The Organizing Process Chapter 2 The Organizing Process

Organizing Function is Helpful By: 1. Assuring more efficient use of the organization’s resources. 2. Improving employee understanding of job duties and responsibilities. 3. Improving employee morale. 4. Providing a sense of direction for each of the organization’s functional areas.

Organization’s Objectives Should be written in context of outcomes, understood and accepted by employees, be measurable, contain a time reference, and be challenging but attainable.

Refers to the number of subordinates Span of Control Refers to the number of subordinates an individual is able to supervise.

Interrelated Functions Organization’s functions have become so interrelated that when a problem arises in one functional area, other related functions are also likely to be affected.

Identifies who reports to whom within Chain of Command Identifies who reports to whom within an organization.

States that each employee should be Unity of Command States that each employee should be directly responsible to one supervisor.

Authority and Responsibility States that individuals who are given the responsibility to undertake a task must also be given an appropriate amount of authority to ensure task completion.

States that each employee’s work assignments should be based on his/her special strengths and talents.

States that empowered employees are Employee Empowerment States that empowered employees are encouraged to participate as much as possible in making decisions that affect all aspects of their job tasks.

Line Organizational Structures Line and Staff Functional Product Committee Matrix

Line Structure Is the oldest and simplest of structures. Has direct authority flowing vertically from the top. Is generally found in small organizations because support staff is needed once they begin to grow.

Advantages of Line Structure 1. Employees are fully aware of the boundaries of their jobs. 2. Decision making is expedited. 3. Is a simple structure to understand. 4. Employees can be held directly accountable when they fail to perform as expected.

Disadvantages of Line Structure 1. Fails to provide specialization needed when organization begins to grow. 2. Line managers need to begin to perform specialized activities.

Line and Staff Structure Has line authority similar to line structure. Specialized staff activities are added that support line activities. Staff employees assist the line function.

Line employees are directly concerned with the organization’s primary objectives. Line Employees Staff Employees Staff employees support the line employees.

Advantages of Line and Staff Structure 1. Line employees have time to focus on those activities directly related to the organization’s primary objectives. 2. Staff employees can lend their specialized support. 3. Flexibility of staff units facilitates undertaking new projects.

Disadvantages of Line and Staff Structure 1. Line and staff employees sometimes are in conflict with one another. 2. Line employees sometimes suppress the talents of staff employees.

Functional Structure Tends to parallel the departments in many organizations. Line managers have both line and functional authority.

Line Managers Can take disciplinary action against those for whom they have line authority. Line Managers Cannot take disciplinary action against those for whom they have functional authority.

Advantages of Functional Structure 1. It provides expertise by functional specialists. 2. It prevents employees from slighting certain specialized areas in the organization.

Disadvantages of Functional Structure 1. Some employees may appear to have two or more supervisors. 2. Some managers evade those areas for which they have functional authority.

Each major product is given division Product Structure Company’s products provide a basis for its structure. Each major product is given division status. Incorporates line and staff structure into these divisions. Each product tends to operate independently of other divisions.

Advantages of Product Structure 1. Enables divisions to develop processes that best meet their needs. 2. Divisions can coordinate their own activities without constraint from main unit.

Disadvantages of Product Structure 1. Divisions can “go their own way” to the extent that they don’t work toward common goals. 2. Problems of some divisions may eventually be felt throughout the entire organization.

Committee Structure Is often used in conjunction with line, line and staff, and functional structures. Some committees perform important managerial functions; others are advisory.

Advantages of Committee Structure 1. Recommendations are often widely accepted. 2. Widely varying views of committee members broaden the nature of their recommendations. 3. Its use reduces the risk of making an incorrect decision.

Disadvantage of Committee Structure 1. It sometimes takes a long time to function properly.

Matrix Structure Is often used by organizations undertaking complex projects. Results in the formation of temporary new units to accommodate the undertaking of a new project. Involves temporarily borrowing employees from other areas of the organization and assigning them to the new temporary unit.

Advantages of Matrix Structure 1. Allows companies to assign employees on the basis of their expertise. 2. Helps companies avoid having to hire new employees for a project. 3. Enables companies to adapt quickly to new situations.

Disadvantages of Matrix Structure 1. Employees often have two supervisors. 2. Employees may experience job-related pressures. 3. Managers may have difficulties coordinating employee activities.

Places related activities under jurisdiction of one individual. Centralization Places related activities under jurisdiction of several individuals throughout the organization. Decentralization

Factors That Determine Feasibility of Centralization 1. Nature of the organization. 2. Size of the organization. 3. Diversification of the organization. 4. Conformity to standardized processes. 5. Quality of personnel. 6. Distribution of operations. 7. Attitude of personnel.

The Organization Chart Identifies lines of authority. Gives employees a better understanding of the formal structure of the organization. Helps identify areas of overlapping responsibility that should be eliminated. Identifies promotional opportunities for job applicants and new employees. Identifies areas suitable for training and orientation.

Guidelines for Preparing Organization Charts 1. Place individuals/departments in relation to their hierarchical level. 2. Identify vertical and horizontal authority by solid lines. 3. Identify functional authority by dotted lines. 4. Use complete titles on the chart. 5. Include on the chart the name of organization and the date the chart was prepared.

Informal Organization Informal Organization Refers to the spontaneous personal and social relationships that exist within organizations. Two Common Elements of Informal Organization Informal Groups Informal Communication Patterns