14/09/2020

ORGANIZING
AND STAFFING

Organizing is…
• The identification and classification of required activities.
• The grouping of similar activities necessary to attain objectives.

• The assignment of each group to a manager with the authority

necessary to supervise it.
• The provision for coordination horizontally (on the same or a
similar organizational level) and vertically (e.g., between
corporate headquarters, division, and department) in the
organization structure.

The Logic of Organizing

1. Establishing enterprise objectives
2. Formulating supporting objectives, policies, and plans
3. Identifying, analyzing, and classifying the activities necessary to accomplish
these objectives
4. Grouping these activities in light of the human and material resources
5. Delegating to the head of each group the authority necessary to perform the
activities
6. Tying the groups together horizontally and vertically, though authority
relationships and information flows.

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The Organizing Process

Feasibility studies and feedback
1. Enterprise
Objectives

2. Supporting 6. Horizontal and 7. Staffing

objectives, 4. Grouping of
policies, and
3. Identification and vertical coordination
activities in light of 5. Delegation of
plans classification of of authority and
resources and authority
required activities information
situations
relationships 8. Leading

9. Controlling

Part 2 Part 3 Part 4,5,6

(Planning) (Organizing) (Other Functions)

Organization
• It is a formalized intentional structure of
roles or positions.
• It includes all the behaviors of all
participants.
• It is the total system of social and cultural
relationships.

Formal Organization
• Formal Organization means the intentional
structure of roles in formally organized enterprise.
• A formal organization must be flexible.
• Individual effort in group situation must be
channeled toward group and organizational goals.

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Informal Organization
• It is a network of interpersonal relationships that arise when people associate

with each other.

• It can also be described as any joint personal activity without conscious joint

purpose, although contributing to joint results.

• Thus, informal organizations—relationships that do not appear on the

organization chart—might include the machine shop group, the sixth-floor crowd,

the Friday evening bowling gang, and the morning coffee “regulars”.

Formal and Informal Organizations

President

Vice president

etc.
Division
managers
etc.
Department
managers

Informal organization: Informal organization: Informal organization:

Morning coffee Bowling team Chess group
“regulars”

Organizational Division: The Department

• One aspect of organizing is the establishment of
departments.

• A department is a distinct area, division, or

branch of an organization over which a manager
has authority for the performance of the
specified activities.

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Organizational Levels and the Span of

Management*
• While the purpose of organizing is to make human cooperation effective, the

reason for levels of organization is the limitation of the span of management.

• In other words, organizational levels exist because the is a limit to the number of

persons a manager can supervise effectively , even thought this limit varies

depending on situations.
• A wide span of management is associated with a few organizational levels; a

narrow span, with many levels.

Organizational Levels and the Span of

Management*
In much of the literature on management, this is referred to as the
span of control. Despite the widespread use of this term, in this
lecture span of management will be used, since the span is one of
management and not merely of control, which is only one function
of managing.

Organization Structures with Narrow

and Wide Spans
Organization with narrow spans

Advantages: Disadvantages:
· Close supervision · Superiors tend to get too involved in
· Close control subordinates’ work
· Fast communication between subordinates and · Many levels of management
superiors · High costs due to many levels
· Excessive distance between lowest level and
top level
Organization with wide spans

Advantages:
· Superiors are forced to delegate
· Clear policies must be made
· Subordinates must be carefully selected
Disadvantages:
· Tendency of overloaded superiors to become
decision bottlenecks
· Danger of superior’s loss of control
· Requires exceptional quality of managers

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Factors Determining an Effective Span

• The number of subordinates a manager can effectively manage
on the impact of underlying factors.

• Aside from such personal capacities as comprehending quickly,

getting along with people, and commanding loyalty and respect,
the most important determinant is a manager’s ability to reduce
the time he or she spends with subordinates.

Organization Structure
1. Departmentation by Enterprise Function
It is the grouping of activities according to the
functions of the enterprise, such as production,
selling, and financing.

Organization Structure A functional organization grouping (in a manufacturing company)

President

Assistant to
Personnel
president

Marketing Engineering Production Finance

Market Engineering Production Financial

Research Administration planning planning

Marketing Preliminary Industrial Budgets

Planning Design engineering

Advertising
Electrical Production General
and Promotion
Engineering engineering accounting

Sales Mechanical Purchasing Cost

administration Engineering accounting

Sales Hydraulic Tooling Statistics and

Engineering data
processing

Packaging General
production

Quality
Control

Advantages: Disadvantages:
· Logical reflection of functions · De-emphasizes overall company objectives
· Maintains power and prestige of major · Overspecializes and narrows viewpoints of
functions key personnel
· Follows principle of occupational · Reduces coordination between functions
specialization · Responsibility for profits is at the top only
· Simplifies training · Slow adaptation to changes in the
· Furnishes means of tight control at the top environment
· Limits development of general managers

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Organization Structure
2. Departmentation by Territory or Geography
It is the grouping of activities by area or territory that
is common in enterprises operating over wide
geographic areas.

