Lesson 3:

Organizing
Chapter

3
 Introduction
• Organizing is a process of identifying and grouping the work to be
performed defining and delegating responsibility and authority and
establishing relationship for the purpose of enabling people to work most
effectively in accomplishing objectives.
• Purposes of organizing:
– Management purposes
– Facilitates growth, creativity
– Ensure optimum use of resources
– Establish relationships among individual groups
– Cluster job into units
– Coordination
 Groups
• Two or more interacting and interdependent individuals who
come together to achieve specific goals.
• Formal groups: Work groups defined by the organization’s
structure that have designated work assignments and tasks
• Informal groups: Groups that are independently formed to
meet the social needs of their members
 Group Development

Forming Storming Norming Performing Adjourning

stage stage stage stage stage

• The first stage • The second • The third stage • The fourth • The final stage
of group stage of group of group stage of group of group
development in development, development, development development
which people characterized characterized when the group for temporary
join the group by intragroup by close is fully groups during
and then define conflict relationships functional and which group
the group’s and works on group members are
purpose, cohesiveness. task. concerned with
structure, and wrapping up
leadership activities rather
than task
performance.
 Group Structure
• Behaviour patterns expected of someone occupying a
Role given position in a social unit.
• Standards or expectations that are accepted and shared
Norms by a group’s members.
• When a group exerts extensive pressure on an individual
Groupthink to align his or her opinion with that of others.
Status • A prestige grading, position, or rank within a group.
• The tendency for individuals to expend less effort when
Social loafing working collectively than when working individually.
Group • The degree to which group members are attracted to one
cohesiveness another and share the group’s goals.
 Work Teams

Groups whose members work intensely on a

specific, common goal using positive synergy,
individual and mutual accountability and
complementary skills.
 Types of Work Teams

Problem-solving Self-managed Cross-functional Virtual

team work team team team

A team from the A type of work

A type of work
same department team that uses
team that operates A work team
or functional area technology to link
without a manager composed of
that’s involved in physically
and is responsible individuals from
efforts to improve dispersed
for a complete various functional
work activities or members in order
work process or specialties.
to solve specific to achieve a
segment.
problems. common goal.
 Organization Structure
• Formal Reporting Relationships
– Number of levels
– Span of control
• Grouping of Individuals
– Creation of departments
• Design of Systems
– Communication, coordination, and integration of efforts
• Horizontal information and coordination reflected in
organization chart
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A Sample Organization Chart

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 Information-Sharing Perspective
on Structure
Vertical and horizontal information flow
– Traditional organization designed for efficiency?
• Centralized authority focused on top level decision-
making
– Learning organization which emphasizes
communication and collaboration
• Decentralized authority focused on shared tasks and
decisions
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 Efficiency versus
Learning Outcomes

11
 Vertical Information Sharing
• Vertical linkages coordinate activities between the top and
the bottom of the organization
• Hierarchical referral are the vertical lines which identify
the chain of command
• Rules and Plans create vertical links
• Reports, computer systems, and written information are
vertical information systems

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 Horizontal Information Sharing
Horizontal linkage coordinates activities across organizational
departments - not traditionally drawn on the organizational
chart
 Information Systems
 Liaison Roles
 Task Forces
 Full-Time Integrator
 Teams

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Ladder of Mechanisms for Horizontal Linkages 14
Teams and Horizontal Coordination
 Relational Coordination

• High level of horizontal coordination

• Frequent, timely, problem-solving
communication
• Relationships of shared goals, shared
knowledge, and mutual respect

16
Horizontal Coordination and Linkages

17
Organization Design Alternatives

Required Work Activities

Reporting Relationships

Departmental Grouping Options

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Departmental Grouping Options

Functional Divisional Multifocused

Grouping Grouping Grouping

Horizontal Virtual Network

Grouping Grouping

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 Functional Structure
 Activities grouped by common function
 All specific skills and knowledge are consolidated
 Promotes economies of scale
 Slow response to environmental changes
 Prevalent approach but few companies can respond in today’s
environment without horizontal linkages

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Functional: Strengths & Weaknesses

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 Divisional Structure
 Product structure or strategic business units
 Divisions organized according to products, services,
product groups
 Good for achieving coordination across functional
departments
 Suited for fast change
 Loses economies of scale
 Lacks technical specialization

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Reorganization from Functional to Divisional 23
Divisional: Strengths & Weaknesses

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 Geographic Structure
 Organizing to meet needs of users/customers
by geography
 Many multinational corporations are
organized by country
 Focuses managers and employees on specific
geographic regions
 Strengths and weaknesses similar to divisional
organization
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Sample Geographic Structure

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 Matrix Structure
 Multifocused with strong horizontal linkage
 Conditions for Matrix:
1. Share resources across the organization
2. Two or more critical outputs required: products and technical
knowledge
3. Environment is complex and uncertain

 Allows organization to meet dual demands

 Largest weakness is that employees have two
bosses and conflicting demands

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Sample Matrix Organization
 Conditions for Matrix Structure

• Need for shared and flexible use of people

across products
• Two or more critical outputs like new products
and technical knowledge
• The environment is complex and uncertain

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Matrix: Strengths & Weaknesses 30
 Horizontal Structure

 Organization around core processes

Processes refers to tasks and activities

 Shift towards horizontal structure during

reengineering
 Eliminates vertical hierarchy and
departmental boundaries

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Sample Horizontal Structure
 Characteristics of
Horizontal Structure
 Structure is created around cross-functional processes
 Self-directed teams, not individuals, are dominant players
 Process owners are responsible for entire process
 People on the team are given authority for decisions
 Can increase organization’s flexibility
 Customers drive the organization, measured by customer satisfaction,
employee satisfaction, and financial contribution
 Culture is one of openness, trust, and collaboration; focus on continuous
improvement
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Horizontal: Strengths & Weaknesses
 Virtual Networks and Outsourcing
 Extend horizontal coordination beyond the
boundaries of the organization
 Most common strategy is outsourcing
• Contract out certain tasks/functions
 Virtual or modular structures subcontract
most of its major functions to separate
companies
 The virtual network organization serves as a
central hub with contracted experts
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Virtual Network Example

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Virtual Network Strengths and Weaknesses

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 YOUR TASK
• Select any ONE organization that are interested in.
• Study and analyze the following matters:
– Organizational Chart
– Type of organizational structure/ departmentalization
– Merits and demerits of the organizational structure/
departmentalization
• Present you study outcome next lesson.
THANK YOU