Unit 2

ORGANIZING
UNIT-2
What is Organizing
The grouping of activities necessary for attaining

objective.
The process of creating an organizations
Structure .
A Process that initiates implementation of plans by
clarifying jobs and working relationship and effectively
deploying resources for attainment of identified and
desired results
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NATURE OF ORGANIZING
Definition
Organizing is the process of identifying and
grouping 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.
Louis Allen
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Importance of Organizing
Benefits of specialization
Clarity in working relationships
Optimum utilization of resources
Adaptation to change
Development of personnel
Expansion and growth
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NATURE OF ORGANIZATION
Division of labor
Coordination
Social system
Objective
Cooperative relationship
Well defined hierarchy
Communication
Purposes of Organizing
Divide work to be done into specific jobs and

Departments
Assign tasks and responsibilities associated with
individual
Coordinates diverse organizational tasks.
Clusters job in to Units.
Establish relationship among individuals , group , and
departments .
Allocates and deploys organizational resources .
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Organization levels
Top level management

Middle level management
Supervisory level of operating management
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Top management:
It consists of managers at the highest level

in the management hierarchy.
Chief executive
Department
managers
supervisors
workers
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top management
middle management
first line management

operative workforce
Middle management:
this level consist of departmental managers. the main function performed by
this level of managers consists of linking the top and supervisory level of
management.
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Supervisory management:
The lowest level of management consist of
first line supervisors.
It ensure that it is of required quality and is
completed on time.
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10
Types of organizations:
Based on function or purpose
Based on primary beneficiary
Based on control or compliance
Based on relations
Based on structure
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Designing Organizational
Structure
Organizational Design
A process involving decisions about six key elements:
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Work specialization
Departmentalization
Chain of command
Span of control
Centralization and decentralization
Formalization
12
Purposes of Organizing
Divides work to be done into specific jobs and departments.
Assigns tasks and responsibilities associated with individual jobs.
Coordinates diverse organizational tasks.
Clusters jobs into units.
Establishes relationships among individuals, groups, and departments.
Establishes formal lines of authority.
Allocates and deploys organizational resources
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13
Organizational Structure
Work Specialization
The
degree to which tasks in the organization

are divided into separate jobs with each step
completed by a different person.
Overspecialization can result in human
diseconomies from boredom, fatigue, stress,
poor quality, increased absenteeism, and
higher turnover.
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Departmentalization by Type
Functional
Grouping jobs by
functions performed
Grouping jobs by
product line
Geographical
Process
Product
Grouping jobs on the

basis of product or
customer flow
Customer
Grouping jobs by type of

customer and needs
Grouping jobs on the

basis of territory or
geography
Copyright 2010 Pearson Education,
Inc. Publishing as Prentice Hall
915
Organizational Structure
(contd)
Chain of Command
The
continuous line of authority that extends

from upper levels of an organization to the
lowest levels of the organization and clarifies
who reports to whom.

916
Organizational Structure (contd)
Authority
The
rights inherent in a managerial position to tell

people what to do and to expect them to do it.
Responsibility
The
obligation or expectation to perform.
Unity of Command
The
concept that a person should have one boss

and should report only to that person.
917
Exhibit 93 Contrasting Spans of Control

918
Organizational Structure (contd)
Centralization
The
degree to which decision making is concentrated at upper

levels in the organization.
Organizations in which top managers make all the decisions and lowerlevel employees simply carry out those orders.
Decentralization
Organizations
in which decision making is pushed down to the

managers who are closest to the action.
Employee Empowerment
Increasing
the decision-making authority (power) of employees.

919
Common Organizational Designs
Traditional Designs
Simple
structure
Low departmentalization, wide spans of control,

centralized authority, little formalization
Functional
Departmentalization by function
Operations, finance, marketing, human resources, and

product research and development
Divisional
structure
structure
Composed of separate business units or divisions

with limited autonomy under the coordination and
Copyright corporation.
2010 Pearson Education,
control the parent
920
Exhibit 97 Strengths and Weaknesses of Traditional

