Fundamentals of Organizing

and Organizational Structure

By: Zyra Manalo
Organizing – A Management Function
• Organizing is the function of management which follows planning. It is the process of
establishing orderly uses for all resources within the management system of the
organization.
• (It is a function in which the synchronization and combination of human, physical,
financial, and information resources takes place for the achievement of the results.
Organizing function is essential because it facilitates administration as well as the
functioning of the organization.)
• According to Louis A. Allen, “Organisation 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”.
• According to Chester Barnard, “Organizing is a function by which the concern is able to
define the role positions, the jobs related and the co-ordination between authority and
responsibility”.
Organizing – A Management Function
• Organizing is the next important function of management after the
planning. In case of planning the management decides what is to be
done in future.
Hence, organizing refers to the following process.

• Identifying and grouping of the work to be performed.

• Defining and determining responsibility and authority for each job position.
• Establishing relationship among various job positions.
• Determining detailed rules and regulations of working for individuals and groups in
organization.
WHAT IS ORGANIZATIONAL
STRUCTURE?
• Organization structure is the pattern of relationships among various
components or parts of the organization which prescribes the relations
among various activities and positions. It defines the system of
relations between elements, factors, and activities within the
organization.
(By structure, we mean the framework around which the group is
organized, the underpinnings which keep the coalition functioning. It's
the operating manual that tells members how the organization is put
together and how it works. More specifically, structure describes how
members are accepted, how leadership is chosen, and how decisions are
made.)
• Important factors which are to be taken into consideration in the process
of designing of the organizational structure.

1) Environment – The environment is relevant for behaviour and the

organization structure. The most important characteristics of environment
that determine organization structure are complexity (determined by the
number of elements affecting the organization, their variety and intensity of
influence on the operations), stability (measured by the rate of changes in
time, similarity of changes, and possibility of their foresight and
comprehension), and uncertainty (related to availability of relevant
information for rational decision-making).
• 2) Technology – It enables transformation of organizational inputs into
outputs and it is an important determinant of the internal efficiency of the
organization. Technology includes technical equipment for manufacturing,
knowledge and ability for using the equipment, and working activity
necessary for the transformation process.
• 3) Strategy – Starting from its internal potentials, chances and threats of
environment, the organization designs its strategy for the realization of the
objectives. This strategy requires a certain organization structure as the
frame. (The concept of organization structure as a consequence of the
adopted strategy has evolved in the sense that the relationship between
strategy and structure is that of reciprocity, which means that the
organization structure also influences the strategy.)
• 4) Size – Connection between the size of the organization (measured
by the number of employees, power of installed capacities, total
revenue, value of capital investment, and other factors) and its
organizational structure is very easy to notice. (Namely, when the
organization grows up, its organization structure becomes more
complex, and vice versa.)
• 5) Forms of aggregating – The essence of aggregating in the process of
organizational structuring is a result of the need to control,
coordinate, and communicate, which implies linkages on vertical and
horizontal bases.
WHY SHOULD YOU DEVELOP A STRUCTURE FOR YOUR
ORGANIZATION?

• Structure gives members clear guidelines for how to proceed. A

clearly-established structure gives the group a means to maintain
order and resolve disagreements.
• Structure binds members together. It gives meaning and identity to
the people who join the group, as well as to the group itself.
• Structure in any organization is inevitable -- an organization, by
definition, implies a structure. Your group is going to have some
structure whether it chooses to or not. It might as well be the
structure which best matches up with what kind of organization you
have, what kind of people are in it, and what you see yourself doing.
WHEN SHOULD YOU DEVELOP A STRUCTURE FOR YOUR
ORGANIZATION?

• It is important to deal with structure early in the

organization's development. Structural
development can occur in proportion to other
work the organization is doing, so that it does
not crowd out that work.
Elements of Structure

• Some kind of governance

• Rules by which the organization operates
• A distribution of work
Elements of Structure

• 1) Outline Your Governance Plan

• Determine what type of governance you need to make decisions.

Identify the roles in your organization. Typically, an initial steering
committee writes the business plan, obtains funding and develops the
first proposals. Identify a leader to coordinate, inspire and support the
work.

