Organizing: Chapter Four

ORGANIZING
Chapter Four
PART ONE:
INTRODUCTION
02/25/2021
 1.1 Meaning of organization
POM/Chapter 4 - Organizing
 1.2 Process of Organization
 1.3 Principles of Organization
2
DEFINITION OF ORGANIZING
02/25/2021
 Activities:  Resources:
 Identification of activities Determining the
 Grouping of Activities
 Assignment of jobs to
specific need of
formal groups resources
 Establishing a network of Allocation of
authority and resources into
responsibility
 Providing framework for specific groups
measurement, evaluation Evaluation and
and control
control of use of
the resources 3
ORGANIZING
02/25/2021
Organizing is the process of
arranging and allocating work,
authority, and resources among an
organization’s members so that
they can achieve organizational
goal.
 Stoner, Freeman and Gilbert
4
PROCESS OF ORGANIZING
02/25/2021
 Division of Work
 Grouping of Work
 Delegation of Authority
 Coordination of Work
5
02/25/2021 POM/Chapter 4 - Organizing
6
PROCESS OF ORGANIZING
SIMPLIFIED
PRINCIPLES OF ORGANIZING
02/25/2021
1.Unity of Objective 8.Exception
2.Specialization
9.Efficiency
3.Coordination
4.Authority and 10.Balance
Responsibility
11.Homogeneity
5.Unity of Command
6.Scalar Chain 12.Continuity
7.Span of Control
13.Simplicity 7
PART TWO: ORGANIZATIONAL
ARCHITECTURE
02/25/2021
2.1 Vertical differentiation
 Tall versus Flat Structure
2.2 Horizontal differentiation
Functional Structure
Multidivisional Structure
Geographic Structure
Matrix Structure
8
TALL VERSUS FLAT ORGANIZATIONS
Tall Organization
President
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Copyright © by Houghton Mifflin Company. All
Flat Organization
President
6–9
ORGANIZATIONAL
ARCHITECTURE - VERTICAL
INTEGRATION
02/25/2021
 Tall Organization:  Flat organization:
 This type of This type of
organizational organizational
architecture has architecture has
many layers and
few layers and
narrow span of
control. wide span of
control.
10
ESTABLISHING REPORTING RELATIONSHIPS:
TALL VERSUS FLAT ORGANIZATIONS
 Tall  Flat Organizations
Organizations
 Are  Lead to higher levels of
more expensive
because of the number of employee morale and
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Copyright © by Houghton Mifflin Company. All
managers involved. productivity.
 Foster more  Create more administrative
communication problems responsibility for the

because of the number of relatively few managers.
people through whom  Create more supervisory
information must pass. responsibility for managers
due to wider spans of control.
6–11
ORGANIZATIONAL ARCHITECTURE –
HORIZONTAL DIFFERENTIATION
02/25/2021
1. FUNCTIONAL STRUCTURE:
General Manager
Production Finance Marketing
Dept Dept HR Deprtment
Dept
Structure is created based on the various

functions of an organization.
12
2. MULTI-DIVISION STRUCTURE
02/25/2021
General Manager
Division I Division II Division III
 Multiple divisions are created in a related

industry.
13
 Divisional or M-form (Multidivisional) Design
 An organizational arrangement based on multiple
businesses in related areas operating within a larger
organizational framework; following a strategy of related
diversification.
 Activities are decentralized down to the divisional level;
others are centralized at the corporate level.
 The largest advantages of the M-form design are the
opportunities for coordination and sharing of resources.
3. GEOGRAPHIC STRUCTURE:
02/25/2021
General
Manager  Departments are created
based on geographic
regions.
 All the activities in one
Eastern Central Western geographic region is

Region Region Region categorized into one unit.
15
4. MATRIX ORGANIZATION
CEO
Vice president, Vice president, Vice president, Vice president,

