Function of Management

by Biyan Belinda (14411050)Engineering ManagementInstitute of Technology Bandung

Function of management

Organizing – to create structure

Controlling – to ensure

results

Leading – to inspire

effort

Planning – to set the direction

Organizing

The process of arranging people and other resources to work together to accomplish a goal.

Organizing is needed to create the structures.0Divide up the work0Arrange resources0Coordinate activities

Organization Structure

A system of tasks, workflows, reporting relationships, communication channels that link together the work of diverse individuals and groups.

Organization Chart

A diagram that shows reporting relationships and the formal arrangement of work positions within an organization.

Shows the formal structure ; official structure of the organization.

The basics of an organization’s formal structure0Division of work – positions and titles shows work

responsibilities0 Supervisory relationship – lines show who report to

whom0Communication channels – lines show formal

communication flows0Major subunits – positions reporting to a common

manager0Levels of management – vertical layer of management

Informal Structure

The set of unofficial relationship among an organization’s member.

Show who talks to and interacts regularly with whom, regardless of their formal titles and relationship.

Sources of emotional support and friendship that satisfy important social needs.

Social Network Analysis

A tool to identify the informal structures and their embedded social relationships that are active in organization.

Disadvantages from informal structure0Susceptible rumor0Carry inaccurate information0Breed resistance to change0Divert work efforts from important objectives

Traditional Organization Structure

Ciri : Departementalization The process of grouping people and jobs into work

units

Traditional Organization Structure is divided by 3 major types :1. Functional structure2. Divisional structure3. Matrix structure

Functional StructureGrouping people with similar skills who perform similar tasks.

Advantages :1. Economic of scale with efficient use of resources2. Task assignments consistent with expertise and training3. High-quality technical problem solving4. In-depth training and skill development within function5. Clear career paths within function

Disadvantages : Functional chimney problemA lack of communication, coordination, and problem solving across

function. It’s because mind-sets of people become formalized.

Director

Commissioner

Financial Marketing OperationalHuman

Resources

Divisional StructureGroups together people working on the same product, in the same area,

with similar costumers, or on the same processes.

Divided by 4 types of stuctures :1. Product structure : groups together people and jobs focused on a single

product or service2. Geographical structure : groups together people and jobs performed in

the same location3. Customer structure : groups together people and jobs that serve the same

customers or clients4. Process structure : groups jobs and activities that are part of the same

processes

*work process : a group of related tasks that collectively creates a valuable work product.

Director

Commissioner

Product Geography Customer Product

0Advantages :1. More flexibility in responding to environmental changes2. Improved coordination across functional departements3. Clear points of responsibility for product or service

delivery4. Expertise focused on spesific customers, products, and

regions5. Greater ease in changing size by adding or deleting

divisions

0Disadvantages1. Reduce economic of scale2. Increase costs through the duplication of resources and

effort across divisions3. Create unhealthy rivalries as divisions compete for

resources and top management attention4. As they emphasize division needs over the goals of the

organization as a whole

Matrix Structure

Often called as matrix organization, combines the functional and divisional structure to emphasize project or program teams.

Found in multinational corporations, where they offer the flexibility to deal with regional differences while still handling multiple product, program, or project needs.

0Advantages1. Better communication and cooperation across function2. Improved decision making; problem solving takes place

at the team level where the best information is available3. Increased flexibility adding, removing, or changing

operations to meet changing demands4. Better customer service ; there is always a program,

product, or project manager informed and available to answer questions

5. Better performance accountability through the program, product, or project managers

6. Improved strategic management ; top managers are freed from lower-level problem solving to focus time or more strategic issues

0Disadvantages1. The two-boss system is susceptible to power struggles if

functional supervisors and team leader compete with one another to exercise authority

2. The two-boss system can be frustrating it creates task confusion and conflicting work priorities

3. The teams may develop “groupitis”, then the strong team loyalties can cause a loss of focus on larger organizational goals

Horizontal Organization Structure

Part of broader movement to organize structure from matrix structure.

Goals :1. Improve communication2. Collaboration3. Flexibility by decreasing hierarchy, increasing

empowerment, better mobilizing human talents

Team Structure

Uses permanent and temporary cross-functional teams to improve lateral relations.

Cross-functional team brings together members from different functional departement

Project teams convened for a particular task or project and disband once it is completed

0Advantages1. Team assignment can break down barriers as people from

different parts of an organization to get know one another boost morale

2. People working in teams oftem experience a greater sense of involvement and identification increase enthusiasm for job

3. Improve the speed and quality of decisions in many situations

0Disadvantages1. Conflicting loyalties with both team and functional

assignments2. Issues of time management and group process3. Teams spend a lot of time in meetings, but not all of that

time is productive

Network Structure

Uses information technologies to link with networks of outside suppliers and service contractors.

Strategic alliance : cooperation agreement with another organization to jointly pursue activities of mutual interest.

0AdvantagesLean and streamlined, helping organizations stay cost-

competitive by reducing overhead and increasing operating efficiency.

0Disadvantages The more complex the business or mission of the organization, the more complicated it is to control and coordinate the network of contracts and alliances.

Boundaryless Structure

Eliminates internal boundaries among subsystems and external boundaries with the external environment.

Virtual organization uses IT and the internet to engage a shifting network of strategic alliances.e.g. : MySpace, Facebook, LinkedIn

Research and Development

Sales

Purchasing

Production

Distribution

Organizational Designs

The process of creating structures that accomplish mission and objectives.

