentalization
The grouping of jobs involving the same
or similar activities.
Example: manufacturing, marketing, sales
and accounting.
12/3/2013 10:19 AM
Decision Making/ Ali Fahad
36

37. •
12/3/2013 10:19 AM
Decision Making/ Ali Fahad
37

38. Functional Departmentalization
• Advantages
– Each department can be
staffed by functional-area
experts.
– Supervision is facilitated in
that managers only need be
familiar with a narrow set of
skills.
– Coordination inside each
department is easier.
• Disadvantages
– Decision making becomes
slow and bureaucratic.
– Employees narrow their
focus to the department and
lose sight of organizational
goals/ issues.
– Accountability and
performance are difficult to
monitor.

39. Product Departmentalization
• It involves grouping and arranging activities
around products or product groups.
Examples:
Advantages:
Disadvantages:
12/3/2013 10:19 AM
Decision Making/ Ali Fahad
39

40. Divisional Organization
for a Pharmaceuticals Company
FIGURE 6–2
G.Dessler, 2003
April 18, 2006
LIS580- Spring 2006
40

41. Product Departmentalization
The grouping of activities around products or
product groups
• Advantages
– All activities associated with
one product can be
integrated and coordinated.
– Speed and effectiveness of
decision making are
enhanced.
– Performance of individual
products or product groups
can be assessed.
• Disadvantages
– Managers may focus on
their product to the
exclusion of the rest of the
organization.
– Administrative costs may
increase due to each
department having its own
functional-area experts.

42. Location Departmentalization
• It groups jobs on the basis of geographic sites
or areas.
Examples:
Advantages:
Disadvantages:
12/3/2013 10:19 AM
Decision Making/ Ali Fahad
42

43. Location Departmentalization
The grouping of jobs on the basis of defined
geographic sites or areas.
• Advantage
– Enables the organization to respond
easily to unique customer and
environmental characteristics.
• Disadvantage
– Large administrative staff may be
needed to keep track of units in
scattered locations.

44. Customer Departmentalization
• It structures the organization’s activities to
respond to and interact with specific
customers and customer groups.
• Examples:
Advantages:
Disadvantages:
•
12/3/2013 10:19 AM
Decision Making/ Ali Fahad
44

45. Customer Departmentalization,
Grayson Steel Company
FIGURE 6–3
G.Dessler, 2003
April 18, 2006
LIS580- Spring 2006
45

46. Chain Of Command
• A clear and distinct line of authority among
the positions in an organization.
Components of chain of command:
There are two components:
• Unity of command.
• The scalar principle.
12/3/2013 10:19 AM
Decision Making/ Ali Fahad
46

47. •
12/3/2013 10:19 AM
Decision Making/ Ali Fahad
47

48. Unity of Command
• Unity of command suggests that each person
within an organization should have a clear
reporting relationship to one and only one
boss.
12/3/2013 10:19 AM
Decision Making/ Ali Fahad
48

49. The Scalar Principle
• The scalar principle suggests that there
should be a clear and unbroken line of
authority that extends from the lowest to the
highest position in the organization.
12/3/2013 10:19 AM
Decision Making/ Ali Fahad
49

50. Span of control
• The span of control determines how
many people will report to each
manager.
• It is the number of subordinates that a
manager can direct efficiently and
effectively.
12/3/2013 10:19 AM
Decision Making/ Ali Fahad
50

51. Spans of Control in Country-Based
Organization
April 18, 2006
51

52. Span of Control
• Wide span: Larger number of direct reports.
• Narrow span: Fewer number of direct reports.
12/3/2013 10:19 AM
Decision Making/ Ali Fahad
52

53. Tall Vs Flat organization
• Tall organization: More management layers
and more hierarchical controls.
• Flat organization: Fewer management layer and
decision making closer to the customer.
.
12/3/2013 10:19 AM
Decision Making/ Ali Fahad
53

54. Establishing Reporting Relationships:
Tall Versus Flat Organizations
• Tall Organizations
– Are more expensive
because of the number
of managers involved.
– Foster more
communication
problems because of
the number of people
through whom
information must pass.
• Flat Organizations
– Lead to higher levels of
employee morale and
productivity.
– Create more administrative
responsibility for the
relatively few managers.
– Create more supervisory
responsibility for managers
due to wider spans of
control.

55. 12/3/2013 10:19 AM
Decision Making/ Ali Fahad
55