Final Organizing

8/8/2019 Final Organizing

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Organising


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Organizing

y In the words of Stephen P. Robbins:

Organizing is determining what tasks are to

be done, who is to do them, how the tasksare to be grouped, who reports to whom &where decisions are to be made.


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Process

Deter ining activities to beperfor ed to achieve organisationobjectives

Identifying ajor functions related tothese activities

Grouping within each function onbasis of si

ilarity/relatedness

Establishing relationship a

ongindividuals and groups.


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1. Determining the activities to be performed to achieve the

Objectives of the organisation

y Organisations undertake economic activities withview to earn profit.

y May perform manufacturing, trading or service

activity In a manufacturing organisation, production & sales are two

major activities. In a trading organisation, purchases & sales are two main

activities.

Service organisations provide services such astransportation to their customers.


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2. Identification of major functions to which these activities

relate

y In a manufacturing organisation, production, selling,finance & personnel are major functions

y At this stage, a list of activities relating to each functionmust be prepared


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3. Grouping and sub-dividing the work within each function

y The activities of a production department, for example,can be divided into a number of workshops whereproduction will actually take place.

y

Besides, separate sections may be created for suchproduction related activities as quality control andrepairs.

y This division and subdivision of activities goes on tillindividual positions have been created for performing alltypes of work in an organisation.


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4. Establishing Relationships Between Individuals & Groups

y It deals with creation of authority relationships amongjob holders/ job positions.

y Various managerial jobs are grouped into different levels

of authority which is called a hierarchy

y Top managerial positions have more authority thanmiddle & lower levels of management

y Authority flows from top level to lower levels ofmanagement


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Organizational Structure

y Organizational structure identifies and distinguishes theindividual parts of an organization and ties them together

to define an integrated whole.

y

It includes the interaction patterns that link people topeople and people to work, and these patterns are

continually evolving.


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Significance of Organizational Structure

1. Clear cut authority-responsibility relationships

2. Provides the patterns of communication and coordination

3. To identify who's involved in the decision-making process

4. Defines how specific tasks and activities are assigned to

their functional departments

5. Defines the number of employees over whom a

manager exercise authority.


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Classification of Organizations Design

MechanisticModel

This type of modelhas bureaucraticorganization

Highly structuredand formallydesigned.

Organic Model

Organic organizationis fluid and dynamic.

Capable of adaptionto both internal andexternalenvironment


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Basis of Selection of Design

Environment Strategy

TechnologySize of

Organization


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1. Environment

Environmental Uncertainty and Structure

y one way to reduce environmental uncertainty is to

adjust the organizations structurey with greater stability, mechanistic structures are more

effectiveo mechanistic structures are not equipped to respond

to rapid environmental change

y the greater the uncertainty, the greater the need for an

organic structureo organizations are being designed to be more organic

nowadays


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2. Strategy

Strategy focuses on

o innovation - flexibility and free flow of information of theorganic structure

o cost minimization - seek efficiency, stability, and tightcontrols of mechanistic structure

o imitation seeks to move into new products or newmarkets only after their viability has already been proven---

organic & mechanistic


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3. Technology

y How an organization transfer its inputs into outputs

y degree of routine: automated & standardized operations

y routine tasks--more departmentalized structure;

formalized documentation

y mechanistic structureo supports routine technology

yorganic structureo supports non-routine technology


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4. Size of Organization

y Large organizations tend to have more Specialization more departmentalization more vertical levels more rules & regulations than do small org.

y Size affects structure at a decreasing rate.


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Ca ses

Strategy

Size

Technology

Environment

Str ct res

Mechanistic

Organic

PerformancePerformanceandand

SatisfactionSatisfaction

Moderated by individual

differences and cultural

norms


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Departmentalization

y Manner or practice in which related individual tasks and

their allocation to work groups is combined, to form a

specialized functional area that is distinct from

other functional areas in an organization.

y Division of labor creates specialists who need coordination.

This coordination is facilitated by grouping specialists

together in departments.


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Basis of Departmentalization

Functional Departmentalization

Customer Departmentalization

Process Departmentalization


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Functional Departmentalization

y Based on the functions or the operations carried within

the organization

y For e.g. production, selling, marketing, distributing andfinancing

y Type of organization or an enterprise affects the

formation of different departments


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President

Marketing Engineering

Engineer

Admin

Packaging

Financial Operating

Purchasing

OperatingPlan

Equipment


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Customer Departmentalization

y Usually found in sales or marketing departments

y Involves division of customer base in terms of types of

customers like individual buyers, industrial buyers orwholesalers

y For e.g. banking services, credit card services, auto

companies


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President

InvestmentBank

CommunityBank

CommercialBank

AgricultureBank


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Process Departmentalization

y Aims at achieving economies or effective utilization of

the companys resources by grouping activities around

a process

y Similar types of labor and equipments are brought

together

y For e.g.: Jewellery makers, shoe makers and oil

companies


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Plant Superintendent

Sewing Department

Milling Department

Assembly Department

Lacquering Department

Finishing Department

Inspection and ShippingDepartment


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Matrix Structure

y Characteristics:

