MODULE 6

• The most common reason for organizational failure is POOR MANAGEMENT
• A good system of management is the key to success and profitability
• The key to a good management system is an ORGANIZED MANAGEMENT STRUCTURE
• What needs to be done?

  REORGANIZE
• Failure to adapt the organization structure, policies, and procedures to the growth in size and complexity of the enterprise leads to stagnation or failure
• Effects of the absence of coordination within an enterprise

  • Delayed Raw Material Orders
  • Idle personnel
  • Idle Machines
  • Shortage of output
  • Excess of inventory
  • Grumbling of personnel
  • Top Management Problems
  • Financial difficulty
• Main types of management structure

  • Simple Management Structure
  • Divisional & Matrix Mgt. Structure
  • Professional Bureaucracy & adhocracy
• Factors that facilitate the coordination and control within a company

  • Organization's classification or type
  • Size
  • Objectives
  • Strategies
  • Environmental factors (both external & internal)
  • Technology
  • Culture
  • Measure of effectiveness
• Delegation


  Entrusting others with responsibility and authority in work, creating accountability for results
• Guidelines for effective delegation

  1. Be clear in the objectives of the task

  2. Determine and Monitor what each worker can most effectively accomplish

  3. Determine if the person has the appropriate resources

  4. Be prepared to live with less than perfect results
• The process of delegation

  1. Assignment of Duties to Subordinates

  2. Transfer/Granting of Authority

  3. Acceptance of Assignment

  4. Creating Responsibility & Accountability
• Authority


  Represents the chain of command. This determines "Who is in-charge of making decisions"
• Responsibility


  Determines "who is responsible for whom" and "who is responsible to whom". It must be FIXED and CLEAR.
• Accountability


  The degree of control within an organization help determine the levels of which higher authorities, as well as subordinates, in an organization assume responsibility and authority.
• Drivers of effective management

  • Available Personnel
  • Span of Control
  • Leadership Potential in Subordinates
• Coordination


  Unification, integration, & synchronization of the efforts of group members to provide unity of action in the pursuit of common goals
• Facilitation


  The process of designing and running a successful, productive meeting
• Line Organization Structure

  • General Managers
  • Superintendent
  • Foreman Dept A
  • Foreman Dept B
  • Foreman Dept C
  • Workers
• Functional (Pure) Organization

  • Clerks with authority over all three worker types
• Line and Functional Staff Organization


  • Managerial roles prioritizing executive training and responsibilities
  • Staff roles furthering specialized knowledge
• Committees


  Formed for the performance of special duties in the company. They may either be permanent (standing) or may be organized to serve a temporary function only (ad hoc).
• Basic principles of committee organization

  • The organization of the committee should grow out of a need that is recognized by representative of a department and the personnel affected
  • The members of a committee should be representative of the function and the personnel concerned and these members should represent variations in opinion among personnel
  • Duties, authorities, and responsibilities must be clearly defined
  • The organization and operation of a committee should be a cooperative development
• Weaknesses of committees

  • Slow
  • Tends to hang on after its usefulness is over
  • Wastes time
• Right to final authority


  The president or chief executive officer may disagree with the majority judgment of the group and exercise their right to final authority
• Alternatives for handling disagreements in organizations

  • Exercise the right of final authority and reverse the majority recommendation
  • Carry the issue at hand to higher authority for further recommendation
• Utilization of these alternatives should be necessary only at rare occasions. Do not use frequently the right to final authority for it will lead to "one-person company".
• If such reversals prove to be always necessary, you don't have the right quality of counsel.
• Change members of the committee and put more competent personnel
• Harold S. Geneen: 'Every company has two organizational structures: The formal one is written on the charts; the other is the everyday relationship of the men and women in the organization.'
• Factors in Management Structure

  Environment

  Technology

  Culture

  Measure of Effectiveness
• Lines of Authority: - represents the chain of command. This determines “Who is in-charge of making decisions”
• Lines of Responsibility: - determines “who is responsible for whom” and “who is responsible to whom”. It must be FIXED and CLEAR.
• Centralized structure means decision-making power is concentrated at the top level while decentralized structure means decision-making power is delegated downward.
• Types of Organizational Structure

  Line Organization Structure

  Line & Staff Organization

  Functional (Pure) Organization

  Line and Functional Staff Organization