180 ORGANIZING jon of numerous steelmaking and other and also to ac tion of numerous s s : Ko to achieve econo, companies. The global steelmaker Mittal operation, With this, formay Xa uses the size, structure and workdwide background, let us diggye tion gy reach of his company to optimize the aspects and importanes of the cig resources and services across the company this chapter, rea 4 Introduction Asa managerial function, goals and plans define what to do, purpose of organizing is to bring order to the organization so that th sion and commotion in the conduct of the business, integrated to perform the predetermined functions. It isactually a Process and grouping of activities and then establish responsibility 4 among them, Organizing als Y elton (GEQTELAGOASHIPS, which is essential for acl ieving organizational objectives principles of organizing are universal in nature even though 4 have different size, stature, goals and environment? An organization is nothing but a whole consisting of several unifieg (departments). The role of organizing here is to properly divide the whole into ps and then unify these parts in an orderly manner to achieve the rganiztn Vision and mission. We shall now see afew definitions of organizing, yn! ing authority— 5 each FEA Definitions of Organizing The ultimate result of organizing as a process is the creation of an organization. Mot definitions of organizing focus on the organizational goal accomplishment throws proper arrangement and allocation of activities, authority and resources ‘among people “Organizing is the process of designing jobs, grouping jobs into units and ets lishing pattern of authority between jobs and units” —Ricky W. Griffin? “Organizing may be defined as arranging and structuring work to accomplish: organization's goals.” —Stephen P. Robbins. “Organizing is the process of engaging two or more people working togetherit structured way to achieve a specific goal or set of goals” —James Stoner’ : “Organizing is defined as the deployment of organizational resources to ache strategic goals.” —Richard L. Daft ‘We may define Characteristics of Organizing s Based on the definitions, the following are the characteristic features of organizf cit’ ® Organizing is «(G@UieAireeteM @EHU, i. the common purpose of organi the accomplishment of organizational goals and objectives.1 each company must consider acl mall oo tion is designed and rb orgal : which HS ine the basic char- | tne 087 I chould also determine su? aniational structures should | tat oer characteristics normally help pesos effectively and ecient ation (0 oP aly ‘A small organization, for eee ye | ae bi more com- ji in size and becomes m | grows i nizational structure too needs to grow | : \ a | ples gach, the designing ofan organia ee | a cha tures often considered as a continuous cre tional st padiohms Agencies Limited (RAL)—one a rots. ORGANIZATIONAL STRUCTURE 181 Of Indias largest FMCG mar the following characterist structure, keting companies—has Sin its organizational “he chief characteristics of RAL are ag follows: (0 ithasa fat structure with fixed levels of reporting This should also enable to play enriching roles and diversity ther skilsts, (iit has a dynamic and Constantly evolving structure in tune with the fast and feverishly changing national and world business Parameters and (ii) its structure clearly defines the role and relationships of organizational members even while remaining flexible! - This is because it involves the@GHHREMGR Organiing is irene. into a variety of processes and activities for ED the goals) of the organization, x a as organizing involves the grouping of activitietilp 3. Itis acmunitectviy _manageable units ike department, teams, etc. I as organizing involves the assignment of 4 I is igiigrORMeegalinig activity roups to different competent authorities (such as managers and supervisors) i necessary authority to oversee their performance, 5, izing is as it involves proper €OGRAiNAHONTONIE ‘ [jn to achieve the organization's overall purpose. 6. Iisa as organizing likely to change intermittently depending upon the significant changes in an organization's environment. i FMCG Box 7.1 shows the characteristics of the organizational structure of an marketing company. Orpniting isan important ning. Managers u Zao to get thiORGANIZATIONAL STRUCTURE 183 ie BRE normaly make : le O1 i: = oy define the job, authoi ity of See a me ie ganization. Clarity inthe o ork environment allows employees the oppo) theit personal needs, ployee sats str ‘motivation. In contrast, when there are cracks i igements run the risk of losing their best employees due to lack ‘tisfaction and motivation. principles of Organizing pipes of organizing refer to the egg incon ‘Most of these principles are drawn(ff@m the famous manage- nent thinker and practitioner (GnriRayOISWOUReEH principles of management, 4silostrated in Figure 7.1, the important principles of organizing are as follows: (ii) principle of unity of command, (ii) principle (¥) principle of specialization, (vii) principle of delegation, (si) prinipleof ex (Glpineple oF party of authontyand responsi We shall now discs them beely