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Chapter Four

Organizing is a key management function that involves assigning tasks, grouping them into departments, and allocating resources to achieve common goals. It encompasses both formal and informal structures, with various departmentalization bases that each have their advantages and disadvantages. Understanding the principles of organization, such as authority, delegation, and the balance between centralization and decentralization, is crucial for effective management.

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9 views3 pages

Chapter Four

Organizing is a key management function that involves assigning tasks, grouping them into departments, and allocating resources to achieve common goals. It encompasses both formal and informal structures, with various departmentalization bases that each have their advantages and disadvantages. Understanding the principles of organization, such as authority, delegation, and the balance between centralization and decentralization, is crucial for effective management.

Uploaded by

hanose
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Chapter Overview

 Organizing: A key management function that follows planning. It involves assigning


tasks, grouping tasks into departments, and allocating resources.

1. Organizing Defined

 Definition: Organizing involves assigning tasks, grouping tasks into departments, and
allocating resources across the organization.
 Components: Men, machines, materials, methods, money, functions, authority, and
responsibility.
 Purpose: To unite these components effectively to achieve common goals.

Characteristics of Organization

1. Related to Objectives: Tasks and authority are organized to achieve predetermined


objectives.
2. Group of People: Formed by people working together to accomplish common goals.
3. Communication: Essential for coordinating activities.
4. Basic Function of Management: Performed by all managers.
5. Continuous Process: Ongoing function.
6. Structure of Relationship: Formal (planned and structured) and informal (arising from
social interactions).

Types of Organization

1. Formal Organization
o Characteristics:
 Consciously designed to achieve objectives.
 Based on delegated authority.
 Represented by an organizational chart.
 Deliberately impersonal.
2. Informal Organization
o Characteristics:
 Arises naturally within formal structures.
 Formed based on interests, beliefs, and social needs.
 Can positively or negatively impact the formal organization.

Advantages and Disadvantages of Informal Organizations

 Advantages:
o Provide additional communication channels.
o Offer satisfaction and stability.
o Alert managers to sensitive issues.
 Disadvantages:
o Can resist change.
o May cause role conflicts and spread rumors.
o Can have hidden agendas.

The Organizing Process

1. Consider Plans and Goals: Align organizational structure with objectives.


2. Determine Activities: Identify necessary activities to achieve objectives.
3. Classify and Group Activities: Group similar activities together.
4. Assign Work and Delegate Authority: Assign tasks and appropriate authority.
5. Design a Hierarchy of Relationships: Establish vertical (chain of command) and
horizontal (departmental relationships) structures.

Departmentalization

 Definition: The process of dividing an organization into different departments.


 Bases of Departmentalization:
o Functional: Based on functions (e.g., marketing, finance).
o Geographical: Based on locations.
o Product: Based on products or services.
o Customer: Based on customer types.
o Process: Based on manufacturing processes.

Advantages and Disadvantages of Different Departmentalization Bases

1. Functional Departmentalization:
o Advantages: Promotes specialization and efficiency, enhances communication
within departments.
o Disadvantages: May create barriers between departments, narrow employees'
understanding of the organization.
2. Geographical Departmentalization:
o Advantages: Exploits local advantages, develops local markets.
o Disadvantages: Requires more managers, coordination challenges.
3. Product Departmentalization:
o Advantages: Enhances specialization and innovation.
o Disadvantages: Can lead to duplication of efforts, coordination issues.
4. Customer-Based Departmentalization:
o Advantages: Focuses on customer needs, promotes team spirit.
o Disadvantages: Difficult to cater to all customer types, resource duplication.
5. Process Departmentalization:
o Advantages: Suitable for specific types of work.
o Disadvantages: Inflexible, affected by process failures.

Major Organizational Concepts and Principles

1. Authority: The right to act or give orders, derived from the managerial position.
o Types of Authority:
 Line Authority: Direct supervisory relationships.
 Staff Authority: Advisory role, offers recommendations.
 Functional Authority: Control over specific activities in other
departments.
2. Unity of Command: Each person should report to only one supervisor.
3. Delegation: Assigning tasks and authority to subordinates.
o Process of Delegation: Assign tasks, delegate authority, accept responsibility,
create accountability.
4. Span of Control: The number of subordinates a manager can effectively supervise.
o Factors Influencing Span of Control: Manager's ability and experience,
complexity of tasks, growth in personnel competence, company's centralization
policy.
5. Centralization vs. Decentralization:
o Centralization: Concentration of decision-making authority at the top level.
o Decentralization: Delegating authority to lower levels.
o Advantages of Decentralization: Reduces manager workload, promotes
decision-making closer to action, enhances control, encourages participative
management.
o Disadvantages of Decentralization: Can cause conflicts, resource duplication,
and high costs.

Principles of Organization

 Objectives: Align organization with its goals.


 Specialization: Assign tasks to specialized individuals.
 Span of Control: Limit the number of direct reports per manager.
 Unity of Command: Maintain a single reporting line for each employee.
 Delegation: Properly delegate authority.
 Responsibility: Hold managers accountable for subordinates' actions.
 Efficiency: Achieve goals at minimum cost.
 Simplicity: Keep organizational structure simple.
 Flexibility: Adapt to changing circumstances.
 Balance: Maintain a balance between different organizational aspects.
 Unity of Direction: Ensure consistent objectives and plans.

Conclusion

Organizing is a fundamental management function that ensures resources are efficiently


allocated and tasks are effectively coordinated to achieve organizational goals. Understanding
the types, processes, and principles of organizing is essential for effective management.

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