ORGANIZING

Organizing
The process of arranging and allocating work, authority, and resources among an organizations
members so that they can achieve organizational goal.
The process of grouping together of men and establishing relationships among them, defining
the authority and responsibility of personnel by using the companys other basic resources to
attain predetermined goals and objectives.
Basic organizing elements that manager must address are:
1.
2.
3.
4.
5.

designing jobs; grouping jobs;

establishing reporting relationships between jobs;
distributing authority among jobs;
coordinating activities between jobs; and
differentiating among jobs

According to Edgar Schien, a prominent organizational psychologist, all organizations share four
characteristics:"
1.
2.
3.
4.

Coordination of efforts
Common goal or purpose
Division of labor
Hierarchy of authority

Nature of Organizing:
Some believe it includes the behavior of all member of the group.
Others say it is the total system of social and cultural relationships.
Generally, most managers think that the terms means a formalized design of intentional
structures, roles and positions.
Organizing as a Process:
First, the structure must reflect objectives and plans because activities of the organization are
based on them.
Second, the structure must reflect authority given to top and middle management.
Third, organization structure, like any other plan, should reflect their external environment (must
be economic, technological, political, social or ethical)
Fourth, the organization must be manned.

Process of Organizing
1. Division of Work
2. Grouping of Work
3. Delegation of Authority
4. Coordination of Work
Principles of Organizing
1. Unity of Objective
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2. Specialization
3. Coordination
4. Authority and Responsibility
5. Unity of Command
6. Scalar Chain
7. Span of Control
8. Exception
9. Efficiency
10. Balance
11. Homogeneity
12. Continuity
13. Simplicity
BENEFITS OF ORGANIZING
Productivity increases when human and material resources are effectively organized.
Combining efforts to collectively accomplish the tasks that would exceed simple sum of individual
efforts is called synergism. Synergy is achieved through the integration of specialized tasks.
Effective organizing can provide the following benefits:
1. Division of work that avoids duplication, conflict, and misuse of resources, both material and
human.
2. Clarity of individual performance expectations and specialized tasks.
3. A logical flow of work activities that can be comfortably performed by individuals or groups.
4. Established channels of communication that enhance decision making and control.
5. Coordinating mechanisms that ensure harmony among organization members engaged m
diversified activities.
6. Focused, efforts that relate to objectives logically and efficient.
7. Appropriate authority structures with accountability to enhance planning and controlling
throughout the organization.
Decisional Roles of Managers
Mintzberg identifies four decisional roles that reflect managers choice making responsibilities.
1. Entrepreneur: Some managers do not start their own firms, but for complex organization, they act
as entrepreneurs by discovering new ways to use resources and technology.
2. Disturbance handler. Managers are for resolving problems, which is their most stressful and
challenging role.
3. Resource allocator. This requires careful proportioning of scarce resources such as time, money,
material or manpower to accomplish all that is expected.
4. Negotiator: Negotiating extends to internal and external managerial activities such as, negotiating
materials or supplies prices and terms, wages and conditions of employment, sales and union
contracts.
Figure 1:, The Activities of Real Managers
Communicating
Exchanging information
Paper works
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Networking

Interacting with outside

Socializing/lobbying
Traditional Mngmt
Planning
Decision making
Controlling
Motivation
Human Resources Management
The Management Hierarchy

Top Management
Executives
Middle Management
Plant, Division, Staff Manager
Supervisory Management
Fine-line Supervisors, Foreman, Department heads

FUNCTIONAL AND GENERAL MANAGERs

A horizontal division of management which is based on expertise and specialization is calIed functional
management.
Skills Managers Need
Technical skills
Knowledge and proficiency in a specific field,
Ability to use tools, apply specialized knowledge, and manage processes and
techniques
Human skills
The ability to work well with other people
Ability to work effectively, lead and assure harmonious interpersonal relations.
These skills include the ability to motivate and influence others to achieve organizational
objectives

Conceptual skills
The ability to think and conceptualize about abstract and complex situations concerning
the organization

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Ability to solve long-term problems and view the total organization as an inter-active
system

Figure 3: Managerial Skills

Relative Importance
by Management
Level
Focus

Focus

Focus

Skills Needed by Managers

Conceptual
Ability to solve long-term problems
and view the total organization as an
interactive system

Human Relations
Ability to work effectively, lead and
assure harmonious interpersonal
relations.

