LOGO QUIZ

Microsoft
BMW
Lipton
eBay
Nestle
Michelin
Louis Vuitton
DELL
Starbucks
Dolce & Gabbana
ORGANIZING

Prepared by:
Dominic Dalton L. Caling
 Learning Objectives
 Discuss the nature of organizations
 Distinguish the various types of organization
structures
 Apply organization theories in solving
business cases
 Identify the different elements of delegation
 Differentiate formal from informal
organization
 Group Activity # 1

1. Group the students with six members each.

Let them construct an organizational
structure with the names of each member
of the group
2. Present the answer in class.
 NATURE OF
ORGANIZATION
 Natural versus Rational Systems

 Are organizations’ organisms that grow change

and adapt or are they tools that are designed for
a specific purpose?

 Open versus Closed Systems

 What level of interaction do the parts of the

organization have with each other and the
environment?
 Rational Systems
 Organizations as tools that are controlled as
purposeful and coordinated agents for the
principal
 Rational calculation
 Goal Specificity
 Formalized planning
 Translation of plans into specific objectives
 Formalization of structure
 Explicit and visible
 Division of labor
 Natural Systems
 Organizations as natural organisms that exist
within an environment
 Goal complexity
 Informal structure
 Irrationality leads to informal norms and
behaviors
 Functional analysis of organizations
 Population ecology
 Closed Systems
 One or few points of contact with the
environment

 No change of system

 No intake of energy, material, or

information
 Open Systems
 Connection of many parts that make up the
organization
 Multiple or many points of interaction with
the environment
 Self-maintenance
 Goal directed
 Reciprocal ties that bind and relate the
organization to the environment
 Environment is ultimate source for materials
energy and information
 Examples
Schools Prisons
Franchises Boarding schools
Rational
Police Departments Military schools

Social clubs
Universities
Natural
Corporations
Governments

Open Closed
 TYPES OF
ORGANIZATIONAL
STRUCTURE
 Organizational Structure
Organization structure is a setup or a
framework which determines:

 The hierarchy of lines of authority

 Function
 Workflow
 Reporting system in an organization
Types of Organizational Structure

Functional Structure

Divisional Structure

Matrix Structure
 Functional Structure
 Most commonly used type of organizational
structure
 Organization is grouped into various
departments
 Department can rely on the talent and
knowledge of its workers and support itself.
 Marketing department, sales department and
a production department
Example of a Functional Structure
 Divisional Structure
 Organization is divided into various divisions
where people with diverse skills are kept
together in the form of groups by a similar
product, service or geographic location, and
each division itself is capable of doing the
task on its own
 Divisional structure typically is used in larger
companies that operate in a wide geographic
area or that have separate smaller
organizations
Example of a Divisional Structure
 Matrix Structure

 Hybrid of divisional and functional structure

 Resources can be shared across various
projects as well as functional divisions
 High level of motivation and cohesiveness as
goal shared is common
Example of a Matrix Structure
 Factors Affecting
Organizational Structure
 Group Activity # 2
1. Group the students with 4 members in each
group.
2. Based on the figure, each member will give
idea/s on how those factors really affected
the organizational structure.
3. Present the answer in class.
ORGANIZATION
THEORIES
CLASSICAL ORGANIZATION THEORY

NEOCLASSICAL THEORY

MODERN ORGANIZATION THEORY

 Classical Organization Theory

 Scientific
Management approach
 Weber's Bureaucratic approach

 Administrative theory
 Scientific Management

 The scientific management approach is based

on the concept of planning of work to
achieve efficiency, standardization,
specialization and simplification. The
approach to increased productivity is through
mutual trust between management and
workers. Taylor (1947) proposed four
principles of scientific management:
 Taylor's principles of scientific
management
 Science, not rule-of-thumb;
 Scientific selection of the worker
 Management and labor cooperation rather
than conflict
 Scientific training of workers
 Weber's Bureaucratic Approach
 Weber's bureaucratic approach considers the
organization as a part of broader society. The
organization is based on the principles of:
 structure;

 specialization;

 predictability and stability;

 rationality; and

 democracy

 Observe that this approach is considered rigid,

impersonal, self-perpetuating and empire building.
 Administrative Theory
 Administrative theory was propounded by
Henry Fayol and is based on several
principles of management. In addition,
management was considered as a set of
planning, organizing, training, commanding
and coordinating functions.
Fayol's principles of management:
Administrative theory
 Division of work  Stability of tenure of personnel
(specialization)  Initiative
 Authority and responsibility  Esprit de corps
 Discipline  The concept of line and staff
 Unity of command  Committees
 Unity of direction  Functions of management
 Subordination of individual  planning
interest  organizing
 Remuneration of personnel  training
 Centralization  commanding
 Scalar chain  coordinating
 Order
 Equity
 Neoclassical theory

 Neoclassical theory emphasizes individual or

group behavior and human relations in
determining productivity. The main features
of the neoclassical approach are individual,
work group and participatory management.
 Principles of the neoclassical
approach

