MODULE-2

ORGANIZING & STAFFING

ORGANIZING
Introduction
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. 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.

Pre Requisite Discussion

The students should be familiar with the tasks to be considered for organizing every
events that needed to be executed for the development of the organization.

2.1 Definition
According to Koontz and O'Donnell, "Organization involves the grouping of activities
necessary to accomplish goals and plans, the assignment of these activities to appropriate
departments and the provision of authority, delegation and co-ordination." Organization
involves division of work among people whose efforts must be co-ordinated to achieve
specific objectives and to implement pre-determined strategies.
2.2 Nature or Characteristics of Organizing
From the study of the various definitions given by different management experts we
get the following information about the characteristics or nature of organization,

2.2.1 Division of Work: Division of work is the basis of an organization. In other words,
there can be no organization without division of work. Under division of work the entire
work of business is divided into many departments .The work of every department is further
sub-divided into sub works. In this way each individual has to do the saran work repeatedly
which gradually makesthat person an expert.

2.2.2 Coordination: Under organizing different persons are assigned different works but
the aim of all these persons happens to be the some - the attainment of the objectives of the
enterprise. Organization ensures that the work of all the persons depends on each other’s
work even though it happens to be different.

2.2.3 Plurality of Persons: Organization is a group of many persons who assemble to fulfill
a common purpose. A single individual cannot create an organization.

2.2.4 Common Objectives: There are various parts of an organization with different
functions to perform but all move in the direction of achieving a general objective.

2.2.5 Well-defined Authority and Responsibility: Under organization a chain is established

between different posts right from the top to the bottom. It is clearly specified as to what will
be the authority and responsibility of every post. In other words, every individual working in
the organization is given some authority for the efficient work performance and it is also
decided simultaneously as to what will be the responsibility of that individual in case of
unsatisfactory work performance.

2.2.6 Organization is a Structure of Relationship: Relationship between persons working

on different posts in the organization is decided. In other words, it is decided as to who will
be the superior and who will be the subordinate. Leaving the top level post and the lowest
level post everybody is somebody's superior and somebody's subordinate.

2.2.7 Organization is a Machine of Management: Organization is considered to be a

machine of management because the efficiency of all the functions depends on an effective
organization. In the absence of organization no function can be performed in a planned
manner.

2.2.8 Organization is a Universal Process: Organization is needed both in business and non
businessorganizations. Not only this, organization will be needed where two or mom than
two people work jointly. Therefore, organization has the quality of universality.
2.2.9 Organization is a Dynamic Process: Organization is related to people and the
knowledge and experience of the people undergo a change. The impact of this change affects
the various functions of the organizations. Thus, organization is not a process that can be
decided for all times to come butit undergoes changes according to the needs. The example in
this case can be the creation or abolition of a new post according to the need.

2.3 Organizing Process

Organization is the process of establishing relationship among the members of the
enterprise. The relationships are created in terms of authority and responsibility. To organize
is to harmonize, coordinate or arrange in a logical and orderly manner. Each member in the
organization is assigned a specific responsibility or duty to perform and is granted the
corresponding authority to perform his duty. The managerial function of organizing consists
in making a rational division of work into groups of activities and tying together the positions
representing grouping of activities so as to achieve a rational, well coordinated and orderly
structure for the accomplishment of work. According to Louis A Allen, "Organizing involves
identification and grouping the activities to be performed and dividing them among the
individuals and creating authority and responsibility relationships among them for the
accomplishment of organizational objectives."
2.4 Organization Structure
An organization structure is a framework that allots a particular space for a particular
department or an individual and shows its relationship to the other. An organization structure
shows the authority and responsibility relationships between the various positions in the
organization by showing who reports to whom. It is an established pattern of relationship
among the components of the organization. March and Simon have stated that-"Organization
structure consists simply of those aspects of pattern of behaviour in the organization that are
relatively stable and change only slowly." The structure of an organization is generally shown
on an organization chart. It shows the authority and responsibility relationships between
various positions in the organization while designing the organization structure, due attention
should be given to the principles of sound organization.
Significance of Organization Structure

 Properly designed organization can help improve teamwork and productivity

by providing a framework within which the people can work together most
 effectively.
 Organization structure determines the location of decision-making in the
 organization.
 Sound organization structure stimulates creative thinking and initiative among
 organizational members by providing well defined patterns of authority.
 A sound organization structure facilitates growth of enterprise by increasing
 its capacity to handle increased level of authority.
 Organization structure provides the pattern of communication and
 coordination.
 The organization structure helps a member to know what his role is and how it
relates to other roles.
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2.5 Principles of Organization Structure
Modern organizational structures have evolved from several organizational theories,
which have identified certain principles as basic to any organization structure.