here. (i) Principle of chain of command—The chain of command refers to the line of authority or reporting relationship that exists within an organization. The principle of chain of command states that the line of authority should be hierarchical and the authority flows from the top to the bottom. This prin- ciple also states that an unbroken and clear chain should connect all the employees with their higher authorities all the way to the highest levels. This Principle usually favour a mechanistic structure with a centralized authority. {also ensures that all employees know whom they report to and also who ports to them, "Principle of unity of command-—This principle states that every employee of {8 tganization should report to one boss or superior only. They should also answerable and accountable to that boss forall ther activities. Similar this ior should be responsible for giving orders and information to employees, ree {it performance and assist them in performing their dues wel. ploy’ Superior must be responsible for encouraging and motivating fond pen {© &0 better. Again the superior should appreciate the employe Aiency, ‘Ormance or initiate corrective actions in the case of performance () ng Ere Principle of unity of command aims at ensuring that thers BS fog, jy n8'on among the employees about whom they should ge Om empigr? “uplication or conflict in the orders passed downs for itll Vande Yee may get two conflicting messages from two bosses, (ii) fe “Standing and supportive relationship between the superior anORGANIZING ease aus rmanagersacrossthe company’s nationvvide operat and infuse speed and flexibility in its deg.” making and implementation processes, This com, pany also considers transparency and accountaby. in decision making and execution as the two ba, cent approach towards the organi quided by more than one princi- ana The function is normally ; ple, Managements look to achieve a precise combina: tion of principles that facilitate the smooth conduct of the business activities and effective accomplishment of organizational goals. The approach of Hindustan _ tenets of its corporate governance. All the Activites Unilever Limited (HUL)—India’ largest fast-mov- of HUL including its organizing function are dri, by an aspiration to serve consumers in a unique ang ing consumer goods company—towards organizing an interesting case. effective way: ‘he fundamental principle determining the organizational structure of HUL is to empower the entrusted with them. This is necessary to get the work done through them without any job dissatisfaction and frustration. In the absence of sufficient authority, employees cannot fulfil their job responsibility. At the same time, they may try to misuse their authority without corresponding responsibility. These principles of organizing are important guidelines for managers at every stege of the organizing process. They can guide them effectively when they have to make decisions relating to organizing functions. The Process of Organizing Organizing process is vital for the organizations to achieve their goals and objectives The primary purpose of organizing is to make possible an orderly use of the org zational resources, Y of this organizing process is the creation of an organization. Organizations cred through fen organizing process can have improved capabilities, superior produ te Z Performance, and employee satisfaction and motivation, The basic steps i 'ganizing process, as shown in Figure 7.2, are generally universal in nature. (@) Recognizing the organizations goals, plans and operation it : The orgaitsg Floss arsutlly begins as soon as the goals and workable plans are formulaeé activities to be carried af ecisions rege Farha ng te ot fr goal accomplishment. is ces OMeCide whether required,ORGANIZATIONAL STRUCTURE Recognizing the organization’ goals, plans and operations Eval ig the: a Deciding the goa- 0% or Seppe oe ted activities Figure 7.2 ‘epsin the Process of Organizing (b) Deciding the goal-related activities—Managers must determine the specific of the organization. They ca that need to be carried out f6Rplan Ahi age, manager usually break down a potentially complex (© GroapingioniWerRUaetivities—Once managers know what b are to be done, they @lassifyjandigroup, these activitie: Such grouping of activities is Usually managers 2iopt the principle of functional similarity (similarity of activities) for Classification and groupi ivities. For instance, @rOuping of activities(ean (marketing, production, etc.) (preiduets ® —Once the activi- ties : mottessary for goal accomplishment are identified, classified and grouped, agers allocate these work activities . They should 2 to the employees enable functio, theirs. Management generally applies the principle of nal definition for assigning activities and authority to specific positions. This prines "Principle insists that the type and quantityrofiauthority to be delegated to 187188 ORGANIZING the individuals Managers should ithin th. expected to decide between vertical gig Ia within the organizational structay sare organization, Normally, mana " onships for various lev horizontal relat \ indicates the decision-making