Functions of

Management:
ORGANIZING
Learning Objectives
After the discussion, students are able to:
• Define the meaning of organizing
• Determine the importance of organizing in management
• Describe the nature of organizing
• Enumerate the importance and process of organizing
• Define organizational structure
• Describe the types and functions of organizational structure
WHAT IS organizing?
"Organization is the process of
identifying and grouping of the
works to be performed, defining
and delegating responsibility
and authority and establishing
relationships for the purpose of
enabling people to work most
efficiently".
- Louis A. Allen
 Organizing IN MANAGEMENT
It is the function of management
which follows planning. It is a function
in which the synchronization and
combination of human, physical and
financial resources takes place. All the
three resources are important to get
results. Therefore, organizational
function helps in the achievement of
results which in fact is important for the
functioning of a concern.
 FUNDAMENTAL CONCEPTS OF
organizing:
 DIFFERENTIATION: It means that an organization is
composed of units that work on specialized tasks using
different work methods and requiring employees with
unique competencies.

 INTEGRATION: It means that the various units must be

put back together so that work is coordinated.
 NATURE OF organizing:

1. Group of Persons 5. Communication

2. Common Objectives 6. Central Authority
3. Division of Work 7. Rules & Regulations
4. Cooperative Efforts 8. Dynamic Element
NATURE OF ORGANIZATION:
 Group of Persons: An organization is a group of people
working together for the achievement of common
objectives. The group may be large or small. An
organization is a system of cooperative relationships of
two or more persons.

 Common Objectives: Every organization has a common

objectives distinct from personal objectives of the
members. The common goal is the basis of cooperation
among the members. The objectives of the organization are
usually are made explicit
 Division of Work: An organization comes into existence
when the total task is divided into the members of the
group. Division of work is necessary not only because
one individual cannot do all the work but specialization
results in efficiency and effectiveness.

 Cooperative Efforts: The members of an organization

are willing to help each other for the achievement of
desired goals. Cooperative relationships are stabilized
both vertically and horizontally among different units of
the organization.
 Communication: People who form an organization
communicates with each other in order to integrate or
coordinate there efforts. The structure must be such that
people can perform together efficiently.

 Central Authority: In an organization, there is a

central directing authority which controls the concerted
efforts of the group. The chain of authority-
responsibility relationships is known as the chain of
command.
 Rules and Regulations: For the orderly and systematic
working of the members, rules and regulations are laid
down and enforced by the central authority.

 The Dynamic Element: An organization is not a mere

mechanical structure but a living organism arising out
of the sentiments, attitudes, and behavior of people. The
people are the material of construction that holds the
structure together and gives it vitality.
 1. Facilitates
Administration

2. Encourages
7. Growth
Coordination &
Diversification

IMPORTANCE OF
ORGANIZING
6. Ensures
3. Optimum
Continuity of
Use of
Enterprise
Technology

5. 4. Stimulates
Encourages Innovation
Good Human &
Relations Technology
 IMPORTANCE OF organizing:
1. Facilitates Administration: It provides a system of authority
and network for effective communication. Individual goals can
be coordinated towards group goals. A properly balanced
organization facilitated both management and operation of the
enterprise.
2. Encourages Growth & Diversification: It has enabled
organizations to grow and expand to giant sizes. Systematic
division of work and consistent delegation of authority
facilitate taking up of new activities and meeting new demands.
It provides flexibility for growth without losing control over
various activities.
3. Optimum Use of New Technology: Optimum use of technology
permits optimum utilization of human resources. Sound
organization ensures that every individual is placed on the job for
which one is best suited.
4. Stimulates Innovation & Creativity: It provides for effective
management of change and responds favourably to changes in
environment. It provides recognition for the professional and the
specialist in terms of their achievement.
5. Encourages Good Human Relations: The assignment of right
jobs to right person improves job satisfaction and inter-personal
relations. Well-defined jobs and clear lines of authority and
responsibility ensure good human relations.
6. Ensures Continuity of Enterprise: It provides scope for the
training and development of future management. It provides
avenues for development and promotions through delegation
and decentralisation.

7. Coordination: It facilitates order and cohesiveness in the

enterprise. Division of labor, better utility of technology and
human talent helps to improve the efficiency and quality of
work. Clear channels of communication among the members
of the organization leads to coordination.
 PROCESS of organizing:

IDENTIFICATION GROUPING OF
OF ACTIVITIES ACTIVITIES

2.

1. 3.

4.