Dual lines of authority (chain of command)

Combines functional & product departmentalization

y Strengthfacilitate coordination; facilitate the efficient deployment of

specialists

y Weakness

confusion & ambiguity foster the seeds of conflict, power

struggle; stress on individuals


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CEO

Vice President

Engineering

Vice PresidentFinance

Vice PresidentPurchasing

Vice PresidentSales &

Marketing

Vice PresidentResearch &

Development

Product A

Manager

Product B

Manager

Product C

Manager

Product D

Manager

Product Team

Two-boss employee


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Span Of Control

y It is the number of subordinatesa manager can direct efficiently& effectively.

y There is an inverse relation

between the span of managementand the number of hierarchicallevels in an organization.

y Ideal span of control dependsupon the nature of anorganization, skills andcapabilities of manager, theemployees skills and abilities, thenature of job, the degree ofinteraction required between

superior and subordinates.


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Graicunas' formula:

Three basic kinds of relationships are:

1.Direct single relationships between superior and individual subordinates

2.Cross relationships between individual subordinates

3.Direct group relationships between superior & combinations of subordinates

Relevant notations and elements:n = number of persons supervised

a = number of direct single relationships (superior to subordinate)

b = number of cross relationships (subordinate to subordinate)

c = number of direct group relationships (superior to combinations ofsubordinates)

d = total group relationships (a + b)

e = total of direct relationships (a + c)

f = total of direct and group relationships (a + b + c)


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Maximum Case

Kind ofRelationship Variable Formula

Direct single relationships a n

Cross relationships b n(n 1)

Direct group relationships c n(2n/2 1)

Total direct single & cross

relationships (a + b)d n2

Total direct single & group (a +c)

e n(2n/2)

Total direct & cross relationships

(a + b + c)f n (2n/2 + n 1)


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Minimum Case

Kind ofRelationship Variable Formula

Direct single relationships a n

Cross relationships b n/2(n 1)

Direct group relationships c 2n n 1

Total direct single & cross

relationships (a + b)d n/2(n+1)

Total direct single & group(a + c)

e 2n 1

Total direct & cross

relationships (a + b + c)f 2n+n/2(n 1)1


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Narrow Span Of Control

It means single manager or supervisor oversees few subordinates. The less capable, motivated and confident the employees are, the better it is to

have a narrow span of management so that the managers can spend time withthem & supervise them well.

Manager 1

Employee Employee

Employee Employee

Employee

Each employee holding a position of authority is responsible for at least two others,

i.e., the span of control is at least 2.


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Narrow Span Of Control

The advantages of a narrow span of control are:

y Quick and easy communication

y Better feedback from subordinates

y Less management skill required

y More growth opportunities

The disadvantages of narrow span of control

y It create a situation where managers are too involved in their

subordinates work, which can reduce innovation and morale amongemployees.

y It is expensive .


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Wide Span Of Control

It means a single manager or supervisor oversees a large number ofsubordinates.

The more efficient and organized the managers are in performing their tasks, the

better it is to have wide span of management for such organization

Manager 1

Employee Employee

Employee Employee Employee Employee

Employee Employee Employee

Each employee holding a position of authority is responsible for at least others, i.e.,

the span of control is at least 5.


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Wide Span Of Control

Advantages:

y There is more flexibility

y Cost efficient

y Effective communication

Disadvantages:

y Time consuming

y Lack of personal contact

y

Danger of superiors loss of controly Requires exceptional quality of managers


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Delegation Of Authority

Delegation of authority means division of authority andpowers downwards to the subordinate.

y Elements ofDelegation:1.

Authority2. Responsibility

3. Accountability


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y For achieving delegation, a manager has towork in a system and has to perform following

steps:

Assignment of tasks andduties

Granting of authority

Creating accountability andresponsibility


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Authority Vs Responsibility

Authority Responsibility

1.It is the right of a person or a superior

to command his subordinates.

It is the obligation of subordinate to

perform the work assigned to him.

2.Authority is attached to the position

of a superior in concern.

Responsibility arises out of superior

subordinate relationship in which

subordinate agrees to carry out duty given

to him.

3.Authority can be delegated by asuperior to a subordinate.

Responsibility cannot be shifted and isabsolute.

4. It flows from top to bottom. It flows from bottom to top.


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Centralization

Centralization is concentration of management and decision

making power at the top of an organizations hierarchy.