2.5.1 Line and Staff Relationships:

Line authority refers to the scalar chain, or to the superior-subordinate linkages, that
extend throughout the hierarchy (Koontz, O'Donnell and Weihrich). Line employees are
responsible for achieving the basic or strategic objectives of the organization, while staff
plays a supporting role to line employees and provides services. The relationship between
line and staff is crucial in organizational structure, design and efficiency. It is also an
important aid to information processing and coordination.

2.5.2 Departmentalization:
Departmentalization is a process of horizontal clustering of different types of
functions and activities on any one level of the hierarchy. Departmentalization is
conventionally based on purpose, product, process, function, personal things and place.

2.5.3 Span of Control:

This refers to the number of specialized activities or individuals supervised by one
person. Deciding the span of control is important for coordinating different types of activities
effectively.

2.5.4 De-centralization and Centralization:

De-centralization refers to decision making at lower levels in the hierarchy of
authority. In contrast, decision making in a centralized type of organizational structure is at
higher levels. Every organizational structure contains both centralization and de-
centralization, but to varying degrees. The extent of this can be determined by identifying
how much of the decision making is concentrated at the top and how much is delegated to
lower levels. Modern organizational structures show a strong tendency towards de-
centralization.
2.6 Span of Control
Span of Control means the number of subordinates that can be managed efficiently
and effectively by a superior in an organization. It suggests how the relations are designed
between a superior and a subordinate in an organization.Span of control is of two types:
 Narrow span of control: Narrow Span of control means a single manager or
supervisor oversees few subordinates. This gives rise to a tall
 organizational structure.
 Wide span of control: Wide span of control means a single manager or
supervisor oversees a large number of subordinates. This gives rise to a flat
organizational structure.



2.7 Formal and Informal Organization
The formal organization refers to the structure of jobs and positions with clearly
defined functions and relationships as prescribed by the top management. This type of
organization is built by the management to realize objectives of an enterprise and is bound by
rules, systems and procedures. Informal organization, which does not appear on the
organization chart, supplements the formal organization in achieving organizational goals
effectively and efficiently. The working of informal groups and leaders is not as simple as it
may appear to be. Therefore, it is obligatory for every manager to study thoroughly the
working pattern of informal relationships in the organization and to use them for achieving
organizational objectives.

2.7.1 Formal Organization

Chester I Bernard defines formal organization as -"a system of consciously
coordinated activities or forces of two or more persons. It refers to the structure of well-
defined jobs, each bearing a definite measure of authority, responsibility and accountability."

(i) Are able to communicate with each other

(ii) Are willing to act and
(iii) Share a purpose.
The formal organization is built around four key pillars. They are:

 Division of labour
 Scalar and functional processes
 Structure and
 Span of control

2.7.2 Informal Organization

Informal organization refers to the relationship between people in the organization
basedon personal attitudes, emotions, prejudices, likes, dislikes etc. an informal organization
is an organization which is not established by any formal authority, but arises from the
personal and social relations of the people. These relations are not developed according to
procedures and regulations laid down in the formal organization structure; generally large
formal groups give rise to small informal or social groups.

2.8 Line and Staff Authority

In an organization, the line authority flows from top to bottom and the staff authority
is exercised by the specialists over the line managers who advise them on important matters.
These specialists stand ready with their specialty to serve line mangers as and when their
services are called for, to collect information and to give help which will enable the line
officials to carry out their activities better. The staff officers do not have any power of
command in the organization as they are employed to provide expert advice to the line
officers. The 'line' maintains discipline and stability; the 'staff' provides expert information.
The line gets out the production, the staffs carries on the research, planning, scheduling,
establishing of standards and recording of performance. The authority by which the staff
performs these functions is delegated by the line and the performance must be acceptable to
the line before action is taken.
2.9 Departmentalization by Different Strategies

2.9.1 Departmentalization
Departmentalization is the process of grouping of work activities into departments,
divisions, and other homogenous units. Key Factors in Departmentalization
 It should facilitate control.
 It should ensure proper coordination.
 It should take into consideration the benefits of specialization.
 It should not result in excess cost.
 It should give due consideration to Human Aspects.
Departmentalization takes place in various patterns like Departmentalization by
functions, products,customers, geographic location, process, and its combinations.

2.9.2 Functional Departmentalization

Functional Departmentalization is the process of grouping activities by functions
performed.
Activities can be grouped according to function (work being done) to pursue economies of
scale
by placing employees with shared skills and knowledge into departments for example human
resources, finance, production, and marketing. Functional Departmentalization can be used in
all types of organizations.

