Course 4 summary

THE FUNCTION OF ORGANIZING

Systemic concept
Organizing is the function of management which follows planning. It is a function
in which the synchronization and combination of human, physical and financial
resources takes place. All the three resources are important to get results.
An organizational chart is a diagram that shows the structure of
an organization and the relationships and relative ranks of its parts and positions/jobs.

The organizing structure

An organizational structure defines how activities such as task allocation,
coordination and supervision are directed towards the achievement of organizational
aims.

Benefits

highlights the vertical and horizontal division of labor

highlights the company goals from the managerial perspective(clarify duties,

communication, responsibilities)

The division of labor within the firm depends on the correlation authority-responsibility.
The independent subsystems of the firm organization chart are based on the model
superior-subordinate.

The Organizational Structure includes three main

subsystems
1)The operating system:
Represents the assembly of those departments directly involved in achieving the
company's objectives.

2)The executive system:

Represents whole persons and functional compartments who lead, coordinate
and regulate the activities of line departments.

3)The representative structure:

Represents whole persons and departments, through which the company
performed consulting and negotiating with members inside and outside the organization.

The design of the organizing structure

Represent the specifics of each type of firm, the particularities of each type of
firm that lead to different organizational structure which can fulfill its strategic plan in a
flexible way.

1. The assessment of the firm strategic plan

In the strategic plan are assessed the objectives of the enterprise and are
chosen and grouped the tasks that result from it.

2. The establishing of the tasks grouping criteria

Is based on the division principles :

vertically, by establishing the hierarchical levels, the problems connected with the
control chain and centralizing decentralizing

horizontally, by establishing the specialized tasks, the designing of the jobs

3. The designing of the compartments

Is done by grouping the jobs, and by establishing the relations between them

4. The determining of the optimum variant

The optimum variant is a function of the weight of advantages, and the facilities
for eliminating the disadvantages.

5. The establishing of the interdependences

The divisions of the organizing structure are conceived with a view to minimize
the dependence between:
the specific and individual objectives of the tasks
abilities and responsibilities.

6. The assessment of the functionality

Has been obtained.

The elements of organizational structure

1. Jobs
Work should be divided and right people should be given right jobs to reduce the
wastage of resources in an organization.

2. Compartments / Departments
Individuals are grouped into departments and their work is coordinated and
directed towards organizational goals.

3. Hierarchical levels
A hierarchical organization is an organizational structure where every entity in
the organization, except one, is subordinate to a single other entity.
A large number of hierarchical levels leads to tight control and reduced
communication overhead.
A small number of hierarchical levels leads to a weak control but facilitates
delegation.

4. Delegation of authority
Delegation is the process managers use to transfer authority and responsibility to
positions below them. Organizations today tend to encourage delegation from highest to
lowest possible levels.

5. Organizational Relations
An organization is a group of people with a defined relationship in which they
work together to achieve the goals of that organization. This relationship does not come
to end after completing each task. Organization is a never ending process.

6. Control Area
Control is the regulation of organizational activities so that some targeted
element of performance remains within acceptable limits.
Areas of control:
The four basic organizational resources usually define the areas of control.
Physical resources: Control includes inventory management, quality control and
equipment control.
Human resources: Control includes selection and placement, training and development,
performance appraisal and compensation.

Information resources: Control includes sales/marketing forecasting, environmental

analysis, public relations, production scheduling and economic forecasting.
Financial resources: Control involves managing the organizations debt, cash flow and
receivables/payables. Control of financial resources may be the most important control
of all.