Professional Documents
Culture Documents
Mba CH4
Mba CH4
Mba CH4
ORGANIZING FUNCTION
The concept of organization
The element of organizing function
The organizing process
Organizational structure
departmentalization
Centralization & decentralization
delegation of authority
authority relations in organizations –line, staff &
functional
span of management
Formal and informal organizations
ORGANIZING FUNCTION
Departmentation by function
Grouping together activities in accordance with
the function of an enterprise, on the basis of
similarity of expertise, skills, work or activities
jobs that call for certain skills or the use of
similar working methods will be put together
It presents in almost every enterprise at some
level in the organizational structure
The kinds of activities are; human resources,
production, marketing, finance, etc .
ORGANIZING FUNCTION
Departmentation by function
Advantage:
simplifies training: train functional specialist by indicating special
abilities required
provides unity of command for closely related activities
managers can easily plan & coordinate – all the jobs that report to them
are similar in content
promotes specialization & operational efficiency –related activities are
grouped together & this permits effective economies of scale
Disadvantages
de-emphasis of overall company objectives – identification with the
departmental objectives
Reduces coordination & communications b/n functions
Decisions are concentrated at the top management, creating delay
Limits the development of general managers –over specialization &
narrow viewpoints of key personnel
ORGANIZING FUNCTION
Departmentation by territory/ geography
Grouping activities on the basis of geographic
region or territory
common in enterprise that operate over wide
geographical area
all activities in a particular area or region should
be assigned to a manager- the manager would be
in charge of all operations in that geographic area
it works best when different laws, currencies,
languages, & traditions exist & have a direct
impact on the ways in which business activities
must be conducted
ORGANIZING FUNCTION
3. Mixed group
Often formed b/c of common bonds outside work
Is a combination of two or more persons whose
positions are on different levels of the formal
organization & in different work areas
A vice- president may develop a close relationship
with the director of computer services in order to
get preferential treatment
A production manager may cultivate an informal,
social r/ships with the director of maintenance for
the same reason
ORGANIZING FUNCTION
Why people form informal groups?
Informal groups are formed for different reasons
Need for satisfaction
People have needs that in some cases are not met through the formal
organization
The opportunity to fulfill security, affiliation, esteem, & sometimes self
actualization needs
Proximity & interaction
A common reason people join groups is that they work near one another-
i.e., in close proximity physically or b/c of frequently interaction
Horizontal informal groups are prime example of this
Similarity
People may join informal groups b/c they are attracted to other people who
are similarity themselves-i.e., with the same attitudes or beliefs
Other factors of similarity can be personality, race, sex, economic position,
age , educational background, etc.
ORGANIZING FUNCTION
Why informal groups exist
1. Maintain the social & cultural values of the group members
Individuals in the group are likely to share the same beliefs & values as a
result of background, education, or cultural heritage
Example; a common beliefs regarding work ethics
2. Provide group members the opportunity for status fulfillment
Individuals can receive what the formal organization cannot provide-avoiding
identity crisis
Example an individual whose post is a technician may assume a position of head for
a volleyball team
3. Provide information for their members
The informal group develops its own system & channels of communication
parallel to management’s formal channel
The ability to acquire access to information for members is a major function
of informal groups
Crucial information can be obtained through informal communications
ORGANIZING FUNCTION
Why informal groups exist
4. They influence the work environment
Regulate or influence the behavior, dress, or
work standards of their members through:
Positive means –acceptance, support, and
affiliation
Negative methods –threats of ostracizing non-
complying members
The informal group can also regulate or
influence the actions of management
ORGANIZING FUNCTION
The impact of informal organization on the formal organization
A. The negative impacts
Resistance to change
Place roadblock in the path to any alteration in the work environment
This is in an effort to protect its values & beliefs
Conflict
The company may allows 10 minutes for coffee break; however, the
informal group may extend it to 30 minutes
Hence, the employee’s social satisfaction is in conflict with the employer’s
need for productivity –conflicting objectives
Rumor
The informal communication system –the grapevine can create & process
false information or rumor
The creation of rumors can upset the balance of the work environment
Pressure to conform
The norms that the formal group develops act as a strong inducement towards
conformity
The more cohesive the group, the more accepted are the behavioral standards
Non-conformity can result in execution
ORGANIZING FUNCTION
B. The positive impacts
1. Makes the total system effective
If the informal organization blends well with the formal system, the
organization can function more effectively
The ability of the informal group to polish the plans & procedures
developed through the formal organization
2. Provides support to management
The informal organization can provide support to the individual
manager
By performing effectively & positively it can build a cooperative
environment
This can means more delegation to the employee & less time spent by
the manager controlling employee behavior
3. Provides a useful communication channel
Provides employees with the opportunity for social information, for
discussing their work & for understanding what happening in the work
environment
ORGANIZING FUNCTION
B. The positive impacts
4. Encourages better management
Managers should be aware of the power of informal
organization in what is actually a check & balance system
Planned changes should be made with an awareness of the ability
of the informal group to make the pan successful or unsuccessful
5. Provides stability in the environment
The informal organization can provide acceptance & belonging
This feeling of being wanted by the group can encourage
employees to remain the environment, thus reducing turnover
Additionally, the informal organization provides a place for a
person to vent/voice frustrations