Organizing

Organizing is the process of arranging resources and tasks in a way that helps an organization achieve its goals.
Imagine you're planning a big party. You need to decide who will handle invitations, food, decorations, and
entertainment. That's organizing.

Organizational Structure

This refers to how roles, responsibilities, and authority are arranged within an organization. Think of it as the blueprint
of how a company operates, showing who does what and who reports to whom.

Organizational Chart

An organizational chart is a visual representation of the organizational structure. It’s like a family tree but for a
business, showing the hierarchy and relationships between different positions.

Organizational Design

Organizational design is the process of creating or reshaping an organization's structure. It's like designing the layout
of a new house to make sure everything is in the right place for efficiency and comfort.

Six Elements of Organizational Design

1. Work Specialization

Work specialization, also known as division of labor, involves dividing tasks into distinct jobs. This allows employees
to focus on specific tasks and become experts in their areas, leading to increased efficiency.

Example: In a manufacturing plant, one worker might be responsible for assembling engines, another for painting the
car bodies, and yet another for installing the interior. Each worker specializes in a specific task, making the production
process faster and more efficient.

2. Departmentalization

Departmentalization is the grouping of jobs into units or departments based on certain criteria. This helps in
organizing work and ensuring that related tasks are managed together.

Types of Departmentalization:

 Functional Departmentalization: Grouping jobs by functions (e.g., marketing, finance, human resources).
Example: All marketing activities are handled by the marketing department.
 Geographical Departmentalization: Grouping jobs based on location (e.g., regions, countries). Example: A
multinational company may have separate departments for North America, Europe, and Asia.
 Product Departmentalization: Grouping jobs based on products or product lines. Example: A consumer
goods company might have separate departments for personal care products, household products, and food
items.
 Process Departmentalization: Grouping jobs based on the stages in a production process. Example: In a
textile mill, there might be separate departments for spinning, weaving, and finishing.
 Customer Departmentalization: Grouping jobs based on customer types or needs. Example: A bank may
have separate departments for personal banking, business banking, and wealth management.

3. Chain of Command

Chain of command refers to the line of authority within an organization, determining who reports to whom.

Components:
  Authority: The right to give orders and make decisions. Example: A manager has the authority to assign tasks
to their team members.
 Staff Authority: Support roles that advise and assist but don't have direct authority over others. Example: The
HR department provides support and advice to all employees but doesn't manage their daily tasks.
 Line Authority: Direct control over subordinates. Example: A production manager has direct control over the
factory workers.
 Unity of Command: Each employee should report to only one manager to avoid confusion. Example: A sales
representative should report to the sales manager, not to multiple managers.

4. Span of Control

Span of control affects how closely managers can supervise employees. A wider span of control means managers have
more employees under them, which can increase efficiency but might reduce the ability to closely supervise each
employee. A narrower span allows for closer supervision but might require more managers.

Example: In a small retail store, the manager might directly oversee all employees (wide span of control). In a large
corporation, a manager might oversee only a few team leaders, who in turn oversee other employees (narrow span of
control).

5. Centralization and Decentralization

Centralization and decentralization affect how decisions are made and can impact the responsiveness and flexibility of
an organization.

 Centralization: Decision-making is concentrated at the top. This can lead to consistent and uniform
decisions, but may slow down the response time to local issues. Example: A centralized government makes
most policy decisions at the national level.
 Decentralization: Decision-making is distributed among various levels of the organization, allowing for
quicker responses to local conditions and employee empowerment. Example: A large retail chain like
Walmart allows store managers to make decisions about local marketing and inventory based on the specific
needs of their store.

6. Formalization

Formalization ensures consistency and predictability in how tasks are performed and how employees behave. High
formalization means that there are clear, written rules and procedures that employees must follow.

Example: In a fast-food restaurant like McDonald’s, there are detailed procedures for everything from how to cook
fries to how to greet customers. These standardized procedures ensure that every customer receives the same
experience regardless of which location they visit.