Organization StructureA territorial, or geographic, organization grouping (in a manufacturing company)

President

Marketing Personnel Purchasing Finance

Western Southwest Central Southeast Eastern

region region region region region

Personnel

Engineering Production Accounting Sales

Advantages: Disadvantages:
· Places responsibility at a lower level · Requires more persons with general manager
· Places emphasis on local markets and problems abilities
· Improves coordination in a region · Tends to make maintenance of economical central
· Takes advantage of economies of local operation services difficult and may require services such as
· Better face-to-face communication with local personnel or purchasing at the regional level
interests · Makes control more difficult for top management
· Furnishes measurable training ground for general
managers

Organization Structure
3. Departmentation by Customer Group
It is the grouping of activities that reflects a primary
interest in customers.

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Organization Structure Customer departmentation (in a large bank)

President

Community-
Corporate Institutional
city banking
banking banking

Real estate and

Agricultural
mortgage loans
banking

Advantages: Disadvantages:
· Encourages focus on customer needs · May be difficult to coordinate operations
· Gives customers the feeling that they have an between competing customer demands
understanding supplier (banker) · Requires managers and staff expert in
· Develops expertness in customer area customers’ problems
· Customer groups may not always be clearly
defined (e.g., large corporate firms vs. other
corporate business)

Organization Structure
4. Departmentation by Product
It is the grouping of activities according to products
or product line, especially in multiline, large
enterprises.

Organization Structure A product organization grouping (in a manufacturing company)

President

Marketing Personnel Purchasing Finance

Indicator Industrial
Instrument Name
Lights Tools Title
division
Division Division

Engineering Accounting Engineering Accounting

Production Sales Production Sales

Advantages: Disadvantages:
· Places attention and effort on product line · Requires more persons with general manager
· Facilitates use of specialized capital, facilities, skills, abilities
and knowledge · Tends to make maintenance of economical central
· Permits growth and diversity of products and services services difficult
· Improves coordination of functional activities · Presents increased problem on top of management
· Places responsibility for profits at the division level control
· Furnishes measurable training ground for general
managers

* Product departmentation is also used in in nonmanufacturing companies.

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Organization Structure
5. Matrix Organization
It is the combining of functional and project or
product patterns of departmentation in the same
organization structure.

Organization Structure Matrix Organization (in engineering)

Director
Of
Engineering

Chief of Chief Chief Chief Chief

Preliminary Mechanical Electrical Hydraulic Metallurgical
Design Engineering Engineer Engineer Engineer

Project A
manager

Project B
manager

Project C
manager

Project D
manager

Advantages:
· Oriented toward end results
· Professional identification is maintained
· Pinpoints product-profit responsibility
Disadvantages:
· Conflict in organizational authority exists
· Possibility of disunity of command
· Requires a manager effective in human
relations

Line / Staff Authority and Decentralization

Authority and Power

Power is the ability of individuals or groups to
induce or influence the beliefs or actions of other
persons or groups.
Authority is the right in a position to exercise
discretion in making decisions affecting others.

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Bases of Power
1. Legitimate Power
 It normally arises from and derives from our cultural system of
rights, obligations, and duties whereby a “position” is accepted
by people as being “legitimate”.

2. Expertness of a person or a group

 This is the power of knowledge. Physicians, lawyers, and
university professors may have considerable influence on
others because they are respected for their specialized
knowledge.

Bases of Power
3. Referent Power
 It is an influence that people or groups may exercise because
people believe in them and their ideas.
4. Reward Power
 It refers to the power that arises from the ability of some
people to grant rewards.
5. Coercive Power
 It is the power to punish, whether by firing a subordinate or by
withholding a merit pay increase.

Line / Staff Concepts and Functional Authority

1. Scalar principle
 “The clearer the line of authority, the clearer will be the
responsibility for decision making and the more effective will
be organizational communication.”
2. Line authority
 The relationship in which a superior exercises direct
supervision over a subordinate.
3. Staff relationship
 It’s nature is advisory.

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Decentralization of Authority

• Decentralization is the tendency to disperse

decision-making authority in an organized
structure.

Delegation of Authority
• Authority is delegated when a superior gives a
subordinate discretion to make decisions.

• Clearly, supervisors cannot delegate authority

they do not have, whether they are members,
presidents, vice presidents, or supervisors.

Delegation of Authority
The process of delegation involves:
1. Determining the results expected from a position
2. Assigning tasks to the position
3. Delegating authority for accomplishing these tasks
4. Holding the person in that position responsible for the
accomplishment of the tasks.

