Principles of Management - Lecture 16

continue this chapter is called chapter six organization little design and structure what's an organizational design all right design we started is at the very beginning about structure how you structure the business in this chapter we'll give you six key elements of organizational design next one we identify contingency factors if you remember I already spoke previous lecture about contingency factors like uncertainty like competition and other things so we're going to define sort identify contingency factors related to organizational structure then we're going to compare and contrast traditional and contemporary organizational designs and finally it's got some of the challenges of business today for this lecture I'll family cover only the first one maybe a little bit of the second piece it's a very long chapter so six elements of organizational design that's section number one and these elements are work specialization I'll be explaining each of these in detail work specialization means you teach cooking you teach bartending you teach management and somebody else is just - but specialization means that a we'll do a narrow title of work so it's a narrow type of work and we'll become very skilled and efficient applicants so specialization is based on the fundamental concept of division of labor in the division of labor yet some group of people who are administrators other people are accounting other tables are teachers people over here and other people second concept is and the second key is departmentalization everything is in departments and that's exactly how universities work but for any particular business your sales department you got a finance department accounting department get a production department okay so for each particular major task or major promotion you got a separate department so modern businesses are faced on specializations they are organized into departments okay and business is management is based on all thority there is someone who's boss and there's someone below the box and usually everybody has a boss except for the it was the CEO and even the CEO is not quickly irresponsible she has to answer the board of directors which is chosen from the owners for the shareholders so you have responsibilities everyone that works is usually responsible to somebody all right the next concept is span of control instead of control simply means how many employees work underneath so manager can have only three people working for him or could have 20 people some organizations are I listen to and some are decentralized centralization refers to the level but which decisions are made and the last pieces formalization is everything is everything I'm going to be discussing things in this particular lecture so number one work specialization how narrow is the work of every person back in the old days it tell her just separate from the it's about doing playing with those separate sentences and put it on the next chair so I can sit okay you had enough right right yeah we'll just close it move to the next chair if you like you can stay but they just play like that right you got company all right so specialization is you don't want people's work to be to draw like doing 10 or 20 different things because if you're doing 20 different things you're doing a little bit of production a little bit of accounting a little bit of finance a little bit of marketing a little bit of advertising if you do a little bit of a lot of things you can't learn your job well what you need is relatively narrow specialty and the narrow special is County focus go accounting you're staying in accounting now whenever accounting department you may have 15 people and accounting department do this is going to easily 25 people you will have wanted to be specializing on payroll and payroll is the responsibility to pay salaries to employees so one person is doing only salaries and nothing else there will be another person doing only purchasing so as the university is buying books isn't buying computers as a dime this that is mine that there's one person who is responsible only for the purchasing but third person in accounting will be responsible for all tables except salaries someone will be doing payments for electricity and it's work internet paying for this and water Hingham for whatever the university is making Eames you may actually have one person in the purchasing who will be responsible for the purchase of equipment and another person will be recording it too you have two people recording what people recording the equipment part and one people recording the payment part okay so in an accounting department provide plenty people in each of them specializing in one very very narrow field okay that's how the narrow specialization or it would be a broad specialization so as you narrow more and more people get more and more and more efficient they can do more and more than the example of the widget ooh division of labor back in the old days where you can get one person to make only 20 pins or needles square pins but if you get people you can get that say 20 thousand needles today each one doing one person doing Cutta Cutta Cutta another doing twisting twisting twisting your seam talk with Charlie Chaplin movie where you have the Assembly of them and you have 20 people it's the only thing the guy who's doing is this with his hands it's got the two wrenches he tightens and then she goes to the next one the Titans go that's the type of specialization it's extremely narrow specialization and the more you specialized the more productivity increase so here we got work specialization more specialization here this is my specialization this is low and he have productivity low productivity high productivity so low specialization is usually so with low productivity as specialization increases so does productivity but specialization increases productivity back to a certain point from a certain point one you can even you can even increase further specialization productivity does not necessarily please so it's important to understand that specialization is beneficial but it's beneficial only to a certain point beyond a certain point it's not any more efficient beyond that point you get what's called this economy is