Mechanistic and organic structures

Mechanistic Structure

A mechanistic structure is a rigid and hierarchical organizational structure characterized by high levels of
formalization, centralization, and specialization. It follows a top-down approach to management, with clear lines of
authority and strict rules and procedures.

Example:

A classic example of a mechanistic structure is a manufacturing company like Ford Motor Company in the early 20th
century. The assembly line production required a highly structured environment with specific, repetitive tasks for each
worker. Managers had clear authority, and decision-making was centralized at the top. Workers followed strict
procedures to ensure uniformity and efficiency.

Organic Structure
An organic structure is a flexible and decentralized organizational structure characterized by low levels of
formalization, decentralization, and a focus on collaboration and adaptability. It encourages employee participation
and supports a more dynamic approach to management.

Example:

A good example of an organic structure is a technology startup. In a startup environment, there are fewer rules and
procedures, and decision-making is often decentralized, allowing employees at different levels to contribute to
important decisions. Employees may take on multiple roles and collaborate closely with each other to adapt quickly to
changing market demands and innovate new products.

Contingency factors affecting structural choices

1. Strategy and Structure

The organizational structure should align with the organization's strategy to effectively support its goals and
objectives. Different strategies require different structures:

 Cost Leadership Strategy: Emphasizes efficiency and cost reduction. Requires a mechanistic structure with
high formalization and centralization to maintain strict control over operations and minimize costs.
 Differentiation Strategy: Focuses on creating unique products or services. Requires an organic structure with
low formalization and decentralization to foster creativity and innovation.
 Growth Strategy: Aims to expand the organization's market presence. May require a combination of
mechanistic and organic structures to balance control and flexibility.

Example: A company pursuing a differentiation strategy like Apple focuses on innovation and unique product
designs. This requires an organic structure with flexible roles, decentralized decision-making, and a collaborative
environment to foster creativity and rapid adaptation to market changes.

2. Size and Structure

The size of an organization significantly impacts its structure. As organizations grow, they often become more
complex and require more formalization, specialization, and hierarchical levels:

 Small Organizations: Tend to have informal, flexible structures with fewer rules and levels of hierarchy.
 Medium-Sized Organizations: Begin to develop more formalized structures with defined roles and
procedures.
 Large Organizations: Require highly formalized and specialized structures with clear hierarchies to manage
the complexity and scale of operations.

Example: A small startup with 15 employees operates with an informal, organic structure where employees take on
multiple roles and collaborate closely. As the startup grows into a large corporation with thousands of employees, it
adopts a more formalized, mechanistic structure with defined departments, roles, and procedures to efficiently manage
the increased complexity.

3. Technology and Structure

The type of technology an organization uses influences its structure. Technologies that vary in complexity and routine
nature require different structural arrangements:

 Routine Technology: Involves standardized and repetitive tasks. Best suited to a mechanistic structure with
high formalization and specialization to ensure consistency and efficiency.
 Non-Routine Technology: Involves complex and variable tasks. Best suited to an organic structure with low
formalization and flexibility to adapt to changing requirements.
 Mediating Technology: Connects different parties. Requires a structure that facilitates coordination and
communication.
 Long-Linked Technology: Sequentially interdependent tasks. Benefits from a structured approach to manage
dependencies effectively.
Example: A research and development (R&D) firm uses non-routine technology involving complex, variable tasks
that require creative problem-solving. This necessitates an organic structure with low formalization, decentralized
decision-making, and a collaborative environment to facilitate innovation and adaptability.

4. Environmental Uncertainty and Structure

The level of uncertainty in the external environment affects the organization's structure. Organizations operating in
stable environments can benefit from mechanistic structures, while those in dynamic environments need organic
structures to remain responsive and adaptable:

 Stable Environment: Characterized by predictable and consistent conditions. Suits a mechanistic structure
with high formalization and centralization to maintain control and efficiency.
 Dynamic Environment: Characterized by rapid and unpredictable changes. Requires an organic structure
with low formalization and decentralization to quickly respond to changes and seize opportunities.
 Complex Environment: Involves multiple and interdependent external factors. Needs a flexible structure that
can navigate and integrate various influences.
 Simple Environment: Involves few external factors. Can operate efficiently with a straightforward structure.

