Organizing

Organizing- Assigning and grouping tasks and responsibilities, and allocating resources

• Organizing: the deployment of organizational resources to achieve strategic goals

Departmentalization: basis for grouping positions into departments and

departments into the total organization

• Five approaches to departmentalization

•  Traditional:

  • Functional

  • Divisional

  • Matrix

• Relatively new:

  • Team

  • Virtual network

Vertical functional approach 

Functional structure: the grouping of activities by common function from the bottom to the top of the organization

• Positions are grouped into departments based on similar skills, expertise, work activities, and resource use

• Each function concerned with the org as a whole (e.g. Marketing dept. responsible for all sales and marketing for the whole org)

Advantages

• Efficient use of resources, economies of scale

• In depth specialization and development

• Top manager direction and control

Disadvantages

• Poor communication across functional departments

• Slow response to external changes lagging innovation

• Decisions concentrated at the top of the hierarchy, creating delay

Divisional Approach

• Divisional structure: departments are grouped together based on similar organizational

outputs (i.e., products/services, projects, programs etc.)

• Diverse departments (functions) are brought together to produce an output

• Geographic or customer-based divisions:

– Focuses company activities on local market conditions

– Competitive advantage: selling a product adapted to a given country

Advantages

• Fast response flexibility in an unstable environment

• Fosters concern for customer needs

• Excellent coordination across function departments

Disadvantages

• Duplication of resources across divisions

• Less technical depth and specialization 

• Poor coordination across divisions

Matrix Approach

• Matrix approach: combines both functional and divisional approaches simultaneously, in

the same part of the organization

• Improves coordination and information

• Dual lines of authority make the matrix unique

Two-boss employees: employees who report to two supervisors simultaneously and

must resolve conflicting demands from the matrix bosses

• Matrix boss: the product or functional boss who is responsible for one side of the

matrix

• Top leader: person who oversees both the product and functional chains of

command and is responsible for the entire matrix

Advantages

• More efficient use of resources than a single hierarchy

• Flexibility, adaptability to a changing environment

• Interdisciplinary cooperations, expertise available to all divisions

Disadvantages

• Frustration and confusion from a dual chain of command

• High conflict between two sides of the matrix

• Many meetings, more discussion than action

Team Approach

• Cross-functional teams: consist of

employees from various functional

departments who are responsible to

meet as a team and resolve mutual

problems

• Permanent teams: groups of employees

who are organized in a way similar to a

formal department

• Team-based structure: the entire

organization is made up of horizontal

teams that coordinate their work and

work directly with customers to

accomplish the organization’s goals

Advantages

• Reduced barriers among departments, increased compromise

• Shorter response time, quicker decisions

• Better morale, enthusiasm from employee involvement

Disadvantages

• Dual loyalties and conflict

• Time and resources spent on meetings

• Unplanned decentralization

Virtual Network Approach

• Outsourcing: farming out certain

activities, such as manufacturing or

credit processing

• Virtual network structure: the firm

subcontracts most of its major

functions to separate companies and

coordinates their activities from a

small organization at headquarters

Advantages- 

• Can draw on expertise worldwide

• Highly flexible and responsive

• Reduced overhead costs

Disadvantages

• Lack of control, weak boundaries

• Greater demands on managers

• Weaker employee loyalty

HRM system-

-Finding the right people- human resource planning, recruiting, selecting

-Managing talent- training and development, performance management

-Maintaining an effective workforce- rewards, benefits, termination

Finding the right people: Human resource planning

• Human resource planning: the forecasting of HR needs and the projected matching

of individuals with expected job vacancies

• Answers to big-picture questions help define the direction for the organization’s

HRM strategy

– What new technologies are emerging, and how will these affect the work system?

– How much is the volume of the business likely to change in the next five to ten years?

– What is the turnover rate, and how much turnover, if any, is avoidable?

Finding the right people: Recruiting

• Recruiting: activities or practices that define the characteristics of applicants to

whom selection procedures are ultimately applied

“Who” are we trying to hire? What are “the types of knowledge, skills, and abilities”

(KSAOs)-

KSAO- knowledge skills abilities and other practices we need?

KSAOs are the subset of individual differences that have intrapsycholigical origins and are relatively stable

Human capital- the subset of KSAOs that are relevant for achieving economic success

Human capital resources- subset of human capital that are accessible for a units purpose

Strategic human capital resources- subset of human capital resources that provide competitive advantages in markets 

• Job analysis: systematic process of gathering and interpreting information about the

essential duties, tasks, responsibilities, and context of a job

– Job description: summary of the tasks, duties, and responsibilities of a job

– Job specification: outline of characteristics needed to perform the job

• Internship: arrangement whereby an intern exchanges free or low-cost labor for the

opportunity to explore a career or gain valuable work experience in a particular field

Finding the right people: Selecting

• Selection: process employers use to assess applicant to determine the fit between

the job and applicant

– Most frequently used selection devices include the application form, interview, and

employment test

Application form: tool used to collect information about the applicant’s education,

previous job experience, and other background characteristics

Interviews are used in nearly every organizations in the selection

process

– Structured interview: set of standardized questions that are asked of every applicant so

comparisons can easily be made

– Behavioral questions: ask people to describe how they have performed a certain task or handled a specific problem

– Work sample: real example of work that a candidate has produced or a live simulation of the job

Finding the right people: Selecting (cont.)

Employment tests: tests that may include cognitive ability tests, physical ability

tests, personality inventories, and other assessments

– Cognitive ability tests measure an applicant’s reasoning, verbal, and mathematical abilities as a predictor of performance

– Personality tests assess such characteristics as openness to learning, agreeableness,

conscientiousness, creativity, and emotional stability

– Studies show that personality tests are better predictors of future career success than job

interviews

Managing talent: Training and Development

• Developing talent includes planned efforts by an organization to facilitate

employees’ learning of job-related skills and behaviors

– On-the-job training (OJT): an experienced employee shows a newcomer how to perform

job duties

– Corporate university: in-house training and education facility that offers broad-based

learning opportunities for employees

– Social learning: learning informally from others by through interactions or using social

media tools

Managing talent: Performance management

• Performance appraisal: observing and evaluating employee performance, recording

assessment, and providing feedback

• Two popular approaches:

– 360-degree feedback: process that uses multiple raters, including self-rating, as a way to

increase awareness of strengths and weaknesses and guide employee development

– Performance review ranking system: method in which managers evaluate direct reports

relative to one another and categorize each on a scale

Maintaining an effective workforce: Rewards and Benefits

• Compensation: all monetary payments and all goods or commodities used to

reward employees

• Wage and salary systems

– Job-based pay

– Skill-based, or competency-based, pay

– Pay-for-performance: incentive pay to tie some part of compensation to employee efforts and

performance

• Compensation equity maintains a sense of fairness within the pay structure and

fortifies employee morale (“equal pay for equal work”)

• Benefits required by law: Social Security, unemployment compensation, and

workers’ compensation

Maintaining an effective workforce: Termination

• Terminations are valuable in maintaining an effective workforce

– Poor performing employees can be dismissed

– Exit interviews can be used to learn about dissatisfaction and reason for departure