Functions of Management - Organizing

1. FUNCTIONS OF MANAGEMENT
Organizing

2. Or·gan·ize
/ˈôrɡəˌnīz/
verb
gerund or present participle: organizing
1. arrange into a structured whole; order
2. make arrangements or preparations for (an event or activity);
coordinate.

3. - The purpose of an organization structure is
to establish a form so that they may better
work together to achieve the enterprises
objectives.
- Many believe organizing is the most critical
of Managerial functions because of its ability
to help or hinder an organizational plan and
that profoundly affects organizational
success.
Organizing in a Nutshell

4. To know the
Importance of
ORGANIZING as
a function of
Management
01 Identify the
Principles of
Organizing
02 Discuss
Organizational
Level and Factors
Determining Span
of Management
03
Differentiate
Types of
Organziational
Design and
Structures
04 Enumerate
Types of
Authority
05 Learn more
about new
forms of
Organizationa
l Design
06
OBJECTIVES

5. ORGANIZING
Organizing is the function of
management which follows
planning. It is a function in
which the synchronization and
combination of human,
physical and financial
resources takes place.

6. 1. Identification of activities - All the activities which have to be
performed in a concern have to be identified first.
2. Departmentally organizing the activities - In this step, the manager
tries to combine and group similar and related activities into units or
departments.
3. Classifying the authority - Once the departments are made, the
manager likes to classify the powers and its extent to the managers.
4. Co-ordination between authority and responsibility - Relationships
are established among various groups to enable smooth interaction
toward the achievment of the organizational goal.
A manager performs organizing function with
the help of following steps:

7. Importance of Organizing Function
1. Specialization - Organizational structure is a
network of relationships in which the work is
divided into units and departments.
2. Well defined jobs - Organizational structure
helps in putting right men on right job which can
be done by selecting people for various
departments according to their qualifications,
skill and experience
3. Clarifies authority - Organizational structure
helps in clarifying the role positions to every
manager.
4. Co-ordination - Organization is a means of
creating co-ordination among different
departments of the enterprise.

8. 5. Effective administration - The
organization structure is helpful in defining
the jobs positions.
6. Growth and diversification - A company’s
growth is totally dependent on how
efficiently and smoothly a concern works.
7. Sense of security - Organizational
structure clarifies the job positions. The
roles assigned to every manager is clear.
8. Scope for new changes - Where the roles
and activities to be performed are clear and
every person gets independence in his
working, this provides enough space to a
manager to develop his talents and flourish
his knowledge.

9. Principles of
Organizing
The organizing process can be done
efficiently if the managers have certain
guidelines so that they can take decisions
and can act.

10. 1. Principle of Specialization
According to the principle, the whole
work of a concern should be divided
amongst the subordinates on the basis
of qualifications, abilities and skills.
2. Principle of Functional Definition
According to this principle, all the
functions in a concern should be
completely and clearly defined to the
managers and subordinates.
3. Principles of Span of
Control/Supervision
According to this principle, span of
control is a span of supervision which
depicts the number of employees that
can be handled and controlled
effectively by a single manager.

11. a. Wide span of control
- It is one in which a
manager can supervise
and control effectively a
large group of persons
at one time. The
features of this span
are:
i. Less overhead cost of
supervision
ii. Prompt response from
the employees
iii. Better communication
iv. Better supervision
v. Better co-ordination
vi. Suitable for repetitive
jobs
b. Narrow span of control
- According to this span, the work
and authority is divided amongst
many subordinates and a
manager doesn't supervises and
control a very big group of
people under him.
The features are:
i. Work which requires tight control
and supervision, for example,
handicrafts, ivory work, etc.
which requires craftsmanship,
there narrow span is more
helpful.
ii. Co-ordination is difficult to be
achieved.
iii. Communication gaps can come.
iv. Messages can be distorted.
v. Specialization work can be
achieved.

12. 4. Principle of Scalar Chain
Scalar chain is a chain of
command or authority which
flows from top to bottom.
5. Principle of Unity of Command
It implies one subordinate-one
superior relationship. Every
subordinate is answerable and
accountable to one boss at one
time.

13. Authority Flows from Top to Bottom
Managing Director
↓
Marketing Manager
↓
Sales/ Media Manager
↓
Salesmen

14. Organizational
Level
refers to the line of division
that exists between
various managerial
positions in an
organization.

15. Organizational Level can be generally classified
into three principal categories:
1. Administrative, Managerial, or Top Level of Management
This level of management consists of an organization’s board of directors and
the chief executive or managing director.
The roles and responsibilities:
a. Laying down the objectives and broad policies of the business enterprise.
b. Issuing necessary instructions for the preparation of department-specific
budgets, schedules, procedures, etc.
c. Preparing strategic plans and policies for the organization.

