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Section III


Organizational Structures

Louis A.Allen

Process of identification and grouping of 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

To Organize is to determine how

best to group activities and resources to achieve set goals

Organizing means designing,

structuring, and coordinating components of an organization to meet its goals.

Nature of Organizing
Division of Labour
Common goals Authority Structure Environment Staff Composition

Rules and Regulation

Significance of Organizing
Optimum Utilization of Manpower Facilitates growth,expansion and

diversification Effective administration Better co-ordination Individual responsibility and ownership Stimulates creativity Better use of Technology

Authority The formal right of a manager to

make decisions, give orders, and expect the orders to be carried out.
Line Authority Staff Authority

Responsibility the managers duty to

perform an assigned task.

Accountability the manager (or other

employee) with authority and responsibility must be able to justify results to a manager at a higher level in the organizational hierarchy.

Line Authority
entitles a manager to directly control the work of subordinates by hiring, discharging, evaluating, and rewarding them line managers hold positions that contribute directly to the strategic goals of the organization part of the chain of command

Staff Authority
the right to provide advice, recommend, and counsel line managers and others in the organization staff managers direct line managers

Authority :: Responsibility

Organizational structure
Management Hierarchy,Departments and

interrelationship between them. Pictured in position relationships shown on organizational charts Revealed in distribution of authority and communication channels Varies from the Tall to Flat structures Can be Formal or Informal May be Centralized or Decentralized

Organization Chart
A graphic illustration of the organizations Structure . Management level, chain of command, division and type of work, and departmentalization

Tall Vs Flat Structures

Tall structures: more management layers and more hierarchical controls.
Flat structures: Fewer management layer and decision making closer to the customer.

Formal V/s Informal Structures

Formal Structure: The structure of the organization in its official state as depicted in the organizational chart Informal Structure
A shadow organization made up of the unofficial, but

often critical, working

relationships between members.

Centralization V/s Decentralization


Decision-making responsibility in the hands of top management.


Pushes the decision-making process down in the organization placing it closer to the decision point.

Decentralization Tends To
Make greater use of human resources Reduce burdens of top managers Cause decisions to be made close to the

Permit rapid response to changes.

Factors That Influence Centralization/Decentralization

Amount of change and uncertainty Availability of competent managers Corporate culture Geographical dispersion Size of organization Efficiency of communication and control

systems. Cost and risk of failure

The process through which an organizations related activities are grouped together into units and assigned to managers for effective functioning and administration
Functional Structures Divisional Structures

Functional Structures Grouping activities into independent units based on functions performed. e.g (Manufacturing, Research, Accounting, HR, Legal) Divisional Structures Product Grouping activities into independent units based on problems or issues relating to a product. e.g (Detergent, Toothpaste, Deodorant, Coffee, Aspirin)

Customer Grouping activities around common customer categories. e.g (Government, Military, Corporate, NonProfit Account)

Geography Grouping activities into independent units based on geography or territory. e.g (Eastern Region, Western Region, Southern Region)

Grouping activities around a process; this

method provides a basis for the homogeneous categorizing of activities. e.g(Spinning,Weaving,Bleaching,Printing)

Grouping activities around the time shifts.This

method is used in hospitals,fire-brigade,help lines. e.g(morning shift,evening shift,night shift)

Advantages and Disadvantages of the Functional Approach

Advantages Decision authority is centralized at the top of the organization hierarchy Career paths foster professional identity with the business function High degree of efficiency
Economies of scale help



between departments
Coordination Diminished Employees

of products and services is difficult

responsiveness to customers needs identify with functional department goals and not organization goals or needs of the customer

develop specialized expertise in employees


Advantages and Disadvantages of the Divisional Approach

Advantages Coordination among different business functions Improved and speedier service Accountability for performance Development of general manager and executive skills


of resources by two or more departments


specialization in occupational skills





Matrix Structure

Uses permanent cross functional teams to try to gain the advantages of both the functional and divisional approaches.