The implication of centralization can be :-

y Reservation of decision making power at top level.

y Reservation of operating authority with the middle level managers.

y Reservation of operation at lower level at the directions of the top level


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DecentralizationD

ecentralization is a systematic delegation of authority at alllevels of management and in all of the organization.

In a decentralization concern, authority in retained by the topmanagement for taking major decisions and framing policiesconcerning the whole concern. Rest of the authority may be

delegated to the middle level and lower level of management.

Implications ofDecentralization :

y Less burden on top managementy Development skills and capabilities of subordinates.

y Diversificationy Coordination of operations at divisional levely Greater motivation and morale of the employees


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Centralization Decentralization

1. Environment is complex, uncertain Environment is more stable

2.Lower-level managers are NOT capable or

experienced at making decisions

Lower-level managers are capable or

experienced at making decisions

3.Lower-level managers do not want to have a say

in decisionsLower-level managers want a voice in decisions

4. Decisions are more significant Decisions are relatively minor

5.Organization is facing a crisis or the risk of

company failure

Corporate culture is more open to allowing

managers to have a say in what happens

6. Company is large Company is geographically dispersed

7.

Effective implementation of company strategies

depends on managers retaining more say over

what happens

Effective implementation of company strategies

depends on managers having more involvement

and flexibility to make decisions.


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Basis Delegation Decentralization

Meaning

Managers delegate some of their

function and authority to their

subordinates.

Right to take decisions is shared

by top management and other

level of management.

Scope

Scope of delegation is limited as

superior delegates the powers to

the subordinates on individualbases.

Scope is wide as the decision

making is shared by the

subordinates also.

ResponsibilityResponsibility remains of the

managers and cannot be delegated

Responsibility is also delegated to

subordinates.

Freedom of

Work

Freedom is not given to the

subordinates as they have to work

as per the instructions of their

superiors.

Freedom to work can be

maintained by subordinates as

they are free to take decision and

to implement it.


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Line and Staff Structure

y This type of structure combines the flow of information from the

line structure with the staff departments that service, advice, and

support them.

y

Line departments are involved in making decisions regarding theoperations, while staff areas provide specialized support.

y Example:

y A line department might be the production department.

y A staff department, on the other hand, has employees who advise andassistmaking sure the product gets advertised .


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y Merits ofLine and Staff Relationship:

1. Relief to line of executives

2. Expert advice

3. Benefit of Specialization

4.Better co-ordination

5. Benefits of Research and Development

6. presence of staff specialists and their expert advice serves as

ground for training to line officials

7. Unity of action


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y Demerits ofLine and Staff Relationship:

1. Lack of understanding

2. Lack of sound advice

3. Line and staff conflicts

4. proves to be costly for a concern with limited finance

5. Staff steals the show

6. Assumption of authority


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Conflicts of Line and Staff

y Viewpoints ofLine Managers:1. Lack of responsibility

2. Encroachment of line authority

3. Theoretical Bias

4. Dilution of Authority

y Viewpoints of Staff Managers:

1. Lack of proper use of Staff

2. Resistance to new idea

3. Lack of proper Authority


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Strategic Business Unit (SBU)

y Autonomous division or organizational unit, small enough to

be flexible and large enough to exercise control over most of

the factors affecting its long-term performance.

y Because SBUs are more agile, they allow the owning

conglomerate to respond quickly to changing economic or

market situations.


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Success factors:

y There are three factors that determining the success ofan SBU:

1. the degree of autonomy given to each SBU manager,

2. the degree to which an SBU shares functional programs and

facilities with other SBUs, and3. the manner in which the corporation is because of new

changes in market.


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Modern Organizational Structure

Boundary LessOrganizational

Structure

VirtualOrganizational

Structure

FeminineOrganizational

Structure


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Boundary Less Structure

y A model that views organizations as having permeable

boundaries.

y The rigidity of internal and external boundary is

removed in boundary less organizations.

y Goal

y develop greater flexibility and

y responsiveness to changey to facilitate the free exchange of information and ideas.


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y

The boundary less organization behaves more like anorganization encouraging better integration between

departments and closer partnerships with suppliers and

customers.


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Virtual Organizational Structure

y A small core organization that outsources major businessfunctions

y small executive group oversee activities done in house,

coordinate the network of relationships with outsourcefirm.

y highly centralized, with little or no departmentalization

y core competency: design, marketing, brand name, etc.


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66 -- 5252

y Advantage:y allow someone with an innovative idea

y little money to compete against large company

y Drawback:y reduce managements control


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Feminine Organizational Structure

y the feminist theories agree on male dominance and

inequality in the work-place.

y They argue that women have different and even better

skills than men for managing the demands of the globalworkplace.

y criticize sex segregation in both horizontal and vertical

dimensions.y leads to wage inequalities.

y barriers to higher status jobs

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