Notes: Chapter 3

ORGANISING

Organizing is the function of management that involves developing an organizational structure

and allocating human resources to ensure the accomplishment of objectives. The structure of the
organization is the framework within which effort is coordinated.
Organising 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.
Organising is that managerial process which seeks to define the role of each individual (manager
and operator) towards the attainment of enterprise objectives
Organising is that managerial process which seeks to define the role of each individual (manager
and operator) towards the attainment of enterprise objectives; with due regard to establishing
authority- responsibility relationships among all; and providing for co-ordination in the
enterprise-as an in-built device for obtaining harmonious groups action.
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. All the
three resources are important to get results. Therefore, organizational function helps in
achievement of results which in fact is important for the functioning of a concern.

Definition
“Organising is the establishment of authority relationships with provisions for co-ordination
between them, both vertically and horizontally in the enterprise structure”. -Koontz and O
‘Donnell
“Organising is the process of identifying and grouping the work to be performed, defining and
delegating the responsibility and authority and establishing a pattern of relationship for the
purpose of enabling people work most effectively to accomplish the objective”. – Louis A. Allen.
According to Chester Barnard, “Organizing is a function by which the concern is able to define the
role positions, the jobs related and the co-ordination between authority and responsibility.
Hence, a manager always has to organize in order to get results.

The Organizational Structure

Organizing, like planning, must be a carefully worked out and applied process. This process involves
determining what work is needed to accomplish the goal, assigning those tasks to individuals, and
arranging those individuals in a decision‐making framework (organizational structure). The end
result of the organizing process is an organization — a whole consisting of unified parts acting in
harmony to execute tasks to achieve goals, both effectively and efficiently.

A properly implemented organizing process should result in a work environment where all team
members are aware of their responsibilities. If the organizing process is not conducted well, the
results may yield confusion, frustration, loss of efficiency, and limited effectiveness.
In general, the organizational process consists of five steps (a flowchart of these steps is shown in
Figure 1):
1.Review plans and objectives.

Objectives are the specific activities that must be completed to achieve goals. Plans shape the
activities needed to reach those goals. Managers must examine plans initially and continue to do so
as plans change and new goals are developed.
2.Determine the work activities necessary to accomplish objectives.
Although this task may seem overwhelming to some managers, it doesn't need to be. Managers
simply list and analyze all the tasks that need to be accomplished in order to reach organizational
goals.
3.Classify and group the necessary work activities into manageable units.
A manager can group activities based on four models of departmentalization: functional,
geographical, product, and customer.
4.Assign activities and delegate authority.
Managers assign the defined work activities to specific individuals. Also, they give each individual the
authority (right) to carry out the assigned tasks.
5.Design a hierarchy of relationships.
A manager should determine the vertical (decision‐making) and horizontal (coordinating)
relationships of the organization as a whole. Next, using the organizational chart, a manager should
diagram the relationships.
7 Types of Organizational Structures
The key purpose of any organizational structure is to make the processes more straightforward.
However, there are many ways to achieve that.
Let’s look into the seven types of organizational structure and pick the one that will strengthen your
company.
1. Functional structure
A functional structure groups employees into different departments by work specialization. Each
department has a designated leader highly experienced in the job functions of each employee
supervised by them.
Most often, it implements a top-down (centralized) decision-making process where department
managers report to upper management. Ideally, leaders of different teams communicate regularly
and coordinate their strategies while lower-level employees have little idea of the processes taking
place outside their department.

The main challenge companies with a functional structure face is the lack of coordination between
departments. Employees may lose the larger company context when focusing on very specific tasks
and failing to interact with members of other departments.
To create a functional organizational structure that works, you’ll need to train leaders to foster
collaboration across departments
2. Divisional structure
A divisional structure organizes employees around a common product or geographical location.
Divisional organizations have teams focused on a specific market or product line.
Examples of companies applying a divisional structure are McDonald’s Corporation and Disney.
These brands can’t help but split the entire organization by location to be able to adjust their
strategies for audiences representing different markets.
These smaller groups are relatively independent and mainly follow a decentralized framework. Still,
the leaders of each department are likely to operate under centralized corporate management. It
means that company culture is dictated by top management, but operational decisions can be made
by each division independently.
Giants such as McDonald’s and Disney also add functional units to their structure for better control.
3. Matrix structure
Within a matrix organizational structure, team members report to several managers at once. Wait,
what’s the point?
Having multiple supervisors allows for company-wide interaction and faster project delivery. For
instance, when answering to functional managers and project managers, employees have a chance
to collect experience outside their team. While functional managers can help to solve job-specific
issues, project managers can bring in knowledge or talents from other departments.
If you go after a matrix organizational structure, you’ll need to find a way to avoid authority
confusion and prevent conflicts between managers.
4. Team structure
A team-based organizational structure creates small teams that focus on delivering one product or
service. These teams are capable of solving problems and making decisions without bringing in third
parties.

Team members are responsible for managing their workload and have full control over the project.
Team-based organizations are distinguished by little formalization and high flexibility. This structure
works well for global organizations and manufacturers.
5. Network structure & Chart
A network structure goes far beyond your internal company structure. It’s an act of joining the
efforts of two or more organizations with the goal of delivering one product or service. Typically, a
network organization outsources independent contractors or vendors to complete the work.

In a network organization, teams are built from full-time employees as well as freelance specialists –
this way, in-house workers can spend most of their time focusing on the work they specialize in.
Such an approach allows companies to adapt to market changes and obtain the missing skills fast.
Working with individuals that aren’t integrated into your company culture results in lower
formalization and higher agility.
6. Hierarchical structure & Org Chart
You must already have an idea of what a hierarchical structure is. It’s the most common
organizational structure type that follows a direct chain of command.
A chain of command, in this case, goes from senior management to general employees through a
range of executives on the departmental and team level. The highest-level executive has the highest
power over the decision-making process.
On one hand, this structure enables organizations to streamline business processes, develop clear
career paths, and reduce conflicts. A company hierarchy leaves no place for challenging managers’
authority, which can be good in some cases.
On the other hand, a hierarchical structure slows down decision-making and may hurt employee
morale.
7. Flat organization structure & Org Chart
In a flat organizational structure, there are few middle managers between employees and top
managers. The structure requires less supervision, increases employee involvement, and boosts trust
in the workplace.

Due to its simple nature, a flat organization structure, also called a “flatarchy”, is typically used by
small businesses and startups.
What Is an Organizational Chart?
An organizational chart is a diagram that visually conveys a company's internal structure by
detailing the roles, responsibilities, and relationships between individuals within an entity. It is one
way to visualize a bureaucracy.
Organizational charts are alternatively referred to as "org charts" or "organization charts."
KEY TAKEAWAYS
 An organizational chart graphically represents an organization's structure, highlighting the
different jobs, departments, and responsibilities that connect the company's employees to
each other and to the management team.
 Organizational charts can be broad-based, depicting the overall company, or can be
department- or unit-specific, focusing on one spoke on the wheel.
 Most org charts are structured by using the "hierarchical" model, which shows
management or other high-ranking officials on top, and lower-level employees beneath
them.
 Other types of charts include the flat org chart, the matrix chart, and the divisional org
chart.
 ganization. This may influence its ability to remain productive and successful.