1. ORGANIZING
MODULE III

2. Meaning of Organizing
The grouping of activities necessary to attain objectives,
The identification and classification of required activities
The assignment of each grouping to a manager with the authority (delegation) necessary to supervise it,
Establishing a network of authority and responsibility
The provision for coordination horizontally (on the same or a similar organizational level) and vertically (e.g., corporate headquarters, division, and department) in the organization structure .

3. 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

4. Definition
Organizing is the process of arranging and allocating work, authority, and resources among an organization’s members so that they can achieve organizational goal.
Stoner, Freeman and Gilbert
Organizing is the process by which employees, facilities and tasks are related to each other, with a view to achieve specific goals. It refers the way, work is arranged and allocated among members of the organization, so as to achieve the goals.

5. ORGANIZING The process of organizing involves the following steps
Identifying the work
Grouping the work
Establishing relationship
Delegating authority
Providing for coordination and control

6. Importance of Organizing
Benefits of specialization
Clarity in working relationships
Optimum utilization of resources
Adaptation to change
Development of personnel
Expansion and growth

7. Objectives of Organizing
Divide work to be done into specific jobs and 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 resources .

8. Elements in Organizing process
Work Specialization
Departmentalization
Chain of command
Centralization and Decentralization
Formalization
Span of Control

9. Process of Organizing simplified

10. Organizing Process
Identifying, analyzing and classifying the activities necessary to accomplish the objectives
Grouping these activities in the light of human and material resources available and the best way under the circumstances , of using them
Delegation of authority (Assignment of duties )
Horizontal and vertical coordination of authority and information relationship

11. Feasibility studies and feedback
Organizing Process
Feasibility studies and feedback
IDENTIFICATION
AND
CLASSIFICATION OF
REQUIREDS
ACTIVITIES
GROUPING
OF ACTIVITIES IN
THE LIGHT OF
RESOURCES AND
SITUATIONS
DELEGATION
OF AUTHORITY
HORIZONTAL
AND VERTICAL
COORDINATION OF
AUTHORITY AND
INFORMATION
RELATIONSHIP

12. Formal and Informal Organization

13. Formal Organization
The Formal Organization is a system of well-defined jobs, each bearing a definite measure of authority, responsibility and accountability.
Louis Allen
Formal Organization is a system of consciously coordinated activities of two or more persons toward a common objective.
Chester Barnard

14. Features It is deliberately designed by the top management
It places more emphasis on work to be performed than interpersonal relationships among the employees.
It specifies the relationships among various job positions and the nature of their inter-relationship.
It lays down rules and procedures essential for achievement of objective
Efforts of various departments are coordinated, interlinked and integrated through the formal organisation.

15. Formal Organizations

16. Features It is deliberately designed by the top management
It places more emphasis on work to be performed than interpersonal relationships among the employees.
It specifies the relationships among various job positions and the nature of their inter-relationship.
It lays down rules and procedures essential for achievement of objective
Efforts of various departments are coordinated, interlinked and integrated through the formal organisation.

17. Advantages 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

18. 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.

19. 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

20. Features
Originates from within the formal organisation as a result of personal interaction among employees.
The standards of behavior evolve from group norms.
Independent channels of communication without specified direction of flow of information are developed by group members.
Emerges spontaneously and is not deliberately created by the management.

23. 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 the informal network.

24. 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 organisation opposes them. Such resistance to change may delay or restrict growth.
It pressurizes members to conform to group expectations.

25. Formal and Informal Organization: A Comparative view
Meaning
Origin
Authority
Behavior
Flow of Communication
Nature
Leadership

26. Principle of the Span of management or control
There is a limit to the number of persons an individual can effectively manage .
Organization with Narrow Span
Organization with Wide Span

27. Organization with Narrow Span

28. Advantage Disadvantage
Subordinates tend to get involved in Subordinates Work
Many Levels of Management
High Costs due to many levels
Excessive distance between lowest level and top level
Close supervision
Close control
Fast communication between subordinates and superiors

29. Organization With Wide Span

30. Advantages Disadvantage
Superior are forces to delegate
Clear polices must be made
Subordinate must be carefully selected
Tendency of overloaded
Danger of superiors loss of control
Requires exceptional quality of Managers

31. Organizational Structure
Organizational Architecture
The organizational structure, control systems, culture, and human resource management systems that together determine how efficiently and effectively organizational resources are used.