Technical
Ability to use tools, apply specialized
knowledge, and manage processes
and techniques

Management Style
Autocratic style A leader who dictates work methods, makes unilateral decisions, and limits employee
participation
Advantages:
1. Autocratic leadership style permits quick decision-making.
2. It provides strong motivation and satisfaction to the leaders who dictate terms.
3. This style may yield better results when great speed is required.
Disadvantages:
1. It leads to frustration, low moral and conflict among subordinates,
2. Subordinates tend to shirk responsibility and initiative.
Democratic style A leader who involves employees in decision making, delegates authority, and uses
feedback as an opportunity for coaching employees.
Advantages:
1. Exchange of ideas among subordinates and leader improves job satisfaction and morale of the
subordinates.
2.
Human values get their due recognition which develops positive attitude and reduces
resistance to change.
3. Labour absenteeism and labour turnover are reduced.
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4. The quality of decision is improved.

Disadvantages:
1. Democratic style of leadership is time consuming and may result in delays in decision-making.
2. It is less effective if participation from the subordinates is for name sake.
3. Consulting others while making decisions go against the capability of the leader to take
decisions.
Free-rein Style A leader gives complete freedom to his subordinates to make most decisions
Laissez-faire style A leader who lets the group make decisions and complete the work in whatever
way it sees fit,
Advantages:
1. Positive effect on job satisfaction and moral of subordinates.
2. It gives chance to take initiative to the subordinates.
3. Maximum possible scope for development of subordinates.
Disadvantages:
1. Under this style of leadership, there is no leadership at all.
2. Subordinates do not get the guidance and support of the leader.
3. Subordinates may move in different directions and may work at cross purpose which may create
problem for the organisation.
Nature of Organization Structure
Organization structure
Is the formal pattern of interactions and coordination designed by management to link the tasks
of individuals and groups in achieving organizational goals.
The formal arrangement of jobs within an organization
They are typically created by management for specific purpose. Organization structure elements are:
1. The assignment of tasks and responsibilities that define the jobs of individuals and units.
2. The clustering of individual positions into unit and of into departments and larger units to form
an organizations hierarchy.
3. The various mechanisms required to facilitate vertical (top-to-buttom) coordination, such as the
number of individual reporting to any given managerial position and the degree of delegation of
authority.
4. The various mechanisms need to foster horizontal (across departments) coordination, such as
task forces and interdepartmental teams.
Organizational design Creating or changing an organizations structure Work specialization,
Departmentalization, Chain of command, Span of control, Centralization and decentralization, and
Formalization.
Organizational chart
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 The visual representation of an organizations structure,

is a diagram that shows the structure of an organization and the relationships and relative ranks
of its parts and positions/jobs.
Chain of command the line of authority extending from upper organizational levels to the lowest levels,
which clarifies who reports to whom.
Job Design
The way tasks are combined to form complete jobs.
is the process of Work arrangement (or rearrangement) aimed at reducing or overcoming job
dissatisfaction and employee alienation arising from repetitive and mechanistic tasks
Job specification A written statement of the minimum qualifications that a person must possess to
perform a given job successfully.
Job simplification is the process of designing jobs so that job holders have only a small number of
narrow activities to perform.
a. job simplification
Worker 1

Worker 2

Worker 3

Task 1

Task 2

Task 3

Job rotation is the practice of shifting workers through a set of jobs in a planned sequence.
b. Job rotation

Worker 1

Worker 2

Worker 3

Task 1

Task 2

Task 3

Job enlargement
Is the allocation of a wider variety of similar tasks to a job in order to make it more challenging
Is the process of upgrading the job task mix 'in order to increase significantly the potential for
growth, achievement, responsibility and recognition.
The horizontal expansion of a job by increasing job scope

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Worker 1

Worker 2

Worker 3

Task 1

Task 2

Task 3

Job score, the number of different tasks as employee performs in a particular job.
Job satisfaction An employees general attitude toward his or her job

DIVISION OF WORK
Specialization is the planned division of work into individual tasks that can be repeated efficiently.
This process of planning the works and breaking it down to most common elements is called work
simplification.
Standardization is the process of making work uniform through repeated use of similar methods,
machines, and materials to achieve similar and predictable results over time.
HORIZONTAL AND VERTICAL JOB SPECIALIZATION
Horizontal job specialization
Is the result of dividing complicated tasks into simpler jobs or operations, reducing the scope of
tasks.
Is done at the same level of decision power, and reflects the breaking down of the production
process = division of labor.
1 2 3 4 5 6
1
2
3
4
5
6
=
Vertical Job specialization results from delegating responsibilities for tasks and decisions to
subordinate.
Task with six
Broken into six tasks
Vertical job
Management
becomes
operations
overloaded; depth of
responsibilities rise

specialization
reallocates task and
responsibilities

Leadership

Reduces leadership
duties

Marketing

Delegates marketing
and
sales
Hires
operations
Promotes
accountant
managers

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Finances
Operations

BUREAUCRATIC STRUCTURES
Bureaucracy A form of organization characterized by division of labor, a clearly defined hierarchy,
detailed rules and regulations, and impersonal relationships.
Five characteristics of modern bureaucracies are:
1. Fixed and official jurisdiction of authority
2. Firmly established rational chain of command
3. Quantified and thoroughly documented information
4. Supposition of expertise
5. Management is technically scientific
Bureaucracy has two specific attributes:
1. Chain of command
2. Span of Control
Chain of command The line of authority extending from upper organizational levels to the lowest
levels, which clarifies who reports to whom.
Span of control The number of employees a manager can efficiently and effectively manage.

