ORGANISING PERSONNEL

FUNCTION

Fundamentals of Organizing
 Organizing
Organizing involves
• Determination of activities required to achieve goals
• Grouping of these activities into departments
• Assignment of such groups of activities to a manager
• Delegation of authority to carry them out and
• Provision of coordination horizontally & vertically in
the organization.
 Work Specialization
◆ Degree to which organizational tasks are
subdivided into separate jobs
◆ Production is efficient because employees
perform small, well-defined tasks
◆ Employees can acquire expertise in their tasks
◆ Employees can be selected by ability and
attitude.
 Work Specialization
◆ Organization achieves standardization
across tasks
◆ When specialization is carried to an
extreme, workers tend to become bored and
alienated
◆ Many companies are moving away from
this principle.
 Chain of Command
An unbroken line of authority that links all
persons in an organization and shows who
reports to whom.
CEO

VP Marketing VP Production VP Finance

 Authority
◆ Formal and legitimate right of a manager to
make decisions, issue orders, and allocate
resources
◆ Vested in organizational positions, not people
◆ Managers have authority because of the
positions they hold
◆ Accepted by subordinates.
 Authority
◆ Flows top down through the hierarchy
◆ Subordinates comply because they accept
the managers' orders
◆ Positions at the top have more formal
authority than those at the bottom.
 Responsibility
◆ Duty to perform the task an employee has
been assigned
◆ Authority commensurate with
responsibility.
 Accountability
Justify outcomes to those above in the
chain of command.
 Delegation
◆ Process to transfer authority and
responsibility to positions below
◆ Delegate authority to the lowest possible
level.

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 Line
◆ Line departments perform tasks that reflect
the organization's primary goal and mission
◆ Line authority means that managers have
formal authority to direct and control
immediate subordinates.

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 Staff
◆ Staff departments include all those who
provide specialized skills in support of line
departments
◆ Staff authority is generally more narrow than
line authority
◆ Staff authority includes the right to advise,
recommend, and counsel in the staff
specialists' area of expertise.

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 LINE & STAFF CONFLIT

Conflicts arise due to 3 major factors

1 VIEW POINT OF LINE
• Unnecessary interference by staff in line authority.
• Staff trying to dilute the importance of line
managers.
• Staff – not accountable
• Lack of realism

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 LINE & STAFF CONFLIT

2 VIEW POINT OF STAFF

• Line managers resist new ideas
• Do not use the service of staff properly.

3 THE TYPE OF LINE AND STAFF

RELATIONSHIP
• Difference in background.
• Absence of clear cut demarkation of authority and
responsibility.
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 Span of Management
◆ Number of employees reporting to a
supervisor
◆ Tradition has recommended a span of
management of four to seven subordinates.

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Factors Determining Span of
Control
◆ Stability of subordinates' work
◆ Subordinates perform similar tasks
◆ Subordinates in a single location
◆ Skill of subordinates
◆ Procedures define tasks
◆ Support available for the manager
◆ Minimum time for nonsupervisory tasks
◆ Managers' preferences and skills.

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 Tall versus Flat Organizations
Chief
Executive
Tall Organization
Tall hierarchy

Chief Relatively narrow

Flat Organization Executive span of control
Flat hierarchy

Relatively wide
span of control
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 Tall Versus Flat Structure
◆ Tall structure has an overall narrow span of
management and more levels in the hierarchy
◆ Flat structure has a wide span, is horizontally
dispersed, and has fewer hierarchical levels
◆ The trend is toward larger spans of management as
a way to facilitate delegation.

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Centralization & Decentralization
When the decision making is only with
chief executives it is known as
centralization ; when it is scattered
throughout the organization, it is
decentralization i.e. systematic efforts
to delegate decision making at lower
levels.

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Decentralization Tends To---
◆ Make greater use of human resources
◆ Reduce burdens of top managers
◆ Cause decisions to be made close to the
action
◆ Permit rapid response to changes.

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 Factors That Influence
Centralization/Decentralization
◆ Amount of change and uncertainty
◆ Corporate culture
◆ Size of organization
◆ Cost and risk of failure
◆ Efficiency of communication and control
systems.

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 Formalization
Written documentation used to direct and
control employees.

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 Departmentalization
Departmentation is the process of
dividing and grouping activities
into various units and departments.

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 TYPES OF DEPARTMENTATION
i. Functional departmentation (refers to grouping
of activities of organization on the basis of
functions).
ii. Product departmentation
iii. Process departmentation
iv. Customer departmentation
v. Geographic/Territorial departmentation
vi. Matrix departmentation
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 Functional Approach
Departments based on similar skills and resource
use.