 Individual work group

 Participative management
 Modern Organization Theory

 Systems approach
 Socio-technical approach

 Contingency or Situational
approach
 Modern Organization Theory
 Modern theories are based on the concept
that the organization is an adaptive system
which has to adjust to changes in its
environment. Modern theories include the
systems approach, the socio- technical
approach, and the contingency or situational
approach.
 Characteristics of modern
approaches to the organization
 Systems viewpoint
 Dynamic process of interaction
 Multileveled and multidimensional
 Multi-motivated
 Probabilistic
 Multidisciplinary
 Descriptive
 Multivariable
 Adaptive
 Systems Approach
 The systems approach considers the
organization as a system composed of a set
of interrelated and thus mutually dependent
- sub-systems. Thus the organization
consists of components, linking processes
and goals .
 COMPONENTS
 The individual
 The formal and informal organization
 Patterns of behavior
 Role perception
 The physical environment
 LINKING PROCESSES

 Communication
 Balance
 Decision analysis

GOALS OF ORGANIZATION
 Growth
 Stability
 Interaction
 Socio-technical Approach

 The socio-technical approach considers the

organization as composed of a social system,
technical system and its environment. These
interact among themselves and it is necessary
to balance them appropriately for effective
functioning of the organization.
 Contingency or Situational
Approach
 The contingency or situational approach
recognizes that organizational systems are
interrelated with their environment and that
different environments require different
organizational relationships for effective
working of the organization.
ELEMENTS OF
DELEGATION
What is delegation?
 Delegation is assigning responsibility and
authority to someone in order to complete a
clearly defined and agreed upon task while
you retain ultimate responsibility for its
success.
 Delegation incorporates empowering your
teammates through effective leadership, and
may be directed in any direction and used in
any organization.
 What is delegation of authority?

 Delegation of authority is a process in which

the authority and powers are divided and
shared amongst the subordinates. When the
work of a manager gets beyond his capacity,
there should be some system of sharing the
work.
 Importance of Delegation
Effective Management
 In the delegation process managers pass
routine work to the subordinates. So they are
free to concentrate on other important
matters.
Employees’ Development
 As a result of delegation employees get more
opportunities to utilize their talents. It allows
them to develop those skills which help them
to perform complex task.
Motivation of Employees
 When the manager shares his responsibilities
and authority with the subordinates it
motivates the subordinates as they develop
the feeling of belongingness and trust which
is shown to them by their superiors.
Better Coordination
 Responsibility and authority is divided and
employees are made answerable for non-
completion of task.
Reduce workload for managers
Efficiency
 Delegation improves efficiency when it
allows work to be transferred to people
whose skills are a better match for the work.
 Elements of Delegation/Process
of Delegation
Responsibility
 The work assigned to an individual.

Authority
 Power to take decision. To carry on the
responsibilities every employee need to have some
authority. It must be equal to responsibility.
Accountability
 Being answerable for uncompleted task, final
output. It cannot be passed or delegated. It deals
with regular feedback.
 Barriers
Barriers from the team leader/members:
 Not enough time

 Loosing credit

 Loosing control

 Loosing task you enjoy

 No confidence in team members

 Not enough experience

 Fear of failure
 Conclusion

 Delegation aids efficiency and effectiveness.

Possible barriers can be mitigated. The merits
of delegation outweighs its demerits.
 Organizations/teams should always delegate
task/authority.
 FORMAL AND
INFORMAL
ORGANIZATION
 Formal Organization

 Formal organization refers to the structure

of well-defined jobs in a formally organized
enterprise.
 These jobs are defined in terms of authority,
responsibility and accountability.
 Informal Organization
 The network of social groups based on
friendship is called informal organization.
 Here, human beings wish to share feelings,
emotions, etc.
Differences Between
Formal and Informal
Organization
 FORMAL INFORMAL
BASIS
ORGANIZATION ORGANIZATION

FORMATION Formal relations are Originates as a result

well defined and of social interaction.
create deliberately.
 FORMAL INFORMAL
BASIS
ORGANIZATION ORGANIZATION

PURPOSE It is created to achieve It will, satisfy social

predetermined and cultural needs.
objectives.
 FORMAL INFORMAL
BASIS
ORGANIZATION ORGANIZATION

STRUCTURE Structure of well Structure based on

defined authority and human emotions and
responsibility sentiments.
relationships.
 FORMAL INFORMAL
BASIS
ORGANIZATION ORGANIZATION

BEHAVIOR OF It has prescribed Social norms are

MEMBERS pattern of behavior of developed through
members. mutual consent of
members.
 FORMAL INFORMAL
BASIS
ORGANIZATION ORGANIZATION

COMMUNICATION Formal Informal

communication communication
through official based on
lines. convenience.
 FORMAL INFORMAL
BASIS
ORGANIZATION ORGANIZATION

LEADERSHIP Managers are in Leaders are chosen by

superior position. group members.
 FORMAL INFORMAL
BASIS
ORGANIZATION ORGANIZATION

STABILITY It is usually stable The life of informal

and continues even groups is short and
if members leave it. disintegrate if
members leave it.
 FORMAL INFORMAL
BASIS
ORGANIZATION ORGANIZATION

FLEXIBILITY It follows a rigid It is loosely

structure. structured and
highly flexible.
 FORMAL INFORMAL
BASIS
ORGANIZATION ORGANIZATION

ADHERENCE TO Strict adherence to No formal rules

RULES rules. exist.
 BASIS FORMAL INFORMAL
ORGANIZATION ORGANIZATION

INTERDEPENDENCE It exists It is dependable to

independently. formal
organization.