Organizational Designs

921
Exhibit 98 Contemporary Organizational Designs

Team Structure
What it is:
A structure in which the entire organization is made up of

work groups or teams.
Advantages:
Employees are more involved and empowered. Reduced

barriers among functional areas.
Disadvantages:
No clear chain of command. Pressure on teams to perform.
Matrix-Project Structure
What it is:
A structure that assigns specialists from different functional

areas to work on projects but who return to their areas when
the project is completed. Project is a structure in which
employees continuously work on projects. As one project is
completed, employees move on to the next project.
Advantages:
Fluid and flexible design that can respond to environmental

changes. Faster decision making.
Disadvantages:
Complexity of assigning people to projects. Task and

personality conflicts.
922
Organizing Process
Identifying, analyzing and classifying the activities

necessary to accomplish the objectives
Grouping these activities in the light of human and
material resources available and the best way under
the circumstances , of using them
Delegation of authority (Assignment of duties )
Horizontal and vertical coordination of authority and
information relationship
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23
Organizing Process
Feasibility studies and feedback
IDENTIFICATION
AND
CLASSIFICATION
OF
REQUIREDS
ACTIVITIES
April 27, 2016
GROUPING
OF ACTIVITIES IN
THE LIGHT OF
RESOURCES AND
SITUATIONS
DELEGATION
OF AUTHORITY
HORIZONTAL
AND VERTICAL
COORDINATION OF
AUTHORITY AND
INFORMATION
RELATIONSHIP
24
Common Errors In Organizing
Unnecessary Lengthy Chain of Command

Unsatisfactory Work Division
Lack of parity between the Authority and
Responsibility
Lack of Coordination and Control
Failure to Classify Relationship
Confusion of authority and relationship with
Informal Organization
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25
Formal and Informal

Organization
Formal Organization
The
Formal Organization is a system of

well-defined jobs, each bearing a definite
measure of authority, responsibility and
accountability.
Louis Allen
Formal Organization is a system of
consciously coordinated activities of two or
more persons toward a common objective.
Chester Barnard
April 27, 2016
27
Features
It is deliberately designed by the top management

It places more emphasis on work to be performed than
interpersonal relationships among the employees.
It specifies the relationships among various job positions and
the nature of their inter-relationship.
It lays down rules and procedures essential for achievement of
objective
Efforts of various departments are coordinated, interlinked and
integrated through the formal organisation.
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28
Formal Organizations
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29
Features
It is deliberately designed by the top management

It places more emphasis on work to be performed than
interpersonal relationships among the employees.
It specifies the relationships among various job
positions and the nature of their inter-relationship.
It lays down rules and procedures essential for
achievement of objective
Efforts of various departments are coordinated,
interlinked and integrated through the formal
organisation.
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30
Advantages
Easier to fix Responsibility
No ambiguity in the role . This also helps
in avoiding duplication of effort.
Behavior of Employee fairly predicted
Unity of command through an established
chain of command
Stability to the organization
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Limitations
The formal communication may lead to procedural

delays
Do not provide adequate recognition to creative talent
More emphasis on Structure and Work, difficult to
understand all human relationships in an enterprise as
it places
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Informal Organization
An
Informal organization is an aggregate of

interpersonal relationships without any conscious
purpose but which may contribute to joint results.
Chester Barnard
Informal organization is a network of
interpersonal relationship that arise when people
associate with one another .
Keith Davis
April 27, 2016
33
Features
Originates from within the formal organisation as a

result of personal interaction among employees.
The standards of behavior evolve from group norms.
Independent channels of communication without
specified direction of flow of information are
developed by group members.
Emerges spontaneously and is not deliberately
created by the management.
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V
35
Chess group
Cricket lovers
Bowling Team
Morning coffeee regulars
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Advantages:
It helps to fulfill the social needs .

Sense of belongingness in the organisation
Faster spread of information as well as quick
feedback.
It contributes towards fulfillment of
organizational objectives. For example,
employees reactions towards plans and policies
can be tested through the informal network.
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Disadvantages:
It spreads rumors. This may work against the interest

of the formal organisation.
The management may not be successful in
implementing changes if the informal organisation
opposes them. Such resistance to change may delay
or restrict growth.
It pressurizes members to conform to group
expectations.
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Formal and Informal organisation: A

