ORGANI

ZING

I
tisamanagementfunct
ionwhi
chrefer
sto“t
hest
ruct
uri
ngofr
esour
cesandact
ivi
ti
est
oaccompl
i
sh
obj
ect
ivesi
naneff
ici
entandeff
ect
ivemanner.
”

Legal
For
msofOr
gani
zat
ion

Sol
ePr opri
et orship
Ownedandoper atedbyoneper son
Simpl et oor gani zeandshutdown
Hasf ewl egal r
est ri
ctions
Owneri sf r
eet omakeal l deci sions
Profitist axedonl yonce
Unlimi t
edr esponsi bi
lityfordebt s
Diff
icultt or aisecapi talf
orgr owt hofbusi ness
Durat i
onofbusi nessi sli
mi t edt ot hel ifeofpr opri
etor
Partner
ship
Associ ationoft woormor epar t
ner s
Hasr elativelyf ewl egal r
est rictions
Permi tst hepool ingt hemanager ialski ll
sandj udgement s
Divi
deddeci sionmaki ngandaut horitymi ghtcausepr oblems
Partnershav eunl imitedl i
abi lityfordebt s
Inal i
mi tedpar tner ship,ther emustbeatl eastonegener al par
tner
Limitedpar tnersar elimitedonl ytot heext entoftheirinv
est ment
Corporat
ions
Legal ent i
tiesownedbyshar ehol der s
Sharehol derhasnol iabil
itybey ondl ossoft hev al
ueofst ock
Hav eper pet ual li
feasl ongassubmi ttingnecessar yrepor t
s
Raisingmoneyf orgr owthi seasy
Easinessi nt ransf erofowner shi pandchangemanagement
Mor edi ffi
cul tandexpensi vet oor gani ze
Subjectt omanyr ulesandr egul ations
Cooperati
ves
Speci altypeofor gani zati
onownedbyuser sorcustomer s
Earningsar eusual l
ydi st
ribut edt axf ree
Boardmember smanagi ngcooper ati
vear eelectedbyal lmember s

Or
gani
zi
nginvolv
es
1.Identi
fi
cati
onandCl assi
ficationofRequi
redActivi
ti
es
2.GroupingofActi
vi
tiestoObt ainObj
ecti
ves
3.Assignmentofamanagert oeachgroupwiththeauthor
it
y
4.Provisi
onforCoordinati
onhor i
zont
all
yandver
t i
call
y

Whenst
ruct
uri
nganor
gani
zat
ion,
theengi
neermanagermustbeconcer
nedwi
tht
hef
oll
owi
ng:

1. Divi
sionofl abor–det er mi
ningthescopeofwor kandhowi ti
scombi nedinajob.
2. Delegationofaut horit
y–t heprocessofassigningv ari
ousdegr eesofdecisi
on-maki
ngauthori
tyto
subordinates.
3. Department ali
zation–t hegroupingofrel
atedjobs, activ
iti
es, orpr
ocessesintomajoror
ganizat
ional
subunits
4. Spanofcont r
ol–t henumberofpeopl ewhor eportdirectlytoagi venmanager
5. Coordinati
on–t hel i
nkingofacti
v i
ti
esint
heor ganizationt hatservestoachi
eveacommongoal or
objecti
ve.
TYPESOFORGANI
ZATI
ON

FORMALORGANI
ZATI
ON

–thestr
uctur
ethatdet
ail
sli
nesofr
esponsi
bil
i
ties,
authori
tyandposi
ti
on.I
tist
heplannedstr
uctur
eandi
t
represent
sthedeli
berat
eatt
empttoest
abli
shpatt
ernedrelat
ionshi
psamongcomponentsthatwi
llmeett
he
objecti
veseff
ecti
vel
y.

Iti
sdescri
bedbythemanagementt
hrough:
a.Or gani
zat
ionchar
t
b.Or gani
zat
ionManual
c. Poli
cyManual

I
NFORMALORGANI ZATION–exi st
swi thi
nthef ormalorganisati
on
- whenmember sofanor ganizati
onspont aneousl
yform agr oupwithfri
endshi
pasapr i
nci
palr
easonfor
belonging.
- Further
, unl
iket heformal or
ganisati
on,itcannotbef orcedorcontrol
ledbythemanagement.
- doesnothav eitsownr ul
esandr egul
ation.
- Itdoesn'thav eanysuper i
or-subordi
nater el
ati
onshipnoranyspeci f
icandwell
-def
inedobj
ect
ives.Her
e
ininfor
mal or ganisat
ion,communi cati
oni sdonethrought hegrapevi
ne.

