CHAPTER 4

ORGANIZING

Learning Outline
1. 2. 3. 4. 5. 6. 7. 8. 9. Definition of organizing The organization process Division of work/labor Organizational structure Span of management Types of organization chart Authority Delegation Coordination

ORGANIZING
Definition: Process of determining the tasks to be done, who will do them and how those task will be managed and coordinated.

The Organization Process

Step 1: Reflecting on plans and objective

Step 5: Evaluating results of organizing strategy

Step 2: Establishing major tasks

Step 4: Allocating resources and directives for subtasks

Step 3: Dividing major tasks into subtasks

DIVISION/SPECIALIZATION
Divided work into process or separated jobs ADVANTAGES Increases productivity Less time spent in changing task It fosters specialization DISADVANTAGES Human diseconomies from work specialization Low skill variety, task identity and task significance Little autonomy and feedback, resulting in low interest and motivation. Sense of control from manager differ because of specialization

Easy to assign task Employee training for specialization is more efficient

ORGANIZATIONAL STRUCTURE

Defines the primary reporting relationships that exist within an organization.

The chain of command and hierarchy of responsibility, authority, and accountability are established through organizational structure. Functional structure Divisional structure Matrix structure Network structure

Common Forms of Organizational Structure

FUNCTIONAL STRUCTURE
Members of the organization are grouped according to the particular function that they perform within the organization. Appropriate when an organizations greatest source of complexity comes from the diverse tasks that must be performed rather than from its products, geographic markets, or consumer groups.

ADVANTAGES
Facilitates specialization Improved operational

DISADVANTAGES
Difficult to get quick

efficiency Employees develop better job skills Centralized control Cohesive workgroup

decision Not encourage innovation Only top level management held accountable for profitability

DIVISIONAL STRUCTURE
Members of the organization are grouped on the basis of:

Common products
Geographic markets Customers served

Product divisional structure

PRESIDENT

GM Pharmaceutical Products Primary Advantage: - Enhanced coordination - Better performance & responsibility

GM Personal Care products Primary Disadvantage: - Lack expertise in wide geographic area - Duplication of resources

Geographical Divisional structure

Primary Advantage: - Focus on specific new market - Emphasize on local needs - Good structure for growth along geographic line

Primary Disadvantage: - Duplication of product/technology effort - Difficult to coordinate & integrate

Customers Divisional structure

Grouping jobs on the basis of common customer This structure is most appropriate for organizations that have separate customer groups with specific and distinct needs.
Advantages Good structure for serving large customer groups. Helps allocate resources to meet demands of specific customer groups. Best for growth by targeting new and distinct groups. Disadvantages Ineffective and inefficient use of resources if most customer groups served are small. Internal competition for resources to serve customers groups may cause loss of market focus.

Matrix Structure: A Dual Focus

A structure in which the tasks of the organization are grouped along two organizational dimensions simultaneously.

Examples include:
Product/function Product/geographic region

ADVANTAGES
Can achieve

DISADVANTAGES
Complex, leading to

simultaneous objectives Managers focus on two organizational dimensions, resulting in more specific job skills

difficulties in implementation Behavioral difficulties from two bosses Time consuming from a planning/coordination perspective

Network structure
set

of alliances with other organizations that serve a wide variety of functions. An organization that has a core coordinating with other organizations (organizational units).

Three Types Of Network Structure

1. Internal network

- Relies on internally developed unit to provide services to a core organizational units.

2. Stable network - Maintain stable network rely to some degree on outsourcing to add flexibility to their product delivery system.

3.

Dynamic network
- Makes extensive use of outsourcing through alliances with outside organization.

 Advantages

Maximizes the effectiveness of the core unit

Do more with less resources Flexibility

Disadvantages

Fragmentation makes it difficult to develop control systems

Success is dependent on ability to locate sources

Difficult to develop employee loyalty

SPAN OF CONTROL
Refers

to number of employees report to a single manager. How many subordinates a manager can effectively & efficiently supervise.

Factors influence span of control

1. 2.

3.
4. 5.

Similarity task The ability of manager Task complexity Physical proximity of subordinates The amount & type of communication required among members

 Chain of command is the line of authority and

Scalar relationships (chain of command)

responsibility that flows throughout the organization from upper to lowest levels 3 concepts are related to chain of command: 1) Authority - the formal right in an organizational position to make decision. 2) Responsibility - the obligation to perform the duties assigned. 3) Unity of Command - an employee is accountable to one and only one supervisor.

AUTHORITY
Authority

The formal right inherent in an organizational position to make decisions.

Formal

authority authority

Authority inherent in an organizational position. Ability to influence others that is based on personal characteristics or skills. The obligation to perform the duties assigned.

Informal

Responsibility

Line authority/departments directly involved in delivering product/service of the organization. Features: 1) pertains to superior- subordinate relationships
2) designates a line manager 3) directly related to the objectives of organization Staff authority/departments provide support to line department, not directly involved in product/service delivery Features: 1) it is a manager- to- manager relationship 2) it includes all units that are not line
-

Roles of staff personnel: a) Advisory or counseling role b) The service role c) the control role

power
Ability

to influence others/ ability to use human, informational or material resources to get something done.

Types of power Position power : reward, coercive, legitimate & information. Personal power : expert & referent

DELEGATION

The process of transforming the responsibility for a specific activity or task to another member of the organization and Empowering that individual to accomplish the task effectively.

Delegating Authority
1. Decide which goals/tasks to delegate. Teach the department or organization mission. Find a capable person. Teach/train the person. 2. Make assignments. Agree on mission, goals, tasks. Establish limits (policy). Agree on results. Establish monitors and feedback. Give information. 3. Grant authority to act. Transfer right to decide. Transfer right to commit resources. Make it public. Do not interfere.

CONT..
4.

5.

Hold responsible/accountable. Check progress. Treat problems and challenges as teaching/learning opportunities. Monitor. Teach. Reward. Communicate. Give information. Give resources. Remove roadblocks.

ADVANTAGES
1. 2. 3. 4. 5. More task delegated, more opportunity managers to accept increased responsibility. Leads to better decision making. Causes subordinate to accept responsibility, be accountable for their actions, Speeds up the decision making Provides opportunity development problem- solving to employees. of analytical and

Barriers to delegation:
a) managers experience dual accountability

Overcoming the barriers of delegation:

1)

Match employee to the task

b) delegation requires planning and planning takes time

c) Managers lack of confident in the abilities of employees d) managers simply too disorganized or inflexible to plan the delegation.

2)

Be organized and communicate effectively

Transfer authority and accountability with the task

3)

4)

Choose the level of delegation carefully

Allow subordinates to develop own solutions and make mistakes Give more support, training and improve communication Gradual increase in the degree of delegation

5)

e) manager felt insecure.

6)

7)

COORDINATION
Definition of coordinating:

Keeping organization units that interact with each other in contact with each to share information and other things in a way that enhance accomplishment of task.
(Pamela lewis, page 193- 200)