CHARCTERISTICS An organization has a purpose It has a clear concept of the major duties or activities It has a classification of activities into jobs It has an establishment of relationships between these jobs

Span of Management Sales Manager Sales Manager Salesmen Asst. Manager Meaning and Importance It means that number of subordinates who report directly to a manager Span affects the efficiency of managers and the effective performance of their subordinates Organizational structure depends on the span of management. It may be a tall or flat organization Sales Manager Sales Manager Salesmen Asst. Manager Salesmen

What is an appropriate span? The ideal number of subordinates is 3 to 6 The limiting factor is no of relationship Direct one-to-one relationship Direct group relationship n[(22/2)-1] 3. Cross-relationships n[(22/2)+n-1]

Factors Governing the Span of Management Ability of the manager Ability of the employees Type of work Well-defined authority and responsibility Geographic location Sophisticated information and control system Level of management Economic considerations

Principles of Organizing Objectives Specialization Span of control Exception Scalar principle Unity of command Delegation Responsibility Authority Efficiency Simplicity Flexibility Balance Unity of direction Personal ability Acceptability

CHOICE OF SUITABLE BASE SPECILISATION COORDINATION ECONOMY WHOLE TASK

ORGANIZATION STRUCTURE ORGANIZATION CHART – Vertical, Horizontal and Circular ORGANIZATION MANUALS Company’s mission and philosophy Company’s objectives, policies and processes Authority and responsibility of each person Relationship of each position with other positions Committees- membership, objectives & functions MECHANISTIC AND ORGANIC STRUCTURES Mechanistic or classical organization structure Pyramid-shaped, Tall organization Organic or behavioural structure - Flat WHAT TYPE OF STRUCTURE IS BEST? Environment Culture Task Technology Strategy

ORGANIZATION STRUCTURE WHAT TYPE OF STRUCTURE IS BEST? Size Span of Control Form Managerial Characteristics Employee Characteristics COLLATERAL ORGANIZATIONS Mode of functioning could be to involve both mechanistic or organic structure depends on his problem VIRTUAL ORGANIZATIONS 1. Technology 2. Opportunism 3. No borders 4. Trust 5. Excellence

COMMITTEES GROUP OF PEOPLE FORMALLY ASSIGNED A TASK OR A PROBLEM FOR SOLUTION TYPES OF COMMITTEES Advisory committee Executive committee Standing committee ADVANTAGES Committees help to understand each other It helps to improve the quality of decisions It helps to communicate either upward or downward

COMMITTEES WEAKNESSES Committees delay decision making It encourages irresponsibility It consumes more money It is difficult to dissolve the committees after their term is over Log-rolling phenomena affects the decisions Suggestions for making the committees effective Committees must have minimum number of members Members must have equal powers Chairman of the committee must be firm and fair in dealing with issues

TEAMS What do you mean by a Team? A team is a small group of people with different backgrounds, skills and knowledge. They are drawn from different function areas of the organization to work together on a specific and defined task. One of the member will be designated as Team leader What are the characteristics of a Team? Skill diversity, clear and defined objectives, task oriented and the entire team is responsible for the task are the characteristics of a team

Problem-solving teams Permanent Work Teams TYPES OF TEAMS Project Teams Problem-solving teams Permanent Work Teams

IMPORTANT TERMS AND DESCRIPTIONS What is called Parochialism? Teams overcome the functional insulation and it is flexible to adopt to any role What is called social loafing? In a team, there is a possibility that an individual reduce his/her effort and performance levels since they think that the performance of others will cover for their reduced effort. What is called sucker effect? Sucker Effect means that few individuals do not want to do more than their perception of effort being given by others in the team

FORMAL WORK GROUP AND TEAM Superior-subordinate relationship are maintained Leadership and composition are permanent in nature Management is by direction and control Communication is up and down Decisions are based on simple majority Purpose is same as organization’s No such relationships are there It changes according to the situation Management is by integration and self-discipline Communication is lateral Decisions are unanimous Purpose is specific

DECENTRALISATION AND DELEGATION OF AUTHORITY Classical View Authority originates from and flows down to subordinates Human Relations View Acceptance of authority by subordinates and it is considered to be legitimate Tradition Rationality Charisma

It is the institutionalized right of a superior AUTHORITY Vs POWER It is the institutionalized right of a superior No position; no authority It can be delegated It is formal It is the ability of the person to influence an another person Power remains even if position changes It cannot be delegated It is informal

It enforces obedience to norms USES OF AUTHORITY It enforces obedience to norms It secures expertise in the making of decisions It permits centralization of decision making and coordination of activity RESPONSIBILITY AUTHORITY should equal RESPONSIBILITY

LINE, STAFF AND FUNCTIONAL AUTHORITY HIGHEST FUNCTIONAL AUTHORITY CONCURRING AUTHORITY COMPULSORY CONSULTATION VOLUNTARY CONSULTATION LOWEST Fig LEVELS OF AUTHORITY OF A STAFF MAN

GUIDELINES FOR EFFECTIVE DELEGATION Make the scope and nature of the task clear Assign the authority proportionate to the task Make the subordinates understand the limits of his authority Provide incentives to the subordinate for accepting responsibility Train them properly Create climate of mutual trust and goodwill Let there be no overlaps or splits in delegation

DECENTRALIZATION OF AUTHORITY Delegation is a process Superior continues to be responsible Delegation is vital Decentralization is the end result Subordinates become liable for the work Decentralization is optional

ADVANTAGES OF DECENTRALIZATION It reduces problem of communication and red tape It permits quicker and better decision making It recognises and actually capitalizes on the importance of human element It leads to competitive climate within the organization It ensures the development of employees