ORGANIZING

The process of determining: The tasks to be done.

Who will do them.

How those tasks will be managed and coordinated.

Structuring working relationships in a way that allows organizational members to work together to achieve organizational goals.

Review Plan & ObjectiveReview Plan & Objective

Establish Major TasksEstablish Major Tasks

Divide Major Task to SubtaskDivide Major Task to Subtask

Allocate resources for subtaskAllocate resources for subtask

Evaluate result Evaluate result

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.

Specifies its division of work activities and shows how different functions of activities are linked and also shows the level of specialization of work activities.

Is defined as a formal diagram that shows the lines of authority.

The purpose of the organization chart includes:

- to indicate to each employee area of responsibility and to whom each employee reports.- to coordinate the division of work and to make those division clear.- to show work to be done.- indicate line of promotion.

5 major aspects of an organization’s structure illustrated by the organization chart:-

1. Division of work2. Managers & subordinates3. Type of work being performed4. Grouping of work segments5. Levels of management

Refers to the number of subordinates who report directly to a given manager of supervision.

Two types of span of control/management:

1. Wide/flat span of management2. Narrow/tall span of management

Advantages:1. Superiors have power to delegate2. Policies are clear3. Selection of employees to receive tasks.Disadvantages:1. Superior might loss control2. Decisions made by managers tend to be

at bottleneck due to the burden of managing subordinates

3. Requires a high quality managers

Advantages:1. Close supervision2. Close control3. Rapid communication between subordinates

and superiorsDisadvantages:1. Superiors tend to get too involved in

subordinates’ work2. So many levels of management – incur high

costs3. Will cause excessive distance between the

lowest and top levels.

Traditional structure:Functional DivisionalMatrix

Newly-emerged structure:Network

Functional structure

Divisional structure

Matrix structure

Network structure

Members of the organization are grouped according to the particular function that they perform within the organization.

Appropriate when an organization’s greatest source of complexity comes from the diverse tasks that must be performed rather than from its products, geographic markets, or consumer groups.

Advantages

Facilitates specialization

Cohesive work groups

Improved operational efficiency

Disadvantages

Focus on departmental vs. organizational issues

Difficult to develop generalists needed for top-level management

Only top-level management held accountable for profitability

Functional structure

Divisional structure

Matrix structure

Network structure

Members of the organization are grouped on the basis of:

Common products

Geographic markets

Customers served

Product divisional Most appropriate for organizations with relatively

diverse product lines that require specialized efforts to achieve high product quality.

Geographic divisional Most appropriate for organizations with limited

product lines that either have wide geographic coverage or desire to grow through geographic expansion.

Customer divisional Most appropriate for organizations that have

separate customer groups with very specific and distinct needs.

Advantages Enhanced coordination. Better assessment of manager

performance and responsibility. Development of generalist managers.

Disadvantages Managers may lack expertise to operate

in wide geographic areas. Duplication of resources.

Advantages Allows for focus on specific new markets. Good structure for growth along

geographic lines. Adaptable to local needs.

Disadvantages Duplication of product or

product/technology efforts. Coordination and integration are

difficult. May be difficult to manage diverse

product lines.

Functional structure

Divisional structure

Matrix structure

Network structure

A structure in which the tasks of the organization are grouped along two organizational dimensions simultaneously.

Examples include:

Product/function

Product/geographic region

Advantages

Can achieve simultaneous objectives

Managers focus on two organizational dimensions, resulting in more specific job skills

DisadvantagesComplex, leading to difficulties in

implementationBehavioral difficulties from “two

bosses”Time consuming from a

planning/coordination perspective

Functional structure

Divisional structure

Matrix structure

Network structure

A contemporary organizational structure that is founded on a set of alliances with other organizations that serve a wide variety of functions.

Internal network A network structure that relies on internally

developed units to provide services to a core organizational unit.

Stable network A network structure that utilizes external

alliances selectively as a mechanism for gaining strategic flexibility.

Dynamic network A network structure that makes extensive use

of outsourcing through alliances with outside organizations.

AdvantagesMaximizes the effectiveness of the

core unitDo more with less resourcesFlexibility

DisadvantagesFragmentation makes it difficult to

develop control systemsSuccess is dependent on ability to

locate sourcesDifficult to develop employee loyalty

Chain of commandWork/Job specializationCentralization vs. DecentralizationAuthority, Accountability &

Responsibility

The line of authority and responsibility that flows throughout the organization.

