Organizing

What is organizing ?
 Is the management function that usually
follows after planning. And it involves the
assignment of tasks, the grouping of tasks
into departments and the assignment of
authority and allocation of resources across
the organization.
Identify the five basic organizing
concepts.
n Job Specialization – creating and
designing jobs
n Grouping Jobs - combining jobs into
meaningful categories
n Delegating Responsibility with
Authority
n Establishing “Span of Management”
n Managing Line and Staff positions
Importance of Organising

 Organisations are often troubled by how to

organise, particularly when a new strategy
is developed
 Changing market conditions or new
technology requires change
 Organisations seek efficiencies through
improvements in organising
DEPARTMENTATION
Departmentation
 The assignment of jobs to departments is
called departmentation, and it represents
one of the core aspects of the horizontal
division of labour.
 Methods of departmentation include:
Functional, product, matrix, geographic,
customer, and hybrid.
FUNCTIONAL DEPARTMENTATION
Functional Departmentation
 Employees with closely related skills and
responsibilities are assigned to the same
department.
 Advantages:
 Efficiency.
 Enhanced communication.
 Enhanced career ladders and training
opportunities.
 Easier to measure and evaluate performance.
Functional Departmentation
 Disadvantages:
 A high degree of differentiation.
 Poor communication and slow response
to organizational problems.
 Conflicts between departments.
 Department empires build at expense of
organizational goals.
PRODUCT DEPARTMENTATION
Product Departmentation
 Departments are formed on the basis of a
particular product, product line, or service.
 Advantages:
 Better coordination and communication among
functional specialists who work on a particular
product line.
 Flexibility.
 Departments can be evaluated as profit centres.
 Timely response to customers.
Product Departmentation
 Disadvantages:
 Professional development might suffer.
 Economies of scale might suffer.
 Inefficiency.
MATRIX DEPARTMENTATION
Matrix Departmentation
 Employees remain members of a functional
department while also reporting to a
product or project manager.
 Advantages:
 Balance.
 Flexibility.
 Better communication.
Matrix Departmentation
 Disadvantages:
 Conflict between product or project
managers and functional managers.
 Role conflict and stress because
employees must report to two managers.
GEOGRAPHIC DEPARTMENTATION
Geographic Departmentation
 Relatively self-contained units deliver an
organization’s products or services in a
specific geographic territory.
 Advantages:
 Shortens communication channels.
 Caters to regional tastes.
 Some local control to clients and customers.
CUSTOMER DEPARTMENTATION
Customer Departmentation
 Relatively self-contained units deliver an
organization’s products or services to
specific customer groups.
 Advantages:
 Better service to customers.
 The disadvantages of geographic and
customer departmentation parallel those for
production departmentation.
 SPAN OF
MANAGEMENT
Span of Management
 Decentralization - structure in which power and
control are systematically delegated to lower
levels in the organization.
 Span of Management - number of subordinates
who report directly to a manager. Affects the total
number of relationships within an organization.
Types of Relationships
 Direct - supervisor over subordinates
 Cross - relationships among
subordinates
 Group - relationships between groups of
subordinates
Factors that Influence the
Span of Management
 Competence of Manager
 Competence of Subordinates
 Staff Assistance
 Activities Performed
 Physical Dispersion
 Performance Standards
Narrow and Wide Spans of Control
Situational Determinants of Span of Control
 AUTHORITY &
RESPONSIBILITY
 Authority - formal and legitimate right of a
manager to make decisions, issue orders, and
allocate resources to achieve organisationally
desired outcomes.
 Responsibility - duty to perform the task or
activity an employee has been assigned
 Accountability - the fact that the people with
authority and responsibility are subject to
reporting and justifying task outcomes to those
above them in the chain of command
Allocating Formal
Authority
 Where is decision-making power in the organization?
 Centralization = authority to make decisions is restricted
to higher levels of management
 Preferred when facing a major threat

 Decentralization = authority to make decisions is given

to lower levels in an organization’s hierarchy
 Leads to higher satisfaction in subordinates, quicker
response to problems, easier training for promotion
 Linked to idea of participation; many want to be
involved in decisions that affect their work
Types of Authority
 Line Authority - right to direct the work of
others and to require them to conform to
decisions, rules, policies, and goals.
 Functional Authority - special right authorized
by Top Executive to a staff position based on
specialized knowledge, expertise, position
(e.g. Legal Counsel)
DELEGATION
Effective Delegation
 Delegation
 Assigning various degrees of decision-making
authority to lower-level employees.
 The Advantages of Delegation
 Frees up managerial time for other important tasks.

