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or key accounts。 
Span of control 
The number of people a manager can have reporting to them in a hierarchy 
is governed by the span of control。 Few people reporting and the span of 
control is termed as narrow; and more as wide。 
A narrow span of control means that any one manager has fewer people 
reporting to them; so munications should be be。。er and control easier。 
However; as the organization grows; that usually means creating more and 
more layers of management; so negating any earlier efficiency。 
A wide span of control; also known as a flat management structure; involves 
having many people or units reporting to one person。 This usually 
means having fewer layers of management; but it does call for a greater 
level of skill from those doing the managing。 The nature of the tasks being 
carried out by subordinates will limit the capacity to run a flat organization。 
For example; a regional manager responsible for identical units such as 
branches of a supermarket chain; supported by good and well…developed 
control systems; may be able to have 10 or more direct reports。 But if the 
organization prises very different types of unit; for example retail outlets; 
central bakeries; garages; factories; accounts departments and sales 
teams; the ability of any one manager to handle that diversity will be 
limited。 
A further factor to take into account is the skill level of both managers 
and managed。 A higher…skilled workforce can operate with a wider span of 
control as they will need less supervision and a higher…skilled manager can 
control a greater number of staff。 
Line and staff organization 
One way to keep an organization structure flat as the enterprise gets bigger 
and more plex is to introduce staff functions that take over some of 
the mon duties of unit managers。 For example; a production manager 
Figure 4。2 Basic hierarchical organization chart 
Employee 1 
(Or Unit 1) 
Employee 2 
(Or Unit 2) 
Employee 3 
(Or Unit 3) 
Top 
Management
124 The Thirty…Day MBA 
could probably handle their own recruitment; selection and training of staff 
while they have a dozen or so people in their domain。 Once that expands to 
hundreds; and if growth is also impacting on other management areas such 
as sales and marketing; then it may be more efficient to create a specialist 
HR unit to support the line managers。 
Staff positions support line managers by providing knowledge and 
expertise but the buck ultimately stops with the line manager。 Three types 
of authority are created in a line and staff organization; so alongside some 
efficiencies lies the possibility for conflict: 
。 Line authority goes down the chain of mand; giving those further 
up the right and responsibility to instruct those below them to carry out 
specific tasks。 
。 Staff authority is the right and responsibility to advise line managers in 
certain areas。 For example; an HR staffer will advise a line manager on 
redundancy terms; conditions of employment and disciplinary issues。 
。 Functional authority or limited line authority gives a staff person the 
ultimate sanction over particular functions such as safety or financial 
reporting。 
There are possibilities for conflict in the relationship between line and staff 
but these can be minimized in two ways。 In the first instance staff people 
report to their own superiors who have line authority over them。 Second; 
line and staff personnel can be organized into teams with shared goals and 
objectives (Figure 4。3)。 
Figure 4。3 Line and staff organization chart 
Functional organization 
In a functional organization (Figure 4。4) the staff and line managers all 
report to a mon senior manager。 This places more of a burden on senior 
management who have a wider span of control and a greater variety of 
tasks for which to take responsibility。 However; this structure concentrates 
all responsibility in one person and so minimizes the area for conflict。 It 
may also deny an organization the high level of expertise that es with 
having a professional staff function。 For example; this would leave the onus 
Top Management 
Accounts 
Unit 1 
Human Resources 
Unit 2
Organizational Behaviour 125 
for being fully conversant with current employment law on a production 
manager; rather than giving them access to staff advice。 They can; of course; 
read up on the law themselves; but that is not quite as good as having it as 
a part of an everyday skill and experience base。 
Matrix organization 
A matrix organization gives two people line authority for interlocking areas 
of responsibility。 In Figure 4。5 you can see that a manager is responsible for 
sales of product group 1 in both Europe and Asia。 However; a manager is 
also responsible for the sales of all product groups within their continent。 
The aim of a matrix structure is to ensure that all key areas in an organization 
have a line manager responsible for championing them。 There is still 
the possibility for conflict of interest。 For example; the person responsible 
for a product group may try to get more a。。ention for their product in a 
particular market than it really warrants。 In theory; the managers in matrix 
organizations are senior enough to iron out their differences。 That is not 
Figure 4。4 Functional organization chart 
Figure 4。5 Matrix organization chart 
Product 
Group 1 
Marketing Accounts Manufacturing Marketing Accounts Manufacturing 
Product 
Group 2 
Product 
Group 3 
Business Area 
Heads 
Top 
Management 
Group 
Europe Top 
Management 
Asia Top 
Management 
Marketing 
Top 
Management 
Sales Accounts 
Human 
Resources Manufacturing
126 The Thirty…Day MBA 
always the case in practice and in such cases their mutual boss has to 
resolve the issue。 
Strategic business unit (SBU) 
SBUs (Figure 4。6) are in effect separate enterprises with full responsibility 
for their own profit or loss。 They may themselves be organized in any one 
of the above structures。 If they don’t have their own specialist staff function; 
they may buy it in from the parent pany when required。 This maintains 
the concept of full profit accountability。 
SBUs are further divided into those that simply have control over current 
revenue and expenditure and those ‘investment centres’ that can make 
capital expenditure decisions such as se。。ing up a new plant; investing in 
research and development or buying up petitors。 
Figure 4。6 Strategic business unit organization chart 
Accounts Human Resources 
Sales and Marketing Manufacturing 
Strategic Business Unit 1 
Europe 
Accounts Human Resources 
Sales and Marketing Manufacturing 
Strategic Business Unit 2 
Asia 
Top management 
Succession planning 
No general would fight a ba。。le without having a reserve force ready to plug 
gaps that appear in the front line or are caused by casualties in key staff。 
Perhaps the most spectacular military example was the rapid deployment 
of Montgomery to head the 8th Army when Churchill’s own preferred 
candidate; ‘Strafer’ Go。。; was killed flying back to Cairo。 
For business and other organizations this reserve is usually limited 
to the process of identifying future potential leaders to fill key positions 
when staff leave or are themselves promoted。 A subsidiary but nonetheless 
important role of any organization chart is to facilitate this planning。 
Elements to consider in this area include: 
。 broadening existing managers’ petences by lateral moves in the 
organization; 
。 training and development across a wider skill base than is required for 
current roles;
Organizational Behaviour 127 
。 having a database of outsiders who can rapidly be approached by head 
hunters (specialist recruitment consultants) when the need arises。 
Teams 
Teams are the ponent parts of a business’s structure and their effective 
creation and operation are a key way to get exceptional results from an 
organization。 A group of people; even if they work together; are not necessarily 
a team。 Look at Figure 4。7; which pares some of the characteristics 
of a sports team with those of a random collection of people that meet for a 
game。 You can see immediately wha

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