CHAPTER 11
Basic Elements of Organizing
The second basic management function, as introduced in Chapter 1, is the organizing process. This part is
devoted to in-depth coverage of the various issues and concepts most relevant to organizing.
As listed below, this Part has four chapters. Chapter 11 introduces the basic elements of organizing.
Chapter 12 discusses organization design. Organization change and innovation are covered in Chapter 13.
Finally, Chapter 14 deals with human resource management.
CHAPTER SUMMARY
This chapter introduces the basic elements of organizing. Key topics covered in the chapter are designing
jobs, grouping jobs via departmentalization, establishing reporting relationships, distributing authority,
coordinating activities, and differentiating between positions.
LEARNING OBJECTIVES
After covering this chapter, students should be able to:
1. Identify the basic elements of organizations.
2. Describe the basic alternative approaches to designing jobs.
The opening case looks reorganization in Anglo American PLC, the world’s fourth-largest mining
company. Because of poor performance caused by the global economic downturn, the company
“delayered” by creating new business units and laying off people.
Management Update: Anglo American reported revenues of $32.929 billion and profits of $11.983
billion in fiscal 2010. Both numbers were substantially up from 2009. Cynthia Caroll continues to the
CEO of the company.
LECTURE OUTLINE
I. THE ELEMENTS OF ORGANIZING
Organizing is deciding how best to group organizational activities and resources.
Organization structure is the set of building blocks that can be used to configure an organization.
Chapter 11: Basic Elements of Organizing
Teaching Tip: The building block analogy used here is a good way to introduce this material. Building
II. DESIGNING JOBS
The first basic element of organization structure is job design.
Job design is the determination of an individual’s work-related responsibilities.
A. Job Specialization
Job specialization is the degree to which the overall task of the organization is broken down
and divided into smaller component parts. It evolved from the concept of division of labor.
B. Benefits and Limitations of Specialization
1. There are four benefits of specialization.
a) Workers will become proficient at their task because it is small and simple.
Extra Example: Another good example to illustrate how job specialization evolves is Sam Walton.
When Walton opened the first Wal-Mart store, he planned the store himself, ordered all the
Discussion Starter: Ask students to recount their own experiences involving highly specialized jobs.
Discussion Starter: Ask students to speculate on how managers and organizations should identify the
optimal degree of job specialization in order to balance efficiency and worker satisfaction.
C. Alternatives to Specialization
Because of the drawbacks noted, many firms have sought alternative approaches to designing
jobs.
1. Job rotation involves systematically moving employees from one job to another.
Chapter 11: Basic Elements of Organizing
Global Connection: At General Electric’s plant in Puerto Rico, workers rotate to new jobs every six
Cross-Reference: Job enrichment is based on the two-factor theory of motivation developed by
Frederick Herzberg. We discuss the two-factor theory in Chapter 16.
4. The job characteristics approach suggests that jobs should be diagnosed and improved
along five core dimensions. If these factors are high, workers are more likely to be
motivated.
a) Skill variety—the number of things a person does in a job.
b) Task identity—the extent to which the worker does an identifiable portion of the
total job.
Group Exercise: Have small groups of students select a job they observe regularly (i.e., retail clerk,
fast-food worker). Ask them to describe how much each of the five core job dimensions is likely to
Cross-Reference: Work teams are discussed more fully in Chapter 19.
III. GROUPING JOBS: DEPARTMENTALIZATION
Departmentalization is the grouping of jobs according to some logical arrangement.
A. Rationale for Departmentalization
The rationale for departmentalization is linked to size. As the organization grows, it is no
Chapter 11: Basic Elements of Organizing
1. Functional departmentalization groups together those jobs involving the same or similar
activities.
Interesting Quote: “One of the beauties of the vertical, functional organization is that who you report
Teaching Tip: Identify local organizations that use product departmentalization. (Many retail outlets
use this approach and are good examples.)
Global Connection: Few Japanese companies have ever used functional departmentalization. Instead,
areas.
Teaching Tip: If possible, identify for your students examples of local organizations that use customer
and location bases of departmentalization.
5. Other forms of departmentalization, such as time, can be used to organize an
organization. Airlines use this type of structuring. Sequence also can be used to structure
6. Departments can be called various things such as divisions, units, sections, or bureaus.
IV. ESTABLISHING REPORTING RELATIONSHIPS
A. Chain of Command
1. The chain of command is a clear and distinct line of authority among positions in the
organization.
