2. Introduction to Organization
Organization is viewed as a group of persons coming
together to achieve common goals and objectives.
As a function of management, organization is a
process of integrating and coordinating the efforts of
human, financial, technological and other resources
for the accomplishment of certain objectives.
Organization involves identification and grouping of
activities to be performed and dividing them among
the individuals and creating authority and
responsibility for the accomplishment of
organizational objectives.
3. Introduction to Organizing
Organizing can be viewed as the activities to
collect and configure resources in order to
implement plans in a highly effective and efficient
fashion.
Organizing is a broader set of activities and often
considered one of the major functions of
management.
Organizing is about how can the necessary
activities be divided so that individuals or groups
can be assigned responsibility for performing
them.
4. Purpose of organizing
Divides work to be done into specific jobs and
departments.
Assign tasks and responsibilities associated with
individual jobs.
Coordinates diverse organizational tasks.
Cluster jobs into units.
Establishes relationships among individuals,
groups and departments.
Establishes formal lines of authority.
Allocates and deploys organizational resources
5. Organizational design and structure
An organization is a pattern of relationships through
which people, under the direction of managers,
pursue their common goals. Managers want to
ensure that their organizations can endure for a long
time. Members of an organization need a stable,
understandable framework within which they can work
together toward organizational goals.
The managerial process of organizing involves
making decisions about creating this kind of
framework so that organizations can last from the
present into the future.
6. What is Organizational
STRUCTURE?
The framework, typically hierarchical, within
which an organization arranges
Its lines of authority and communications,
and allocates rights and duties.
Organizational structure determines the
manner and extent to which roles, power,
and responsibilities are delegated, controlled,
and coordinated, and how information flows
between levels of management.
7. STRUCTURE Cont’d
An organizational structure depends entirely
on the organization's objectives and
the strategy chosen to achieve them.
8. Organizational Design
Organizational Design is the decision making
process by which managers choose an
organizational structure appropriate to the
strategy of the organization and the environment
in which members of the organization carry out
that strategy.
Organizational design thus has managers looking
into two directions simultaneously: inside their
organization and outside their organization.
9. Organization design can be defined
narrowly, as the process of reshaping
organization structure and roles, or it
can more effectively be defined as the
alignment of structure, process,
rewards, metrics and talent with the
strategy of the business.
DESIGN
10. Defining organizational
structure/design
Organizational structure is the formal
arrangement of jobs within an organization.
When managers develop or change the
structure, they are engaged in organizational
design, a process that involves decisions about
key elements: work
specialization, departmentalization, chain of
command, span of control, centralization and
decentralization and formalization
11. Four Building Blocks
1. Divide the total workload into tasks that can logically
and comfortably be performed by individuals or groups.
This is referred to as the division of work.
2. Combine tasks in a logical and efficient manner. The
grouping of employees and tasks is generally referred
to as departmentalization.
3. Specify who reports to whom in the organization. This
linking of departments results in an organizational
hierarchy.
4. Set up mechanisms for integrating departmental
activities in to a coherent whole and monitoring the
effectiveness of that integration. This process is called
coordination.
12. Departmentalization
The basis by which jobs are grouped together is
called departmentalization. Every organization
will have its own specific way of classifying and
grouping jobs, viz:
1. Functional departmentalization
2. Product departmentalization
3. Geographical departmentalization
4. Process departmentalization
5. Customer departmentalization
13. Chain of command
The chain of command is the line of authority
extending from upper organizational levels to the
lowest levels , which clarifies who reports to
whom.
It helps employees answer questions such as
“Who do I go to if I have a problem? Or “ to whom
am I responsible?
14. Span of control
How many employees can a manager efficiently
and effectively manage?
The traditional view was that managers could not-
and should not – directly supervise more than five
or six subordinates.
The question of span of control is important
because to a large degree, it determines the
number of levels and managers an organization
has.
15. Centralization and Decentralization
In some organizations, top managers make all
the decisions and lower level managers and
employees simply carry out their orders.
At the other extreme are organizations in which
decision making is pushed down to the managers
who are closest to the action.
The former organization is centralized and the
latter are decentralized.
16. In a decentralized organization, considerable
authority and accountability are passed down the
organizational hierarchy.
In a centralized organization considerable
authority and accountability remain at the top of
the hierarchy.
17. More Centralization
Environment is stable
Incapable lower level managers or inexperienced
at making decisions as upper level managers
Lower level managers do not want to have a say
in decisions
Company is large
18. More Decentralization
Environment is complex , uncertain
Lower level managers are capable and
experienced at making decisions.
Lower level managers want a voice in decisions.
Corporate culture is open to allowing managers to
have a say in what happens.
19. Highly Centralized
Authority
Authority given to a few top
managers, allowing decisions to be
made by those with the “big picture”
Facilitates development of a few
“masters of knowledge”
Provides non-decision makers the
freedom to perform technical tasks
with fewer distractions
20. Decentralized Authority
Authority distributed throughout the
organization
Allows leaner organizations and fewer levels
Allows those closest to problems and
opportunities to make decisions
Is received favorably by many organizational
members
21. FORMALIZATION
Formalization refers to how standardized an
organization's jobs are and the extent to which
employee behavior is guided by rules and
procedures.
If a job is highly formalized, then the person doing that
job has little discretion over what is to be done, when
it is to be done, and how he or she does it.