 Serves as a training and development tool for lower-

level managers.
 Increases subordinates’ commitment by giving them

challenging assignments.
Review the need for delegation with
responsibility and authority
 Delegation- process of assigning tasks and
responsibilities to subordinates.
 Three aspects of delegation:
 Responsibility - assigning a task to a subordinate.
 Authority - granting the subordinate the necessary power
to complete the task.
 Accountability - acknowledging the subordinate is
obligated to complete the task.
Barriers to Effective Delegation:
1. Manager is too disorganized to assign tasks.
2. Manager doesn’t want to be ‘outdone’ by a
subordinate.
3. Manager afraid the subordinate won’t do the job
as well.
4. Subordinate may be unwilling or unable to
perform the task.
5. Task may be one that should not be delegated.
6. Manager unwilling to relinquish control.
DECENTRALIZATION
Centralization, Decentralization,
and Formalization

 Centralization - The location of decision making

authority near top organizational levels.
 Decentralization - The location of decision
making authority near lower organizational levels.
 Formalization - The written documentation used
to direct and control employees.
Decentralization
Transfer of responsibility for
 Planning
 Management
 Raising resources

from central government to other bodies

Types of decentralization

Decentralization

Political Administrative
decentralization decentralization

Fiscal Management
decentralization decentralization
 LINE & STAFF
ORGANIZATION
Line and Staff Authority

 Line authority - in which individuals in

management positions have the formal power to
direct and control immediate subordinates.
 Staff authority - granted to staff specialists in
their areas of expertise. Narrrower than line
authority and includes the right to advise,
recommend, and counsel in the staff specialists'
area of expertise..
Line and Staff Units
 Line units = work groups that conduct the major
business of the organization
 Internal line units (e.g., production)

 External line units (e.g., marketing)

 Staff units = groups that assist the line units by

performing specialized services in the
organization
 Internal staff units (e.g., accounting)

 External staff units (e.g., public relations)

Figure 10.6 A Line and Staff
Organization
Differentiate between Line
and Staff positions
 Line Positions - positions in the direct
‘chain of command’ which the
supervisor has direct authority and
specific responsibility.
 Staff Positions - positions which are
outside of the direct ‘chain of
command’ that are primarily advisory
or supportive in nature.
Principal distinction between line &
staff
 Line manager is  Staff manager is a specialist
generalist whose knowledge is limited only
 Line manager to his field
directs others  Staff manager assists others
 Line manager  Staff managers serves authority
trains his or her  Staff manager investigates the
subordinates problem related to his/her field of
 Line managers specialization
make operating  Staff manager provide ideas to
decision line managers
 Line managers  Staff managers have expertise in
bear final specialized field
responsibility
Placement of Staff Units
 Staff units can be assigned at any level of the
organization, offering their specialized help at
mostly the senior level, the middle management
level, or to lower-level managers
 Increasing interest in outsourcing many staff
functions
 Also interest in decreasing need for some
internal staff through greater use of information
technology by managers, enhancing their
analytical and decision-making capabilities
Directing
 Directing is influencing people's behavior through
motivation, communication, group dynamics,
leadership and discipline. The purpose of directing is
to channel the behavior of all personnel to accomplish
the organization's mission and objectives.
 The directing function gives the manager an active
rather than a passive role in employee performance,
conduct and accomplishments. Managers accomplish
their objectives through people.
 The directing function gives managers a second
responsibility: helping people in the organization
accomplish their individual career goals.
Organizations do not succeed while their people are
failing. Helping people in the organization with career
planning and professional development is an integral
part of the directing function.
Motivation
 Selection, training, evaluation and discipline cannot
guarantee a high level of employee performance.
Motivation, the inner force that directs employee behavior,
also plays an important role.
 Highly motivated people perform better than unmotivated
people. Motivation covers up ability and skill deficiencies in
employees. Such truisms about motivation leave employers
wanting to be surrounded by highly motivated people but
unequipped to motivate their employees.
 Employers and supervisors want easily applied motivation
models but such models are unavailable.
 Motivation probably tops the list of complex activities with
which labor managers deal. Their intuition suggests an easy
answer, "I want everyone around here to be motivated."
 They often blame employees for their lack of motivation and
performance problems. Employees on the other hand often
blame any performance problems they may have on external
factors - their supervisors, equipment, training, co-workers,
weather, unrealistic demands made on them, pressures at
home, lack of recognition etc., etc.
 Despite the conflicting perceptions held by employers and
employees, employers must deal with employee motivation.
 Three ways of looking at motivation are: needs, rewards and
effort.
 The needs approach stems from the notion that peoples'
unsatisfied needs drive their behavior. Figure out a person's
needs, satisfy the needs and the person will be motivated. For
example, a person with a high need to satisfy goals is motivated
by production targets.
 The rewards approach is based on the expectation that
rewarded behavior is repeated. Giving a person a bonus for
excellent performance during a difficult harvest period
encourages the person to make a special effort during the next
difficult harvest.
 The effort approach to motivation is based on the expectation
that effort brings the worker what he or she wants.
 The most effective motivation for employees comes from
within each employee, i.e., self-motivation. Possible
indicators of self-motivation include: past accomplishments
in school, sports, organizations and work; stated career
goals and other kinds of goals; expertise in one or more
areas that shows evidence of craftsmanship, pride in
knowledge and abilities, and self-confidence; an evident
desire to continue to learn; and a general enthusiasm for
life.
 Threats, bribery, manipulation and coercion have only
limited usefulness beyond the very short-run in changing
behavior in the farm environment. More effective employer
action responds to employee needs, making their work
useful to satisfying their needs, helping employees
understand the relationship between their contribution to
success of the farm and rewards received, and creating an
atmosphere of equity and fairness.
Communication
Three Common Small-Group Networks