2.9.3 Product Departmentalization

Product Departmentalization is the process of grouping activities by product line.
Tasks can also be grouped according to a specific product or service, thus placing all
activities related to the product or the service under one manager. Each major product area in
the
corporation is under the authority of a senior manager who is specialist in, and is responsible
for, everything related to the product line. Dabur India Limited is the India’s largest
Ayurvedic medicine manufacturer is an example of company that uses product
Departmentalization.

2.9.4 Customer Departmentalization

Customer Departmentalization is the process of grouping activities on the basis of
common customers or types of customers. Jobs may be grouped according to the type of
customer served by the organization. The assumption is that customers in each department
have a common set of problems and needs that can best be met by specialists. UCO is the one
of the largest commercial banks of India is an example of company that uses customer
Departmentalization. Its structure is based on various services which includes Home loans,
Business loans, Vehicle loans and Educational loans.

2.9.5 Geographic Departmentalization

Geographic Departmentalization is the process of grouping activities on the basis of
territory. If an organization's customers are geographically dispersed, it can group jobs based
on geography. For example, the organization structure of Coca-Cola Ltd has reflected the
company’s operation in various geographic areas such as Central North American group,
Western North American group, Eastern North American group and European group.
2.9.6 Process Departmentalization
Geographic Departmentalization is the process of grouping activities on the basis of
product or service or customer flow. Because each process requires different skills, process
Departmentalization allows homogenous activities to be categorized. For example, Bowater
Thunder Bay, a Canadian company that harvests trees and processes wood into newsprint and
pulp. Bowater has three divisions namely tree cutting, chemical processing, and finishing
(which makes newsprint).

2.9.7 Martix Departmentalization

In actual practice, no single pattern of grouping activities is applied in the
organization structure with all its levels. Different bases are used in different segments of the
enterprise. Composite or hybrid method forms the common basis for classifying activities
rather than one particular method,. One of the mixed forms of organization is referred to as
matrix or grid organization’s According to the situations, the patterns of Organizing varies
from case to case. The form of structure must reflect the tasks, goals and technology if the
originations the type of people employed and the environmental conditions that it faces. It is
not unusual to see firms that utilize the function and project organization combination. The
same is true for process and project as well as other combinations. For instance, a large
hospital could have an accounting department, surgery department, marketing department,
and a satellite center project team that make up its organizational structure.
2.10 Committees:
2.11 Delegation of Authority

A manager alone cannot perform all the tasks assigned to him. In order to meet the targets,
the manager should delegate authority. Delegation of Authority means division of authority
and powers downwards to the subordinate. Delegation is about entrusting someone else to do
parts of your job. Delegation of authority can be defined as subdivision and sub allocation of
powers to the subordinates in order to achieve effective results.

2.11.1 Delegation Process

The steps involved in delegation ,

1. Allocation of duties – The delegator first tries to define the task and duties to the
subordinate. He also has to define the result expected from the subordinates. Clarity of duty
as well as result expected has to be the first step in delegation.
2. Granting of authority – Subdivision of authority takes place when a superior divides
and shares his authority with the subordinate. It is for this reason; every subordinate should
be given enough independence to carry the task given to him by his superiors. The managers
at all levels delegate authority and power which is attached to their job positions. The
subdivision of powers is very important to get effective results.

3. Assigning of Responsibility and Accountability – The delegation process does not end
once powers are granted to the subordinates. They at the same time have to be obligatory
towards the duties assigned to them. Responsibility is said to be the factor or obligation of an
individual to carry out his duties in best of his ability as per the directions of superior.
Therefore, it is that which gives effectiveness to authority. At the same time, responsibility is
absolute and cannot be shifted.

4. Creation of accountability – Accountability, on the others hand, is the obligation of

the individual to carry out his duties as per the standards of performance. Therefore, it is said
that authority is delegated, responsibility is created and accountability is imposed.
Accountability arises out of responsibility and responsibility arises out of authority.
Therefore, it becomes important that with every authority position an equal and opposite

responsibility should be attached. Therefore every manager, i.e., the delegator has to follow a
system to finish up the delegation process. Equally important is the delegatee’s role which
means his responsibility and accountability is attached with the authority over to here.

2.12 Centralization and Decentralization

2.12.1 Centralization
It is the process of transferring and assigning decision-making authority to higher
levels of an organizational hierarchy. The span of control of top managers is relatively broad,
and there are relatively many tiers in the organization.