hierary of the organization Te Ne ind ofsiructuring normally leads 0 establish, oral ent vels in the organizations structure from the bottom to the yy of different levels in the 01 a ‘the organization, It also provides details of who should report 10 hon, of the organiza alse . efor in the organization and also within in the various teams, departments ang divisions. A indicates the working relationship prevailing among the different departments, Tt also indicates the span of control for different managers and supervisors of the organization, The or. ganizational structure become: complete once the various activities of the 7 and directed towards goal accomplishment, A, arts to develop the diagrams of organization are coordinated this stage, managers can use organizational ¢ the relationships. © GRAN gUNARTEOMTELONRBAMIAIAEPOEESS—Organizational goals and plans are dynamic in nature, @rgainiitionalestencturenshould therefordbe Tt isthe essential for managers to process to know the effectiveness of organizing functions in achieving the stated goals and mission, BaSCUORUNGHESUlts of such evaluation, managers can modify the existing organizing process and organizational structure. ‘They can also introducelamneworganizingiprocessito replace the old ones for developing vibrant organizational structures, Box 7.3 outlines the structure transforma tion initiatives of a telecommunications company. Itshould be clear by now that the organizing process helps managers to establish working relationship among the members necessary for goal accomplishment. Mat agers may choose a specific organization type for establishing relationship among the members of choice making is known as organizational design, Organizational Design The first major task of managers en| ganizational design. izati i . Designing organizational structure i for an organization." It is actully a formal and guided process of integrating the activities and resources of # eeaiation on a continuous basis. Organizational design process helps mansBe® © Solve two important but complementary problems of organizations. They ** gaged in organizing is the development of ano"sg generily prefer organizational asin enable them f0 proactively embrace 13 ply manne to make the best use of jon en their environment, The new or- gp gcture introduced by Bharti Airtel oe ne integrated telecommunications 1 ein pm tna ‘sires business operations have been sa bse on its technologies into three strate ‘pases unis > Mobile services, Airtel teleme- «bus sir pices and enterprise services. However, it has et cdued a new organizational structure in 2011 for i | bainess operations in India and South Asia, The pe bottom, oftheir organizat f * Primary “ation of “tonal design, relationships among n ), distribution of authority Definitions of Organizational Design a ign is on the creati Y focus of definitions on organizational design is 0 rganizational structure. We shall now ORGANIZATIONAL STRUCTURE the flat structure will also faci empowerment, job autono ment, Further, litte enhanced employee A ny and employee engage- this new “business to customer” (82) and "business to business’ (B2B) based structure is aimed at providing enhanced business efficiency and employee value to the company’? i how to divide a big task (organizational goals) of the whole organization into sndller tasks or sub-units and (ii) how to coordinate these smaller tasks efficiently ‘oacomplish the bigger task.!® Organizational design involves multidimensional approach as it deals with human components and structural components. ‘the human component normally includes, among others, the people, processes, sewards,coordination and control. The structural componentsinclude organizational cbjectves, goals, plans, strategies and structure. Management normally adopts a top- éovn approach to the organizational design process by working from the top to the While designing the organizational structure, managers normally consider the nature of goals, strategies, people, environment, technology and activities The (Keyaelementsyshat influence the decisions | job grouping (known as positions (known ion or modi- Took at afew definitions of org?"190 4 ORGANIZING “Organizational design is the process of assessing an organization's strate environmental demands and then determining the appropriate organization tures” Hitt! “Organizational design is the process by which managers select and man, aspects of structure and culture so that an organization can control the activities ms ang al strug essary to achieve its goals” —Jones.” “Organizational design is the determination of the organizational structure tj is most appropriate for the strategy, people, technology, and tasks of the organiza, tion.” —James Stoner.” “Organizational design is the design of the process and people systems to port organizational structure” —Richard M. Burton.” The ultimate aim of the event of mismatch between their goals and structure. Organizational Structure Organizational design involves the designing of organizational structure by managers for grouping the activities and then allocating them to different units, departments and teams. As