Advantages and Disadvantages of the Matrix Approach

Efficient utilization of


scarce, expensive specialists Flexibility that allows new projects to start quickly Development of crossfunctional skills by employees Increased employee involvement in management decisions affecting project or product assignments

Employee frustration and confusion as a result of the dual chain of command

Conflict between product and Functional managers over deadlines and priorities Too much time spent in meetings to coordinate decisions

Team Structures
make extensive use of permanent and temporary

teams, often cross functional, to improve communication, cooperation, and problem solving

Network Structures
Network structures maintain a staff of core

fulltime employees and use contracted services and strategic alliances to accomplish many business needs

Virtual Structures
A temporary network of independent companies that use information technology to share skills, reduce costs, and provide access to one anothers markets
Its success depends on each of the individual firms responsibility and self-interest to accomplish the networks purpose



Staffing is the function by which managers build an organization through recruitment,selection and development of individuals as capable employees

Staffing is process which involves:

Manpower planning Recruitment Selection Training Compensation Integration and welfare

Of employees

Importance of Staffing
Obtaining competent manpower
Right jobs for right person Optimum utilization of resources

Improves job satisfaction and employee

morale Growth and prosperity to the organization Building block to future expansion

Factors affecting Staffing


Competition Legal Socio-Cultural External influence


Organizational Image Past Practices Size of the Organization Business Plan

Recruitment & Selection

Involves seeking & attracting a pool of

people from which qualified candidates for job vacancies can be chosen Positive function Various sources

Recruitment & Selection

Its is the process of picking applicants with

requisite qualifications and competencies to fill the job Right man for the right job Negative process

The Recruitment and Selection Process

Step 1
Planning for Recruitment and Selection Job Analysis Job Qualifications Job Description Recruitment & Selection Objectives Recruitment & Selection Strategy

The Recruitment and Selection Process

Planning stage Job Analysis An investigation of the tasks, duties, and responsibilities of the job

The Recruitment and Selection Process

Job Qualifications

the aptitude, skills, knowledge, personal traits, and willingness to accept occupational conditions necessary to perform the job

The Recruitment and Selection Process

Job Description - a written summary of the job Job Title Duties, Tasks, and Responsibilities Administrative Relationships Type of Products to be Sold Customer Types Significant Job-Related Demands

The Recruitment and Selection Process

Determine present and future needs

Reduce the number of under qualified or

overqualified applicants Increase the number of qualified applicants at a specified cost Evaluate the effectiveness of recruiting sources and evaluation techniques

The Recruitment and Selection Process

When will the recruitment and selection be done?

How will the job be portrayed?

How much time will be allowed for a candidate to

accept or reject an offer? What are the most likely sources for qualified applicants?

The Recruitment and Selection Process

Step 1
Planning for Recruitment and Selection Job Analysis Job Qualifications Job Description Recruitment & Selection Objectives Recruitment & Selection Strategy

Step 2
Recruitment: Locating Prospective Candidates Internal Sources External Sources

The Recruitment and Selection Process

Sources of Recruitment
Internal Sources

Employee Referral Programs External Sources Advertisements Private Employment Agencies Colleges and Universities Job Fairs Management Training Schemes Career/Job-related web sites

The Recruitment and Selection Process

Step 1
Planning for Recruitment and Selection Job Analysis Job Qualifications Job Description Recruitment & Selection Objectives Recruitment & Selection Strategy

Step 2
Recruitment: Locating Prospective Candidates Internal Sources External Sources

Step 3
Selection: Evaluating & Hiring Screening Resumes and Applications Written test Physiological Test Personal Interview Assessment Centers Background Investigation Medical Test Selection Decision/Job Offer

The Recruitment and Selection Process

Selection: Evaluation and Hiring

Screening Resumes and Applications Written Test Physiological Test Personal Interview Assessment Centers Background Investigation/Reference Check Medical Test

Selection Decision

Job Offer

END Of Section III