• (The first element of structure is governance - some person or group

has to make the decisions within the organization.)
Elements of Structure
2) Establish Rules for Operation
• Establish rules by stating how formal and informal groups operate within the
organization. For example, committees typically use Robert’s Rules of Order to
conduct meetings. Rules make up an organization’s culture
• (By documenting operating procedures, you can minimize misunderstandings
and confusion, especially if you work in a culturally diverse environment.
Groups formed to resolve a single issue may not need a formal structure but
large complex organizations typically need clear rules and authority.)
• (Another important part of structure is having rules by which the organization
operates. Many of these rules may be explicitly stated, while others may be
implicit and unstated, though not necessarily any less powerful.)
Elements of Structure
3) Distribute the Work

• Establish task forces and action committees to carry out activities. These people make specific changes
to policies and practices in order to achieve their goals. Define conditions when a temporary support
committee, or collection of volunteers, respond to organization's needs.
• There are four tasks that are key to any group:
Envisioning desired changes. The group needs someone who looks at the world in a slightly different
way and believes he or she can make others look at things from the same point of view.
Transforming the community. The group needs people who will go out and do the work that has been envisioned.
Planning for integration. Someone needs to take the vision and figure out how to accomplish it by
breaking it up into strategies and goals.
Supporting the efforts of those working to promote change. The group needs support from the
community to raise money for the organization, champion the initiative in the state legislature, and
ensure that they continue working towards their vision.
5 Main Steps Involved in Organizing
Process
• Step # 1. Consideration of Plans and Goals:
Organisational plans and their goals affect organising and its outcome, the
organisation. The purposes and activities that organisations have at present or
are likely to have in future are dictated by plans. Certain basic purposes and
some general activities are likely to remain fairly constant in the long run.

• (For example, from its very inception a business firm will continue to seek
profit and in this endeavour it will continue to employ human and non-
human (material) resources. Moreover there may emerge new relationships
among groups of decision makers. Organising is supposed to create the new
structure and relation­ships and modify the old ones.)
• Step # 2. Determining the Work Activities Necessary to Accomplish Objectives:
• It is necessary to determine those work activities which are necessary to accomplish
organisation objectives. Prima facie, it is absolutely essential to prepare a list of tasks to
be done. Therefore, there is the need to classify the tasks into two categories: on-going
tasks and once-for-all tasks. (An example of the latter is setting up a new plant or
department or installing a new plant in an existing plant. In an ongoing business such
specific programmes — which are essentially single-use plans-may require temporary
re-or­ganisation within a business or department to handle them.
• For example, the Finance Department may temporarily look after the newly set up
corporate planning department. Likewise, a pilot project conducted for an ongoing
business may identify which activities should be performed in a work unit or
incorporated into the business. Once managers come to know what tasks must be done,
they are ready to classify and group those activities into manageable work units.)
• Step # 3. Classifying and Grouping Activities:
Classifying and grouping similar activities using the guidelines of
homogeneity are based on the concept of division of labour and
specialization. (Once the activities have been identified, then there is a
necessity that they are grouped. The activities are grouped in various
ways. The activities which are similar in nature can be grouped as one
and a separate department can be created.)
• Step # 4. Assigning Work and Delegating Appropriate Authority:
• After identifying activities necessary to achieve objectives, classifying and grouping these into major
operational areas, and selecting a departmental structure, management has to assign the activities to
individuals who are simultaneously given the appropriate authority to accomplish the task.

• (Having completed the exercise of identifying, grouping and classifying of all activities into specific jobs,
the individual employees comes into picture since the employees are to be assign with the
responsibilities to take care of activities related to the specific jobs.This step is a crucial one in both the
initial and ongoing organising processes. The foundation of this step lies in the principle of functional
definition. The principle basically suggests that in estab­lishing departments, the nature, purpose, tasks,
and performance of the department must first of all be determined as a basis for authority.)
• (On the basis of specific responsibilities given to individual employees, they are to be provided with the
necessary authority for the discharge of the assigned responsibilities in order to ensure their effective
performance and in turn the performance of the organization.)
• Step # 5. Designing a Hierarchy of Relationships:

• This final step necessitates the determination of both ver­tical and horizontal
operating relationships of the organisa­tion as a whole.
(In effect this step is ‘putting it all together)
(This is a very important part of the organizing function since each employee in
the organisation is to know as to whom to report and which are the employee
who are to work with him. This establishes a structure of relationships in the
organization which helps to ensure that the organization has clear relationships.
This structure of relationships also facilitates the delegation.)