Organi
zati
onalStruct
ure
“asyst
em usedt odefi
neahi er
archywi
thi
nanorgani
zat
ion.I
tidenti
fi
eseachj
ob,i
tsfunct
ionandwhereit
repor
tstowit
hint heorgani
zati
on.”Ast
ruct
urei
sthendevel
opedt oestabl
i
shhowtheorgani
zati
onoperat
est
o
execut
eitsgoals.

Pur
posesoft hestr
uct
ure:
1.I tdefinest
herel
ationshi
psbetweent asksandauthor
it
yfori
ndiv
idual
sanddepar t
ments.
2.I tdefinest
heformal r
eport
ingrelat
ionshi
ps,t
henumberoflevel
sinthehi
erarchyoft
heor gani
zati
on
andt hespanofcont r
ol.
3.I tdefinest
hegroupingsofindi
vidualsint
odepar
tmentsanddepartment
sintoorgani
zati
on.
4.I tdefinest
hesystem toeff
ectcoordinati
onofef
forti
nbothvert
ical(
aut
hori
ty)andhori
zontal(
tasks)
directi
ons.

TYPESOFORGANI
ZATI
ONALSTRUCTURE

FUNCTI ONALORGANI ZATI

ON–t hi
sisafor
m ofdepart
mental
izat
ioni
nwhi
chev
ery
oneengagedi
none
funct
ionalact
ivi
ty,
suchasengi
neer
ingormarket
ingi
sgroupedint
ooneuni
t.

ADVANTAGES
- thegroupingofempl oyeeswhoper f
orm acommont askper miteconomiesofscal
eandef fi
cient
resourceuse
- sincethechainofcommandconv ergesatthetopoft heorganizati
on,deci
sion-
makingiscentral
i
zed,
provi
dinguni f
ieddir
ectionf rom t
het op.
- Communi cati
onandcoor dinat
ionamongempl oy eeswi t
hineachdepar t
mentareexcell
ent.
- Thestr uct
urepromot eshi ghquali
tytechni
calproblem solvi
ng.
- Theorgani zat
ionisprov i
dedwi thindepthski
llspecial
izati
onanddev elopment.
DI
SADVANTAGES
- communi cat
ionandcoor dinationbetweendepartmentsar eoftenpoor
- Deci sionsinvolv
ingmor ethanonedepar t
mentpi l
eupatt het
opmanagementl evelandareoft
en
delayed.
- Wor kspeciali
zati
onanddi v i
sionoflabor,
whicharest r
essedi nafunct
ional
or ganizat
ion,
produce
routi
ne, nonmot i
vati
ngempl oyeetasks.
- Itisdi ff
icul
ttoidenti
fywhi chsecti
onorgr oupisresponsibleforcer
tai
nproblems.
- Ther ei sli
mitedviewofor ganizati
onalgoalsbyempl oyees.
- Ther ei sli
mitedgeneralmanagementt rai
ningforemploy ees.

PRODUCTORMARKETORGANI ZATI
ON–t hi
sref
erstotheorgani
zat
ionofacompanybydi
vi
sionst
hatbr
ings
toget
heral
lthosei
nvol
vedwi
thacer
tai
nty
peofproductorcustomer
.

ADVANTAGES
- Theorgani
zat
ionisfl
exi
bleandresponsivetochange.
- Theorgani
zat
ionprovi
desahighconcernf orcustomer’sneeds.
- Theorgani
zat
ionprovi
desexcel
lentcoordinat
ionacrossfuncti
onaldepart
ments.
- Ther
eiseasypinpoi
nti
ngofresponsibi
li
tyforproductproblems.
- Ther
eisemphasisonov er
all
productanddi vi
siongoals.
- Theopport
uni
tyforthedevel
opmentofgener al managementskil
lsisprov
ided.