16. d. Appointing the executives for middle-level management, i.e.
departmental managers.
e. Establishing controls of all organizational departments.
f. Since it consists of the Board of Directors, the top management level is
also responsible for communicating with the outside world and is
held accountable towards an organization’s shareholders for the
performance of the enterprise.
g. Providing overall guidance, direction, and encouraging harmony and
collaboration.

17. 2. Executive or Middle Level of Management
The branch and departmental managers form this middle management level.
The roles and responsibilities:
a. Executing the plans of the organization in accordance with the policies and
directives laid out by the top management level.
b. Forming plans for the sub-units of the organization that they supervise.
c. Participating in the hiring and training processes of lower-level management.
d. Interpreting and explaining the policies from top-level management to lower-
level management.
e. Sending reports and data to top management in a timely and efficient
manner.
f. Evaluating the performance of junior managers.
g. Inspiring lower level managers towards improving their performance.

18. 3. Supervisory, Operative, or Lower Level of Management
This level of management consists of supervisors, foremen, section
officers, superintendents, and all other executives whose work must do
largely with HR oversight and the direction of operative employees.
The roles and responsibilities:
a. Assigning jobs and tasks to various workers.
b. Guiding and instructing workers in day-to-day activities.
c. Overseeing both the quality and quantity of production.
d. Maintaining good relations within lower levels of the organization.

19. e. Acting as mediators by communicating the problems, suggestions, and
recommendatory appeals, etc. of workers
f. to the higher level of management, and in turn elucidating higher-level goals
and objectives to workers.
g. Helping to address and resolve the grievances of workers.
h. Supervising and guiding their subordinates.
i. Taking part in the hiring and training processes of their workers.
j. Arranging the necessary materials, machines, tools, and resources, etc.
necessary for accomplishing organizational tasks.
k. Preparing periodical reports regarding the performance of the workers.
l. Upholding discipline, decorum, and harmony within the workplace.
m. Improving the enterprise’s image as a whole, due to their direct contact with
the workers.

20. Span of Management
Depending upon the complexity of
organizational activities and
relationships amongst superiors and
subordinates, it becomes important the
superiors manage an optimum number
of subordinates that result in optimum
organizational output.

21. Span of Control: Two Dimensions
1. Horizontal dimension
This is the number of direct subordinates a manager actually
supervises. This is also referred to as Span of Control.
2. Vertical dimension
This is the number of levels that are (in)directly managed. It
refers to the extent to which the manager’s wishes trickle
down to the lowest levels of the organization. This is also
known as Depth of Control.

22. Depending on the number of employees that can be
supervised or controlled by managers, there can be two
kinds of structures in the organization:
I. Tall structures:
These structures are found in classical bureaucratic organizations. A
tall structure or a narrow span of control appears like this.

23. Merits of a Tall Structure:
1. Managers can closely supervise activities of the
subordinates.
2. There can be better communication amongst
superiors and subordinates.
3. It promotes personal relationships amongst
superiors and subordinates.
4. Control on subordinates can be tightened in a
narrow span.

24. Limitations of a Tall Structure:
1. It creates many levels in the organisation structure which complicates co-
ordination amongst levels.
2. More managers are needed to supervise the subordinates. This increases the
overhead expenditure (salary etc.). It is, thus, a costly form of structure.
3. Increasing gap between top managers and workers slows the communication
process.
4. Decision-making becomes difficult because of too many levels.
5. Superiors perform routine jobs of supervising the subordinates and have less time
for strategic matters.
6. Employees work under strict control of superiors. Decision-making is primarily
centralised. This restricts employees’ creative and innovative abilities.
7. Strict control leads to low morale and job satisfaction. This can affect productivity in
the long-run.

25. II. Flat Structures:
These structures have a wide span of control. When
superior supervises a larger number of
subordinates, flat structure is created with lesser
number of hierarchical levels.
A structure where span of control for each
managerial position is 4 appears as follows:

26. Merits of a Flat Structure:
1. There is low cost as less number of managers can supervise
organizational activities.
2. The decision-making process is effective as superiors delegate
authority to subordinates. They are relieved of routine matters and
concentrate on strategic matters. The decision-making is
decentralized.
3. Subordinates perform the work efficiently since they are
considered worthy of doing so by the superiors.
4. There is effective communication as the number of levels is less.
5. It promotes innovative abilities of the top management.

27. Limitations of a Flat Structure:
1. Superiors cannot closely supervise the activities of
employees.
2. Managers may find it difficult to co-ordinate the activities of
subordinates.
3. Subordinates have to be trained so that dilution of control
does not affect organizational productivity.

