ORGANIZING

Chapter Four
PART ONE: INTRODUCTION

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1.1 Meaning of organization

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1.2 Process of Organization

1.3 Principles of Organization

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DEFINITION OF ORGANIZING

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Activities: Resources:
Identification of Determining the

POM/Chapter 4 - Organizing
activities
Grouping of Activities
specific need of
Assignment of jobs to resources
formal groups Allocation of
Establishing a network resources into
of authority and
responsibility specific groups
Providing framework for Evaluation and
measurement, evaluati control of use of
on and control
the resources 3
ORGANIZING

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Organizing is the process of
arranging and allocating

POM/Chapter 4 - Organizing
work, authority, and resources
among an organizations
members so that they can
achieve organizational goal.
Stoner, Freeman and Gilbert
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PROCESS OF ORGANIZING

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Division of Work
Grouping of Work

POM/Chapter 4 - Organizing
Delegation of Authority

Coordination of Work

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 1/8/2012 POM/Chapter 4 - Organizing
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PROCESS OF ORGANIZING SIMPLIFIED
 PRINCIPLES OF ORGANIZING
8.Exception

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1. Unity of Objective
2. Specialization
9.Efficiency

POM/Chapter 4 - Organizing
3. Coordination
4. Authority and 10.Balance
Responsibility
11.Homogeneity
5. Unity of Command
6. Scalar Chain 12.Continuity
7. Span of Control
13.Simplicity 7
PART TWO: ORGANIZATIONAL ARCHITECTURE

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2.1 Vertical differentiation
Tall versus Flat Structure

POM/Chapter 4 - Organizing
2.2 Horizontal differentiation
Functional Structure
Multidivisional Structure

Geographic Structure

Matrix Structure
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TALL VERSUS FLAT ORGANIZATIONS
Tall Organization
President

All rights reserved.

Copyright by Houghton Mifflin Company.
Flat Organization
President

69
ORGANIZATIONAL ARCHITECTURE -
VERTICAL INTEGRATION

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Tall Organization: Flat organization:
This type of This type of

POM/Chapter 4 - Organizing
organizational organizational
architecture has architecture
many layers and
has few layers
narrow span of
control. and wide span
of control.
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 ESTABLISHING REPORTING RELATIONSHIPS:
TALL VERSUS FLAT ORGANIZATIONS
Tall Organizations Flat Organizations
Are more expensive Lead to higher levels of
employee morale and

All rights reserved.

Copyright by Houghton Mifflin Company.
because of the number
of managers involved. productivity.
Foster more Create more administrative
communication responsibility for the
problems because of relatively few managers.
the number of people Create more supervisory
through whom responsibility for managers
information must pass. due to wider spans of
control.
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 ORGANIZATIONAL ARCHITECTURE HORIZONTAL
DIFFERENTIATION
1. FUNCTIONAL STRUCTURE:

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General Manager

POM/Chapter 4 - Organizing
Production Finance Marketing HR
Dept Dept Dept Deprtment

Structure is created based on the

various functions of an organization.
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 ORGANIZATIONAL ARCHITECTURE HORIZONTAL
DIFFERENTIATION
2. MULTI-DIVISION STRUCTURE

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General Manager

POM/Chapter 4 - Organizing
Division I Division II Division III

Multiple divisions are created in a

related industry.
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ORGANIZATIONAL ARCHITECTURE HORIZONTAL
DIFFERENTIATION

Divisional or M-form (Multidivisional) Design

An organizational arrangement based on multiple
businesses in related areas operating within a larger
organizational framework; following a strategy of
related diversification.
Activities are decentralized down to the divisional
level; others are centralized at the corporate level.
The largest advantages of the M-form design are the
opportunities for coordination and sharing of
resources.
ORGANIZATIONAL ARCHITECTURE HORIZONTAL
DIFFERENTIATION
3. GEOGRAPHIC STRUCTURE:

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General

POM/Chapter 4 - Organizing
Manager Departments are
created based on
geographic regions.
All the activities in one

Eastern Central Western geographic region is

Region Region Region categorized into one
unit.