discussed earlier, once these activities are assigned, formal authority and responsibility relationship is established among these departments and teams, ‘To make the organizational structure viable, authority is delegated throughout the organization and a mechanism is established for coordinating diverse organizational activities. Organizational structure is a powerful instrument for reaching organizational goals and objectives. In this regard, managers must ensure a perfect fit between the organizational plans and organizational structure to achieve success. Generally, the goals and size of organizations determine the nature and types of organizational structures. For instance, large organizations may keep extensive and complicated organizational structure. In contrast, small organizations may have comparatively simple and straightforward structure. In any case, sup. the, (echiBology and . Generally, organi zational structure can b ind. umber faeries nanaed by each manage clad aso en cussed later in this chapter). Definitions of Organizational Structure . We shall now look at af" definitions of organizational structure. “Organizational structure is the framework in which the organization defines how tasks are divided, resources are deployed and departments are coordinated” ~ Richard L. Daft.” seid “Organizational structure is defined as the sum of the ways an organiza divides its labour into distinct tasks and then coordinates them” —Hitt."‘ORGANIZATIONAL STRUCTURE wat pes of Organizations jon how author i disbted, decisions are made and tasks are performed, jafjons can be classified into three fundamental types, They ar: () line orga 3) line-staff organization and (ii) committee organization. Even though ‘hor forms of organizations may exist they are only the variation or ombi- ese three basic forms, We shall now discuss these three forms. stie® al oft ratio ation is the QUESTS SAPIETMERGY of organization, This type of panzation i four (0 bc GHRDIEHTOSUFTORSMAUEANADS. However, theGM@ FOr se organization mostly exists @HUMILAEY systems. Line organizations are also doing’ organizations where all activities from the production to marketing of the managers/owners. In the case of companies with (life ve are controlled by ‘of managers depicts the line discuss the merits and limitations of line ganizational structure. We shall now rganizations ‘The important merits of a line organization are as fllows: Onis 2 simple and “easy to understand” form of organization without any complex organizational structure or chain of command, © 1 cocourages RES to @tuRaEpedemy «° they. These committees are thus capable of improving employee moti ions of the ‘an find their views and opinions included in the recommendations committees, 195196 ORGANIZING Management review boards 180 9001 ‘management representative Quality assurance Bia ea Production inance & purchasing Sales & marketing Figure 7.5 Committee Organizational Structure (Giftitations of committee organization—The important weaknesses ofc, mittee organizations are as follows: “+ Decision makings nor Process inconite organizations. As such, committees aré@obusua! (@ibemmaderquickly without any waste of time, @ In committee organizations, (ERMDETREPPIEREM AMIGA” in decisn making 8 prt of Ompomenoseteeanicingintesy! of th mene This may prevent the committees from choosing the best sofutions to the org nizational problems. @ Committees may SUpINEROSCOfadministrations it may involve addin al expenditures for organizations. For instance, managements have to bear the GARG and sWoReaisturbamees when mente attend these meetings. of group deliberations in committee organizations. Powerfullmembersiny! scenrpetepupreseueronrattermebe to get their views and decision accepted. This may affect the sanctity and purpose of the decision meking it committee organizations. @ The authority to make @GCiSiOHSISCOMECHVEIERETEISEA. tis therefore fica G@iixandividwalespONsIblity for decision failures. This may make membs* reckless and adventurous in making decisions. more form In addition to the above, management can also opt for one ’ ‘ti organization called matrix organizations. We shall now discuss the features ® organization. Matrix Organization ‘The P! Matrix organization is usually formed when employees from diferent ft “departments are required collectively for the execution ofa projet. The 1°ORGANIZATIONAL STRUCTURE Matrix organization 15 structure, where the matrix organizational structure, and QUaIGEBOREAB) relationship are the essence of any in, In matrix organizations, each member should report that deputed them to the project. For instance, when an executive of the Hn department of an engineering unit is deputed to a large project under sore of another manager, he would report to both the fabrication department pecan athe project manager. Matrix organizations facilitate the horizontal fing «information within an organization, We shall now discuss the merits and f matrix organizations. ange wis an jitations 0! qi@ats of matrix organizations—The merits of matrix organizations are as follows: (@ They facilitate th (acon deparsnens as members of one single matrix organization. This