28. Graicunas Theory on Span of
Management:
A French management consultant, V.A. Graicunas,
introduced a theory on span of management which
explains three kinds of relationships that a superior can
have with subordinates. He formulated a theory and
suggested the number of subordinates under one
superior based on mathematical calculations.

29. The kind of relationships and the formula for arriving at the number of
relationships is as follows:
1. Direct single relationship:
This is the relationship between the superior and his immediate subordinates.
2. Direct group relationships:
This is the relationship of superior with subordinates in the presence of other
subordinates.
The number of relationship (9) is represented by the formula:
3. Cross relationships:
While the subordinates work under the same superior, they also interact amongst
themselves. Based on the formula n (n -1), with 3 subordinates, 6 such
relationships will be formed.
These are between:
A and B B and A A and C C and A
B and C C and B

30. Operative Span versus Executive Span
Ralph C. Davis, however, described two kinds of spans: an operative span for lower-
level managers and an executive span for middle and top managers.
Optimum Span:
Thus, the optimum span of management depends on several variables such as the size
of the organization, technology, specialization, and routines of activities.
As Plunkett and Attner rightly put it:
“The more capable and experienced the sub-ordinates, the larger is the number of
subordinates can be effectively supervised by one competent manager. The less
time needed to train and acclimate, the more there is to devote to producing
output.”
A final factor that can influence the span of control of a manager is the company’s
philosophy toward centralization or decentralization in decision-making.

31. Factors influencing Span of Control
01 Competence of managers
02 Nature of work
03 Assistance to managers

32. Factors influencing Span of Control
04 Competence of subordinates
05 Plans and policies
06 Organizational level

33. Factors influencing Span of Control
07 Authority-responsibility
structure
08 System of control
09 Financial factors

34. Delegation of Authority

35. What is Delegation of Authority?
● Delegation is the process by which
a manager assigns/entrusts a part
of his workload to his/her
subordinate.
● It can also be defined as
subdivision and sub-allocation of
powers to the subordinates in
order to achieve effective results.
● Delegation of authority is the base
of superior-subordinate
relationship,

36. Elements of Delegation
Delegation involves following three elements:
Authority
• in context of a business
organization, authority
can be defined as the
power and right of a
person to use and
allocate the resources
efficiently, to take
decisions and to give
orders so as to achieve
the organizational
objectives.
Responsibility
• is defined as the duty of
the person to complete
the task assigned to him.
A person who is given the
responsibility should
ensure that he
accomplishes the tasks
assigned to him.
Accountability
• is the obligation of a
subordinate to perform
the duties assigned to
him. The delegation
creates an obligation on
the subordinate to
accomplish the task
assigned to him by the
superior.

37. For achieving delegation, a
manager has to work in a system
and has to perform the following
steps :
1. Assignment of tasks and duties
2. Granting of authority
3. Creating responsibility and
accountability

38. Centralization
and
Decentralization

39. a process where the
concentration of decision
making is in a few hands. All the
important decision and actions
at the lower level, all subjects
and actions at the lower level are
subject to the approval of top
management.
Centralizatio
n

40. ● Reservation of decision making power
at top level.
● Reservation of operating authority
with the middle level managers.
● Reservation of operation at lower
level at the directions of the top level.
Implications of Centralization

41. is a conscious process of systematic
distribution of authority by the top
management down the line to create
operative levels and to make them
autonomous in there functioning.
Decentralization

42. ● There is less burden on the Chief Executive as in the
case of centralization.
● The subordinates get a chance to decide and act
independently which develops skills and capabilities.
● Diversification and horizontal can be easily
implanted.
● Concerns diversification of activities can place
effectively since there is more scope for creating new
departments. Therefore, diversification growth is of a
degree.
● In decentralization structure, operations can be
coordinated at divisional level which is not possible
in the centralization set up.
Implications of
Decentralization

43. Centralized VS Decentralized
The designations and hierarchy in both centralized and decentralized organizations might be the
same but the levels at which decisions are taken differ greatly.

44. • Organic in nature
• Strong employee
involvement
• Authority based
on capability
New Forms of Organization
• Alliances
• Teams
• Mindfulness of environments, changes,
patterns and themes
• Flatter,
decentralized
organization

45. Network Structure
This modern structure includes the linking of numerous,
separate organizations to optimize their interaction in
order to accomplish a common, overall goal
Virtual Organization
This emerging form is based on organization members
interacting with each other completely, or almost
completely, via telecommunications.
Self-Managed Teams
These teams usually include from 5-15 people and are
geared to produce a product or service. Members provide
a range of the skills needed to produce the product. The
team is granted sufficient authority and access to
resources to produce their product in a timely fashion.

