ORGANIZING

Organizing is a process by which employees,

facilities & tasks are related to each other, with a view to achieve the specific goals. organizing is a process of identifying & grouping the work to be performed , defining & delegating the authority & responsibility & establishing relationship for the purpose of enabling the people to work together on accomplishing objectives by Allen

Process of organizing
1.

2.
3. 4. 5.

Identify the work Grouping of related work Establishing the relationships Delegating the authority Providing for coordination & control

IMPORTANCE
Enlarges abilities

Facilitates administration
Facilitates growth & diversification Permits optimum use of resources Stimulates creativity

What Is an Organization?
A group of two or more people working

together to achieve a common set of goals Developing organization charts

Organization chart A representation of the positions and relationships in an organization Chain of command The line of authority that extends from the highest to the lowest levels of the organization Staff (advisory) positions Jobs that are not part of the direct chain of command in the organization

A Typical Corporate Organization Chart

Five Steps to Organizing a Business

1. Job design Divide the work into separate parts and assign those parts to positions 2. Departmentalization Group the positions into manageable units 3. Delegation Distribute responsibility and authority 4. Span of management Determine the number of subordinates who will report to each manager 5. Chain of command Designate the positions with direct authority and those that are support positions

Job Design
Job specialization The separation of activities into distinct tasks and the assignment of different tasks to different people Rationale for specialization The job of the organization is too large for one person to accomplish A worker learning only a specific, highly specialized task should be able to learn to do it efficiently Workers do not lose time switching from one operation to another Specialization makes it easier to design machinery to assist those who do the job Specialization makes it easier to train new workers

Work Specialization
Definition: Work specialization is a component of organization structure that involves having each discrete step of a job done by a different individual rather than having one individual do the whole job.

Exhibit 6-1 Economies and Diseconomies of Work Specialization

High Impact from human diseconomies

Productivity

Impact from economies of specialization

Low
Low High

Work Specialization

Job Design (contd)

Alternatives to job specialization

Job rotation

The systematic shifting of employees from one job to another to reduce boredom and dissatisfaction Adding tasks to a job to increase the variety of a workers activities Increasing the autonomy workers have in deciding how to do their jobs

Job enlargement

Job enrichment

Departmentalization
Departmentalization is the process of dividing the large organizations into smaller, flexible administrative units. Common bases for departmentalization

By function By product By location By customer Combinations

Functional departmentalization
The grouping of activities by functions performed eg sales, marketing, production etc FEATURES 1. Specialized by function 2. Sub goals emphasis 3. Growth is always pyramidal 4. Line & staff division 5. Functional relationship 6. Centralisation & decantralisation 7. Span of control

Functional pyramid
General Manager Finance R&D MArketing

A
A1

B
B1 A1.1 A1.2 A1.3

Advantages/Disadvantages

Clarity Economies of scale within a functional unit Specialization suitability Disadvantages 1. Effort focus 2. Poor decision making 3. Sub unit conflicts 4. Managerial vacuum

Product departmentalization
The grouping of activities by product produced
President Vice president ( Production) Manager Automobiles Manager Refrigerator Manager Spare parts

Product departmentalization
Factor Influencing 1. Diversity of product line 2. Interdependency 3. Level of technology 4. Innovative problem solving 5. Divergent production & marketing

Customer departmentalization
The grouping of activities by common customers

Vice President Marketing Retail customers Wholesale customers Foreign customers

** Common in banking, book publishing, food industry

Geographic departmentalization
The grouping of activities by territory
President
Vice president marketing

Manager East zone

Manager Weat zone

Manager South zone

Process departmentalization
The grouping of activities by work or customer flow
Drilling Grinding Vice president production

Welding

Assembling

Finishing

Departmentalization by Time
Vice president Production Day shift Evening shift Night shift

Departmentalization by Time
Done where work is done round the clock E.g. call centers, railways, hospitals, manufacturing units

Composite Departmentalization
The hybrid structure combines aspects of

both the functional & divisional forms with some jobs grouped into departments by functions other by products or markets.

Span of Management
Definition It is the number of subordinates a manager can direct efficiently and effectively.