can encourage the members to WORRRTSFEGBHMI) and purposefully OWA @ These organizations are capable of, increasing the effectiveness of communi- cation system, conflict resolution process and - It can also of the members. @ The cross-functional nature of matrix organizations This (Ghefdepariment@even after they return to their own functional departments. General manager [Manufacturing] [Design Finance rep |... i Organ: 'vanizational Structure 197198 ORGANIZING (Ginifations of matrix organization: hey are as follows: @ The scope for © are high in matrix organizations, an The evo-bass stem de to create sre fr the meni er projet organizations. When conflicting orders are given by the Funct ‘ers may feel anxious and confused in Aecigh a boss and project boss, memb fers out immediately. .s—Matrix organizations suffer from, fey whose orders are to be carried @u the structure of matix oy ani zations as they ar when separate structure and organy rojects. Establishment of a matrix organo 0 @m tions are created to manage may call fo The result of all these wou be high administration cost. en inthe form of a chart for deinng Organizational structures are normally writt and outlining the role and responsibility of the organizational members. scribing the lization presented 's for the organization, department, nature ofte. line of authority, titles of p We shall now look at a few de! Definitions of Organiz visual representation of an organization's is ; is ‘ganization’s structure is known tional chart.” —Stephen Robbins.” ™ rent ways. In employee orient igers to show where each job is located it its relationship with other jobs in the dep ict the relationship of one department s0 maps the flow of authority tial and effective too the organizational str ment. Organizational c of different rs within an organization, manag ‘a at the time of auditing the manageme ices. Organiza les the management to spot and recognize, discrepancies and inconsi* the organizational structure with ease.200 ORGANIZING Irenables managers to set exact performance standards for the » Mploye, facilitates faster detection of job-specific performance probleiny. Ha, managers to find replacements for the employe + ILis easier f gle and spe m ln Aisitsiony, 6 OF inspira nd other pro jobs may become bored and ly offer any challeng m, attrition a: Departmentalization An organization does not feel the need for division of its activities into diffy. ent units as long as it remains small, simple and straightforward. This is because the owner-cum-manager can personally supervise the activities of all his/her en- ployees. However, such personalized supervision may not be possible GAB ‘ers who would look after these activities on behalf of the owners. In academic ins tutions, for instance, the need for departmentalization is considered as a function of growth in size, specialization of knowledge and faculties desired for autonomy.” Since the activities cannot be randomly grouped, organizations follow certain norms, bases or plans. The grouping of organizational activities based on thee norms and processes is called departmentalization. The ultimate purpose of any such grouping is the effective accomplishment of organiz tional goals and plans. Groupings can be done by managers on the basis of functions geographical locations, products or service types, process used for manufacturing Or Customer categories. Sales people working together in the sales department Production people working together in tlie production department are examples departmentalization, Organizations may also create hybrid organizational struct" through the combination of various departmentalization types.” Definitions of Departmentalization a i i The primary focus of departmentalization is on the grouping of organizational — ties. Let us now look at a few definitions of departmentalization.ORGANIZATIONAL STRUCTURE 201 spepartmentaization may be defined as the process epg jobs in accordance wit shared characters 1 mestabiztion isthe proces of grouping jo pent” —Ricky Griffin. ‘by which a firm is divided ics”_—Jerry W. Gilley.® s according to some logical rar ‘Let he purpose of departmentalization as derived from these definitions “new Define the relationshij (i) (i) co) ) Establish formal lines of autho! irresponsibility and accountability. members. Provide job specialization to 0 Increase the economies of s -ed production). When management acl apt desired improver (b) managerial comm fon and (d) the Of decisions.