CHAPTER 4 ORGANIZING

LEARNING OBJECTIVE
Explain why organizing is an important managerial function, describe the process of organizing, and outline the primary stages of the process.

When you have finished studying this chapter, you should be able to:

Define delegation and discuss why it is important for managers to delegate.

Discuss the four types of organizational structure and the strategic conditions under which each might be appropriate.

DEFINITION

Organizing
Process of arranging people and other resources to work together to accomplish a goal.
The process of determining:

The tasks to be done.

Who will do them. How those tasks will be managed and coordinated.

ORGANIZING PROCESS
Detailing of works

Division of works

Departmetalization

Coordination of works

Monitoring and reorganizing

The Process of Organizing

ORGANIZING PROCESS

Detailing of works Various task of the organization must first be determined. e.g. a new restaurant must detailed the number of person involved , types of cooking equipment and task involved Division of work- Dividing total workload into activities be performed by group or individual. The tasks have to be allocated based on capabilities and fair work load Departmentalization Once the org. grows, grouped them with employees which tasks are related. Coordination of works : Harmonize the individual goals to contribute to org goals.

Monitoring and reorganizing works- to measure in term of effectiveness and efficiency structure of the organization.

ORGANIZATIONAL STRUCTURE
The working relationships that exist within an organization affect how its activities are accomplished and coordinated. These relationships are defined by:

Span of control

Chain of command
Line and staff responsibilities Authority, responsibility and accountability

1. Span of control

The number of employees reporting to a particular manager Narrow span of management (tall) - In theory, when tasks are very complex, span of control should be relatively narrow. (2-4 people) Wide span of management (Lean/flat) - In contrast, where jobs are highly standardized and routine (low complexity), a manager will not need to spend as much time supporting individual subordinates, and the span of control may be larger. (above 5 people)

2. Chain of command

The line of authority and responsibility that flows throughout the organization. Unity of command = an employee in the organization is accountable to one and only one supervisor Multiple command = each employees is reporting to more than one boss Scalar relationship=relationship between each organization member in the chain of command.

3. Work specialization : The work will be separated into many steps and every work has been done by a separate individual specialist enable the work to be completed quickly 4. Formalization = The organization has a procedure to do jobs there needs to be some sort of formalization in the work process

CENTRALIZATION
Definition: the process of transferring and assigning decision making authority to higher level of an organizational hierarchy The decision making has been moved to higher levels or tiers of the organization such as head office or corporate center The span of control of top managers is relatively broad and there are relatively many tiers in the organization.

DECENTRALIZATION
Def : the process of transferring and signing decision making authority to lower level or tiers of the organization such as division, branches, department or subsidiaries. Knowledge , information and ideas are flowing from the bottom to the top of the organization The span of control of top managers is relatively small. There are relatively few tiers in the organization because the is more autonomy in the lower ranks

Line and staff responsibilities

Line department = an organizational unit that is directly involved in delivering the products and services of the organization Staff department = an organizational unit that is not directly involved in delivering the products and services of the organization but provides support for line personnel.

Authority, responsibility and accountability

Authority = the formal right inherent in an organizational position to make decision Responsibility = the obligation to perform the duties assigned Accountability = being held answerable for result, to accept credit or blame in carried out the assignment.

DELEGATION
Delegation = the process of transferring the authority for a specific activity or task to another member of the organization and empowering the individual to accomplish the task effectively Empowerment - power to make decision without asking their superior permission Signs of deleting too little - Taking work home - performing employee tasks - feeling stress and pressure

DELEGATION

Reasons for delegation - Managers burden partly release - Manager may receive more responsibilities - Help develop the skills and managerial abilities Barriers for delegation process - Some manager unable to plan work in advance - Some manager worry their staff do too well - Managers may not trust the staff abilities Overcoming barriers for delegation process - Manager must give real freedom to staff while doing task
- Allow them use their creativity ingenuity - Provide appropriate training.

 2007 Thomson/SouthWestern. All rights reserved.

LEARNING TO DELEGATE EFFECTIVELY

1.

2.
3.

4.

Match the employee to the task. Be organized and communicate clearly. Transfer authority and accountability with the task. Choose the level of delegation carefully.

717

DEPARTMENTALIZATION
Organizational

structure defines the primary reporting relationships that exist within an organization. Common Forms of Organizational Structure

Functional structure Divisional structure Matrix structure

Network structure

FUNCTIONAL STRUCTURE

DIVISIONAL STRUCTURE
Product Divisions For organizations with relatively diverse product lines that require specialized efforts to achieve high product quality. Geographic Divisions For organizations with limited product lines that either have wide geographic coverage or desire to grow through geographic expansion. Customer Divisions For organizations that have separate customer groups with very specific and distinct needs.

PRODUCT DIVISIONAL STRUCTURE

GEOGRAPHIC DIVISIONAL STRUCTURE

CUSTOMER DIVISIONAL STRUCTURE

CEO

COUNTER

CREDIT CARD

REAL ESTATE MORGAGE

LOAN

 2007 Thomson/SouthWestern. All rights reserved.

MATRIX STRUCTURE: A DUAL FOCUS

Multiple command system

Some employees actually report to TWO or more supervisors simultaneously.

MATRIX STRUCTURE

 2007 Thomson/SouthWestern. All rights reserved.

NETWORK STRUCTURES: FLEXIBILITY

Using outsiders Organization may be viewed as Central core or Central Hub

NETWORK STRUCTURE

COORDINATION

Process of integrating the objective and activities of the separate units, so organization goal can be achieved efficiently. The main reason for coordination is interdependent

Importance of coordination : It would ease the tasks that require communication between units. It is beneficial for work that is non routine and unpredictable, work in which factors in the environment are changing and for work in which interdependence is high. It can assist organization that set high performance objectives to achieved those objectives.

COORDINATION

Three major form of interdependence; 1. Pooled interdependence 2. Sequential interdependence 3. Reciprocal interdependence

EXERCISE
Discuss the differences between narrow span and wide span of management control. (10 marks) State the difference between centralization and decentralization. (6 marks) Explain the organizing process. (14 marks)

THE END
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