Chapter Ch -07 The Nature of Organizing, Entrepreneuring, and Reengineering

Management

A GLOBAL AND ENTREPRENEURIAL PERSPECTIVE by Weihrich, Cannice, and Koontz

Decision Making
Sajjad Ahmad Qadri Minhaj University

After studying this chapter, you should understand:

1. 2. 3. 4. 5. 6. 7. 8. 9. The purpose of an organization structure The meaning of "organizing" and "organization." The distinction between formal and informal organization. How organization structures and their levels are due to the limitations of the span of management. The exact number of people a manager can effectively supervise depends on a number of underlying variables and situations. The nature of entrepreneuring and intrapreneuring. The key aspects and limitations of reengineering. The logic of organizing and its relationship to other managerial functions. That organizing requires taking situations into account.
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Chap. 7. The Nature of Organizing, Entrepreneuring, and Reengineering

Organizational Roles
For an organizational role to exist and be meaningful, it must incorporate (1) verifiable objectives, which, are a major part of planning (2) a clear idea of the major duties or activities involved and (3) an understood area of discretion or authority so that the person filling the role knows what he or she can do to accomplish goals

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Organizing involves:
(1) the identification and classification of required activities, (2) the grouping of activities necessary to attain objectives, (3) the assignment of each grouping to a manager with the authority (delegation) necessary to supervise it, and (4) the provision for coordination horizontally (on the same or a similar organizational level) and vertically (for example, corporate headquarters, division, and department) in the organization structure
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Definition of Organization

Organization implies a formalized intentional structure of roles or positions

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Formal and Informal Organization

Formal organization pertains to the intentional structure of roles in a formally organized enterprise The informal organization is a network of interpersonal relationships that arise when people associate with each other

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What is a Department?
The department designates a distinct area, division, or branch of an organization over which a manager has authority for the performance of specified activities

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Organization with Narrow Spans

Chap. 7. The Nature of Organizing, Entrepreneuring, and Reengineering

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Organization with Wide Spans

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What is the Principle of the Span of Management?

The principle of the span of management states that there is a limit to the number of subordinates a manager can effectively supervise, but the exact number will depend on the impact of underlying factors

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What Determines an Effective Span of Management?

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Difference Between an Intrapreneur and an Entrepreneur

An intrapreneur is a person who focuses on innovation and creativity and who transforms a dream or an idea into a profitable venture by operating within the organizational environment The entrepreneur is a person who does similar things as the intrapreneur, but outside the organizational setting

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Definition of Reengineering

"...the fundamental rethinking and radical redesign of business processes to achieve dramatic improvements in critical contemporary measures of performance, such as cost, quality, service, and speed. The underlined words are considered key aspects of reengineering by Hammer and Champy

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Key Aspects of Reengineering

Fundamental rethinking of what the organization is doing and why. Radical redesign of the business processes [Note:Downsizing or "rightsizing" is not the primary purpose of reengineering, although in many cases it does result in a need for fewer people]

Reengineering calls for dramatic results The fourth key word in the reengineering definition is processes. The need for carefully analyzing and questioning business processes
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Management by Processes

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The Steps in the Organizing Process:

1. Establishing enterprise objectives 2. Formulating supporting objectives, policies, and plans 3. Identifying, analyzing, and classifying the activities necessary to accomplish these 4. Grouping these activities in light of the human and material resources available and the best way, under the circumstances, of using them 5. Delegating to the head of each group the authority necessary to perform the activities 6. Tying the groups together horizontally and vertically, through authority relationships and information flows
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Basic Questions for Effective Organizing

It is useful to analyze the managerial function of organizing by raising and answering the following questions: 1. What determines the span of management and hence the levels of organization? (answered in this chapter) 2. What determines the basic framework of departmentation, and what are the strengths and weaknesses of the basic forms? (answered in Chapter 8)
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Basic Questions for Effective Organizing cont.

3.What kinds of authority relationships exist in organizations? (answered in Chapter 9) 4.How should authority be dispersed throughout the organization structure, and what determines the extent of this dispersion? (answered in Chapter 9) 5.How should the manager make organization theory work in practice? (answered in Chapter 10)
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Defining the strategy

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The concept of strategy

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The concept of strategy

strategic goals strategic management strategic capability resourcebased strategy

distinctive capabilities

strategic plan

competitive advantage,

strategy

Strategic Intent

The concept of strategy is based on a number of associated concepts:

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Strategic intent
The strategic intent sequence has been defined by Miller and Dess (1996) as:

>> a broad vision of what the organization should be; >> the organizations mission; >> specific goals, which are operationalized as: >> strategic objectives
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Strategic plans
Strategic plans are formal expressions of how an organization intends to attain its strategic goals. Boxall and Purcell (2003) make the point that We should not make the mistake of equating the strategies of a firm with formal strategic plans It is better if we understand the strategies of firms as sets of strategic choices, some of which may stem from planning exercises and set piece debates in senior management, and some of which emerge in a stream of action.

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Strategy Formulation

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Approaches to strategy formulation Cont..

1. Classical 2. Evolutionary 3. Processual 4. Systemic

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strategy formulation as a rational process of deliberate calculation. The process of strategy formulation is seen as being separate from the process of implementation.

strategy formulation as an evolutionary process that is a product of market forces in which the most efficient and productive organizations win through.

strategy formulation as an incremental process that evolves through discussion and disagreement. It may be impossible to specify what the strategy is until after the event.

strategy is shaped by the social system in which it is embedded. Choices are constrained by the cultural and institutional interests of a broader society rather than the limitations of those attempting to formulate corporate strategy.

The reality of strategic management

The reality of strategic management is that managers attempt to behave strategically in conditions of uncertainty, change and turbulence, even chaos. The phenomenon of bounded rationality as described by Miller et al (1999) applies while people by their own lights are reasoned in their own behaviour, the reasoning behind their behaviour is influenced by human frailties and demands from both within and outside the organization.

Sajjad Ahmad Qadri Minhaj University, Lahore.

Sajjad Ahmad Qadri Minhaj University, Lahore.