FORMAL ORGANIZATIONS VS INFORMAL ORGANIZATION

Formal organization
Refers to the systematic and organized structure in a workplace.
It is carefully administered by the organization and it is always in total control of the
management.
The efficient utilization of resources, profits and employees within a rigid and systematic
structure is the main function of a formal organization.
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Informal organization
Is the social structure of the organization, as opposed to the formal structure of an organization.
It establishes how an organization functions from a practical standpoint.
The informal organization can work in concurrence with the formal organizational structure,
parallel with it, or against it.
What is an Organization?
Executive structure of a business, Webster It indicates that organization is the framework or
backbone
Connotes a creative process. All the parts of a business do not come into existence
spontaneously. They are the results of managerial efforts to carry out a predetermined course of
action.
Sometimes used to mean the total business organization, including facilities, materials,
money, and manpower.
TYPES OF ORGANIZATION STRUCTURES
1. Line Organization simplest form of structure and refers to a direct straight-line responsibility
and control from the top management to the middle management and to the lower level.

2. Line and Staff Organization This utilizes the assistance of experts or specialists. Companies
expands from single to complex by adding more people to the organization.

3. Functional Organization It utilizes the pure services of experts or specialists. This removed the
staff specialist from his assisting capacity and gave him the pure authority and responsibility for
supervision and administration of the function.

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4. Committees Used in situation where group participation and decision are required. These are
created to undertake special activities rather than routinary activities.

Organization Chart
is a diagram or drawing showing the important aspects of an organizational structure. It shows
the relationship among positions as to authority, responsibility, and accountability and the people
who occupy them.
As defined by George Terry: is a diagrammatical form which shows important aspects of an
organization including the major functions and their respective relationships, the channels of
supervision, and the relative authority of each employee who is in charge of each function.
Purpose and Types of Organization Chart
Purpose:
assists one to view the firms structure as a whole. It shows the principal divisions and lines of
formal authority.
assists management to divide the different duties or functions in the business establishment so
that they will be performed effectively and efficiently.
Types of Organization Chart
1. Master Chart or Chart of Authority it shows the entire organizational structure.
2. Functional Chart Shows at a glance the functions and activities of the positions and/or
departments. It shows the major responsibilities or departments or positions. Listed below each
job title are brief statement of the responsibilities.
3. Personnel Chart same relative manner as the functional chart. Instead of listing the functions,
the tiles of the positions of the names of persons are indicated.
Reorganization
is the process by which an existing organization undergoes changes in the size and shape of
the organization structure. The change may range from simple to complex.
Departmentalization
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 Results from the grouping of work, the desire to obtain organization units of manageable size,
and to utilize managerial ability.
Four bases for departmentalizing an organization. Departmentalization by function, product,
process and geographical location.
1. Functional Organization
Grouping jobs by functions performed
Is a approach to departmentalization based on grouping people according to their skills,
and expertise, giving the authority within their areas of expertise

2. Product Organization
Grouping jobs by product line
An approach to departmentalization based .on grouping people according to an
organization's products or services, with functional activities relocated under product or
service divisions

3. Geographical Organization
Grouping jobs on the basis of territory or geography
is an approach to departmentalization based on territorial control and localized
decision making, with functioned activities subordinated to geographical divisions.

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4. Customer Organization
Grouping jobs by type of customer and needs
An approach to departmentalization based on well-defined customer groups whereby
people and activities are focused on unique needs of clientele is called customer
organization

DELEGATION
This involves the partial distribution of authority to subordinates for making decisions or
performing tasks. A spectrum of delegation d the degree of management decision making authority.
1. Personnel assistance. Minimum authority is delegated, where subordinates act as advisers.
They influence decision, but do not participate in decision making.
2. Participative assistance. Subordinates are involved in decisions where their expertise .is
needed, but they do not actually participating making major decisions.
3. Joint decision making. This is the line separating 'advising from decision making. Committees
are used and superior consider recommendation from subordinates.
4. Subordinate decision making. Greater delegation occurs, formal position are created either in
staff or line management. Subordinates have appropriate authority for making decision without
the direct participation of superiors.
5. Autonomy in decision making. Authority is generally transferred to subordinates. Periodic
reporting procedures are means to informing result to superiors.
Reasons for Delegating Authority
a. Managerial overload. Limited transfer of authority relieves operational pressures.
b. Need for expertise. Specialization is needed in so many situations. That no one person can
successfully handle decisions across the breadth of the company.
c. Proximity of tasks. SUpervisors' proximity to tasks suggests a logical transfer of authority to
ensure timely decisions at operational points.
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d. Behavioural needs. A psychological climate of cooperation, a feeling that everyone is important

in an organization, and belief that we are making a contribution in the process, are reason for
delegates
Figure: Degree of Delegation along the spectrum of authority
Manager Authority