B. Narrow Versus Wide Spans
Span of management or span of control determines how many people will report to each
manager.
Chapter 11: Basic Elements of Organizing
Group Exercise: Have students research the different spans of management for different
administrators in your college or university.
Teaching Tip: Have students use the formula shown in the text to calculate the effects of different
Extra Example: An example of a firm that has always used a flat structure is Toyota. Ask students to
compare the number of layers in Toyota and its automotive rival, General Motors.
D. Determining the Appropriate Span
There are at least eight factors that influence the determination of the appropriate span.
Teaching Tip: Table 11.1 in the text summarizes the eight factors influencing span of management.
1. Competence of supervisor and subordinates (greater equals wider)
2. Physical dispersion of subordinates (greater equals narrower)
Interesting Quote: “Remember the theory that a manager should have no more than six or seven direct
reports? I say the right number is closer to ten or fifteen. …With ten or fifteen reports, a leader can
Global Connection: Many Chinese managers today are still concerned with trying to identify the
“ideal” span of management. U.S. consultants report that when they visit Chinese businesses, this is
one of the most frequently asked questions.
V. DISTRIBUTING AUTHORITY
Authority is power that has been legitimized by the organization.
A. The Delegation Process
Delegation is the process by which a manager assigns a portion of his or her total workload to
others.
1. The primary reason for delegation is to allow the manager to get more work done. Also,
Chapter 11: Basic Elements of Organizing
2. The delegation process involves three steps: (1) assign responsibility or task, (2) give the
Teaching Tip: Relate delegation back to job specialization. As managers find it useful to create new
specialized jobs to perform various functions, they similarly may find it useful and necessary to
delegate authority to people performing those jobs.
B. Decentralization and Centralization
1. Decentralization is the process of systematically delegating power and authority
throughout the organization to middle and lower-level managers.
Teaching Tip: Point out the relationship between decentralization and flat organizations. Specifically,
as organizations become flatter, they must also become more decentralized.
VI. COORDINATING ACTIVITIES
Coordination is the process of linking the activities of the various departments in the organization.
Global Connection: Brazilian firms are traditionally managed in a highly centralized manner. Guards
often patrol factory floors, employee trips to the bathrooms are timed, and employees are frequently
searched when they leave work.
A. The Need for Coordination
The primary reason for coordination is that departments and work groups need information
and resources from each other to do their jobs.
Extra Example: Note that different courses have different levels of interdependence. A biology course
and a philosophy course may be unrelated other than contributing to overall student education (pooled
interdependence), whereas Statistics I may feed directly into Statistics II (sequential interdependence).
B. Structural Coordination Techniques
1. Organizations that use the managerial hierarchy to achieve coordination place one
Chapter 11: Basic Elements of Organizing
4. Task forces may be created when the need for coordination is acute. Individuals from
Teaching Tip: Liaison roles, task forces, and integrating departments are more likely to be used for
coordination in organizations that are relatively flat and decentralized.
C. Electronic Coordination
VII. DIFFERENTIATING BETWEEN POSITIONS
A. Line positions are positions in the direct chain of command that are responsible for the
achievement of an organization’s goals.
B. Staff positions are intended to provide expertise, advice, and support for line positions.
Teaching Tip: Provide students with some local examples of line and staff organizational positions.
D. Administrative Intensity
Administrative intensity is the degree to which managerial positions are concentrated in staff
positions.
Discussion Starter: The text notes that many organizations have reduced the number of staff members
END OF CHAPTER QUESTIONS
Questions for Review
1. Describe the five alternatives to job specialization. What is the advantage of each, as compared to
specialization?
Job rotation occurs when employees move systematically from one job to the next. This offers
Chapter 11: Basic Elements of Organizing
2. What is meant by unity of command? By the scalar principle? Can an organization have one without
the other? Explain.
Unity of command is an organization design principle that states that every worker should report to
3. Describe the organizational structure that results from each of the different bases of
departmentalization. What implications does each of these structures have with regard to the
distribution of authority within the organization?
Functional departmentalization results in an organization in which workers who perform similar
geographic site. Authority resides in a leader who supervises all the work done at one site.
4. Explain the differences between line and staff positions. What are the advantages and disadvantages
of high versus low administrative intensity?