Comparative view
Meaning
Origin
Authority
Behavior
Flow of Communication
Nature
Leadership
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39
Delegation of Authority
By means of delegation,the manager

extends his area of operations,for without
delegation,his actions are confined to what
he himself can perform.
Features
Delegation is authorisation to a manager to act in a

certain manner.
Delegation has dual characteristics.
Authority once delegated can be enhanced,reduced,or
withdrawn .
Delegation of authority is always to the position created
through the process of organising.
A manager delegates authority out of the authority
vesting in him.
Delegation of authority may be specific or general.
Steps in delegation
Determination of results expected.
Assignments of duties.
Authorisation for action.
Creation of obligation.
Principles of delegation
Delegation by results expected.
Functional definition.
Clarity of lines of authority.
a) scaler chain.
b) unity of command.
Level of authority.
Absoluteness of responsibility.
Parity of authority and responsibility.
B) Factors in delegant
(subordinate);
Subordinates are expected to exercise less authority in

the following situations:1) when they fear harsh criticism for
unfavourable results.
2) when they lack self confidence.
3) when they lack resources.
4) when they have inadequate positive incentives;and
5) when their superior is easily available for making
decisions on their part.
Blocks to effective delegation
A) Factors in delegator (superior):

1) love for authority.
2) maintenance of tight control.
3) fear of subordinates.
4) fear of exposure.
5) attitude towards subordinates.
6) personality of superior.
Defining controlling
Process that managers go through to control.
Process of making things happen as planned.
**** According to Roberto Mockler controlling is a

systematic effort by business management to compare
performance to predetermined standards, plans or
objectives to determine whether performance is in line
with these standards and presumably to take any
remedial action required to see that human and other
corporate resources are being used in the most
effective and efficient way possible in achieving
corporate objectives.
THE CONTROLLING
SUBSYSTEM
Can be viewed as a subsystem of the
over-all management system.
The purpose of this subsystem is to help
managers enhance the success of the
overall management system through
effective controlling.
THE THREE MAIN STEPS IN

CONTROLLING PROCESS
1.
2.
3.
Measuring performance
Comparing measured performance to
standards
Taking correlative action
1.
2.
3.
4.
Work
continues
Measure
performance
New work
situation begins
Man
Money
Machine
Materials
No
correlative
action
Compare
measurement to
necessary
standards
Take correlative action:
change plans,
organization, or
influencing methods
Performance
equivalent to
standards
Performance
significantly different
from standards
Making Controlling Successful

Specific organizational activities being
focused on
Different kinds of organizational goals
Timely corrective action
Communication of the mechanics of the
control process
Importance of controlling
Controlling helps in achieving the objective
Efficient use of resource
Facilities decision making
Improve employee morale
Helps in achieving better coordination
Helps in better planning
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Process of controlling
Key areas to be monitored
Establishing standards
Measuring performance
Compare performance with standards
Take no action, if performance is in
harmony with standards
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Methods of controlling
Feedback control
Concurrent control
Preventive control
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ORGANIZING

The grouping of activities necessary for attaining

April 27, 2016

April 27, 2016

Divide work to be done into specific jobs and

April 27, 2016

Top level management

April 27, 2016

It consists of managers at the highest level

April 27, 2016

first line management

April 27, 2016

April 27, 2016

April 27, 2016

A process involving decisions about six key elements:

April 27, 2016

Divides work to be done into specific jobs and departments.

Assigns tasks and responsibilities associated with individual jobs.

Coordinates diverse organizational tasks.

Clusters jobs into units.

Establishes relationships among individuals, groups, and departments.

Establishes formal lines of authority.

Allocates and deploys organizational resources

April 27, 2016

degree to which tasks in the organization

Grouping jobs on the

Grouping jobs by type of

Grouping jobs on the

continuous line of authority that extends

Copyright 2010 Pearson Education,

Organizational Structure (contd)

rights inherent in a managerial position to tell

obligation or expectation to perform.

concept that a person should have one boss

Exhibit 93 Contrasting Spans of Control

Copyright 2010 Pearson Education,

Organizational Structure (contd)

degree to which decision making is concentrated at upper

in which decision making is pushed down to the

the decision-making authority (power) of employees.

Common Organizational Designs

Low departmentalization, wide spans of control,

Operations, finance, marketing, human resources, and

Composed of separate business units or divisions

Exhibit 97 Strengths and Weaknesses of Traditional

Copyright 2010 Pearson Education,

Exhibit 98 Contemporary Organizational Designs

A structure in which the entire organization is made up of

Employees are more involved and empowered. Reduced

No clear chain of command. Pressure on teams to perform.

A structure that assigns specialists from different functional

Fluid and flexible design that can respond to environmental

Complexity of assigning people to projects. Task and

Identifying, analyzing and classifying the activities

April 27, 2016

April 27, 2016

Common Errors In Organizing

Unnecessary Lengthy Chain of Command

Formal and Informal

Formal Organization is a system of

It is deliberately designed by the top management

April 27, 2016

April 27, 2016