Principles

of
Managemen
t
B B A - 1 , B S ( P SY ) - 4
2 JUNE 2021

WEEK 12
Dr. Imran Asghar Warraich
Designing Adaptive
Organizations
CHAPTER 9

2
 What are Your Leadership
Beliefs?
Personal beliefs about the role of leadership impact a new manager
A manager’s work is influenced by how the organization is organized

Organizational systems should be compatible with leadership beliefs

Good managers understand and learn to work within a variety of structural
configurations

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Organizing
 Organizing follows from strategy
 Strategy dictates what you do
 Organization dictates how you do it

 Organizing is the deployment of organizational resources to

achieve strategic goals

4
Organizing The Vertical Structure
Organization Structure is:
1) The set of formal tasks assigned to individuals and departments
2) Formal reporting relationships, including lines of authority,
decision responsibility, number of levels and span of control
3) The design of systems to ensure effective coordination of
employees across departments

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Organizing Concepts
 Org. Chart – the visual representation of an org’s structure
 Work Specialization – the division tasks into individual jobs
called division of labor
 Chain of Command – a line of authority that links individuals
and direct reports

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 Authority, Responsibility, and
Delegation
The chain of command – unbroken line of authority that links all
individuals in the organization and specifies who reports to whom
Authority is the formal and legitimate right to make decisions and issues
orders
 Authority is vested in organizational positions, not people
 Authority is accepted by subordinates
 Authority flows down the vertical hierarchy
Responsibility is the duty to perform the task or activity assigned
Delegation is the process managers use to transfer authority and
responsibility to others
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Line and Staff Departments
 Line departments perform the tasks that reflect the
organization’s primary goals
 They work directly with customers/products
 Internet company, developing & selling online offers etc.

 Staff departments are those departments that provide

specialized skills in support of line departments
 Legal, Human Resources, Marketing

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Line Authority
 Means that people in management positions have formal
authority to direct and control immediate subordinates.
 Supervisor  Associate

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Staff Authority
Staff authority is narrower and includes the right to advise, recommend, and counsel
in the staff specialists’ area of expertise.

 A situation where a Manager has the right to give orders to a

Person who does not work in his/her own Section
 Example. Finance dept. advise line dept. which Acct. forms need to be used for purchasing and
payroll.
 IT Dept & HR Dept.

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Organizing Chart for a Water
Bottling Plant

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Span of Management
The number of employees reporting to a supervisor is span of
management / control

A Tall Structure
 Has an overall narrow span and more hierarchical levels

A Flat structure
 Has a wide span, is horizontally dispersed, and has fewer hierarchal levels.

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Reorganization to Increase Span
of Management

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Centralization and
Decentralization
Decentralization means
decision authority is
pushed downward to lower
Centralization means that organizational levels
decision authority
is located near the
top of the organization

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Centralization and
Decentralization Factors
 Change and uncertainty are usually associated with decentralization
 The amount of centralization or decentralization should fit the firm’s
strategy
 During crisis or risk of company failure, authority may be centralized

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Departmentalization
 In which individuals are grouped into departments & depts. into total organization.
 Choices regarding chain of command
 Five structural design approaches
 Three traditional approaches:
 Functional
 Divisional
 Matrix

 Innovative approaches:
 Teams
 Virtual Networks
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Approaches to Structural Design

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Approaches to Structural Design

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Vertical Functional Approach
 Grouping into departments based on skills, expertise, work activities
and resource use
 Departmentalized by organizational resources
 Accounting
 Human resources
 Engineering
 Manufacturing

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Divisional Approach
 Departments are grouped based on outputs
 Product structure, program structure, self-contained unit structure

 Many large corporations have multiple divisions for different

business lines
 Organizations may assign division responsibility by geographic
region or customer group

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Functional Vs. Divisional
Approach

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Geographic-Based Global
Organization Structure

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Matrix Approach
 Combines aspects of both functional and divisional structures
simultaneously
 Improves coordination and information sharing
 A matrix organization structure is usually defined as one where there are
multiple reporting lines – that is, people have more than one formal boss.
 A key challenge is the dual lines of authority
 Employees report to two supervisors

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Dual-Authority Structure in a
Matrix Organization

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Team Approach
 Teamwork is a growing trend

 Teams allow organizations to delegate authority

 Cross-functional, permanent teams

 Become flexible and competitive in global environment

 Organizations may use cross-functional and/or permanent team

strategies

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The Virtual Network Approach
 Extending the boundaries of collaboration beyond the organization
 Subcontracting functions to other/separate companies
 Coordinate their activities from headquarter

 Interconnected groups of companies

 Partnerships and Collaborations

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Network Approach to
Departmentalization

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The Need for Coordination
Organizations grow and evolve

Organizations need systems to process information and enable

communication

Coordination is the quality of collaboration across departments

Coordination is required, regardless of the structure

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Evolution of Organization
Structures

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Task Forces, Teams, and Project
Management
Project Managers are
responsible for
coordinating
the activities of Task Force
several departments on A temporary team or
a full-time basis for committee formed to
the completion solve a specific
of a specific project short-term
OR problem
A person who is assigned to lead the
team, responsible for achieving the
project objectives
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Examples of Project Manager
Relationships

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Examples of Project Manager
Relationships

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Reengineering
 Reengineering or business process reengineering
 Radical redesign of business processes to achieve dramatic
improvements
 Cost
 Quality
 Service
 Speed

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Reengineering at Michigan
Casting Center

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