Line positions are filled by workers and managers who are in the direct chain of command related to
Questions for Analysis
5. Some people have claimed that the increasing technological sophistication required by many of
today’s corporations has led to a return to job specialization. In your opinion, what would be the
consequences of a sharp increase in job specialization? Consider both positive and negative
outcomes in your answer.
Many jobs devoted to information technology require specialization of skills and knowledge—for
6. Try to develop a different way to departmentalize your college or university, a local fast food
restaurant, a manufacturing firm, or some other organization. What might be the advantages of your
form of organization?
Responses will vary. One example follows: “Our business department has two units—the
Chapter 11: Basic Elements of Organizing
7. Consider the list of jobs below. In your opinion, what is the appropriate span of management for
each? Describe the factors you considered in reaching your conclusion.
• A physician practices medicine in a privately-owned clinic, while also supervising a number of
professional nurses and office staff.
Questions for Application
8. Consider a job you have held. (Or, if you have not held a job, interview a worker.) Using the job
characteristics approach, assess that job’s core dimensions. Then describe how the core dimensions
led to critical psychological states and, ultimately, to personal and work outcomes.
Clearly, students’ answers will vary. The students should correctly identify the core dimensions, and
9. Use the Internet to locate organization charts for five different organizations. (Or use data from the
Internet to draw the organization charts yourself.) Look for similarities and differences among them
and try to account for what you find.
Many organizations do not publish their organization charts, but often, a look at the senior
10. Contact two very different local organizations (retailing firm, manufacturing firm, church, civic
club, and so on) and interview top managers to develop organization charts for each organization.
How do you account for the similarities and differences between them?
Interesting similarities should become evident among the civic organizations and the retail store.
Chapter 11: Basic Elements of Organizing
END OF CHAPTER EXERCISES
Building Effective Conceptual Skills
I. Purpose
This exercise develops students’ conceptual skills through an investigation of span of control.
II. Format
The exercise must be done outside of class and can be effectively completed by an individual or by
III. Follow-Up
A. First, survey ten workers and managers about the span of management in their respective
workplaces.
B. Now, choose one of these individuals for further investigation. Interview this person to get a
D. If the span of management seems to be appropriate, what are some of the likely outcomes that
the organization can expect? What are some likely outcomes if it seems inappropriate?
Building Effective Diagnostic Skills
I. Purpose
This exercise is designed to help students develop their diagnostic skills through the analysis of a
very real problem that should also be relevant and interesting to them.
II. Format
This diagnostic skills exercise can be done by individual students or students working together in
groups. The estimated time for completion of the exercise is about 20 minutes.
III. Follow-Up
A. For Scenario A, list the major barriers to decentralization that you foresee.
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C. In your opinion, which scenario would be easier to implement in reality? In other words, is it
probably easier to move from centralization to decentralization or vice versa? Whatever your
opinion in the matter, be ready to explain it.
Students will probably recognize that the move from centralization to decentralization reduces
D. Given a choice of starting your career in a firm that’s either highly centralized or high
decentralized, which would you prefer? Why?
Students’ answers will vary, depending somewhat on their self-confidence and risk-taking
WHO GOVERNS THE GOVERNING AUTHORITY?
WHO GOVERNS THE GOVERNING AUTHORITY?
This case points out the importance of ethics officers in organizations and details best practices in how
such a position should be organized for maximum effectiveness. A key guideline is to ensure that the
ethics officer reports to the highest position in the organization. As an example, the ethics officer at
1. Case Question 1: Explain the role of an ethics officer as a specialized managerial position. In your
opinion, what are the benefits to an organization of specialization in performing the job of an ethics
officer? What are the limitations?
An ethics officer develops ethics-related policy for the organization, administers ethics training, and
2. Case Question 2: In a traditional setting, is an ethics officer more likely to hold a line position or a
staff position? Could the position be either a line position or a staff position? How about both? In
all of your answers, be sure to consider the nature of the authority that is – or ought to be – attached
to the position.
If one looks at the five core responsibilities of an ethics officer identified by Ethics Resource Center
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3. Case Question 3: Who’s the ethics officer for student affairs at your school? At the University of
Vermont (UVM), for example, it’s the Dean of Students, who can hand out various “sanctions,”
such as warnings, probation, or dismissal. What kind of authority does the comparable officer have
at your school? UVM also publishes a Code of Student Rights and Responsibilities, which
“reaffirms the principle of student freedom coupled with personal responsibility and accountability
for individual action.” Does your school have a student ethics code? If so, what does it have to say
about your “responsibility and accountability” as a student?