* Having seasithe purposes of departmentalization, we shall now discuss the com- roa bases for departmentalization. in: (a) organizational performance an ‘ion, (c) employee commitment, involvement an Bases for Departmentalization 4s4 pat of organizing function, activities of an organization can be divided and ffouped on any one of the bases discussed here. |—When departments are formed on the basis of bespecilized activities or functions performed by an organization, itis: called functional ‘mentalization, Organizational functions form the basis for this type of departments. Organizatio sas ate different from the managerial functions such as planning and organizing igs department ate the traditional and most common form of depart the o"0Ver, the functional approach to departmentalization is considered to be loi “al way to organize departments.” wational ei «jet teach functional department normally report to the function “partments of functi iti f depa ional dey —, traditional form of depé onal depan Partments—As 2 frat ations. They are as fllOWs: tments offer several benefits to organi: Kg202 ORGANIZING spartments In functional de tis therefor r . iat nts, For instance, a manager with market experts m ; departme: 2s of their depart ‘he marketing department and so on. departmentalization Gif P This is because departmental Tenn ay il er red to have relatively narrow sets of skills only. Ty I @ 1 citar as employees perform same o, sing, is z © eC TESERTES SATIN EPR i, Sigg and possible. @ Functional_ managers can usually well skills, knowledge and orientation of their employees. Gimitations of functional departments—Functional departments also hg some major limitations. They are as follows: © As (GHHORALRHERER and members usually have specialized knowledge narrow perspective, it may be for them (ORGAN ane apts {he cts of other apeona departs. They may ae Ganizational prioritiesand goals by giving undue importance for department matters, interests and priorities. © DEGSOARKABIs likely to with functional depat. ments. This is becaus due to the homogenous nature of the individual departments. e . Giffieil. This is because the individual functional department cannot beheld directly responsible for any failed organizational mission. For instance, itis tough to decide whether a new product failed due to marketing factors, pt duction factors or finance factors. (Product departmentalization—When organizational activities are cast and grouped @RNEHEISISiSIGP tHETBFSUUEMORSEANEENSOlA, it is called prod : departmentalization. In this kind of departmentalization, all activities comes? : ‘4 In this way, an organization will have a separate dep* ment for each of its products, A izati ue » An organiz; ct depal ieee PI ganization maydpréfer product dep: ct Sei, dete dain tit Production sates, mi ce The top managers of the P departmentalization nor mally have complete autonomy over the operations! UrssiiecGnipanies ofienadept product dépattmenavation for e008", activities.® Box 7, i 4 ati Provides information on t ion departmenta” of the Michelin Group, n the production dep:hy managements may use different bases departments at different levels, the basis lization at the highest level usually or nection, dimensions and priorities of ae In this regard, the organizational on eeating jepartmentl ture of Michelin—the worlds leading tyre , vcr is worth mentioning here. “the Michelin Group is organized into product superior understanding of its market pines to gait indition and customer needs and preferences. It fhas eight product line departments each with its in marketing, development, production and sales of product departme! ih many benefits to organizations. with a product or service. @ Product departmentalization. accurately, © 1G the departments t @t enables the organization to of the organization limitations. They are as follows: Since each ese eae financial analysis, it ofte "eventually leads to , especial ieeneseeement in guccessioyplanning lepartment performs the same set of functions, sud ORGANIZATIONAL STRUCTURE 203 Tesources, To support its product lines, it has eight Beographical zones, 13 group departments in charge of support services and four performance depart- ments like logistics and supply chain performance departments. Through its organizational structure, ‘Michelin looks to increase responsiveness while deal- ing with customers, to expedite decision making by decentralizing responsibilities, to enhance the group's profitability and performance, to strength research to achieve lead-in technological advances over their competitors and to accelerate growth by achieving better access to new markets. ntalization—Product depart mentalization brings They are as follows: in charge of these departments , such as production, marketing, financing, etc. ©: ixeasientotintegrat@anelCOOEEHRATE all the activities or functions connected for the management 6] directly, objectively and also keep their needs and requirements in constant focus. This in turn@s> of product departmentalization—This form of departmentaliza- +h as market the organization.”204 ORGANIZING “other prodits from their organization In this process, the Customer departmentalization—When the organizati aad oa : | ational Aes.ORGANIZATIONAL STRUCTURE Departmentalization the activities of an organization are grouped on the basis is called geographical departmentalization, MHIpUigaSeaey i . this These departments are responsible for carrying out the activities in the as- MS | geographical area, It enablesorganizations to PROUMETOGALTOSs oth ir erations ) has adopt- i geographical departmentalization for grouping its activities. It has a central fice eight zonal offices, 105 divisional offices and 2048 branch offices across the vy to serve different regions, Transportation companies too normally pre- sr eographical