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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 what needs to be done to weld people into 
a team。 
Sports team Sports club 
。 Has the right number of players for 
the game 
。 Everyone has a clearly defined role 
。 Concrete and measurable 
objectives 
。 An obvious petitor for the team 
to unite against 
。 A coach to train and improve 
players’ game 
。 Right equipment for the game 
。 Just the number of people who turn 
up 
。 Positions of players decided on the 
day 
。 Often the aims have never been 
explained and where they have; 
different people have different aims 
。 Sometimes the internal petition is 
more important than winning a game 
。 Training is ad hoc 
。 The right equipment is sometimes 
missing and not all players have the 
right equipment 
Successful teams have certain features in mon。 They all have strong 
and effective leadership; clear objectives; appropriate resources; the ability 
to municate freely throughout the organization; the authority to act 
quickly on decisions; a good balance of team members; the ability to work 
collectively; and a size appropriate to the task。 
Team types 
Teams can be made up of anything from 5 to 20 people。 Anything above 20 is 
usually too unwieldy and will take up more resources than an organization 
can afford to devote to one aspect of the business。 
Business teams 
These are a group of people tasked with managing functions and achieving 
specific results over the longer term。 In this example there are three of these; 
Figure 4。7 Groups are not the same as teams
128 The Thirty…Day MBA 
covering sales; administration and warehouse/dispatch。 So; for example; 
the sales team is expected to meet sales targets and the dispatch team to 
get goods to customers on time。 In practice; every firm will have its own 
definition of business functions。 
Project teams 
These are o。。en cross…functional; made up of people from different areas。 
These can be assembled for any period of time to look at a particular project。 
In this example we have assumed that each of these teams has been asked 
to look at how each function could be made more efficient。 The value of 
having someone from other functions in these teams is to ensure that too 
parochial a view is not taken。 
Taskforce teams 
This is a short…term body put together quickly to look at one narrow issue 
or specific problem。 For example; if you proposed changing your working 
hours a taskforce could look at the implications for everyone inside 
and outside the firm and report back。 Then a decision based on the best information; 
provided by people most affected by the change; can be made。 
Team roles 
However talented the soloists are in an organization; in the end it is orchestras 
that make enough ‘noise’ to make things happen。 But teams don’t just 
occur naturally。 The presumption that people are going to work together is 
usually a mistake。 Chaos is more likely than teamwork。 
Cultures in businesses have very different pedigrees and can pull the 
organization in very different directions。 Take one successful new internet 
business for example; where people came from financial services; retail and 
more recently technology。 The pany’s roots were in financial services。 
Their petitors were banks and brokerage firms and their employees 
had moved around the sector in search of the ultimate accolade; to bee 
a vice…president。 The focus was inwards towards ‘hierarchy and title’。 Their 
second cohort of employees came from retailing; the staff of their one…time 
expanding branch network。 For retailers the focus is outwards towards 
the customer。 Their success was measured in the market and the best salespeople 
had the greatest respect and power。 The third group; and the most 
recent; was the technologists。 For these people success was measured by 
technical expertise。 Titles were irrelevant and their main concern was for 
the pletion of the project。 Their loyalty was not to the hierarchy but to 
the principles of the project itself; and to their team。 
Pu。。ing people with dis

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