Organizing

Chapter 4
 LEARNING OBJECTIVES
When you have finished studying this chapter, you
should be able to:
1. Define organizing.
2. Explain the organizing process.
3. Discuss the division of work/ labor.
4. Explain the types of organizational structures.
5. Define the span of management.
6. Differentiate the types of organization chart.
7. Discuss the chain of command, authority and delegation.

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What is Organizing?
� Organizing
� The process of determining:
� The tasks to be done.
� Who will do them.
� How those tasks will be managed
and coordinated.

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The organizing process

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1) Detailing of work
� Various tasks of the organization must first be determined.
� Ex: a restaurant owner, before he operate a new restaurant,
he must detail the number of person involved, the type of
cooking.
2) Division of work
� Dividing the total workload into activities that can
logically and comfortably be performed by one person of
by a group.
� Division of labor and the grouping together of people
should be organized by reference to some common
characteristics which will form a logical link between the
activities involved
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 ADVANTAGES & DISADVANTAGES
OF DIVISION OF WORK/LABOUR
Advantages
-Person-to-fit (based on talents and interests) - the job given

can be fit based on individual’s ability.

-Creates job specialization
-Increase productivity

Disadvantages

Higher degree of control

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-Boredom
3) Departmentalization
� Group individuals into related assigned tasks.
� Ex: individuals involved in sales, promotions, advertising
to be grouped under the marketing department.

4) Coordination of work
� Reconcile differences in approach, timing effort, or
interest and to harmonize individual goals to contribute to
organizational goals.

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5) Monitoring and reorganizing work
� Periodical reassessment of the four preceding steps is
necessary.
� The structure of the organization must be reevaluated to
make sure it is consistent with the current requirements
and see that it is still effective and efficient.

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Organizational Structure
� Defines the primary reporting relationships that exist within an
organization.
� The chain of command and hierarchy of responsibility, authority, and
accountability are established through organizational structure.
� Common Forms of Organizational Structure
� Functional structure
� Product structure
� Geographic structure
� Customer structure
� Matrix structure
� Network structure

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 Functional Structure

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Functional Structure
� Advantages
� Facilitates specialization
� Cohesive work groups
� Improved operational
efficiency
� Easy supervision
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� Disadvantages
� Focus on departmental
versus organizational issues
� Difficult to develop
generalists needed for top-
level management
� Only top-level management
held accountable for
profitability
� Slow in decision
� Difficult to monitor
performance
CHAPTER 4: ORGANIZING
Types of Divisional Structure
� Product Divisions
� For organizations with relatively diverse product lines that
require specialized efforts to achieve high product quality.
� Geographic Divisions
� For organizations with limited product lines that either have
wide geographic coverage or desire to grow through geographic
expansion.
� Customer Divisions
� For organizations that have separate customer groups with very
specific and distinct needs.

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Product Divisional Structure
� For organizations with relatively diverse product lines that require
specialized efforts to achieve high product quality.
� Advantages
� Enhanced coordination.
� Better assessment of manager performance and responsibility.
� Development of generalist managers.
� Easy focus and quick/speed in decision
� Disadvantages
� Managers may lack expertise to operate in wide geographic areas.
� Duplication of resources and increase costs
� Focus only on own products
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 Product Structure

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Geographic Divisional
� For organizations with limited product lines that either have wide
geographic coverage or desire to grow through geographic expansion.
� Advantages
� Allows for focus on specific new markets.
� Good structure for growth along geographic lines.
� Adaptable to local needs and lead to positive competition
� Better communication with customers
� Disadvantages
� Duplication of job, product or technology efforts.
� Coordination and integration are difficult.
� Less control and may be difficult to manage diverse product lines.
CHAPTER 4: ORGANIZING

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 Geographic Structure: Canadian National Railway Company

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Customer Divisional
� For organizations that have separate customer groups with very specific and
distinct needs.
� Advantages
� Good structure for serving large customer groups.
� Helps allocate resources to meet demands of specific customer groups.
� Best for growth by targeting new and distinct groups.
� Good feeling from customers. Expert in the customer handling
� Disadvantages
� Ineffective and inefficient use of resources if most customer groups served are
small.
� Internal competition for resources to serve customers groups may cause loss
of market focus.
� Difficult to coordinate operations and must be experts in customers’ problems

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Matrix Structure: A Dual Focus
� A structure in which the tasks of the organization are
grouped along two organizational dimensions
simultaneously.
� Examples include:
� Product/function
� Product/geographic region

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 Matrix Structure

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Matrix Structure (cont’d)
� Disadvantages
� Complex, leading to difficulties in implementation
� Behavioral difficulties from “two bosses”
� Time consuming from a planning/coordination perspective
� Frustration and confusion
� High conflict
Advantages
� Good use of resources and sharing of information
� Can achieve simultaneous objectives
� Managers focus on two organizational dimensions, resulting in
more specific job skills
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Network Structures: Flexibility
� An organizational structure that is
founded on a set of alliances with
other organizations that serve a
wide variety of functions.
� An organization that has a core
coordinating with other
organizations or organizational
units.