from specialization so impact from human physical when a person does the very narrow job they are not very happy and when they're not very happy with it they usually get distracted and what they get tired they just don't like the job a lot people like to have some variety so sometimes favorite subject but every semester they like to change one subject a little bit because the job is getting too boring and high specialization makes anyone's job or okay if you're a cook you can specialize getting Chinese but sometimes it's nice to cook some other which otherwise you get bored so that's one specialization modern business is based on specialization and that's number one number two is departmentalization everything in modern business in modern Recology organizations including government is based in two departments these are a particular unit inside the organization which has similar responsibilities this is a little bit more complicated five different ways that you can divide Department you can divide department by function and my function means that you can have a separate bias depart you're going to have a separate accounting department you can have separate production department some magical manufacturing department going to have separate sales separate purchasing so you have the division based on the different functions so based on the mark perform again engineering accounting yes you will a separate IP Human Resources so that's the function sometimes it is based on when it's based on product you focus a manager responsible for a particular product first Apple you have an apple you have certain departmentalization based on god you're responsible for ipads so that students can play with them during that time you're responsible for iphone so that other students sitting right on the back play with them during plans right someone else is going to be responsible for the MacBook which is going to be extremely lightweight the MacBook Air is supposedly the lightest and thinnest the skinniest computer laptop on the market until recently which provides little way for the businessperson cooking caring for eight hours of this shoulder you can carry around and it's not very tiresome okay so you're going to have a separate one for the iMac which is the computer you will probably also have a separate one Philip monitor for the part of sound who specializes only Apple more they like to think that they monitors are the best in the world with the highest possible at least back in the old days there were also much bigger expense but if you get graphics design or picture you have to use Apple because Apple was girl that same was also the death process apple also add and produce its processor the chip inside running which they hide again specialized it was good for graphics design for movies and stuff like that but over time in tail part to them in a design here is not going to oh not gonna make it Hector the point is management is based entirely on product they give example about 1980 our men's footwear meaning men's running shoes and shoes in general women's footwear means in women's shoes they have a parent like gloves running shirts and stuff like that so you know this would work on a particular product in making responsible for here in the university the product is education based on of let's say specialization so we have inside the department box or the faculty for support during textbooks if another faculty you got another person focusing order in textbook we got here one person ninety you got another personality but in general we focus on hospitality and tourism over there they focus on international studies so the specialization here in management on the type of course of the type of education essentially educational product educational product being engineering or hospitality completely different so universities are based on the type of the education of the club sometimes the educational product the university will be an actual as degree in a master's degree when I was studying at the Ohio State University you got any undergraduate school and I was in the graduate school in graduate school specializes in masters and doctorates and undergraduate school specializes in bachelors sometimes it will be based on customers so the whole departments will be different customers and see these are good group of employees based on customers problems in a sense graduate and undergraduate division is based on the product but in another sense graduate and undergraduate is based on a customer and the graduates have completely different all the other things from graduates graduates are a lot fewer they're much more narrow specialized and so on so sometimes you have a very high customer specialization you with a whole new Sacramento retail separate sales to the government now you can have a mixed structure which I'll explain now here when I was working at that sterling color study Commerce was a software company of about three thousand and three thousand people there was about accounting department which will squirrel 100 people 100 people in the company apart I was a sales analyst and the sales department had 200 feet you had the software division which was the engineering part they wrote the software were another 200 yet separately a tiny tiny little marketing so you got department based on function now inside the sales department we are designed by customers so sales department of two hundred people you will have what's called big corporate accounts you're going to have a certain number of people at thirty sales people focused on big corporate accounts one sales person will be servicing only five corporation another sales person will be serviced in Poland by corporations another salesperson will be servicing only five so you may have the whole organization being the whole corporation design by action but inside the sales department you are separated by the customer so the sales department will have separate one only for government customs a small Department of 30 salespeople working with to sell the software there was another one called small business sales and small business sales will have 60 people in it who will dispatch sending only to small businesses and it was another Department called mid-sized businesses so I'm going to have