Example: A tech company operating in the fast-paced and dynamic technology industry faces constant changes in
market demands and technological advancements. This necessitates an organic structure with flexible roles,
decentralized decision-making, and a collaborative culture to swiftly adapt to changes and drive innovation

traditional organization design option

1. Simple Structure

The simple structure is the most basic type of organizational design. It has minimal hierarchy, few rules, and direct
supervision. This structure is usually found in small businesses where the owner makes most of the decisions.

Example: Imagine a local bakery owned by a single person. The owner manages everything—baking, selling,
marketing, and finances. The owner may have a few employees who help with baking and serving customers, but the
owner makes all the important decisions and directly oversees the employees.

2. Functional Structure

The functional structure groups employees based on their specialized functions or roles within the organization. Each
department focuses on a specific area of expertise, such as marketing, finance, or production.

Example: Consider a small manufacturing company with different departments. There's a Marketing Department
responsible for promoting products, a Finance Department handling budgets and financial records, and a Production
Department managing the manufacturing process. Each department has a manager who oversees the specific
functions and reports to the top management.

3. Divisional Structure

The divisional structure organizes the company into semi-autonomous divisions based on products, services, or
geographical areas. Each division operates like a separate business with its own resources and management.

Example: Think of a large company like Procter & Gamble, which has different divisions for various product lines
such as beauty care, household cleaning, and health products. Each division has its own management team, marketing
strategies, and production facilities. They operate independently but follow the overall company's policies and goals.

organizing for flexibility in the twenty first century.

1. Team Structure
Team structure involves organizing employees into groups or teams that work together towards common goals. This
fosters collaboration and flexibility, allowing for quicker decision-making and problem-solving.

Example: In a software development company, there might be a team dedicated to creating a new app. This team
includes developers, designers, testers, and project managers who work together closely to develop the app efficiently.

2. Matrix and Project Structures

The matrix structure combines functional and divisional approaches, allowing employees to report to multiple
managers for different projects. Project structures are similar but focus specifically on temporary projects.

Example: In a construction company, an engineer might report to both the head of engineering (functional manager)
and the project manager of a specific construction project. This allows for efficient resource allocation and expertise
sharing.

3. The Boundaryless Organization

A boundaryless organization removes traditional barriers between departments and the external environment. It
emphasizes open communication, collaboration, and flexibility, often leveraging technology to connect people.

Example: A global consulting firm uses video conferencing and collaborative software to connect employees across
different countries and departments, enabling them to work together seamlessly on client projects.

4. Telecommuting

Telecommuting allows employees to work from locations outside the traditional office, typically from home. This
provides flexibility and can improve work-life balance.

Example: A graphic designer works from home, using their computer to create designs and communicate with clients
via email and video calls. This allows the designer to work in a comfortable environment and manage their own
schedule.

5. Compressed Workweeks, Flextime, Job Sharing

These are flexible work arrangements that cater to employees' diverse needs:

 Compressed Workweeks: Employees work longer hours per day but fewer days per week.
 Flextime: Employees choose their work hours within a set range.
 Job Sharing: Two part-time employees share the responsibilities of one full-time position.

Example: In a marketing agency:

 An employee works a compressed workweek of 10 hours per day, Monday to Thursday, and has Fridays off.
 Another employee has flextime, arriving at work between 7 and 10 AM and leaving between 3 and 6 PM,
depending on their preference.
 Two employees job share the role of a social media manager, each working part-time and ensuring the
responsibilities are covered.

6. The Contingent Workforce

The contingent workforce consists of temporary, part-time, or freelance workers who are hired on an as-needed basis.
This allows organizations to be more flexible and adapt to changing workload demands.

Example: A retail store hires extra staff during the holiday season to handle the increased customer traffic. These
contingent workers help manage the workload during the busy period and are not needed year-round