Unit 4

Organizing
Introduction
• It is the process of grouping similar tasks and activities into
different department and section. Division of work,
assigning to employees, delegating authority to them,
fulfilling responsibility and being accountable are the key
activities of organizing. Group of people working together
to achieve common goal is Organization.
Organizing Process
• Determination of objectives: common objective of
company organization, should be known by all level of
management
• Determination of activities: tasks and activities must be
determined to meet the predetermined common objective
• Grouping the activities: among the tasks and activities,
similar and like tasks must be grouped into one, different
department and sections are established under this
• Establishing formal relation: by delegating authority to
different department and sections, formal relation is
established
• Creation of managerial position: each department and
section is handled by functional manager, managerial position
is created for this
• Assignment of work: respective work must be assigned to
respective department
• Establishment of communication and coordination: maintain
cooperation and coordination among different departments
and sections
Organizing Principles
• Unity of objective coordination
• Specialization Authority and responsibility
• Unity of command Scalar chain
• Span of control Efficiency
• Balance Simplicity
• Continuity Exception Homogeneity
• Unity of objective: overall company’s objective must be
same even there are different functional departments and
sections
• Specialization: employee and functional department is
concentrating and focusing in particular task and function
only
• Unity of command: commanding by single superior only to
subordinates
• Span of control: no. of subordinates to be controlled by
single superior must be fixed
• Balance: keeping centralization and decentralization among
subordinates must be in balance
• Continuity: in an enterprise, organizing must be continued,
it should not be interrupted
• Coordination: among group of people and functional
department coordination must be present
• Authority and responsibility: two sides of a coin, must be in
balance
• Scalar chain: unbreakable chain of command, flow of
information from top level to bottom level
• Efficiency: working capacity must be high, ratio of input
and output
• Simplicity: simple to understand and follow up
• Exception: any problem should be solved by subordinates
themselves in their own level, only in exceptional cases and
problem, it should be taken to top level
• Homogeneity: single department must be assigned only
similar tasks and activities
Organizational Architecture
• It is simply the organization structure and design
• There are two types of organizational architecture
differentiation,
• vertical differentiation and Horizontal differentiation
Vertical Differentiation
• It is vertical relationship between different hierarchy in
organization, it may be tall, having many hierarchy and flat,
having less hierarchy
Tall Organization: having many hierarchy of subordinate, up
to 10, 12 hierarchy, applied in government offices
Advantages
• Systematic work performance
• Less overload
• Easy to work
• Sound decision
Disadvantages
• Delay in work performance/decision
• Costly
• Conflict
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Flat Organization: less hierarchy of subordinates, wide in
nature, authority and work performance, applied in small
and private organization, up to 4, 5 hierarchy
Advantages:
• High motivation
• Cheaper
• Quick decision
Disadvantages:
• Over burden
• Chances of wrong decision
• Misuse of authority
Horizontal Differentiation
• In Horizontal Differentiation, there is less hierarchy but
wide peers members, there exist different departments,
sections, divisions etc in same hierarchy.
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• Functional structure: also known as departmental
structure, as per different function, department is
established with individual departmental head for
proper control and operation
Advantages
• Logical
• Promote specialization
• Facilitate in controlling
• Eliminate duplication work
Disadvantages
• Conflict
• Lack of coordination
• Over emphasis on specialization
• Lack of innovation
 Chief Executive
officer

Production Finance Marketing R&D

HR Department
Department Department Department Department
• Multi-dimensional structure: org. architecture by its
products and services, applied in big manufacturing
org. having wide variety of products and services
Advantages
• Suit for production/manufacturing org.
• Promote specialization on the basis of products
• Facilitate in monitoring and evaluating
• Accountable the respective manager only
Disadvantages
• Arise conflict
• Control problem in over production division
• Maximize administrative costs
 Chief Executive
officer

Product Division Product Division

A B

R&D
Production Finance Marketing R&D Production Finance Marketing Department
HR Department HR Department
Department Department Department Department Department Department Department
• Geographical structure: based on geographical area,
location and region of the organization, org. having
wide coverage of market, multinational org. follow
this structure
Advantages
• Facilitate to cover local to global market
• Environmental adaptation
• Uniformity in business
Disadvantages
• Integration problem
• Chances of duplication of work
• Difficulties in control
• costly
 General
Manager