engineering production finance marketing
Employees
Project
manager A
Project
manager B
Project
manager C
6–16
MATRIX
STRUCTURE:
02/25/2021
 Advantages:  Disadvantages:
 Enhances organizational  Employees are uncertain
flexibility.
about reporting relationships.
 Team members have the  The dynamics of group
opportunity to learn new skills. behavior may lead to slower
 Provides an efficient way for decision making, one-person
the organization to use its domination, compromise
human resources. decisions, or a loss of focus.
 Team members serve as  More time may be required
bridges to their departments for coordinating task-related
for the team. activities.
17
PART THREE:
RESPONSIBILITY
02/25/2021
3.1 Meaning of Responsibility
3.2Establishing Task and Reporting
Relationships
3.3 Creating Accountability
18
RESPONSIBILITY:
02/25/2021
Responsibility is the
obligation to perform
or
duty to carryout certain
activities
19
ESTABLISHING TASK AND REPORTING
RELATIONSHIP:
02/25/2021
 Task Relationship:
 How activities related to each other in an
organization.
 How the basic units of an organization are formed.
 Establishment of 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.
20
ESTABLISHING TASK AND REPORTING
RELATIONSHIP:
02/25/2021
 Establishing Reporting Relationship:
 It is finding out
 Chain of command
 Span of control or span of management
1. Who reports to whom?
2. How many subordinates will a supervisor have?
(Relate it to tall vs flat organizational architecture.)
21
ACCOUNTABILITY:
02/25/2021
Accountability:
the state of being accountable
, liable, or answerable
Requirement to report
It creates a mechanism of control.
22
PART FOUR: AUTHORITY
02/25/2021
4.1 Line and Staff Authority
4.2 Delegation of Authority
23
AUTHORITY:
02/25/2021
Right to take decisions that arises due to position in
organizational structure.
Authority is the right to perform or command. It
allows its holder to act in certain designated ways
and to directly influence the actions of others
through orders.
Types of Authority:
 Line Authority
24
 Staff Authority
LINE AUTHORITY
02/25/2021
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.
25
STAFF AUTHORITY
02/25/2021
 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
26
DELEGATION OF
AUTHORITY
02/25/2021
Assigning work to subordinates and
giving them necessary authority to do
the assigned work effectively.
Simple terms,
GRANTING AUTHORITY TO SUBORDINATES
27
FEATURES OF DELEGATION OF
AUTHORITY:
02/25/2021
 No delegation of total authority
 Delegation of only that authority a manager
has
 Representation of the superior
 Delegation for organizational purpose
 Restoration of delegated authority
 Balance of authority and responsibility
 No delegation of responsibility
28
CONFLICT BETWEEN LINE – STAFF EMPLOYEES
02/25/2021
Assume Line Authority
Do not give Sound Advice
Steal Credit for Success
Fail to Keep line personnel
informed of their activities
Do not see the whole picture.
29
PART FIVE:
CENTRALIZATION AND DECENTRALIZATION
02/25/2021
 Meaning : Centralization and Decentralization
 Reasons: In which case which is needed
 Advantages and Disadvantages: of both
30
CENTRALIZATION
02/25/2021
Systematically retaining power
and authority in the hands of
higher level managers.
Not dividing authority to lower

level employees.
31
ADVANTAGES V/S DISADVANTAGES:
02/25/2021
Advantages:
Facilitates unified decision.
Simplifies structure
Facilitates quicker decision
Economy in operation
Integrate operation
Suitable for small firms 32
ADVANTAGES V/S DISADVANTAGES:
02/25/2021
Disadvantages:
Unsuitable for large organization
Manager is overburdened
Possibility of power misuse
Low morale and motivation
Lack of environmental adaptation
In appropriate for routine decisions. 33
DECENTRALIZATION:
02/25/2021
 Delegation of authority to the lower levels.
 Decentralization
is tendency to disperse
decision making authority in an organized
structure.
• Koontz and Weihrich
34
ADVANTAGES V/S DISADVANTAGES
02/25/2021
Advantages:
 Relief to top management
 Facilitates managers’ development
 Possibility if better decisions
 Effective control
 High morale and motivation
 Facilitates diversification
 Environment adaptation 35
ADVANTAGES V/S DISADVANTAGES
02/25/2021
Disadvantages:
 Increase in expenditure
 Conflict
 Unsuitable for emergency situations
 Maximizes risk
 Difficulty in communication
 Unsuitable for specialized services
36
EMERGING ISSUES IN ORGANIZATION
DESIGN
02/25/2021
Re-engineering process
Team work
Network organization structure
Downsizing organization
Boundary-less organization
37
STAFFING:
CONCEPT AND IMPORTANCE
02/25/2021
 It is the process of obtaining and maintaining competent
employees to fill all positions.
 Recruitment: Encouraging people to apply
 Selection: Finding the right person for the job
 Training: Teaching the employees certain skill
 Development: Progress/advancement of career
 Motivation: Encouraging the employees to work

harder.
38
IMPORTANCE OF STAFFING:
02/25/2021
Managing effective staff
Utilization of physical resources
Increase in productivity
Focus on goal achievement
Helps to solve problems
Job satisfaction
Self-development of workers
39
02/25/2021 POM/Chapter 4 - Organizing
40
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Organizing: Chapter Four

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Organizing: Chapter Four

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ORGANIZING

 1.3 Principles of Organization

communication problems responsibility for the

Structure is created based on the various

 Multiple divisions are created in a related

Eastern Central Western geographic region is

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

3.3 Creating Accountability

certain position in a job. It describes the job.

1. Who reports to whom?

2. How many subordinates will a supervisor have?

(Relate it to tall vs flat organizational architecture.)

It creates a mechanism of control.

 The Advisory or Counseling Role :

 Advantages and Disadvantages: of both

Not dividing authority to lower

 Training: Teaching the employees certain skill

 Development: Progress/advancement of career

 Motivation: Encouraging the employees to work

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