Subordinates Authority
Subordinates advice

Manager makes decisions

Manager shares decision making
Manager reviews decisions
Manager reviews . results

Subordinates have voice in

decision
Subordinates share decision
making
Subordinates make decision,
implement after review
Subordinates makes decision and
implement: report results

Manager reviews on need

only

CENTRALIZED AND DECENTRALIZED ORGANIZATIONS

Centralized Management
major decisions are made by a few top executives, subordinates exercise little (if any) initiate in
decision making.
even when there are multiple branches, most decisions are made at the main office rather than
the local branch.
Decentralized Management
represents a systematic effort to delegate to lower levels all authority, except that which can
only be exercised at the highest levels.

authority is dispersed throughout and decision making is distributed throughout the

organization.
Centralization Vs Decentralization

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COMMITTEE
Structure committees are also referred to as standing committee and are a permanent part of
the structure of an organization, such as a corporate finance committee, a compensation or salary
grading committee or a research and development committee. Ad hoc committees function similarly to
a task force in seeking to accomplish a specific purpose and are then disbanded, they do not have
permanency.
Basic Committee Functions
Committee Purpose

Nature and Functions

Examples

Enables communication,
integration of various
departments and activities
that are interrelated

Nee product planning committee

Advising

Provide advice or make

recommendations to
management

University
faculty;
Budget committee;
Advisory councils

Decision Making

Provide advice or make

recommendations to
management

Corporate
board of
directors;
Bank loan
committee; Executive
compensation committee

Coordinating

HUMAN RESOURCE PLANNING

This consists of forecasting future needs for employees in different jobs forecasting the
availability of such employees, and then taking steps to match supply and demand. It includes the set
of organizational activities directed at attracting, developing, and maintaining effective workforce.
Systematic planning of this type results in improved efficiency and effectiveness throughout the
organization.
Staffing function is required in this system. This includes the set of activities aimed at attracting
and selecting individuals for positions in a way that will facilitate the achievement of organizational
goals.
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Recruitment is the process of finding and attempting to attract job candidates who are capable
of effectively filling job vacancies.
A method use is Job posting a practice whereby information about job vacancies is placed in a
conspicuous place in as organization, such as bulletin board or newsletters.
Selection is the process of choosing the best among applicants through series of written
examinations, interviews, medical examination and training.

JOB ANALYSIS
This is a systematized procedure for collecting and recording information about job.
Parts of job analysis are
1. job title,
2. Job description and
3. job specification
Job title identifies the 'vacancy.
Job description lists the duties of a job, its working conditions and the tools, techniques, skills,
equipment used to perform the work.
Job specification lists the skills, abilities and other credentials needed to do a job. Its personal,
academic and professional requirements for effective performance of the job.
Internal Recruitment VS. External Recruitment
Internal Recruitment
Advantages
1. Candidates are already oriented to the organization
2. Reliable information is available about candidates
3. Recruitment costs are lower.
4. Internal moral is increased due to upward mobility opportunities
5. Good performance IS rewarded
Disadvantages
1. There may be fewer ideas.
2. Unsuccessful contenders may become Upset.
3. Selection susceptible to office politics.
External Recruitment
Advantages
1. Candidates are a potential source of new ideas.
2. Candidates may have broader experience.
3. Candidates may be familiar with competition.
4. Candidates may have new specialization
Disadvantages
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1. The probability of mistake is higher because of less reliable information.

2. Potential internal candidates may be resentful.
3. The new employee may have a slower start because of the need for orientation to the
organization.
4. The recruitment process may be expensive
HUMAN RESOURCE MANAGEMENT
The term human resource management (HRM) refers to activities undertaken to attract,
develop, and maintain an effective workforce within an organization.
This consists of three parts.
First, all managers are human resource managers, expected to pay attention to the
development and satisfaction of subordinates.
Second, employees are viewed as assets, giving company a competitive assets.
Third, human resource management is a matching process, integrating the organization's goals
with employees' needs.

Figure: A general a model for Human Resources Management

Organizational Strategy and
Structure

Human Resources
Planning

Selection

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Identifying and
solving human
resource problem

Desired
Result
Performance
The Appraisal
right number of
appropriately
skilled people
Training
in the right jobs at the right
time

Page 17 of 17