2.12.2 Decentralization:
It is the process of transferring and assigning decision-making authority to lower
levels of an organizational hierarchy. The span of control of top managers is relatively small,
and there are relatively few tears in the organization, because there is more autonomy in the
lower ranks.
2.13 Staffing
Staffing involves filling the positions needed in the organization structure by
appointing competent and qualified persons for the job. The staffing process encompasses
man power planning, recruitment, selection, and training.

2.13.1 Manpower requirements: Manpower Planning which is also called as Human

Resource Planning consists of putting right number of people, right kind of people at the
right place, right time, doing the right things for which they are suited for the achievement of
goals of the organization. The primary function of man power planning is to analyze and
evaluate the human resources available in the organization, and to determine how to obtain
the kinds of personnel needed to staff positions ranging from assembly line workers to chief
executives.

2.13.2 Recruitment: Recruitment is the process of finding and attempting to attract job
candidates who are capable of effectively filling job vacancies. Job descriptions and job
specifications are important in the recruiting process because they specify the nature of the
job and the qualifications required of job candidates.

2.13.3 Selection: Selecting a suitable candidate can be the biggest challenge for any
organization. The success of an organization largely depends on its staff. Selection of the
right candidate builds the foundation of any organization's success and helps in reducing
turnovers.

2.13.4 Training and Development: Training and Development is a planned effort to

facilitate employee learning of jobrelated behaviors in order to improve employee performance.
Experts sometimes distinguish between the terms “training” and “development”; “training”
denotes efforts to increase employee skills on present jobs, while “development” refers to
efforts oriented toward improvements relevant to future jobs. In practice, though, the
distinction is often blurred (mainly because upgrading skills in present jobs usually improves
performance in future jobs).

2.14 Selection Process

Selecting a suitable candidate can be the biggest challenge for any organisation. The
success of an organization largely depends on its staff. Selection of the right candidate builds
the foundation of any organization's success and helps in reducing turnovers.

2.14.1 Initial Screening

This is generally the starting point of any employee selection process. Initial
Screening eliminates unqualified applicants and helps save time. Applications received from
various sources are scrutinized and irrelevant ones are discarded.

2.14.2 Preliminary Interview

It is used to eliminate those candidates who do not meet the minimum eligibility
criteria laid down by the organization. The skills, academic and family background,
competencies and interests of the candidate are examined during preliminary interview.
Preliminary interviews are less formalized and planned than the final interviews. The
candidates are given a brief up about the company and the job profile; and it is also examined
how much the candidate knows about the company. Preliminary interviews are also called
screening interviews.
2.14.3 Filling Application Form
An candidate who passes the preliminary interview and is found to be eligible for the
job is asked to fill in a formal application form. Such a form is designed in a way that it
records the personal as well professional details of the candidates such as age, qualifications,
reason for leaving previous job, experience, etc.

2.14.4 Personal Interview

Most employers believe that the personal interview is very important. It helps them in
obtaining more information about the prospective employee. It also helps them in interacting
with the candidate and judging his communication abilities, his ease of handling pressure etc.
In some Companies, the selection process comprises only of the Interview.

2.14.5 References check

Most application forms include a section that requires prospective candidates to put
down names of a few references. References can be classified into - former employer, former
customers, business references, reputable persons. Such references are contacted to get a
feedback on the person in question including his behaviour, skills, conduct etc.

2.14.6 Background Verification

A background check is a review of a person's commercial, criminal and (occasionally)
financial records. Employers often perform background checks on employers or candidates
for employment to confirm information given in a job application, verify a person's identity,
or ensure that the individual does not have a history of criminal activity, etc., that could be an
issue upon employment.

2.14.7 Final Interview

Final interview is a process in which a potential employee is evaluated by an
employer for prospective employment intheir organization.

2.14.8 Physical Examination

If all goes well, then at this stage, a physical examination is conducted to make sure that
the candidate has sound health and does not suffer from any serious ailment.
2.15 STAFFING
 DIRECTING & CONTROLLING

2.16 DIRECTING

Introduction

Directing is said to be a process in which the managers instruct, guide and oversee the
performance of the workers to achieve predetermined goals. Directing is said to be the
heart of management process. Planning, organizing, staffing has got no importance if
direction function does not take place.

In simple words, it can be described as providing guidance to workers is doing work. In

field of management, direction is said to be all those activities which are designed to
encourage the subordinates to work effectively and efficiently.

Pre-Requisite Discussion

The student should be familiar with the path to be followed and the hurdles, Merits and
demerits in the ongoing path and evaluation points have to be analyzed.