46. Learning Organizations
In a learning organization managers don't direct as much
as they facilitate the workers' applying new information
and learning from that experience. Managers ensure time
to exchange feedback, to inquire and reflect about the
feedback, and then to gain consensus on direction.
Self-Organizing
Systems
Self-organizing systems have the ability to continually
change their structure and internal processes to conform
to feedback with the environment. They exist in increasing
complexity and adapt their structures and forms to
accommodate this complexity. Ultimately, they change
structure dramatically to adjust to the outer environment.

47. Global Organizing
• Overseas
Experience
• Presence
“An essential activity that every decision maker must perform to
keep pace in today’s world”
• Sensitivity to
Cultural Diversity
• Humility
• Deep Self
Awareness
• Lifelong
Curiosity
• Well-
Spoken
• Good
Negotiator

48. Roles of Global Organizing
Day 4
Collect
Statistical
Information
Making
Comparative
Study
Disseminate
information to
other
countries
Analyze
Trends in the
Variables

49. Goals of Global Organizing
Profability
Customer
Service
Growth
Efficiency
Retention

50. Virtual
Organizatio
n as
Networks

51. What is Virtual Organization?
● The term virtual organization is used
to describe a network of
independent firms that join
together, often temporarily, to
produce a service or product.
● Virtual organization is often
associated with such terms as
virtual office, virtual teams, and
virtual leadership.

52. Characteristics of Virtual
Organization
2. Geographically
spread (multi sites)
3. Interchangeable
partners given a
similar business
culture
4. A combination of
complementary
resources to
accomplish a
specific goal
5. Spread power
amongst the
partners
6. Electronic
communication
through ICT
1. It is a borderless
organization, located
in Cyberspace (web-
based)

53. Virtual
Organization
as Network

54. Virtual
Organization
a temporary or permanent collection of
geographically dispersed individuals, groups,
organizational units, or entire organizations
that depend on electronic linking in order to
complete the production process. Virtual
organizations do not represent a firm’s
attribute but can be considered as a different
organizational form and carries out the
objectives of cyber diplomacy.

55. 1. Flat organization
2. Dynamic
3. Informal communication
4. Power flexibility
5. Multi-disciplinary (virtual) teams
6. Vague organizational boundaries
7. Goal orientation
8. Customer orientation
9. Home-work
10.Absence of apparent structure
11.Sharing of information
12.Staffed by knowledge workers.
Virtual Organization
Characteristics

56. Types of Virtual
Organizations
1. Telecommuters
2. Outsourcing employees/competencies
3. Completely virtual
Depending on the degree or spectrum of
virtuality, virtual organizations can be
classified into three broad types as
follows:

57. Virtual Organization as Network
Alternatively speaking, the virtual organization is a social network in which all
the horizontal and vertical boundaries are removed. In this sense, it is a
boundary less organization. It consists of individual’s working out of
physically dispersed work places, or even individuals working from mobile
devices and not tied to any particular workspace. The ICT is the backbone of
virtual organization.

58. Network
Organization
/ Clusters

59. Network Organization
A collection of autonomous firms or units
that behave as a single larger entity, using
social mechanisms for coordination and
control.
A blend of market and firm. They are
halfway between vertical integration and
market disaggregation.

60. Types of Network Organization
Internal Network
Large company that sees its units as
separate profit centers.
Stable Network
Consists of a central organization that
outsources much of its operations to
other companies.
Dynamic Network
Outsource even more heavily. Basically,
an
integrator firm identifies and assembles
assets
owned by other companies.
Market
Networks
These organizations don't have a lead
player that coordinates the others.
Instead, a collection of organizations
trading in the market fall into a stable
pattern of relationships that gradually
becomes solidified

61. Conditions that Favor Network
Organizations
Frequent
Transaction
Demand
Uncertainty
Task
Complexity
Customizatio
n
Structural
Embeddedness

62. Self-
Organizing
Systems

63. Self Organizing
Systems
A class of systems that are able to change their internal
structure and their function in response to external
circumstances. By self-organization it is understood that
elements of a system are able to manipulate or organize
other elements of the same system in a way that stabilizes
either structure or function of the whole against external
fluctuations

64. organzation in
Companies
•Authority is pushed down to individuals and teams, rather than being
centralized, which means they can respond more quickly and take more
responsibility
•Information is shared widely and transparently so teams and individuals
can make faster, more informed decisions
•With distributed authority and leadership, employees take more ownership
for making local improvements and reducing waste, for example
•The quality of customer service increases dramatically when frontline
employees are given the autonomy to decide how they deal with the
customer
•Managers are an expensive resource and removing the need for
supervision or management means organizations can be leaner

65. Don’t use force to
coerce another
person
Honour your
word and
keep your
promises
Balance
individual needs
with the needs of
the collective
Simple Guiding Principles for New
Forms of Organization