Principles of Management

Organizing & Organizational Design

Case study: Sony organizes for success

Sony Corporation designs, manufactures and sells electronic equipment to both consumers and companies Sony also develops, manufactures and sells other entertainment products eg film music and videogame hardware and software Sony also has a financial services division which accounts for a majority of its income With the broad range of products and services, Sonys executives have faced some difficulties in determining the optimal organizational structure Sir Howard Stringer, CEO, has implemented several organizational changes In the past Sony relied on its electronics division to produce innovative products like the Sony Walkman. Recently, however, Sony has had problems in producing innovative products Stringer has vowed to restructure the electronics division to allow more communication which should lead to more innovations and more new products More communication will also improve coordination between different units. At one point, for example, three different divisions within Sony were developing their own digital music players Sony has also restructured its music business: reduced a large number of support positions in sales, manufacturing and distribution. Many employees in these positions were performing similar activities Sony will search for new ways to combine its music, film and electronics businesses with its videogame business. When Sony first released its Playstation Portable in the US, the first million units were packaged with copies of Spider Man 2

Mr. Stringer, in meeting your organizing challenges at Sony, you should

Design organizing activities to be more closely related to controlling activities than planning activities
1. 2.

Yes No

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Concentrate more on clearly outlining an organization chart and less on how characteristics of people will affect the success of the chart
1. 2.

Yes No

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Design an organization chart to reflect authority, responsibility and informal communication patterns
1. 2.

Yes No

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Know subordinates well because their makeup should influence the type of organization to be established
1. 2.

Yes No

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1

0%
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Create more and more specialization within jobs in order to make jobs more interesting and thereby make workers more productive
1. 2.

Yes No

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1

0%
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Make sure that managers at lower levels of the organization have more individuals to supervise than those at upper levels of the organization
1. 2.

Yes No

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0%
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Decide to manage more organization members if the members are performing complex jobs than if performing simple jobs
1. 2.

Yes No

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0%
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Increase the height of an organization chart to help managers manage people performing jobs of high complexity
1. 2.

Yes No

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0%
2

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Emphasize organizing as a means of putting controls into action

Yes No

1. 2.

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1

0%
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Commonly establish situations in which organizations have more than one boss
1. 2.

Yes No

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Ensure that authority is properly scaled within the organization chart

Yes No

1. 2.

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0%
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Establish division of labour to increase worker efficiency and worker interest levels in jobs
1. 2.

Yes No

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Importance of organizing

Primary mechanism for activating plans Creates and maintains relationships between all organizational resources

Indicates which resources are to be used for specified activities When, where and how they are to be used

Helps minimize costly weaknesses

Duplication of effort Idle organizational resources

The organizing process

Step 1 Reflect on plans and objectives

Step 5 Evaluate results of organizing strategy

Step 2 Establish major tasks

Step 4 Allocate resources and directives for subtasks

Step 3 Divide major tasks into subtasks

Classical organizing theory

Webers bureaucratic model Division of labour structure

Webers bureaucratic model

Bureaucracy: the management system that includes 3 primary components

Detailed procedures and rules Clearly outlined organizational hierarchy Impersonal relationships between organization members

Bureaucracy not an end but a means to goal attainment

Division of labour

Assignment of various portions of a particular task among a number of organization members

production divided into number of steps Responsibility for completing various steps assigned to specific individuals Individuals specialize in doing part of a task rather than the entire task

Importance of coordination

Structure

Defined relationship among resources of the management system Formal structure:

relationship among organizational resources as outlined by management Represented by the organizational chart Patterns of relationships that develop because of the informal activities of organization members Evolves naturally System of network of interpersonal relationships that exists within, but is not usually identical to, the formal structure

Informal structure:

Vertical dimensioning

The extent to which an organization uses vertical levels to separate job responsibilities Scalar relationships

Chain of command Authority scaled down according to position on the organization chart