departmentalization similarly hat market their products or service across nations Let us now look at the merits and of this method. of geographical departmentalization—Departmentalization based on jeography can offer several benefits, These benefits are as follows: @ Geographical departmentalization enables organizations to SpOHgAMgaIEKly without needless loss of time. @ Wthelps organizations to a e in the decision-making process of the organization. This method also (GALIGA of regional issues. “+ Experience gained atthe regional levels @ good training for managers at ‘ihe evel" @ kt can help organizations to reduce cost by keeping the unique organization! _Tesources closer to the market." li f geographical departmentalization—This form of departmen- ization has some weaknesses. They are as follows: @ since the departments are @OGRApHicalipadispersed and physically separated from one another, it is ities effectively. This Problem becomes i6Reaeutelwhenmthe departments elo located i separated by thousands of miles. @ organizations usually ifferent geographical parte of the employees working in This ki in d of departmentalization often results in th Sutcom For instance, high inventory cost is 0! ‘© of geographical departmentalization. ften the 205a 206 ORGANIZING (GREW departmentalization—When the organizational on thbasiS{OfipFOAUEHORSERVICEPFOCEES used, i is called process pari ee tion. Usually, the @ehinigal Rinetionsinvelved in a manufacturing type “ form the basis for process departmentalization. Mostly, GRCOES|FUASMHSUCEIIONS relating to departmentalization based on Process ty type, the needifP coordination is more as th often depen the degree of Snags ces dys is better @@HEQNOROFGARIZATIONS that !havrenvironmentistid technology” refer process deus’ talization. The typical process departments for a sugar-manufacturing company, cleansing and grinding, juicing, clarifying, evaporation and crystallization, Tefini separation and packing. Now we shall discuss the merits and limitations Of proces departments. G@IEHES of Process Departmentalization The merits of process departmentalization are as follows: @ Process departmentalization helps the members to gain al , (GalZAGSD by enabling them toshapEn their ia ‘specific and limited areas. (© 1GGSHES logical and effective flow of work activities necessary for smoothand of goods. @ This method is bette work activities which involve the . This is possible because specialized equipmet 's vested with @@parateMdepatiments, which are @HaGeRESBOHRBI for te operation and maintenance, @ It facilitates @HECHVERUPENISION of employeesi@s they often have @jommos (GREKGAOTAA with the @ It makes the@@parHMEAB interdependent and @OIectivelyiresponisible for p™ ductivity and performance ze necessitates the departments to fOstenbets a a GUAGE of process departmentalization—A few limitations of # method are as follows, @ This method is@1OHGVERA in nature as it “sizes and nature of organizations. This method is ideal only for certain YP" Products or goods, @ Though the departments are interdependent, it i ‘coordination, This is (8GHHS the age cratiment tee. isues and problems, even and goals. @ It will be @EREMP for organizations a (GGGMMEGGE to the managers due to their limited exposure and experi¢ORGANIZATIONAGISTRUCTURE atrit departmentalization Wher two or more for: Mie (or GROUPING the organizational activities, are sis a hybrid nature of organizational structure." Thi -ationtiiaERGeO RSENS essere ws 2 of departmentalization. The pri % customer or any other tradi- ional for™ ¢ ee }e primary objective of matrix di ; Hipantage ofthe strengths of conventional forms of department and to avd theit inherent — : ; 's and to avoid Ta earns of depart are cemaaaton junctional and produc partmentdlizatigiiprior instance, the sales depart- fa an organization may be clasiigd ahd grouped@imhe bass ofthe various nets manufactured: However, an ofgthization may also Combine other forms of epartmentalization (like geographi¢al and functional) to form matri{department. For example, @ matrix depagumient may be formed by locating the marketing/depart- ment of an ofgannization at ‘different geographical locations of the country(Generally, matfiydepartment is sdeal(fOr projectitype ol Works\because they cover some or all {hy ORfanization’s departmental areas. Matrix departmentalization is commonly found in multinational corporations. It provides necessary flexibility to deal with multiple projects, programmes or product needs and to take care of the regional dif- Feencesifany:* Let UsitaKe an evaluation of the matrix form of departmentalization. zatio” nixture 0 oak Mefits of matrix departmehtalization—Matrix departmentalization can offer ultiple benefits to an organizationiihey are as follows: Jp Matrix departmentalization is fielpRi ensuring higtTevel ofieross-Functional {leraetion among members of different departments. d@linsinatingdupli@ation of functions and resources. al departments depute specialized em- ix departments onjameedsbased manner ® itis capable of reducing an This is possible because the function *PlOVeRS from their department to matri for a specific time period. ® This method