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 Network Structure (Building Contractor)

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Network Structure (cont’d)
� Advantages
� Maximizes the effectiveness of the core unit
� Do more with less resources. Reduce cost
� Flexibility

� Disadvantages
� Fragmentation makes it difficult to develop control systems
� Success is dependent on ability to locate sources
� Difficult to develop employee loyalty
� Conflict between management
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Span of Control/ Management
� The number of employees reporting to a particular
manager.
� In theory, when tasks are very complex, span of control should
be relatively narrow.
� In contrast, where jobs are highly standardized and routine (low
complexity), a manager will not need to spend as much time
supporting individual subordinates, and the span of control may
be larger.

Two (2) types:

1. Wide/ Flat
2. Narrow/ Tall
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Major factors that influence the span of
management
� The type of work (heavy supervision or not)
� The location of the tasks
� The ability of the manager
� The abilities and skills of the employees
� The amount and type of communication required among
the members

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 Types of organizational chart

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Tall span of management
� Has narrow span, and sometimes referred as steep or deep
span
� Advantages:
� Close supervision
� Close control
� Rapid communication between subordinates and supervision
� Disadvantages:
� Tall organization have more managers, they are more costly
� Superiors tend to get much involvement in subordinates work
� It will cause excessive distance between the lowest and top
levels

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Lean (flat) structure
� Lean span of management sometimes referred as flat, wide
span of management.
� Advantages:
� Superiors are forced to delegates and put empowerment to practice
� Clear policies must be made to avoid confusion
� Subordinates must be carefully selected and if possible to select
candidates who are capable of doing their own work with less
supervision
� Disadvantages:
� Little communication because of too many subordinates
� There is a danger of the superior’s loss of control
� The organization requires an exceptional quality manager to handle
the situation which means high costs

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Chain of Command
� Definition: Separate lines of authority/power among all position
in an organization

� It has 2 components:-
(i) UNITY OF COMMAND
- Suggests that each person within an organization must have a
clear reporting relationship to only one superior

(ii) SCALAR RELATIONSHIP

- Suggests that there must be a clear and unbroken line of
authority that extends from the lowest to the highest
position in the organization

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Authority
• Definition: “The right to make decisions with respect
to work assignments & to require subordinates to
perform assigned tasks in accordance with the decision
made”
• Authority
– The formal right inherent in an organizational position
to make decisions.
• Formal authority
– Authority inherent in an organizational position.
• Informal authority
– Ability to influence others that is based on personal
characteristics or skills.
• Responsibility
– The obligation to perform the duties assigned.

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Line & Staff Authority

⚫ Line Authority
◦ Those organizational members that are directly
involved in delivering the products and services of the
organization
⚫ Staff Authority
◦ Those organizational members that are not directly
involved in delivering the products and services to the
organization, but provide support for line personnel

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Delegation

� Definition: “The process of transferring the authority

for a specific activity or task to another member of the
organization and empowering that individual to
accomplish the task effectively”
� Transforming the responsibility for a specific activity
or task to another member of the organization
� Empowering that individual to accomplish the task
effectively

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Steps in Delegation
• Decide which goals/tasks to delegate.
– Teach the department or organization mission.
– Find a capable person.
– Teach/train the person.
• Make assignments.
– Agree on mission, goals, tasks.
– Establish limits (policy).
– Agree on results.
– Establish monitors and feedback.
– Give information.
• Grant authority to act.
– Transfer right to decide.
– Transfer right to commit resources.
– Make it public.
– Do not interfere.

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Steps in Delegation (cont’d)
• Hold responsible/accountable.
– Check progress.
– Treat problems and challenges as teaching/learning
opportunities.
• Monitor.
– Teach.
– Reward.
– Communicate.
– Give information.
– Give resources.
– Remove roadblocks.

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 Benefits of Delegation
� Leads to a more involved and empowered
workforce.
� Improved response time as a result of decisions
and information not needing to be passed up and
down the organization.
� Leads to better decision making.
� Provides opportunity for employee to develop
analytical and problem solving skills.
� Provides managers the opportunity to accomplish
more complicated, difficult, or important tasks.
� Empowerment
� Managers magnify their accomplishments
 Barriers of Delegation
1. Manager may refrain to delegate because they
are insecure about their value to the
organization
2. Managers simply lack confidence in the
abilities of their subordinates
3. Manager experience dual accountability
4. Subordinate are reluctant to accept delegation
5. No reward for the job done.
Overcoming Barrier to Delegation

� Allow subordinates to develop their own solutions & to

make mistake
� More support & training
� Improved communication
� Give employees freedom in their task
� Increase complexity in delegated assignments over
time
 Tutorial Questions
1. Define organizing.
2. Explain the organizing process.
3. With a diagram, explain the types of organizational
structures.
4. Define the span of management.
5. Differentiate the types of organization chart.
6. Explain delegation steps.

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