a new part of the form big enterprises a separate sales sales department within the sales for little size for small sized forgotten so you can have a mixture within an organization again it's a big dream next one you're going to be based on Geographic and in our corporation within a sublevel if you have let's say 50 people working for small businesses so 50 people working selling to small businesses they be divided geographically one person covering the state of Ohio another person covering state of Michigan another person covering State Building three or four people covering the state of California so you will have further structure where you have a huge sales department which is divided into four sub departments and then put a small one you will have a geographic division where you got resisting we've covered this thing to cover this thing together distant and you're going to have California for people they further subdivide California we call these territories that's how they're known in the sales department they're known as everything okay for example if your health hotel here it'd have three people doing marketing and advertising foreign countries you will have one person focusing on advertising in North America which will be United States in Canada you're going to have a separate person focusing on advertising in Europe getting a third one deputizing in Asia so that's going to be geographic part territorial division and the final one is based on process and groups when please based on the work flow or customer flow that's how our design may government services when I was when I was a last week getting my work permit here in work in town we went with the administrator and they say go here and we sit now we fill out the form we sign the form then they say go to that desk everything's finished and go with the ready paper the employees this is that they killed out another form maybe a few hundred things they say everything's great now we go to Big Boss for approval we go to big BOTS for approval big boss is looking at all the documents but says everything looks good they sign the big boss put a stamp on it and then big boss says now go to get your work permit issue it's actually a document so local pork place where all they do is say okay everything sign everything's okay we're going to be bossed approval we need just to issue it's a nice tiny little booklets and it's a bonafide lips come and get back over there five minutes the book is ready you put it in your pocket so that's the simple flow process another type of a flow process this way go and try to register a car I don't know how it's here but I hit it two times in the Middle East I've done it too many in Europe they said first go here fill out the document then go there we need to see that you have pictures that go here we need a car inspection it look here we need a license plate then go there we need to attach the last system then go there for the inspector to see the damages okay and when the inspector signs they give you car registration and you got your car registration and that's your legal documents that you all that particular carpet this is kind of chancing and without engine cereal so this is based on closest not necessarily only government it could be some other businesses could be also divided in based on process but that's yeah here's another one that I'm thinking that is based on processes hospitals actually had to go to the local hospital to get a little vaccination over here you see I got a little vaccine so they say go go to the entrance and let's say okay they look at the hospital see I'm registered the hospital show us idea show the mighty equipment and computer they say oh you need a rabies vaccination cocaine and the mue rats in the computer gives my document to the nurse the nurse says okay she goes to get the rain if vaccine better they go set it to the payments Department to the cash register and say okay way to the room when the room is empty you go in there they give you rabies vaccine okay and then the same go to the cash register pain when you're they go home so everything is based on the process hospitals modern hospitals today are very usually focused on different processes especially in the emergency when someone comes injured you need very quick so you gotta have a very well we build houses and going so this is the departmentalization and it could be now let me again we in the hospital which is based on process you still have a separate accounting department five ten twenty three working in you still want to have a separate department let's say procuring the medicine buying the different types of pills from the different pharmaceutical companies so even within the hospital you would have a separate department which is like I Department usually everyone and the hospital's got a bit here in Iraq so I have a computer and I got a hospital 300 people we are after 300 computers you're going to have a little I require many form they define people responsible for everybody else's computer so you can have a structure on the one hand based on the process of serving the patient even at a separate structure which is based on accounting on i.t yeah a hospital or a human resources department thinking - okay salaries and hiring injured qualifications and all the other things so you will have oftentimes a mixture these rhythms of one level you will probably have only one but in the lower level you have a different type of departmentalization because you have different levels sales department facebook customer and there is something within job for its own that was if I remember number two right number one is about specialization number two is departmentalization to the different populations number three is types of authority and authority basically means that you have president responsive to the for calling chief executive officer known in English as CEO CEO is the big boss CEO the big boss they are president now you will also have vice-president here you can also have executive vice Allah now you may get one little thing the chief executive officer where one little thing called a secretary now secretary today is considered really that okay so they don't like to use the word secretary they call it a ministry system the minister to