Fundamentals
(basic)
of Organizing
Design Metaphor
Architecture theory
At least 2,500 years during Roman times, three were three
fundamentals of architecture (refined by Greek ideas)were
identified as
(1) Firmness,
(2)Utility, and
(3)Beauty.
Government
“We design our organizations’ structures, and thereafter those
Structures shape us.”
Winston
Churchill
Business, Military, Government, Sports etc.
FBL,TBL or SET, Services, Manufacturing, Integrated, etc.
The four fundamentals of organizing (Max Weber)-1
1. Ensure work activities are designed to be
completed…
in the best way to accomplish the overall
work of the
This component involves
organization
Understanding the overall mission and strategy
of the organization,
And breaking it down into smaller steps and
specific activities that, ……..
Taken together, can help accomplish the overall
work of the organization. Like all 4
fundamentals, it includes both formal and
informal elements.
The four fundamentals of organizing (Max Weber)-2
FBL TBL SET
Standardizatio Enlightened Experimentati
n= standardization on
Developing A variation of FBL Members’
uniform practices standardization that ongoing
for organizational embraces SET voluntary
members to experimentation when implementation
follow in doing it profitably reduces of new-and-
their jobs. negative socio- possibly-better
Ex. operating ecological externalities ways of
manuals (Mc Donalds’ standard performing
cooking time for tasks on a trial
products) basis
The three approaches to management has some
emphasis on both standardization and
experimentation; the key difference is in their
relative emphasis on each.
Specialization-1
Henry Ford revolutionized production in the
automobile industry
Pioneered the assembly line
Individual members worked on one step in building a car
(narrow specialization),
rather than trying to assemble an entire car (broad
specialization).
Typically, the specialized knowledge, skills, abilities, and
other characteristics (KSAOs) required to perform each job
are spelled out in job descriptions,
Specialization-2
Job specialization can be narrow
The tasks that members perform are fairly limited and
focused) or
Broad
(which means that members perform a wide range of
tasks).
The four fundamentals of organizing-1
2. Ensure that tasks assigned to
members are the
ones required to achieve the
overall work of the
Involves taking all the specific activities
organization
that need to be performed,…..
and assigning them to specific organization
members to make sure the activities are
completed (unduplicated)
The four fundamentals of organizing-2
FBL TBL SET
Specialization Enlightened Sensitization =
= specialization =
members actively
selecting a variation of FBL being aware of how
sub-sets of specialization that their work fits with
standardized embraces SET co-workers and
organization sensitization (SE others(awareness)
al tasks awareness) in instances
where it profitably and improving
and reduces negative socio- practices via
allocating ecological externalities experiments that
them to take advantage of
separate opportunities or
jobs (Ford- address needs
Notestep byeach of the three approaches to management
that (flexibility)
has some
step) on both specialization and sensitization; the key difference
emphasis
is in their relative emphasis on each.(FBL-Law, TBL-additional Profits,
The four fundamentals of organizing-1
3. Ensure that there is orderly
deference(respect to a
Linesuperior)
Authority among members.
This component involves ensuring that members
know :
Who makes which decisions,
Who assigns tasks,
And who should be listened to in which situation.
Note that each of the three approaches to management
has some emphasis on both centralization and
dignification; the key difference is in their relative
emphasis on each.
The four fundamentals of organizing-2
3. Ensure that there is orderly
deference(respect to a
superior) among members.
FBL TBL SET
Centralization = Enlightened Dignification =
centralization =
the extent to treating
which decision- a variation of FBL everyone with
making centralization that dignity and
authority embraces SET respect in
resides atop the dignification on a community.
organization’s piecemeal basis when it
hierarchy(levels profitably reduces
of Management) negative socio-ecological
externalities (deliberate
Note that each of theawareness)
three approaches to management has
some emphasis on both centralization and dignification; the
key difference is in their relative emphasis on each.
The four fundamentals of organizing
4. Ensure that members work together
harmoniously.
This component pulls everything together, ensuring that the
different pieces of the organizational puzzle are working
harmoniously
FBL TBL SET
Departmentalizatio Enlightened Participation =
n = how members departmentalization = mutual
and resources are a variation of FBL discernment and
grouped together to departmentalization that giving stakeholders
achieve the work of embraces SET a voice in how the
the larger participation when it organization is
organization (not to profitably reduces managed and how
be confused with negative socio-ecological jobs are performed
specialization- externalities.
individuals)
Note that each of the three approaches to management has
some emphasis on both departmentalization and participation;
the key difference is in their relative emphasis on each.