2.16.1 Definition

"Activating deals with the steps a manager takes to get sub-ordinates and others to carry
out plans" - Newman and Warren. It is the final action of a manager in getting others to
act after all preparations have been completed.
2.17 Motivation

According to Koontz and O'Donnell, "Motivation is a class of drives, needs, wishes and
similar "Motivation" is a Latin word, meaning "to move". Human motives are internalized
goals within individuals. Motivation may be defined as those forces that cause people to
behave in certain ways. Motivation encompasses all those pressures and influences that
trigger, channel, and sustain human behaviour. Most successful managers have learned to
understand the concept of human motivation and are able to use that understanding to achieve
higher standards of subordinate work performance forces".
2.18 Nature of Motivation
2.19 Motivation Theories
2.20 Communication

Communication is the exchange of information using a shared set of symbols. It is the

process that links group members and enables them to coordinate their activities. Therefore,
when managers foster effective communication, they strengthen the connections between
employees and build cooperation. Communication also functions to build and reinforce
interdependence between various parts of the organization. As a linking mechanism among
the different organizational subsystems, communication is a central feature of the structure of
groups and organizations. It helps to coordinate tasks and activities within and between
organizations.

2.20.1 Definition

According to Koontz and O'Donnell, "Communication, is an intercourse by words, letters

symbols or messages, and is a way that the organization members shares meaning and
understanding with another".
2.21 Leadership

2.21.1 Definition

Leadership is defined as influence, the art or process of influencing people so that they will
strive willingly and enthusiastically toward the achievement of group goals. - Leaders act to
help a group attain objectives through the maximum application of its capabilities. - Leaders
must instill values – whether it be concern for quality, honesty and calculated risk taking or
for employees and customers.

Importance of Leadership
 Aid to authority
 Motive power to group efforts
 Basis for co operation
 Integration of Formal and Informal Organization.

Behavioral Theory:
Assumptions
• Leaders can be made, rather than are born.
• Successful leadership is based in definable, learnable behavior.

Description

Behavioral theories of leadership do not seek inborn traits or capabilities. Rather, they look at
what leaders actually do. If success can be defined in terms of describable actions, then it
should be relatively easy for other people to act in the same way. This is easier to teach and
learn then to adopt the more ephemeral 'traits' or 'capabilities'.
2.22 COORDINATION
2.23 CONTROLLING

Introduction

Controlling consists of verifying whether everything occurs in conformities with the plans
adopted, instructions issued and principles established. Controlling ensures that there is
effective and efficient utilization of organizational resources so as to achieve the planned
goals. Controlling measures the deviation of actual performance from the standard
performance, discovers the causes of such deviations and helps in taking corrective actions

Pre Requisite Discussion

The students should be familiar with the task of evaluating the process and the tools used to
control the variations involved in the process of execution.

2.23.1 Definition
A process of monitoring the performance and taking action to ensure desired results.
It sees to it that the right things happen, in the right ways, and at the right time.

Nature & Purpose of Control

 Control is an essential function of management
 Control is an ongoing process
 Control is forward – working because pas cannot be controlled

 Control involves measurement

 The essence of control is action
 Control is an integrated system

2.23.2 Control Process

The basic control process involves mainly these steps

2.23.2.1 The Establishment of Standards:

Because plans are the yardsticks against which controls must be revised, it follows logically
that the first step in the control process would be to accomplish plans. Plans can be
considered as the criterion or the standards against which we compare the actual performance
in order to figure out the deviations.
2.23.2.2 Measurement of Performance:

The measurement of performance against standards should be on a forward looking basis so

that deviations may be detected in advance by appropriate actions. The degree of difficulty in
measuring various types of organizational performance, of course, is determined primarily by
the activity being measured. For example, it is far more difficult to measure the performance
of highway maintenance worker than to measure the performance of a student enrolled in a
college level management course.

2.23.2.3 Comparing Measured Performance to Stated Standards:

When managers have taken a measure of organizational performance, their next step in
controlling is to compare this measure against some standard. A standard is the level of
activity established to serve as a model for evaluating organizational performance. The
performance evaluated can be for the organization as a whole or for some individuals
working within the organization. In essence, standards are the yardsticks that determine
whether organizational performance is adequate or inadequate.

2.23.2.4 Taking Corrective Actions:

After actual performance has been measured compared with established performance
standards, the next step in the controlling process is to take corrective action, if necessary.
Corrective action is managerial activity aimed at bringing organizational performance up to
the level of performance standards. In other words, corrective action focuses on correcting
organizational mistakes that hinder organizational performance. Before taking any corrective
action, however, managers should make sure that the standards they are using were properly
established and that their measurements of organizational performance are valid and reliable.