ASSIGNMENT OF DELEGATION OF
DUTIES AUTHORITY
 Process of organizing:
1. Identification of Activities: First step is to determine the tasks
that must be performed to achieve the established objectives.
Activities and jobs are building blocks of any organization. The
activities to be performed depends upon the objectives, nature
and size of the enterprise.
2. Grouping of Activities: The various activities are grouped into
departments or divisions according to similarity and common
purpose. Such grouping is necessary for the purpose of
specialization, coordination and control. It may be grouped on
various basis i.e. functions products, territories, customers etc.
depending on requirements.
3. Assignment of Duties: Groups of activities or departments are
then allotted to different positions. Every position is occupied by
an individual best suited for it. The assignments of activities
creates responsibility and ensures certainty of work performance.
The process should be carried down to the lowest levels. It is
basically done to avoid duplication of work and over-lapping
efforts.
4. Delegation of Authority: Every individual is given the authority
required to carry out the responsibility assigned to him. A chain of
command is created through successive delegation of authority.
Different positions are linked vertically and horizontally by
establishing formal authority. Every individual must know to
whom he is accountable and who are his subordinates.
 Organizing and Organization Structure
Organizing
- The process of arranging people and other resources to
work together to accomplish a goal.

Organization Structure
- The system of tasks, workflows, reporting relationships,
and communication channels that link together diverse
individuals and groups.
Types of Organizational Architecture
• Vertical differentiation
– Tall versus Flat Structure

• Horizontal differentiation
– Functional Structure
– Divisional / Multidivisional Structure
– Geographic Structure
– Matrix Structure
 Tall versus Flat Organization
Tall Organization
President

Flat Organization
President
 Tall versus Flat Organization
Tall Organization:
– This type of organizational
architecture has many layers
and narrow span of control.

Flat organization:
– This type of organizational
architecture has few layers
and wide span of control.
 An Organization Structure can be:
 Formal structures…
The structure of the organization in its official state.
An organization chart is a diagram describing reporting relationships
and the formal arrangement of work positions within an organization.
An organization chart identifies the following aspects of formal
structure:
• The division of work
• Supervisory relationships
• Communication channels
• Major subunits
• Levels of management
 Informal structures 
A “shadow” organization made up of the unofficial, but often
critical, working relationships between organization members.
Potential advantages of informal structures:
• Helping people accomplish their work
• Overcoming limits of formal structure
• Gaining access to interpersonal networks
• Informal learning
MAJOR TYPES OF ORGANIZATION STRUCTURES:

 FUNCTIONAL Structures

– People with similar skills and performing similar

tasks are grouped together into formal work units.
– Members work in their functional areas of expertise.
– Are not limited to businesses.
– Work well for small organizations producing few
products or services.
Functional structures in a business, branch bank, and community hospital.
 DIVISIONAL Structures

– Group together people who work on the same product

or process, serve similar customers, and/or are located
in the same area or geographical region.
– Common in complex organizations.
– Avoid problems associated with functional structures.
Divisional structures based on product, geography,
customer, and process.
 MATRIX Structures

– Combines functional and divisional structures to gain

advantages and minimize disadvantages of each.
– Used in:
• Manufacturing
• Service industries
• Professional fields
• Non-profit sector
• Multi-national corporations
Matrix structure in a small multi-project business firm.
CEO

Vice president, Vice president, Vice president, Vice president,

engineering production finance marketing

Employees
Project
manager A

Project
manager B

Project
manager C
 TEAM Structures

– Extensively use permanent and temporary teams to solve

problems, complete special projects, and accomplish day-to-
day tasks.
– Often use cross-functional teams.
 NETWORK Structures

– A central core that is linked through networks of relationships

with outside contractors and suppliers of essential services.
– Own only core components and use strategic alliances or
outsourcing to provide other components.
RESPONSIBILITY in an Organization

 Responsibility

– Responsibility is the obligation to perform a duty or

carryout certain activities.
– It involves establishing tasks and establishing
reporting relationship.
RESPONSIBILITY in an Organization
 Establishing Tasks Relationship

– How activities are related to each other in an

organization
– How the basic units of an organization are formed
– Establishing job description and job specification
• Job Specification: Prerequisites of job. Various skills and
experiences needed to perform certain job.
• Job Description: The activities that have to be carried out at
certain position in a job. It describes the job.
RESPONSIBILITY in an Organization

 Establishing Reporting Relationship

– It is finding out
– Chain of command
– Span of control
– Who reports to whom?
– How many subordinated will a supervisor have?
ACCOUNTABILITY in an Organization

 Accountability

– The state of being accountable, liable or answerable

– Requirement to report

It creates a mechanism of control.

AUTHORITY in an Organization
 Authority

– Right to take decisions that arises due to position in

organizational structure.
– Right to perform or command. It allows it holders to
act in certain designated ways and to directly
influence the actions of others through orders.
– Types of Authority:
• Line Authority
• Staff Authority
1. Line Authority
• The chain of command in the organizational structure that
flows major decision making power.
• The officially sanctioned ability to issue orders to
subordinate employees within an organization.
2. Staff authority
• Staff authority consists of the right to advise or assist those
who possess line authority as well as other staff personnel.
– The Advisory or Counseling Role
– The Service Role
– The Control Role
• Delegation of Authority
– Assigning work to subordinates and giving them
necessary authority to do the assigned work effectively.
Simple terms, granting authority to subordinates.
ASSIGNMENT:
• Make a research on an existing organizational structure
of companies here in the Philippines.
• Describe the nature of the company/department or office
that you have chosen.
• Give brief descriptions of jobs and job specifications for
each position levels included in your organizational
chart.