In a highly formalized organizations, there are explicit
job descriptions, numerous organizational rules, and
clearly defined procedures.
On the other hand , where formalization is low, job
behaviors are relatively unstructured and employees
have a great deal of freedom in how they do their
work.
23. Hierarchy of Authority
Tall
organizations
have many
levels
Flat
organizations
have few levels
24. Tall structures and flat organizational
structures
Tall structures are often viewed negatively in modern
organizational analysis. But tall structures offer more
personal contact between managers and
subordinates. There is more communication.
But in tall structures there can be lot of bureaucratic
delay and red tapism which are not present in flat
structure. But increased equality that exists between
employees in a flat structure may lead to
communication problems.
In flat structures managers cannot possibly keep
closed control over many subordinates. So there is
more delegation
25. Matrix Structure
The Matrix structure, sometimes referred to as
a “Multiple Command System” is a hybrid that
attempts to combine the benefits of both types
of designs while avoiding their drawbacks.
An organization with a matrix structure has
two types of structure existing simultaneously.
Employees have two bosses- that is they work
in two chains of command- one vertical and
the other horizontal.
26. matrix – project structure
Matrix 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 . As one project is completed,
employees move on to the next project.
Advantage is that it has fluid and flexible design
that can respond to environmental changes.
There is faster decision making.
Disadvantages are complexity of assigning
people to projects. There is also conflicts of
personality and tasks.
27. As organizations have become more global
many use a type of matrix form in their
international operations.
28. Mechanistic and organic organizations
A mechanistic organization is a rigid and tightly
controlled structure. It is characterized by high
specialization, rigid departmentalization, narrow
spans of control, high formalization, a limited
information net work (mostly downward
communication), and little participation in decision
making by lower level employers.
Mechanistic organizations structures tend to rely
heavily on rules, regulations and other controls.
Although there is no totally mechanistic
organization, almost all large corporations and
governmental agencies have some of these
mechanistic characteristics.
29. Organic organizations
In direct contrast to the mechanistic form of
organization is the organic organization, which is
highly adaptive and flexible .
Employees are highly trained and empowered to
handle diverse job activities and problems.
Employees in organic type organizations require
minimal formal rules and little direct supervision
30. Traditional organizational designs
Most organizations start as entrepreneurial
ventures with a simple structure consisting of
owners and employees.
A simple structure is an organizational design
with low departmentalization, wide spans of
control, authority centralized in a single
person, and little formalization. This structure is
mot commonly used by small business in which
the owner and manager are one and the same.
31. Most organizations do not remain simple
structures, especially as they grow and add
employees. As the number of employees
increases, the structure tends to become
more specialized and formalized. Rules and
regulations are introduced, work becomes
specialized, departments are created, levels
of management are added, and the
organization becomes increasingly
bureaucratic. At this point a manager might
choose to organize using a functional
structure or a divisional structure
32. Contemporary organizational designs
Managers in contemporary organizations are
finding that these traditional hierarchical designs
often are not appropriate for the increasingly
dynamic and complex environments they face.
In response to marketplace demands for being
lean, flexible and innovative, managers are
finding creative ways to structure and organize
work and to make their organizations more
responsive to the needs of customers, employees
and other organizational constituents.
33. Team structure
A structure in which the entire organization is
made of work groups or teams.
Advantages of this kind of structure is that
employees are more involved and empowered
which reduces barriers among functional
areas.
Disadvantage is that there is not clear chain of
command and there is lot of pressure on
teams to perform.
34. Virtual organizations
A virtual organization is an organization that
consists of a small core of full time employees
and that hires outside specialists temporarily as
needed to work on projects. Work gets done
through networking. By relying on web
freelancers around the globe, the company
enjoys a network of talent without all the
unnecessary overhead and structural complexity.
35. Power and Authority
Power can be defined as an ability to influence
Power when legitimized becomes Authority.
Authority is a form of Power.
Formal authority is the type of power that we
associate with organizational structure. It is
based on the recognition of the legitimacy of
manager’s attempts to exert influence.
36. The sources of Power
1. Reward Power is based on one persons having the ability to
reward another person for carrying out orders for meeting
performance requirements.
2. Coercive Power based on the influencers’ ability to punish the
influence for not meeting requirements.
3. Legitimate Power is the power granted by the virtue of one’s
position in the organization.
4. Expert Power is the extent to which a person controls information
that is valuable to someone else. Control over information is a
source of power by itself.
5. Referent power is basically power through identification. Referent
power may not always correlate with formal organization authority.
37. Delegation
How to distribute formal authority throughout the
organizational structure is a key organizing
decision.
Delegation is the assignment to another person of
formal authority (legitimate power) and
accountability for carrying our specific activities.
The delegation of authority by managers to
employees is necessary for the efficient
functioning of any organization, because no
manager can personally accomplish or
completely supervise all of what happened in an
organization.
38. Advantages of Delegation
1. More time at managers’ disposal.
2. Improves the self confidence of the employees.
3. Better decision making and also faster decision
making.
39. Barriers to Delegation
Fear of losing control
Feeling of being threatened
Inefficient subordinates
40. Guidelines for Effective Delegation
Define assignments and delegate authority in light of
results expected.
Select the person in light of the job to be done.
Maintain open lines of communication.
Establish proper controls.
Reward effective delegation and successful
assumption of authority.