DI
SADVANTAGES
- Therei
sahighpossibilit
yofduplicati
onofr esour
cesacrossdi
vi
sions.
- Therei
slesst
echnical dept
handspeci ali
zat
ionindi
vi
sions
- Therei
spoorcoordinationacrossdivisions
- Therei
slesst
opmanagementcont r
ol.
- Therei
scompeti
ti
onf orcorporat
er esources.

MATRIXORGANIZATION–anor gani
zat
ional
str
uct
urei
nwhi
cheachempl
oyeer
epor
tst
obot
haf
unct
ional
or
di
vi
sionmanagerandtoapr
ojectorgr
oupmanager.

ADVANTAGES
- Ther
eismor eeffi
ci
entuseofr esour cesthanthedi
visi
onalstr
ucture.
- Ther
eisflexi
bil
it
yandadaptabili
tyt ochangingenvi
ronment.
- Thedevel
opmentofbot hgeneralandf uncti
onalmanagementskill
sarepresent
- Ther
eisinter
disci
pli
narycooperationandanyexper t
iseisavai
labl
et oal
ldivi
sions.
- Ther
eareenlargedtasksforempl oyeeswhi chmotiv
atethem bett
er.

DI
SADVANTAGES
- Therei
sfrustr
ati
onandconf usi
onf rom dualchainofcommand.
- Therei
shighconf l
i
ctbetweendi v
isi
onal andfuncti
onali
nterest
s.
- Therear
emanymeet ingsandmor edi scussi
onthanacti
on.
- Therei
saneedf orhumanr elat
ionst r
ainingf
orkeyemploy eesandmanager
s.
- Therei
sat endencyforpowerdomi nancebyonesi deofthemat ri
x.

TypesofAut
hor
it
y
AUTHORTIY–isthef
ormal
rightofamanagert
omakedeci
sions,
giv
eor
der
s,andexpector
der
stobecar
ri
ed
out
LINEAUTHORITY–amanager ’
srighttotellsubor
dinateswhatt odoandt henseethattheydoit
.
STAFFAUTHORI TY–astaffspeciali
st’
sr i
ghttogiv
eadv i
ce,makingrecommendat i
ons,andoff
eri
ngcounsel
toli
nemanagersandot
hersintheor ganizati
on.
FUNCTI ONALAUTHORI
TY–aspeci ali
st’
sr i
ghttoov erseelowerlev
elpersonneli
nvolv
edi nt
hatspeci
alt
y,
regar
dingofwheret
hepersonnelareintheor gani
zation.

TwoDi st
inctTypesofAuthori
ty
LineManagers–per f
ormt asksthatr
efl
ecttheorganizati
on’spri
marygoalandmissi
on.
StaffManagers–incl
udeal lt
hosethatpr
ovidespeciali
zedskill
sinsuppor
tofli
nedepar
tment
s.Basedon
expert
iseandsnotdirect
lyrelat
edtoachiev
ingthestrategicgoalsoft
heorgani
zati
on

Delegati
on
Objecti
ve-Toimpr
ovemanager’
sov er
alleff
ici
encybyselecti
velydist
ri
buti
ngworkf
orempl
oyeest
odo
Process-Manager
sdelegat
etheresponsibi
li
tyandneededaut hori
tyofdoi
ngspeci
fi
cwor
ktoemploy
eesand
cr
eat eupwar
daccount
abil
it
yint
hem forsecuringtheant
icipat
edr esul
ts

El
ement sofDelegati
on
Responsibil
i
ty
- ist heobli
gati
onofasubor di natet
opr operl
yper f
ormt heassigneddut y.Whenasuperiorassi
gnsajob
tohissubordinatei
tbecomest heresponsibi
lit
yofthesubor dinatetocompletethatj
ob.
- CannotBeDel egated,butI
tCanBeAssi gned
Author
ity
- Thi sisthepowert otakecer t
aindecisi
onsinor dertoaccompl ishtasks. 
- CanBeDel egated
Accountabil
it
y
- answer abil
it
yoft heobli
gationtoperform delegatedresponsibili
tyandtoexer
cisetheauthori
tyf
ort
he
properperf
ormanceofwor k.
- CannotBeDel egat
ed