mo 2nd class

8/13/2019 MO 2nd Class

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The process of organizing takes

place within a structure reflected

by the way in which the

organization

Divides its labor into departments andjobs

Establishes formal lines of authority

Establishes mechanisms for coordinating

diverse tasks


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What is Organizing

The grouping of activities necessary forattaining objective.

The process of creating an organizationsStructure .

A Process that initiates implementation ofplans by clarifying jobs and workingrelationship and effectively deployingresources for attainment of identified anddesired results

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Definition

Organizing is the process of identifying

and grouping the work to be performed,

defining and delegating responsibility and

authority, and establishing relationships

for the purpose of enabling people to

work most effectively together in

accomplishing objectives.Louis Allen

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Organizing process leads to creation of

an Organizational Structure

Formal tasks assigned

Formal reporting relationships

Systems design for coordination acrossdepartments


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Importance of Organizing

Benefits of specialization

Clarity in working relationships

Optimum utilization of resources

Adaptation to change

Development of personnel Expansion and growth

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Purposes of Organizing

Divide work to be done into specific jobsand Departments

Assign tasks and responsibilities

associated with individual Coordinates diverse organizational tasks.

Clusters job in to Units.

Establish relationship among individuals ,group , and departments .

Allocates and deploys organizational

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Principles of Organization

Organizational structure- The way

managers design their firms to

achieve their organizations missionand goals.

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Formal and Informal

Organization


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Formal Organization

The Formal Organization is a system ofwell-defined jobs, each bearing a definitemeasure of authority, responsibility and

accountability.Louis Allen

Formal Organization is a system of

consciously coordinated activities of twoor more persons toward a commonobjective.

Chester Barnard29 November 2013 9


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Formal Organizations

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Advantages

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Easier to fix Responsibility

No ambiguity in the role . This also

helps in avoiding duplication of

effort.

Behavior of Employee fairly

predicted

Unity of command through an

established chain of command

Stability to the organization


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Limitations

The formal communication may lead to

procedural delays

Do not provide adequate recognition to

creative talent

More emphasis on Structure and Work,

difficult to understand all human relationships

in an enterprise as it places

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Informal Organization

An Informal organization is an aggregate

of interpersonal relationships without any

conscious purpose but which may

contribute to joint results.

Chester Barnard

Informal organization is a network of

interpersonal relationship that arise when

people associate with one another .

Keith Davis

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Features

Originates from within the formal organisationas a result of personal interaction amongemployees.

The standards of behavior evolve from groupnorms.

Independent channels of communication

without specified direction of flow ofinformation are developed by group members.

Emerges spontaneously and is not deliberatelycreated by the management.

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29 November 2013 16

A

B C C

D E F G H I

J L N P R UK M 0 Q T V


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Chess group

Bowling Team

Morning coffeee regulars

Cricket lovers

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Advantages:

It helps to fulfill the social needs .

Sense of belongingness in the organisation

Faster spread of information as well as quick

feedback.

It contributes towards fulfillment of organizational

objectives. For example, employees reactions

towards plans and policies can be tested through theinformal network.

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Disadvantages:

It spreads rumors. This may work against the interest

of the formal organisation.

The management may not be successful in

implementing changes if the informal organisationopposes them. Such resistance to change may delay

or restrict growth.

It pressurizes members to conform to group

expectations.

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Elements in Organizing process

Work Specialization

Departmentalization

Chain of command

Centralization and Decentralization

Formalization

Span of Control Delegation

Empowerment29 November 2013 20


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Division of Labor and Departmentalization

Division of labor - Degree to which tasks aresubdivided into separate jobs.

Specialization can lead to efficiency andincreased performance, but if jobs becometoo specialized and boring, performance

can decrease. DepartmentalizationGrouping of related

activities into units.

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Chain of Command

Line of authority from the top to the

bottom of the organization.

Tells you who your boss is and who to go to

for help.

To work quickly, employees at all levels

need to communicate directly, and who the

boss is can change according to the task to

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Span of Management

It is the number of employees reporting to

a manager.

The number of employees reporting to one

manager affects the number of levels of

managers.

With downsizing, the trend has clearly been

to increase the span of management.

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Span of Management

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Delegation

- Appointing a person to act on one's behalf.

- Delegation is the entrusting of authority, power

and responsibility to another.

-Makes work easier.

-Improves efficiency.

-Increases employee effectiveness.

-Develops employees.

-Ensures that the right people do the right jobs.


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Centralized and Decentralized Authority

With centralized authority, top managers

make important decisions.

With decentralized authority, middle and

first-line managers make important

decisions where the action is.

Decentralization allows more input into

decision making and greater employee

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Empowerment

The process of giving employees at all levels in the

organization the authority to make decisions, be

responsible for their outcomes, improve quality,and cut costs

Empowerment increases a managers ability to get

things done

Empowerment increases workers involvement,

motivation, and commitment

Empowerment gives managers more time to

concentrate on their pressing concerns


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Exhibit 6.2 - Organization Chart

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Common Types of

Departmentalization

Functional Departmentalization

Involves organizing departments around essential

input activities, such as production and

operations, finance and accounting, marketingand sales, human resources.

Product (Service) Departmentalization

Involves organizing departments around goodsand services provided.

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Common Types of

Departmentalization

Customer Departmentalization

Involves organizing departments around the

needs of different types of customers.

Territory (Geographic) Departmentalization

Involves organizing departments in each area in

which the enterprise does business.

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Common Types of

Departmentalization

Divisional Departmentalization (Subsidiary)

The firm develops independent lines of business

that operate as separate companies, all

contributing to the corporation profitability.

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Common Types of

Departmentalization

Matrix Departmentalization

Combines the functional and product

departmentalization structures.

Its flexibility is a major advantage.

Combination

Many large companies have more than one form

of departmentalization.

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Matrix Structure

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Multi-base Departmentalization

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Contemporary Organization

Team organizations and reengineering

Contemporary organizations are using teamsas a

central coordinating organizational principle.

The coordinating focus is horizontal rather than

vertical.

Cross-functional teams have members from

different departments to coordinate tasksbetween departments.

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Virtual organizations

Outsources major business functions and focuses

on core competencies.

Core competencies are the functions an

organization does well.

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e-Organizations

Use e-business.

Communicate over the Internet, Intranets, and

Extranets.

All employees can quickly and easily get

information from sources both inside and outside

the organization to break down boundary barriers.

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Organizational Structure

Mechanistic Structure

Division of work

Bureaucratic

Multiple and strict levels of authority

Supports people as well as suppresses them

Strong in task support

Unidirectional communication

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Organizational Structure

Organic Structure

Decline in use of structure

Organic, flexible structures

Multidirectional communication

Joint problem solving

Tasks not defined well enough to become routine

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