CEO

VP VP VP
Finance Production Marketing

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 Advantages of Functional
Approach
◆ Efficient use of resources
◆ In-depth skill specialization
◆ Career progress within the department
◆ Top manager has direction and control
◆ Excellent coordination
◆ High-quality problem solving
◆ Simplifies training.

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Disadvantages of Functional
Approach
◆ Poor communication among functional
departments
◆ Slow response to external changes
◆ Centralized decision making
◆ Responsibility for problems difficult to identify
◆ Employees have limited view
◆ Limited general management training.

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 PRODUCT
DEPARTMENTATION

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 PRODUCT DEPARTMENTATION
MERITS:
◆ Better quality production, marketing, and co-
ordination.
◆ Product & technical specialization are possible.
◆ Activities of different departments are easily
measurable in terms of individual units.
DEMERITS:
◆ It may increase managerial cost.
◆ Internal competition

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 PROCESS
DEPARTMENTATION

3
 PROCESS DEPARTMENTATION
MERITS:
◆ Specialization
◆ Effective utilization of human resource
◆ Cost economy

DEMERITS:
◆ As subsequent processes are directly dependent on previous
processes, their work may get affected if the immediate
previous process fails to work as required.
◆ As processes are distinctly headed by different managers,
effective co-ordination may become difficult due to
personality conflicts.
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 CUSTOMER
DEPARTMENATION

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 CUSTOMER DEPARTMENTATION

Relatively self-contained units deliver an organization’s

products or services to specific customer groups.
MERITS:
◆ Better service to customers.
DEMERITS:
◆ Departmental conflict may come up due to various internal
and external causes.

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Geographic departmentation
◆ All functional skills in each region
◆ To meet the needs of the customer.
P r e s id e n t

C o r p o r a t e C o r p o r a t e
H e a d q u a r t e r s F in a n c e

V P E u r o p e V P N o r th A m e r i c aV P F a r E a s t

E a s t C o a s t C e n t r a l W e s t C o a s t
R e g io n R e g io n R e g io n

M a n u f a c tu r in g F in a n c e M a r k e t in g

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 Advantages of Geographic
departmentation
◆ Responsive in an unstable environment
◆ Shows concern for customer
◆ Coordinates across functional departments
◆ Identifies responsibility for product
◆ Emphasizes overall product and division goals
◆ Develops general management skills
◆ Minimizes travel costs.

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Disadvantages of Geographic
departmentation
◆ Duplication of resources across divisions
◆ Less specialization in divisions
◆ Poor coordination across divisions
◆ Less top management control
◆ Competition for resources among divisions
◆ More managers needed.

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MATRIX DEPARTMENTATION
Key
KeyElements:
Elements:
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departmentalization
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downunity-of-
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Matrix Structure (College of
Business Administration)
(Director)

Employee
(Dean)

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Key Design Questions and Answers
for Designing the Proper
Organization Structure

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What is wrong with the following
organizational structures?
if anything?

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 Company A

B C D E F G H I J K L M N

4
Span of Management Is Too
Large

4
 Company B
A

B C D E

F G H I P Q R S J K L

M N O W X Y

T U V

4
Violates Unity of Command

4
 Company C
A

B C D

E F G H J K

L M N O P

Q R S
4
 Person I Reports to No One--
Break in the Chain of Command.

4
 Company D
A

B C D E F G

H I J K L M

N O P Q R S

T U V W X Y

4
Span of Management Is Too
Narrow or Small

4
 Company E
A

B C

D E F G

H I J K L M N O P Q

R S T U V W X Y

4
This structure seems okay!

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 The Unorganized Church Office
B i s h o p

A s s i s t aA n s t s i s t a n At s s i s t a n At s s i s
P a s t o r P a s t o r P a s t o r P a s t o

S e c r eO t fa f ir c Sy e e c r eM t ea dr Sy i a e c r eY t o a u r F yt hi n a
M a n a g e r M a n a g e r S t a f f e r

P r i n P t ea r r t R - T e i c m e ep tr i o n i s t

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 The Reorganized Church Office

B i s h o p

A s s i s t a An st s i s t a n t O f f i c e A s s i s t a An st s i s t
P a s t o r P a s t o r M a n a g e r P a s t o r P a s t o

S e c r e t a Fr y i n a n c R e e c e p t i o Pn ir s i nt t e r M e d i a S e c r e t a rY y o u t h
C l e r k M a n a g e r S t a f f e

P a r t - T im e r