the system sounds a lot nicer and usually shortened it to be they just call it public admin so aramid is usually used instead of secretary in modern physics now a lot of times the athlete could be actually there okay doesn't have to be necessarily both big was smart well we're going to have two secretaries right for different things three possibilities so you're gonna have a 100 Authority now we have the president of the we see what happens vice president vice president vice president vice president vice president so for example you're going to have president of you vice president for the tronex okay fun time right so you may have different vice present you may have installed vice president accounting you have vice president finance okay you're a vice president manufacture so each major department will have its own vice president okay and then here to use the word region and region in this particular case region 1 region 2 region 3 we will mean that the departmentalization is based on geography so you will have region 1 mainly east the Eastcote region 2 will be west coast region 3 will be southern USA ok so you will have different regions and you can see the vice president will be divided we call nowadays regional regional and then within the region you graph districts districts to do 15 so this is a an example of what's called chain of command chain of command essentially means who reports to whom the key word they use in businesses to report to to report to somebody means who the key is your boss that you are his we call it supportive so who you recording to self-reported the Jim King the king the SEC reporting to Jim King me cheating is my boss so chain of command basically tells you who reports to from one of the key ideas good management ation becoming their wizard that one person is usually responsible only to one neighbor um you're not responsible to two managers at the same time you have only one boss that's a fundamental concept in management which I'll be discussing in more days is not is getting not so true I'll be discussing this next time so you got both your diverses staff work already and we need to you need to make difference between line and staff white board it is in general authority is the power to make decisions power to influence decisions that's for authority basically means that what you can tell other people's what to do okay what are the best means when you're understanding you're the boss okay and the right that the Box usually has so you need to understand between five and staff why is it means the main business they call it the main line business and it's usually associated either with the customer or is associated with the main product staff means supporting supporting the main business supporting the line staff in this particular and usually is accounting so in all businesses which are not accountable businesses for example materialistic the accounting department is staff in a hotel yet County Department is staff in the hospital the accounting department is staff all right so I appeal department is usually staff ID Department the university is staff it's all in helping other people do their work so staff are the local narrowly specializing or some little County could be also purchasing the part this University will surely have a purchasing department which purchases for everybody keyboard for all students I has right so the favor by 1000 1000 and me they were just a sensor but it is going to be purchasing department the purchasing department will negotiate it's called a log price or wholesale price so that university will buy a will or me cheaper is a gonna buy cattle and instead of the regular price of $40 Apple sales would we'll say okay we'll agree on hit me now so we're going to get a wholesale discount so all of this is staff and wine will make us line moving profess we are doing the main work in the hospital the line will be the doctor and many of the nurses may be the nurse your actual work like the nurse is going the injection okay that will be the main line of business but I have to go through the reception which is staff ACTA both of the cash register which is postal stamp you also have another Department which is like a pharmacy really get them different whatever so again you know here's executive there right there and as I explained a little bit ago that assistant to the executive director which is usually go minister assist Tennessee Director of Human Resources the other director of operations the other director of purchasing you can add their members and then in operations in a hospital of we'll be doctors and you're going to have one pencil type of operations will be channeled deliver okay another of another operation relief surgeries another one will be heart problems another one movie one problem so doctors will specialize according to their field and you're going to have different departments within the hospital and they have again within the unit manager you had purchasing of your own you make their own operations you may have their own Human Resources and up these that the line shows you who you are responsible to who you are reporting and it shows you a lot of responsibilities see what else we have here that'd be more and I just explained a little bit ago the concept of unity of command unity of command is a smattering which each employee reports to adhere the world reports to meaning is subordinate to reports to only one manager in other words everyone has only one boss and you have two bosses because if you have two bosses one boss was from your computer this a B and C there are one says hope you got to do EEG and then anyone actually do this or shouldn't do that should I make this was happy or surely made that was okay so usually there are lots of conflicts associated with in I have two or three boxes that one has typically avoided yet only one boss all right it's important to understand when we say boss it means basically authority and power when you save us women or foreign power is very very different explaining them so Authority is the right you are actually the Box can actually can tell your subordinates what to do it is a right and it's based on all four in this figure or it's the position in the organization so for example we got a department