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6 Chapter Six The Organizing Function
6 Chapter Six The Organizing Function
THE ORGANIZING
FUNCTION
Objectives
Students are expected to be able to:
Define the organizing function
Evaluate the organizing process
Evaluate the considerations for developing an
organizational structure
Examine the forms of organizational structure
Grasp concepts such as span of control, delegation,
centralization and decentralization
Evaluate techniques for achieving coordination
Introduction
•There are numerous activities in an organization and
these activities are usually divided in ways intended
to get the work done efficiently and effectively.
A working definition
Organizing is the process of developing a formal pattern of prescribed roles
and role relationships, the allocation of activities and resources into separate
sub-units, the distribution of authority among administration positions, and
the coordination of activities to achieve organizational objectives.
The Organizing Process
1. Set the objectives for which one is organizing
2. Determine task necessary to achieve objectives
3. Divide tasks into separate jobs and define duties and
responsibilities associated with each job
4. Group separate jobs into logical units or
departments
5. Assign authority to managers and define their
respective responsibilities
6. Provide the needed financial and physical resources
7. Coordinate the various units in the organization
Organizational Structure
•This is a final plan for achieving an efficient division
of labour and the effective coordination of member
activities.
5. Organizational strategy
Organization Chart
•An organization chart is the visual representation of
the structure of that organization.
3. Levels of management
4. Lines of authority
5. Relationships
Merits and Demerits of Org. Chart
Merit
•It helps employees to identify how their own specialized
task relates to the total task of the whole organization.
Demerits
•It is a static model which do not lend itself to change.
•It shows only the formal and not the informal
organizational structure.
•It is only a picture of the organization at a certain time
and is rapidly outdated by changes in structure or
personnel.
Formal and Informal Organizational
Structure
Formal Organizational Structure
Officially defined and often documented by management.
Characteristics:
The simple structure has flat organization- one in which there are relatively few
layers of management, with each manager having a wide span of control.
Characteristics:
Decentralized authority
Many managerial levels
A narrow span of control
Can be very expensive
Unnecessary delays in decision-making and communication
Basic elements of an Organizational
Structure
Work specialization
Evolved from Adam Smith’s concept of division of
labor.
Job enlargement
Job enrichment
Basic elements of an Organizational
Structure cont’d…
Departmentalization
It is the fundamental principle by which individual resources and activities
grouped into departments (separate but interdependent sub-units).
Benefits:
Establishes a system of common supervision
Typically creates common measures of performance
Encourages informal communication.
Bases of Departmentalization
Three of these are frequently used:
1. Departmentalization by Function- done according to common employees skills
and similar work activities.
Advantages:
Efficiency is fostered through specialization of tasks
Specialists can work in their field
It is simple, straightforward and logical
Clear career paths are defined
Coordination is enhanced
Very well suited for structuring a single business
Promotes in-depth functional expertise
Direct supervision and control are easier
Cont.
Disadvantages:
Employees tend to concentrate too narrowly on their own
unit goals
Disadvantages:
Does not foster overall coordination
It limits career mobility of personnel
Creates duplication of efforts.
Divisions may become too autonomous
Division by geographic location
Advantages:
Provides an excellent training ground for incoming managers
Enables the firm to adapt to local customs and laws, and to
service customers more quickly
Allows a strategic tailoring of operations to the needs of each
geographic market
Easy coordination within each region
Decision-making is made more decentralized
Disadvantages:
Does not foster coordination across geographic divisions
May cause conflict between the goals
Duplication of efforts and functions
Division by customer requirement
Advantages:
Allows a faster response to environmental changes
Strong orientation to customer requirements
Ensures accurate measurement of performance in the entire
organization
Simultaneous concentration on all customers
Disadvantages:
Does not foster coordination across customer division
Can lead to the neglect of overall organizational goals
Sometimes breeds unnecessary competition among divisions
The Matrix Design, Structure or Organization: It’s a hybrid design in
which both functional and divisional structures are combined to leverage the
benefits of both.
There are usually two superiors (dual line of command)- one a functional
manager, and the other a divisional manager
Advantages:
Duplication of functional department at each division is avoided
Higher management levels are not overloaded with operational decisions.
Project teams can be created, modified and dissolved quickly and
continuously
Increases motivation and commitment of subordinates
Individual specialists as well as equipment can be shared across projects
Cont.
Communication is enhanced both laterally and vertically
Frequent contact between members from different departments
expedites decision-making and adaptive responses
Disadvantages:
Can lead to power struggles among functional and divisional
managers
They are very complex to manage
Employees used to rigid bureaucracies may find it difficult in
adjusting to its relatively fluid nature
Contributes to ambiguity and role conflict
Conflicts may occur as boundaries of authority and responsibility
overlap.
Reporting relationships
Some concepts to note:
Scalar chain/ chain of command: A clear and unbroken
chain of authority and responsibility should be
established to link every person and department in the
organization.
Unlike the staff, the functional specialists offer a common service throughout
all departments of the organization, but have no direct authority over line
managers who make use of the service
There is the need for the distribution of authority backed by formalized legal systems to
give them the necessary backing and protection. In addressing this, the following
concepts come to fore:
Disadvantages of Centralization:
7. Autocratic and does not allow personal initiatives
8. Ineffective use of human resource at the lower levels
9. Increased work load on senior executives
Advantages of Decentralization:
1. Top management can concentrate on more important issues
2. Generally, lower level managers have more detailed and up-
to-date information
3. Increased motivation and enthusiasm of lower level managers
4. Provides an excellent training ground for lower level
managers
5. Problems at lower level management can be solved more
quickly
Disadvantages of Decentralization:
6. Narrowed knowledge and experience of lower level managers
7. Difficult to effectively spread innovative ideas
Coordinating Activities
Coordination: it is the integration of the activities of
the separate parts of an organization that serves to
achieve a common goal of objective.