The Span of Management

Wide and narrow spans of control

The Span of Management (contd)

Organizational height Flat organizations Have wider spans of management and fewer levels Require managers to perform more administrative tasks and to spend more time supervising subordinates Tall organizations Have narrow spans of management and many levels Have higher administrative costs (more managers) May distort internal communications during passage of the communications through the multiple levels of organization

Contingency Variables

The level in the organization The quality of employees Similarity of employee tasks The complexity of tasks The physical proximity of employees The degree of standardization of work procedures The strength of the organizations value system The sophistication of the organizations MIS The preferred managing style of managers

Chain of Command
Line and Staff Management
Line management position

A position that is part of the chain of command; includes direct responsibility for achieving the goals of the organization

Line authoritythe authority line managers have to make decisions and issue directives related to organizational goals

Staff management position

A position created to provide support, advice, and expertise within an organization

Advisory authoritythe expectation that line managers will consult with staff managers before making decisions Functional authoritystaff managers authority to make decisions and issues directives within their area of expertise

Line and Staff Management

Line-Staff Conflict
Reasons for conflict

Staff managers often have more formal education Staff managers are sometimes younger and more ambitious Line managers may perceive staff managers as a threat Staff managers may become angry if their recommendations are not adopted Minimizing conflict Integrate line and staff managers into one team Ensure that responsibilities are clearly defined Hold both line and staff managers accountable for results

Forms of Organizational Structure

1. Bureaucratic structure A management system based on a formal framework of authority that is carefully outlined and precisely followed Characteristics 1. A high level of job specialization 2. Departmentalization by function 3. Formal patterns of delegation 4. A high degree of centralization 5. Narrow spans of management, resulting in a tall organization 6. Clearly defined line and staff positions Advantages Inflexibility helps ensure fair and equitable treatment Disadvantages Inflexibility creates problems in adapting to dynamic business environments

Forms of Organizational Structure

(contd)
2. Matrix structure

A structure that combines vertical and horizontal lines of authority, usually by superimposing product departmentalization on functional departmentalization Authority flows both down and across Employees on cross-functional teams report to both the project manager in charge of the team and to their superiors in their home-base functional department

A Matrix Structure

Source: Management, Eighth Edition by Ricky W. Griffin. Copyright 2005 by Houghton Mifflin Company. Adapted with permission.

The Matrix Structure (contd)

Advantages
Added flexibility

Disadvantages
Chain of command

Increased productivity
Higher morale Increases in creativity and

innovation Personal development of team members

conflicts May take longer to resolve problems and reach solutions Personality clashes Poor communications Undefined individual roles Unclear responsibilities Difficulty in determining how to reward individual and team performance

Forms of Organizational Structure

(contd)
3. Cluster structure

An organization that consists primarily of teams with no or very few underlying departments
Also called team or collaborative structures Teams may move on to other projects or individual members may be reassigned to different teams and projects Strengths Small teams allows for flexibility to change direction quickly and try new things Weaknesses Employees may be concerned about job security Increased stress due to rapid changes

Forms of Organizational Structure

(contd)
4. Network structure (virtual organization)

An organization in which administration is the primary function performed and most other functions such as engineering, production, and marketing are contracted out to other firms Strength

Flexibility allows the organization to adjust quickly to changes Difficulty controlling the quality of work by other organizations Low morale and high turnover of hourly workers Vulnerability of relying on outside contractors

Weaknesses

 Delegation Assigning part of a managers work and power to other workers Responsibility

Delegation, Decentralization, and Centralization

The duty to do a job or perform a task The power within the organization to accomplish an assigned task. The obligation to accomplish an assigned job or task

Authority

Accountability

Features
2 sided relationship

Act of trust
Freedom to think & act A challenging task Forward thinking process

Steps in the Delegation Process

The manager

assigns responsibility The subordinate is empowered to do the task Ultimate accountability remains with the manager

Decentralization of Authority
Decentralized organization Management consciously attempts to spread authority widely in the lower levels of the organization

Centralized organization Authority is concentrated at the upper levels of the organization

Factors favoring decentralization A complex and unpredictable business environment Decisions that carry low risk or that are unimportant Highly capable lower-level managers with strong decision-making skills Past practices of the firm in decentralizing its structure and decision-making processes

Centralization Versus Decentralization

Centralization is a function of how much decision-making

authority is pushed down to lower levels in an organization; the more centralized an organization is, the higher is the level at which decisions are made. Decentralization refers to the pushing down of decisionmaking authority to lowest levels of an organization. Centralization-decentralization is not an either-or concept. Its a degree phenomenon.