Unity of command

An individual should have only one boss

Span of management

The number of individuals a manager supervises Also called

Span of control Span of authority Span of supervision Span of responsibility

Factors that influence span of management

Factors Similarity of functions Geographic continuity Complexity of functions Coordination Planning Factor has tendency to increase span when Subordinates have similar functions Subordinates are physically close Subordinated have simple tasks Work of subordinates needs little coordination Manager spends little time planning Factor has tendency to decrease span when Subordinates have different functions Subordinates are physically distant Subordinates have complex tasks Work of subordinates needs much coordination Manager spends much time planning

Height of organization chart

The greater the height of the organization chart, the smaller the span of management

Tall charts

The lower the height of the chart, the greater the span of management

Flat charts

Horizontal dimensioning

Extent to which firms use lateral subdivisions or specialties within an organization To build organizations horizontally, departments are used Departmentalization

By function By product or service By geography By matrix

Departments based on function

CEO

VICE PRESIDENT MARKETING

VICE PRESIDENT RESEARCH & DEVELOPMENT

VICE PRESIDENT FINANCE

Departments based on product or service

CEO

Vice President Skin care

Vice President Hair care

Vice President Hygiene Products

Departments based on geography

CEO

Vice President Asia Pacific

Vice President The Americas

Vice President Middle East, Europe & North AFrica

Departments by matrix
CEO

Vice President Marketing

Product Manager Skin care

Vice President R&D

Vice President Finance

Marketing support staff

R&D support staff

Finance support staff

Product Manager Hair care Product Manager Hygiene products

Marketing support staff

R&D support staff

Finance support staff

Marketing support staff

R&D support staff

Finance support staff

Case study: Sony organizes for success

Sony Corporation designs, manufactures and sells electronic equipment to both consumers and companies Sony also develops, manufactures and sells other entertainment products eg film music and videogame hardware and software Sony also has a financial services division which accounts for a majority of its income With the broad range of products and services, Sonys executives have faced some difficulties in determining the optimal organizational structure Sir Howard Stringer, CEO, has implemented several organizational changes In the past Sony relied on its electronics division to produce innovative products like the Sony Walkman. Recently, however, Sony has had problems in producing innovative products Stringer has vowed to restructure the electronics division to allow more communication which should lead to more innovations and more new products More communication will also improve coordination between different units. At one point, for example, three different divisions within Sony were developing their own digital music players Sony has also restructured its music business: reduced a large number of support positions in sales, manufacturing and distribution. Many employees in these positions were performing similar activities Sony will search for new ways to combine its music, film and electronics businesses with its videogame business. When Sony first released its Playstation Portable in the US, the first million units were packaged with copies of Spider Man 2

Mr. Stringer, in meeting your organizing challenges at Sony, you should

Design organizing activities to be more closely related to controlling activities than planning activities
1. 2.

Yes No

0%
1

0%
2

15
Countdown

Concentrate more on clearly outlining an organization chart and less on how characteristics of people will affect the success of the chart
1. 2.

Yes No

0%
1

0%
2

15
Countdown

Design an organization chart to reflect authority, responsibility and informal communication patterns
1. 2.

Yes No

0%
1

0%
2

15
Countdown

Know subordinates well because their makeup should influence the type of organization to be established
1. 2.

Yes No

0%
1

0%
2

15
Countdown

Create more and more specialization within jobs in order to make jobs more interesting and thereby make workers more productive
1. 2.

Yes No

0%
1

0%
2

15
Countdown

Make sure that managers at lower levels of the organization have more individuals to supervise than those at upper levels of the organization
1. 2.

Yes No

0%
1

0%
2

15
Countdown

Decide to manage more organization members if the members are performing complex jobs than if performing simple jobs
1. 2.

Yes No

0%
1

0%
2

15
Countdown

Increase the height of an organization chart to help managers manage people performing jobs of high complexity
1. 2.

Yes No

0%
1

0%
2

15
Countdown

Emphasize organizing as a means of putting controls into action

Yes No

1. 2.

0%
1

0%
2

15
Countdown

Commonly establish situations in which organizations have more than one boss
1. 2.

Yes No

0%
1

0%
2

15
Countdown

Ensure that authority is properly scaled within the organization chart

Yes No

1. 2.

0%
1

0%
2

15
Countdown

Establish division of labour to increase worker efficiency and worker interest levels in jobs
1. 2.

Yes No

0%
1

0%
2

15
Countdown