is appropriate for @ffectivelexecution of huge ProjeetS as necessaryiphysi¢allresources and human resources: Kkly drawn from other departments." and complicated (experts) can be Limitatic itations)of matrix department—The major limitations ofthis method are: D Th ere is a scope for misuaderstanding and conflictsamong the managers of mat ee . Dati departments and functional¥epartmentfleading 10 confusion in proj- sieetlons. Managers of functional depanumen's may not be too willing to than their best people for matrisedepartments fearing work disturbances in aaa departmentse ‘Oordinati ’ / ¢ agit EP be difficult among different departmentsNespecially when x Starcity @ ion has several ongoing projects at a time. of m an / ; anagers with diverse skills required for managing complex ™abnix partment 7 ts ma Times may affect the formation and performance of these departments. Meh dep, P88eqf Spang dey . Menainaiertmentalization— Organizations can also form time-based © organize their activities. In time-based departmentalization, rr. 207Time-based departmentalization— Organizations can also form time-based departmentalization to organize their activities. In time-based departmentalization,208 ORGANIZING time becomes the basis for classifying and grouping the organizational ACtivitieg (Ciganizanionstoperatingiontalshiltibasis are an example of departmentalizationy ime. For instance, factories may operate on tHFCE=SHifE\BaSiSNORAINATHOAR i; day with separate functional departments and managers for each shift. This fom of departmentalization: Even though each type of department can bring some benefits to th organization, management should choose a departmentalization type that best sui the organizational needs and helps it to fulfil the short- as well as long-term goak. We shall now discuss the common benefits of departmentalization to organizations. Benefits of DepartmentalizationAuthority Delegation of authority is essential for developing the skills and abilities of the subordinates. It is an important technique for preparing the lower-level managers fo, higher positions at the later stage. Delegation of authority also plays an important role in increasing the productivity of the employees. While delegating, managers must ensure that authority is accompanied with appropriate level of responsibility and ac. countability. Authority should be equal to the responsibility. If somebody is given responsibility for something, then he or she must have adequate authority to take the action needed for achieving success.’ Responsibility The term responsibility refers to . Responsibility may also be defined as the : the employees to perform specified tasks with the @uthiority.’ Responsibility requires t authority delegated. Responsibility gives employees the feeling of usefulness and pri in their work. But, it is essential for managers to @qisureythat the subordinates have just enough authority to meet their responsibility. When the subordinates are give" I] result i J responsibility qioutappropriateauthoriiy * ¥. In such a situation, employees may view responsibility as ‘a burden and not as a privilege. On the contrary, if€6OlMUehMuthOrity goes with too ibility, it . Managers must therefore ensure a balance between responsibility and authority. Ag@ight)blend of atithorityand iresponsibilityis necessary forachieving high employee @SOperationjimotivation ald productivity. A right combination is also sure that their subordinates become answerable for all their actions. This can be done by bringing in accountability for employees’ action. Box 8.1 shows ITC’s method of balancing authority and responsibility. Accountability Fixation of accountability after the delegation of authority and responsibility is of utmost importance. Accountability (aKeStthe employees ansWerableyHformehie * Accountability is actually a At the time of delegation, managers must clearly what they are aecountablesfor. This will then ensure that employees constantly of their actions to the managers. Though it is easy for Managers (@ifixecountability for the employees, there should not be any arbitrariness in such decisions. We shall now discuss the steps involved in delegating authority and responsibility along with accountability to the employees.224 ORGANIZING Process of Delegation Delegation, which involves the f nuultistep process. It is one of the difficult tasks of the managers for two reqy-°* ‘The frst reason is that itis difficult to find the right person to whom the tasks ang i thority can be delegated. The second reason is that managers may find it hard to sh; some of their authority with another. However, the hardest part of any delepatio, is in i ; Managers shou delegate neither too much nor too little authority to their subordinates, Manager, through a systematic delegation process, can make certain that authority and reg 7 sibility are properly delegated. the procs sown in aur an eso, managers aftergmakkingmecessaryichanges to make it | "Determining the Need for Delegation The process of delegation begins only when the managers feel a need for sharing of some of their tasks and authority with others. GHARGSSEATHETRERTETOE TED ‘CEREAL