Chain Wheel All-Channel

Prentice Hall, 2000 Chapter 9 52

 Three types of small-group networks are the chain, wheel,
and all-channel.
 The chain rigidly follows the chain of command.
 The wheel relies on the leader to act as the central conduit
for all the group’s communication.
 The all-channel permits all group members to actively
communicate with one another. The all-channel network
characterizes the problem-solving task force, in which all
group members are free to contribute.
 The effectiveness of each type of network depends on the
goals of the group. If speed is important, for example, the
wheel and all-channel networks are best. For accuracy,
choose the chain or wheel. The wheel is best for allowing
leaders to emerge. And if member satisfaction is important,
the all-channel network is the best choice and the wheel is
the worst choice.
 Th e G rap evi ne

Accuracy Anxiety

Ambiguity

Prentice Hall, 2000 Chapter 9 54

 The formal system is not the only communication
system in an organization or a group. There is also an
informal system--where information flows along the well-
known grapevine and rumors can flourish.
 Is the information that flows along the grapevine
accurate? Evidence indicates that about 75 percent the
information is accurate. But what conditions foster the
grapevine?
 It is frequently assumed that rumors start because they
make titillating gossip. This is rarely the case. Rumors
emerge as a response to situations that are important to
us, where there is ambiguity, and under conditions that
arouse anxiety. The fact that workplace situations
frequently contain these elements explains why rumors
flourish in organizations.
Cross-Cultural Communication

• Assume differences until similarity is proved

• Emphasize description over interpretation
and evaluation
• Cultivate the art of being empathetic
• Treat your interpretation as a working
hypothesis
Prentice Hall, 2000 Chapter 9 56
Managers Should Be
Active Listeners

 Make eye contact  Paraphrase

 Avoid distractions  Avoid interrupting
 Ask questions  Don’t talk too much
 Exhibit appropriate  Combine speaking and
expressions listening

Prentice Hall, 2000 Chapter 9 57

 Simplify Constrain
Language Emotions

More Communication
Skills for Managers
Observe Use the
Nonverbal Cues Grapevine

Prentice Hall, 2000 Chapter 9 58

 Because language can be a barrier, managers should
structure messages in ways that will make them clear and
understandable. Words should be chosen carefully. A
manager must simplify his or her language and consider the
audience for whom the message is intended.
 It would be naïve to assume that a manager is always
rational when he or she is communicating. Since emotion can
distort the transference of meaning, the best approach for a
manager who is upset is to wait before trying to send a
message.
 Since actions can speak louder than words, managers must
watch their actions to be sure that they align with and
reinforce their verbal messages.
 The grapevine cannot be eliminated. So managers should
make it work for them. They can transmit information over the
grapevine to test the reaction of employees before they make
decisions. To minimize the impact of damaging rumors on the
grapevine, managers should use formal channels by
ensuring that they carry relevant, accurate information that
will be of interest to employees.
Leading
Leadership style
The Directing Leader