chair and the barber chair is authoritative all professors inside the department because the department chair is the boss now power is something very different it means individual capacity to influence decision so someone may have a very low position but it could be regarded influential it could influence sometimes someone and they give an example in it someone's been given example has 20 years of experience in particular operation and that particular person is extremely bad and he can easy to go to the big boss to the chief exec there hey boss we gotta do this and this we're trying to do this this is no good because whoever the problems are okay so someone may have a very very global position and yet be extremely influential usually their influence comes and that's coming a little later because there good experts sometimes they may be influential because it's the boss's daughter okay you may have a parallel position when she is influential right she can talk to big box because she goes tonight oh that's just her daddy okay so they go home tonight the genetic goodness of that water so she can influence decisions by being a good friend to the big boss or being a relative to the big boss being the daughter or the nice-looking boss okay so someone they have that's very important to understand they're very very global position and yet be very influential so influential are usually people with very very very long experience to become someone who's 4 to 20 or 25 years they know everything about the business they're extremely influential a lot of times a lot of the big boxes they just go to that person we call it experience they go in because of his experience to consult with him all right sometimes a lot of power of the admin assistant she just the secretary maybe only 20 all sacred okay when little education and no practical Authority yet she could be very powerful because she can send particular documents to the boss she'll decide what to print out in the boss you see she will decide when you want to go and see the rest other boss is busy you cannot go and sing come tomorrow okay so she can effectively block the access to the box for she can block the information to the boss and that means a lot of power so the big difference between authorities and let's see what else we got all right there is chief executive officer this is the little crack over here this piece here is demo strength is called the core of poor the power this is where the power is it is where the decisions are one thing is sure in your higher octave level so this is the low level this you can think of the middle element for this building at the top level neighborhood top level management is close to the of power these are very powerful people then the male that level management several dakar from the pair very far you can have someone at the very low level who could be close to the core of power and sound crews far away so usually the higher you are the closer you will be to the para power but they may be people who have a very global position and are still very close to them for example when I was working at the software company I was only in technical and listed systems analyst by providing all the recording for the vice president of sales so vice president of sales know that I'm the recording man is going to call me or send a message or send his sacrifice a can give me district and hibbe-dah and I'll be going through the big boss by off how are you working they erected for the big boss so this has do this able to do that and I can usually tell the most impulsive see the sales of this product of going well between these groups in that they were the analysis of a PEZ so I relatively close to the vice-president of sales okay and if I'm doing a great job for the vice-president of sales which is the big boss my little boss doesn't really matter if he likes me or does one because I already have a good connection with the big boss I'm working most of the time for the big boss and they say oh yeah he's doing big boss is recording so my managers asked me just now we want you did for the big boss and say well if they disappoint his report this report this report separately I didn't report for the regional manager reported this is this a list so he doesn't bother me much because I just said okay I'm doing business is this every Monday we have when we have a meeting of all the meetings you just asked me tell me which projects you're working on tell me what you're working on and I don't I work on this this this this this this is my list of current projects and then he says it doesn't give me any more new things it has asked me anything I know what I'm supposed to do I know what I'm supposed to do it so I had much communication and I tell what I'm going but I have very many date same thing here when I'm teaching these courses I have very little communication with my boss because there's not much to discuss look what I came in almost all going to be teaching accounting there kitchenette all right some teaching accounting teach you may as well work rules my schedule and I know your schedule is management group one on Tuesday and Wednesday this time at this time this classroom in this classroom I ask is there a textbook already or do I choose the textbook and they say yes you have a textbook this is your textbook I can't choose it it's already chosen it's already poured okay it's a medal so I said okay I'll take this technical and then I ask you what about accounting I says oh we don't have accounting textbook you choose textbook order so basically we arranged the course and for them to last for weeks I have very many communication the coracles course goes on and everything's fine now they're asking me the only thing they've asked me is please prepare the midterm and submit it up and I submit but that's pretty much so this is a example of power 4 and some people may be very low level it still goes to the power and that one or two more are sources of power with this you know maybe more control got two men next time we continue remind me from this is slide number 12 okay slide number 12 the containers

Channel: Krassimir Petrov

Views: 22,534

Rating: 4.8814816 out of 5

Keywords:

Id: najTXyFeDKA

Length: 48min 50sec (2930 seconds)

Published: Tue Jul 02 2013