Contingency in Organizational Design Beaureaucracy, emphasizes formal authority, order, fairness, and efficiency

Mechanistic and Organic Design

Mechanistic design centralized, with many rules and procedures, a clear-cut division of labor, narrow spans of control, and formal coordination

Organic design decentralized, with fewer rules and procedures, open divisions of labor, wide spans of control, and more personal coordination

Adaptive design operates with minimum of beaureaucratic features and encourages worker empowerment and teamwork

Trends in Organizational Design0Fewer level of managementShows the chain command : links all persons with

successively higher levels of authorityIncluding :1. Span of control : number of subordinates directly

reporting to a manager2. Tall structure : have narrow spans of control and

many hierarchical levels, or3. Flat structure : have wide spans of control and few

hierarchical levels

0More delegation and empowerment

Delegation process of distributing and entrusting work to other persons

Empowerment allows others to make decisions and exercise discretion in their work

0Decentralization and centralization

Centralization concentration of athority for most decisions at the top level of an organization

Decentralization dispersion of authority to make decisions throughout all organization levels

0Reduced use of staff

Staff positions : provide technical expertise for other parts of the organization

LEADING

Leading

Leadership : process of inspiring others to work hard to accomplish important tasks.

Power : the ability to get someone else to do something you want done or to make things happen the way you want.

Position Power

Reward PowerThe capacity to offer something of value as a means of

influencing other people.Coercive PowerThe capacity to punish or withhold positive outcomes

as a means of influencing other people.Legitimate Power The capacity to influence other people by virtue of formal authority, or the rights of office

Reward Power

• “If you do what I ask, I’ll give you a reward.”

Coercive Power

• “If you don’t do what I ask, I’ll punish you.”

Legitimate Power

• “Because I am the boss ; you must do as I ask”

Personal Power

Expert powerThe capacity to influence other people because of

specialized knowledge.

Referent power The capacity to influence other people because of their desire to identify personally with you.

Leadership and Vision

Vision : a clear sense of the futureVisionary leadership brings to the situation a clear sense of the future and an understanding of how to get there.

Leadership as Service

Servant leadershipfollower-centered and committed to helping others in

their work

Empowerment enables others to gain and use decision-making power.

Leadership Traits and Behaviors0Leadership traits1. Drive2. Self-confidence3. Creativity4. Cognitive ability5. Job-relevant knowledge6. Motivation7. Flexibility8. Honesty and integrity

0Leadership behavior

1. A leader high in concern for task ; plans and defines the work to be done

2. A leader high in concern for people ; acts with warmth and supportiveness toward followers

Classic Leadership Styles

0Leadership style : the recurring pattern of beahaviors exhibited by a leader

0Autocratic : acts in command-and-control fashion0Human relations : leader emphasizes people over task0Laissez-faire : leader has a do “do the best you can and

don’t bother me” attitude0Democratic style : leader emphasizes both tasks and

people

Fiedler’s Contingency Model

0 Understanding Leadership StyleThe least-preffered co-worker scale to measure a person’s leadership style

0 Understanding Leadeship SituationsThree factors of situations control :1. Quality of leader-member relations2. Task structure3. Position power

0 Matching Leadership Style and Situation

Hersey-Blanchard Situational Leadership Model

0Delegating0Participating0Selling0Telling

Path-Goal Leadership Theory

0Directive leadership0Supportive leadership0Achievement-oriented leadership0Participative leadership

Leader-Participation Model

0Authority decision : made by the leader and then communicated to the group

0Consultative decision : made by a leader after receiving information, advice, or opinions from group member

0Group decision : made by group members themselves

Personal Leadership Development0Charismatic and transformational leadership0Emotional intelligence0Gender0 Interactive leadership0Moral leadership

Drucker’s “Old-Fashioned” Leadership

Drucker’s Leadership Wisdom0Define and communicate a clear vision0Accept leadership as a responsibility, not a rank0Surround yourself with talented people0Don’t blame others when things go wrong0Keep your integrity ; earn the trust of others0Don’t be clever, be consistent

CONTROLLING

Controlling

The process of measuring performance and taking action to ensure desired results

Make sure that the things happen in the right way and the right time

Types of Controls

Feedforward ControlsEnsures that directions and resources are right before

the work begins

Concurrent ControlsFocuses on what happens during the work process

Feedback Controls Takes places after an action is completed. Also called as post-action controls.

Internal and External Control

Self-control Internal control that occurs through self-dicipline in fulfilling work and personal

responsibilities

Beaureaucratic control Influences behavior through authority, policies, procedures, job descriptions,

budgets, and day-to-day supervision

Clan control Influences behavior through norms and expectations set by the organizational

culture

Market controlEssentially influence of the market competition on the behavior of organizations

and their members

The Control Process

STEP 1 : Establish objectives and standards0Output standards measures performance results in

terms of quantity, quality, cost, or time.0 Input standards measures work efforts that go into a

performance task

STEP 2 : Measure performance results

STEP 3 : Compare results with objectives and standardsThe control equation states :

Need for action = Desired performance – Actual performance

STEP 4 : Take corrective actionManagement by exception : the practice of giving attention to situations that show the greatest need for action.

Control Tools and Techniques

0Employee dicipline systems0Project management and control use gantt chart ;

graphically displays the scheduling of tasks required to complete a project

0CPM/PERT techniquesCPM/PERT : combination of the critical part method and the program evaluation and review technique.0Financial Controls

Gantt Chart timeline of job

Date/Tasks

1 2 3 4 5 6 7 8 9

T-I

T-II

T-III

T-IV

T-V

T-VI

T-VII

0Balanced ScorecardTallies organizational performance in financial, customer

service, internal process, and innovation and learning areas.

Balanced Scorecard

Financial

Internal (SOP)

Learning and Grow

Customer

Thanks for the attention