A clear and distinct line of authority among the positions in an organization

The continuous line of authority that extends from upper levels to lower levels and clarifies who report to whom.

Chain of command has two components:- Unity of command;- Scalar principle

Unity of command: A principle that each employee in the

organization is accountable to one, and only one, supervisor.

Scalar principle: Suggest that there must be a clear and unbroken

line of authority that links all person in an organization and show who report to whom i.e.▪ To whom they can delegate▪ Who can delegate them▪ To whom they are accountable

A degree to which the overall task of the organization is broken down and divided into smaller component parts.

Also known as the division of labor. E.g: restaurant :–

- staff A takes orders;- staff B cuts vegetables; - staff C cooks- staff D makes drinks- staff E serves customers

*outcome – can serve more customers at one time (rather than one staff doing all jobs at one time)

Centralization:- The process of systematically

retaining power and authority in the hands of upper-level managers.

Decentralization:- The process of systematically

delegating power and authority throughout the organization to middle- and lower-level managers.

Advantages of Centralization Absolute controls over the organization Administratively convenient Common standards throughout the

organization Disadvantages of Centralization

Control can be autocratic and inflexible Lead to frustration – staffs are forced to

operate to inflexible rules Upper level managers who give orders may not

aware of what is needed

Advantages of Decentralization Unburdening top managers of ordinary

task and freeing them for other activities Flexibility and faster decision making Enable subordinates to appreciate their

action and activities Improved decision making because

decisions are made closer to the scene of action.

Disadvantages of Decentralization Upper level managers may lose control

over the organization Without coordination and leadership from

the top, staffs will become disorganize

Power that has been legitimized by the organization.

Right of a manager to make decisions, issue orders, and allocate resources.

Flows top down through the hierarchy.

2 types of authority:1.Line authority A form of authority in which individuals in management positions have the formal power to direct & control immediate subordinates.

2.Staff authorityA form of authority granted to staff specialists in their area of expertise.

Employees’ justification for their decisions and actions with regard to the task they have been assigned.

An obligation on the part of an employee to complete assigned activities.

* The concept of Authority, Accountability & Responsibility are applied in Delegation Process.

The process by which managers assign a portion of their workload to others.

The process of transforming the responsibility for a specific activity or task to another member of the organization, and empowering that individual to accomplish the task effectively.

To enable the manager to get more work done by utilizing the skills and talents of subordinates

To foster the development of subordinates by having them participate in decision making and problem solving that allows them to learn about overall operations and improve their managerial skills

Assigning responsibility Responsibility refers to the employee’s

obligation to complete the activities that he or she has been assigned.

Granting authority Authority is the formal right of an

employee to marshal resources and make decisions necessary to fulfill work responsibilities.

Establishing/creating accountability Where there is accountability for

performance, employees understand that they must justify their decisions and actions with regard to the tasks for which they have assumed responsibility.

Principle 1: Match the employee to the task.

Principle 2: Be organized and communicate clearly.

Principle 3: Transfer authority and accountability with the task.

Principle 4: Choose the level of delegation carefully.

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.

Is the process of linking the activities of the various departments of the organization.

The greater the interdependence between departments, the more coordination is required.

Three forms of interdependence:1. Pooled interdependence2. Sequential interdependence3. Reciprocal interpendence

When units operate with little interaction, their output is simply pooled.

Represents the lowest interdependence

When the output of one unit becomes the input for another.

Moderate level of interdependence.

When activities flow both ways between units.

The degree of interdependence is very high.

If one department fails to do jobs properly, other departments will be affected.

1. The managerial hierarchy2. Rules and procedures3. Liaison roles4. Task forces5. Integrating departments

- Organizations that use the hierarchy to achieve coordination place one manager in charge of interdependent departments or units.

- Coordination is handled via rules and procedures.

- Useful in routine situations- Not effective coordination problems

are complex

- A manager in a liaison role coordinates interdependent units by acting as a common point of contact.

- Created when the need for coordination is critical.

- When interdependence is complex and a single liaison person may not be sufficient.

- Coordination function spread across several individuals – representative from each group.

- Temporary basis – when a project is completed, the representatives return to their original positions

- Occasionally used.- More permanent than Task Forces- Members : combination of

permanent and temporary- Has more authority than Task Forces