Province 1 Province 2 Province 3 Province 4

Manager Manager Manager Manager
• Matrix structure: combined structure of functional
department and different project works, getting popular,
widely applicable in big organization having different
project work, increase efficiency and effectiveness of org
Advantages
• Better coordination and control
• Fit in dynamic environment
• Optimum utilization of resources
• Participative
• Team work spirit
Disadvantage
• Lack of unity of command
• Costly
• Difficulties in balance
• conflict
Matrix Organization
Chief Executive officer

Production Marketing HR Finance R&D

Department Department Department Department Department
Project A PD A MD A HR A FD A RD A

PD B MD B HR B FD B RD B
Project B

PD C MD C HR C FD C RD C
Project C
• Responsibility: It is an obligation in performing
task and duties. Every position and hierarchy in an
organization have their own responsibilities.
Authority is key factors to complete the
responsibilities. It is assigned by superior to
subordinate level and it can not be delegated .
• Accountability: It is answerability to the superior
about the fulfillment of responsibility. Fulfilling
responsibility is not enough only, subordinates
must be accountable to superior as well. It is also
not delegated
Authority
• It is simply power granted to group of people,
department and individual to do task assign
them. It is granted from superior to subordinate
level. Authority and responsibility are two sides
of a coin. There is triangular relationship
between authority, responsibility and
accountability. Authority provided to line
members of an organization is Line authority and
authority to staff members is staff authority
Delegation of Authority
• It is transferring authority from superior level to
subordinate level of an organization. Most authority
is concentrated in top level management, as per
requirement and responsibility assigned to them,
authority is delegated to bottom level.
Advantages
• Minimize work load to superior
• Benefit of specialization
• Motivation and moral
• Training and development
• Facilitate growth and expansion
• Quicker and better decision
• Basis of organization
Disadvantages
• Loss of control
• Fear of losing importance
• Incompetence subordinates
• Authorization tendency
• Mutual discontent
Centralization
• It is systematic reservation of decision making
authority in top management. All kinds of decisions
are done in top level in centralization. Authority and
power is concentrated in only in top level. In initial
stage of organization, centralization is suited. It is
applied when leader is autocratic in nature, also
when employees are incompetent.
Advantages
• Facilitate unified decision
• Simplifies organization structure
• Quick decision
• Economy
• Integrate operation
• Suitable for small and organization
Disadvantages
• Not fit for large organization
• Overload to manager
• Misuse of authority
• Low morale/motivation
• Lack of environmental adaptation
• Inappropriate for routine work
Decentralization
• It is philosophy of systematic delegation of authority from
top level to bottom level of management. Authority is
dispersed among different departments, sections and
branches to perform tasks. It is modern approach of
authority delegation.
Advantages
• Relief to top management
• Facilitates manager development
• Better decision
• High morale/motivation
• Expansion and diversification
• Environmental adaptation
Disadvantages
• Increase cost Maximize risk unfit in emergency
• Conflict Difficulty in communication
• Not fit for specialized work
Devolution
• It is transferring authority to the successor. In absence of
top executive, immediate successor is responsible for the
works and authority. In case of emergency and outgoing of
top executive, devolution is done.
• Basically popular in administration rather than business. So
it is delegation of power or authority by a central
government to local governing units. It is a transfer or
allocation of authority, especially from a central government
to regional government or particular interest.
Features
• Transfer of power
• Differs in degree of decentralization
• Democratic shift
• Effective decision making
• Encourage innovation
Staffing
• Management function concerned with employees
recruitment, selection, promotion and retirement is
staffing. It is placement of right person in right job at
right time to achieve organizational goal. Human
Resource Management is vague than staffing.
Importance of staffing
• Manage effective staff: proper recruitment, selection
maintain well qualified staffs in organization
• Utilization of physical resources: well qualified staffs
utilize physical resources of organization optimally
• Increase in productivity: output and productivity of
an organization will be increased having well staffs
• Focus on goal achievement: staffs are means to
achieve goal, qualified staffs always focus on goal
• Helps to solve problem: any kind of problem is
well handled and solved by qualified staffs
• Job satisfaction: proper remuneration, facilities
and promotion of staffs make them satisfied in
their work, job satisfaction will give maximum
output
• Self development of workers: qualified staffs
getting proper platform, they self develop their
career