32. What Is Organizational Structure?
How job tasks are formally divided, grouped, and coordinated
Key Elements:
Work specialization
Departmentalization
Chain of command
Span of control
Centralization and decentralization
Formalization

33. 1. Work Specialization
The degree to which tasks in the organization are subdivided into separate jobs
Division of Labor
Makes efficient use of employee skills
Increases employee skills through repetition
Less between-job downtime increases productivity
Specialized training is more efficient

34. 2. Departmentalization The basis by which jobs are grouped together
Grouping Activities by:
Function
Product
Geography
Process
Customer

35. 3. Chain of Command Authority Chain of Command Unity of Command
The rights inherent in a managerial position to give orders and to expect the orders to be obeyed
Chain of Command
The unbroken line of authority that extends from the top of the organization to the lowest echelon and clarifies who reports to whom
Unity of Command
A subordinate should have only one superior to whom he or she is directly responsible

36. 4. Span of Control
The number of subordinates a manager can efficiently and effectively direct. Span of control refers to the number of subordinates a supervisor has.
Wider spans of management increase organizational efficiency
Narrow span drawbacks:
Expense of additional layers of management
Increased complexity of vertical communication
Encouragement of overly tight supervision and discouragement of employee autonomy

37. 5. Centralization and Decentralization
The degree to which decision making is concentrated at a single point in the organization.
Decentralization
The degree to which decision making is spread throughout the organization.

38. Centralized vs. Decentralized
In a centralized organization:
people have little autonomy
norms that focus on being cautious, obeying authority, and respecting traditions emerge
predictability and stability are desired goals
In a flat, decentralized structure:
people have more freedom to choose and control their own activities
norms that focus on being creative and courageous and taking risks appear
gives rise to a culture in which innovation and flexibility are desired goals.

39. 6. Formalization
The degree to which jobs within the organization are standardized.
High formalization
Minimum worker discretion in how to get the job done
Many rules and procedures to follow
Low formalization
Job behaviors are non-programmed
Employees have maximum discretion

40. Organizational Architecture/Structure
Vertical differentiation
Tall versus Flat Structure
Horizontal differentiation
Functional Structure
Multidivisional/ Divisional Structure
Geographic Structure
Matrix Structure

41. Tall and Flat Organizations
Tall structures have many levels of authority and narrow spans of control.
As hierarchy levels increase, communication gets difficult creating delays in the time being taken to implement decisions.
Communications can also become distorted as it is repeated through the firm.
Can become expensive

42. Tall Organizations

43. Tall and Flat Organizations
Flat structures have fewer levels and wide spans of control.
Structure results in quick communications but can lead to overworked managers.

44. Tall Versus Flat Organizations
President
Tall Organization
Flat Organization

45. Organizational architecture – Vertical integration
Tall Organization
This type of organizational architecture has many layers and narrow span of control.
Flat organization
This type of organizational architecture has few layers and wide span of control.

46. 1. Functional Structure:
Organizational Architecture – Horizontal Differentiation
1. Functional Structure:
Structure is created based on the various functions of an organization.
An organizational structure composed of all the departments that an organization requires to produce its goods or services.
General Manager
Production Dept
Finance Dept
Marketing Dept
HR Department

47. 2. Multi-Division/ Divisional structure
General Manager
Division I
Division II
Division III
Multiple divisions are created in a related industry.
Managers create a series of business units to produce a specific kind of product for a specific kind of customer

48. Types of Divisional Structure
Product Structure
Geographic Structure
Market Structure

49. Types of Divisional Structures
Product Structure
Managers place each distinct product line or business in its own self-contained division
Divisional managers have the responsibility for devising an appropriate business-level strategy to allow the division to compete effectively in its industry

50. Product Structure
Allows functional managers to specialize in one product area
Division managers become experts in their area
Removes need for direct supervision of division by corporate managers
Divisional management improves the use of resources

51. Types of Divisional Structures
Geographic Structure
Divisions are broken down by geographic location/regions
All the activities in one geographic region is categorized into one unit.
Global geographic structure
Managers locate different divisions in each of the world regions where the organization operates.
Generally, occurs when managers are pursuing a multi-domestic strategy

52. Types of Divisional Structures
Market Structure
Groups divisions according to the particular kinds of customers they serve
Allows managers to be responsive to the needs of their customers and act flexibly in making decisions in response to customers’ changing needs

53. Matrix Design Structure
Matrix Structure
An organizational structure that simultaneously groups people and resources by function and product.
Results in a complex network of superior- subordinate reporting relationships.
The structure is very flexible and can respond rapidly to the need for change.
Each employee has two bosses (functional manager and product manager) and possibly cannot satisfy both.

54. Matrix Structure

55. Matrix Structure Advantages: Disadvantages:
Enhances organizational flexibility.
Team members have the opportunity to learn new skills.
Provides an efficient way for the organization to use its human resources.
Team members serve as bridges to their departments for the team.
Disadvantages:
Employees are uncertain about reporting relationships.
The dynamics of group behavior may lead to slower decision making, one-person domination, compromise decisions, or a loss of focus.
More time may be required for coordinating task-related activities.

56. References
Gareth R. Jones. Contemporary Management, Tata McGraw hill publication.
VSP Rao. Management, Excel Publication.
Koontz & Weilrich. Management.