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The Art of Delegation

Personal Attitudes toward Delegation
• Receptiveness
An underlying attribute of managers who will delegate
authority is a willingness to give other people’s ideas a
chance.
Decision making always involves some discretion, and a
subordinate’s decision is not exactly the one a superior
would have made.

The Art of Delegation

Personal Attitudes toward Delegation
• Willingness to let go
 A manager who will effectively delegate authority must be
willing to release them to make decisions to subordinates.
 A major fault of some managers who move up the executive
ladder—or of the pioneer who has built a large business from
the small beginning of, say, a garage machine shop—is that
they want to continue making decisions for the positions they
have left.

The Art of Delegation

Personal Attitudes toward Delegation
• Willingness to allow mistakes by subordinates
 Although no responsible manager would sit idly by and let a subordinate make
a mistake that would endanger the company or the subordinate’s position in
the company, continual checking on the subordinate to ensure that no
mistakes are ever made will make true delegation impossible.
 Since everyone makes mistakes, a subordinate must be allowed to make some,
and their cost must consider an investment in personal development.

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The Art of Delegation

Personal Attitudes toward Delegation
• Willingness to trust subordinates
Superiors have no alternative to trusting their
subordinates, for delegation implies a trustful
attitude between them.

The Art of Delegation

Personal Attitudes toward Delegation
• Willingness to establish and use broad controls
Since superiors cannot delegate responsibility for
performance, they should not delegate authority
unless they are willing to find means of getting
feedback, that is, of assuring themselves that
authority is being used to support enterprise or
departmental goals and plans.

Three (3) Elements of Delegation

1. Responsibility
 means that a person is assigned a task that he or she is supposed to carry out.

2. Authority
 means that the person has the power and the right to give orders, draws upon
resources, and do whatever else is necessary to fulfill the responsibility.

3. Accountability
 means that the subordinate’s manager has the right to expect the subordinate
to perform the job and to take corrective action in the event the subordinate
fails to do so.

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Recentralization of Authority and

Balance as the Key to Decentralization

• Recentralization is centralization of
authority that was once decentralized;
normally not a complete reversal of
decentralization, as the authority delegated
is not wholly withdrawn.

Staffing
• It is defined as filling, and keeping filled, positions in the organizational structure.

• Work specialization – degree to which the work necessary to achieve

organizational goals is broken down into various jobs

• Job design – specification of task activities associated with a particular job (e.g. a

job as an administrative assistant may include typing, filing and photocopying, or

it could involve such activities as coordinating travels and meetings, investigating

trouble spots, and making decisions about a certain range of issues).

Staffing
Approaches to Job Design

• Job simplification – the process of designing jobs so that

jobholders have only a small number of narrow activities
to perform.
• Job rotation – practice of periodically shifting workers
through a set of jobs in a planned sequence.

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Staffing
Approaches to Job Design

• Job enlargement – the allocation of a wider variety of

similar tasks to a job in order to make it more
challenging.
• Job enrichment – process of upgrading the job-task mix
in order to increase significantly the potential for growth,
achievement, responsibility, and recognition.

Job Simplification
Job Simplification

Worker 1 Worker 2 Worker 3

Task 1 Task 1 Task 1

Job Rotation
Job Rotation

Worker 1 Worker 2 Worker 3

Task 1 Task 2 Task 3

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Job Enlargement
Job Enlargement

Worker 1 Worker 2 Worker 3

Task 1,2,3 Task 1,2,3 Task 1,2,3

Movement of Personnel
• RECRUITMENT is the process of encouraging,
inducing, or influencing applicants to apply for a
certain vacant position.
• SELECTION is the process of getting the most
qualified applicant from among different job
seekers.
• TRAINING is the systematic development of the
attitude/knowledge/behavior patterns for the
adequate performance of a given job or task.

Movement of Personnel
• TRANSFER refers to the shifting of an employee
from one position to another without increasing
his duties, responsibilities, or pay.
• PROMOTION refers to the shifting of an employee
to a new position to which both his status and
responsibilities are increased.

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Movement of Personnel
• OUTPLACEMENT is the process of helping people who have
been dismissed from the company to regain employment
elsewhere.
• LAY-OFF is a type of separation, temporary and involuntary,
usually traceable to a negative business condition
• DISCHARGE is a permanent separation of an employee, at the
will of an employer, if a person is not competent in his job,
guilty of breaking rules like delinquency and insubordination,
and other violations

Movement of Personnel
• RESIGNATION is voluntary and permanent separation of an
employee due to due to low morale, low salary, etc.
• RETIREMENT can either be voluntary or involuntary; if an
employee retires upon reaching the number of years of
services in a company as provided for by its policies or upon
reaching the age of 65.
• PERFORMANCE APPRAISAL is the process of defining,
measuring, evaluating, and recording expectations from
employee performance.

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