 Sets goals.
 Identifies the problems.
 Comes up with solutions.
 Decides who does what work.
 Gives specific directions.
 Announces decisions.
 Closely supervises and evaluates employees'
work.
The Coaching Leader
 Sets the goals.
 Identifies the problems.
 Develops a plan to solve problems and consults with
employees.
 Makes the final decision about procedures or solutions
after hearing employees' ideas, opinions, and feelings.
 Explains decisions to employees and asks for their ideas.
 Praises employees' work efforts.
 Continues to direct employees' work.
 Evaluates employees' work.
The Supporting Leader
 Involves employees in problem-solving and goal-
setting.
 Takes the lead in defining how to do a job or solve a
problem.
 Provides support, resources, and ideas if requested.
 Shares responsibility for problem-solving with
employees.
 Listens to employees and guides them as they make
decisions.
 Evaluates an employee’s work with that person.
The Delegating Leader
 Identifies problems with employees.
 Sets goals with employees.
 Develops plans and makes decisions with
employees.
 Lets employees decide who does the tasks.
 Accepts employees' decisions and monitors their
performance.
 Lets employees evaluate their own work.
 Lets employees take responsibility and credit for their
work.
Autocratic leader:
 Leader makes decisions without reference to anyone
else
 High degree of dependency on the leader
 Can create de-motivation and alienation
of staff
 May be valuable in some types of business where
decisions need to be made quickly and decisively
Democratic leader:
 Encourages decision making
from different perspectives – leadership
may be emphasised throughout
the organisation
 Consultative: process of consultation before
decisions are taken
 Persuasive: Leader takes decision and seeks to
persuade others that the decision
is correct
Democratic:
 May help motivation and involvement
 Workers feel ownership of the firm and

its ideas
 Improves the sharing of ideas

and experiences within the business

 Can delay decision making
Paternalistic leaders:
 Leader acts as a ‘father figure’
 Paternalistic leader makes decision but
may consult
 Believes in the need to support staff
Coordination
Basic Methods of Coordinating
 Coordination is a process of facilitating
timing, communication, and feedback
among work tasks.
 There are five basic methods of
coordination.
 The methods can be ordered in terms of
the degree of discretion they permit in
terms of task performance.
Basic Methods of Coordinating
 From least to most work discretion,
the five methods are:
 Direct supervision
 Standardization of work processes
 Standardization of work outputs
 Standardization of skills
 Mutual adjustment
Basic Methods of Coordinating
 The method of coordination affects
the design of jobs.
 The use of the various methods of
coordination tends to vary across
different parts of the organization.
 Methods of coordination may
change as task demands change.
Other Methods of Coordination
 Lateral coordination across highly
differentiated departments often requires
more elaborate forms of coordination.
 Integration is the process of attaining
coordination across differentiated
departments.
Three methods of achieving
integration
 Liaison roles
 Task forces
 Full-time integrators
Liaison Role
 A person is assigned to help achieve
coordination between his or her department
and another department.
 One person serves as a part-time link
between two departments.
Task Forces
 Temporary groups set up to solve
coordination problems across several
departments.
 Self-managed and cross-functional teams
are also an effective means of achieving
coordination.
Integrators
 Organizational members permanently
assigned to facilitate coordination between
departments.
 They are especially useful for dealing with
conflict between highly interdependent
departments with diverse goals in an
ambiguous environment.
Controlling
Control
 Set of mechanisms an organization
uses to ensure that actions and outputs
respect predetermined limits
 Involves setting standards, measuring
results, and taking corrective actions
 Types of controls:
 Output controls
 Process controls
 Output Controls
 Controls that focus on desired targets and allow managers
to use their own methods for reaching these targets
 Steps in developing output controls:
 Developing targets or standards

 Measuring results against targets

 Taking corrective action

 Part of a “management by exception” approach

 Promotes flexibility as only goals are defined; methods still
open to creativity
Process Controls
 Controls that try to specify how tasks are to
be accomplished
 Represent use of experience to prevent
recurring problems
 Three types of process controls:
 Policies, procedures, and rules
 Formalization and standardization
 Total quality management controls
Policies, procedures, and rules
 A policy is a guideline for action, noting important
objectives and broad indication of performance
approach
 A procedure indicates the best method for performing a
task, shows which aspects of a task are most
important, or outlines how an individual is to be
rewarded
 A rule is a specific, rigid guideline for action, typically
indicating how something should be done or what
should not be done
 Are often used as substitutes for direct
managerial supervision
Formalization and standardization
 :
 Formalization refers to the written documentation
of work rules, policies, and procedures
 Simplifies jobs, ensures consistency
 Standardization is the degree to which the range
of actions in a job or series of jobs is limited
 Guidelines are created so that similar work
activities are repeatedly performed in a similar
manner
Total Quality
Management (TQM)
 Deming’s process approach
focused on continual improvement
through use of statistical analyses
of all firm’s operations
 Emphasizes managers and
employees collaborating in search
of quality improvements
 Often uses empowerment and
participative management
Techniques of controlling

 Centralization and decentralization.

 Centralization.
 Decision making responsibility is moved upward in
the hierarchy of authority.
 Decentralization.
 Decision making responsibility is moved
downward in the hierarchy of authority.
 Greater centralization is often used by firms
facing a single major threat to its survival.
Benefits of decentralization.

 Higher subordinate satisfaction.

 Quicker response to a series of unrelated

problems.
 Assists in on-the-job training of

subordinates for higher level positions

 Participation is closely related to
decentralization.