Key Terms/Concepts
Line authority
Span of Control
Formal power to direct and
Wide in Centralized levels of
control immediate
hierarchy
subordinates
Staff Authority
Formal authority to advise Delegation
and give technical support but Giving authority to a person or
not instructions (market group (ex. when the boss is
research, medical, support away)
groups)
Centralized
(Small/Medium size)
DECENTRALIZED
(Large Companies)
The four fundamentals of organizing-
a
Four types of departmental structures
The four fundamentals of organizing
Four types of departmental structures
1. Divisional structure Is evident when members are
placed together based on them working as a subunit that
provides
A specific kind of product or service, serves similar
customers, (J&J)
Or operates in the same geographic region.(usually large
corporations like SMC in the Philippines)
2.Functional structure Places members:
in the same department based on their having similar
technical skills and using similar resources to perform their
tasks (accounting, sales, etc.).
Usually where small/medium size corporation begin-
departments
The four fundamentals of organizing
Four types of departmental structures
3.Hybrid structure (bigger companies)
Seeks to get the advantages of the functional
structure
By achieving internal efficiencies and developing
internal expertise in some areas)
And the advantages of the divisional structure (by
being able to adapt to changes in a dynamic
external environment).
4.Matrix Structure (complex)
Occurs when an organization has both divisional
and functional departments,
And members are simultaneously assigned to
Variations
Teams- 3 or more people towards a certain goal
Task forces-Teams that are disbanded after tasks is completed (ad hoc)
Network Structure- usually in manufacturing and distribution(outsourcing-
Nike)
Virtual Organization- Come and go group-aided by information technology for
short/long term tasks. Anywhere worldwide, members may not even see each
other (usually project based)
Entrepreneurial implications
Fundamental #1: Experimentation >
standardization
Rather than develop specific standards, entrepreneurs often use
the organization’s overarching goals to:
(a) Serve as general guidelines for members’ decision-making,
(b) Facilitate coordinated decision-making, &
(c) Motivate members by showing how their work matters.(often
do not have developed systems & processes)
Fundamental #2: Sensitization > specialization
Entrepreneurs value workers who are sensitive to
Understanding (and improving) the big picture,
And who are generalists rather that specialists.
Example teamwork in school projects
Entrepreneurial implications
Fundamental #3: Dignification > centralization
Entrepreneurs tend to have very strong ideas and tend to
micromanage everything,
But they often learn the merit in focusing their efforts on those
tasks that are the most crucial for the success of the start-up,
and then delegating authority to others to complete less
essential tasks. (evolution)
Fundamental #4: Participation >
departmentalization
Participation is easier to implement and more appropriate for
start-up organizations who are engaging in ongoing learning.
Taken together, weekly staff meetings go a long way
in helping entrepreneurs to manage the four
fundamentals of organizing.
QUESTIONS FOR REFLECTION AND DISCUSSION
1. Describe the four fundamental components of
organizing. What are the general differences between
the three management approaches (FBL, TBL, and SET)
in terms of how the organizing function is carried out?
2. Do you think virtual organizations will become more
prevalent during your career? Why, or why not?
3. If you treat others with dignity, will that change
(increase or decrease) the amount of power that you
have? Is the effect of treating others with dignity the
same for all people, regardless of how much power they
have to start with? Explain.
QUESTIONS FOR REFLECTION AND DISCUSSION
4. Review the Semco case at the start of the chapter.
Should employees be trusted to set their own salaries,
choose their own hours, and hire their own managers?
Should university students be trusted to assign their own
grades? In your view, what sort of information should
instructors provide, and what should students provide, to
set up a fair way for students to self-assign marks?
5. Ricardo Semler writes: “I’m not preaching anti-
materialism. We do, however, desperately need a better
understanding of the purpose of work, and to organize
the workplace and the workweek accordingly. Without it,
the purpose of work degenerates to empty materialism
on one side and knee-jerk profiteering on the other.” Do
you agree with Semler’s observations? Explain what you
understand to be the purpose of work. How might you as
a manager best structure the workplace based on your
understanding? How does you analysis related to Figure
QUESTIONS FOR REFLECTION AND DISCUSSION
6. Think of an organization you might want to start.
Describe how you would manage each of the four
fundamentals of organization, describing your approach
to: 1) standardization and experimentation; 2)
specialization and sensitization; 3) centralization and
dignification, and 4) departmentalization and
participation. Why do you think your choices are the best
ones? What effect will they have on the organization?
7. Imagine that you just started the organization as
described in your answer to question #6. What sorts of
changes in how you manage the four fundamentals of
organizing would you expect to see after 5 years of
operations? What factors would affect the changes?
Explain your answer.