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ORGANIZATIONAL ARCHITECTURE HORIZONTAL
DIFFERENTIATION
4. MATRIX ORGANIZATION
CEO

Vice president, Vice president, Vice president, Vice president,

engineering production finance marketing

Employees
Project
manager A

Project
manager B

Project
manager C

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MATRIX STRUCTURE:
Advantages:
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.
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Disadvantages:
Employees are uncertain
POM/Chapter 4 - Organizing
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- 17
related activities.
PART THREE: RESPONSIBILITY

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3.1 Meaning of Responsibility

POM/Chapter 4 - Organizing
3.2Establishing Task and
Reporting Relationships

3.3 Creating Accountability

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RESPONSIBILITY:

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Responsibility is the

POM/Chapter 4 - Organizing
obligation to perform
or
duty to carryout certain
activities

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ESTABLISHING TASK AND REPORTING
RELATIONSHIP:

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Task Relationship:
How activities related to each other in an

POM/Chapter 4 - Organizing
organization.
How the basic units of an organization are
formed.
Establishment of job description and job
specification
Job Specification: Prerequisites of job. Various skills and
experiences needed to perform certain job.
Job Description: The activities that have to be carried
out at certain position in a job. It describes the job.
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ESTABLISHING TASK AND REPORTING
RELATIONSHIP:

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Establishing Reporting Relationship:
It is finding out

POM/Chapter 4 - Organizing
Chain of command
Span of control or span of management

1. Who reports to whom?

2. How many subordinates will a supervisor have?

(Relate it to tall vs flat organizational architecture.)

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CREATING ACCOUNTABILITY

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Accountability:
Requirement to report

POM/Chapter 4 - Organizing
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PART FOUR: AUTHORITY

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4.1 Line and Staff Authority

4.2 Delegation of Authority

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AUTHORITY:

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Right to take decisions that arises due to
position in organizational structure.

POM/Chapter 4 - Organizing
Authority is the right to perform or
command. It allows its holder to act in
certain designated ways and to directly
influence the actions of others through
orders.

Types of Authority:
Line Authority
Staff Authority 24
LINE AUTHORITY

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The chain of command in the
organizational structure that flows

POM/Chapter 4 - Organizing
major decision making power.
The officially
sanctioned ability to issue orders t
o subordinate employees within
an organization.
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STAFF AUTHORITY

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Staff authority consists of the right to
advise or assist those who possess

POM/Chapter 4 - Organizing
line authority as well as other staff
personnel.

The Advisory or Counseling

Role :
The Service Role
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The Control Role
DELEGATION OF AUTHORITY

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Assigning work to subordinates
and giving them necessary

POM/Chapter 4 - Organizing
authority to do the assigned work
effectively.

Simple terms,
GRANTING AUTHORITY TO SUBORDINATES
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FEATURES OF DELEGATION OF
AUTHORITY:

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No delegation of total authority
Delegation of only that authority a

POM/Chapter 4 - Organizing
manager has
Representation of the superior

Delegation for organizational purpose

Restoration of delegated authority

Balance of authority and responsibility

No delegation of responsibility
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CONFLICT BETWEEN LINE STAFF EMPLOYEES

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Assume Line Authority

POM/Chapter 4 - Organizing
Do not give Sound Advice
Steal Credit for Success
Fail to Keep line
personnel informed of their
activities
Do not see the whole picture. 29
PART FIVE:
CENTRALIZATION AND DECENTRALIZATION

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Meaning : Centralization and Decentralization

POM/Chapter 4 - Organizing
Reasons: In which case which is needed

Advantages and Disadvantages: of both

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EMERGING ISSUES IN ORGANIZATION DESIGN

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STAFFING: CONCEPT AND IMPORTANCE

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