Organizing

• “Organizing is determining what tasks are to be

done, who is to do them, how the tasks are to be
grouped, who reports to whom, and where
decisions are to be made” Stephen Robbins &
Mary Coulter.
• “The process of identifying and grouping work to
be performed, defining & delegating
responsibility & authority and establishing
relationship for the purpose of enabling people
to work most effectively together in
accomplishing objectives” L A Allen
 Benefits of Organizing
• Helps individual to develop clear picture of tasks
he or she is expected to accomplish
• Support planning and control activities by
establishing accountability and an appropriate
line of authority.
• Creates channel of communication and thus
support decision making and control
• Helps maintain the logical flow 0f work activities,
thus help individuals and work groups to easily
accomplish their tasks.
 Cont..
• Helps an organization make efficient use of it’s
resources and conflict and duplication of efforts.
• Coordinates activities that are diverse in nature
and helps build harmonious relationship among
members involved in those activities.
• Helps managers to focus task efforts such that
they are logically and efficiently related to a
common goal.
 Formal & Informal
Organizations
• Formal organization is a group of people working
together cooperatively, under authority, towards
goal that mutually benefit the participants and
the organization. It is a system of well defined
jobs, each bearing a definite measure of
authority, responsibility and accountability.
• Informal organization is a network of personal
and social relations not established or required
by the formal organization but arising
spontaneously as people associated with one
another.
 Difference between Formal &
Informal Organizations
Formal Basis of Informal
Organization Comparison Organization
Official General Nature Unofficial

Authority & Responsibility Major Concepts Power & politics

Position Primary Focus Person

Delegated by Management Source of leader power Given by group

Rules Guidelines for Behavior Norms

Rewards and Penalties Source of control Sanctions

 Process of Organizing
• The objective of organization should be established
• The supporting objectives, policies and plans should be
formulated
• The activities required to achieve the objectives should
be identified and classified
• The best way of grouping the activities and utilizing the
available human and material resource should be
chosen
• Authority should be delegated to the head of each group
so that they can perform their activities
• Various groups should be connected to each other, both
horizontally as well as vertically, by means of authority
relationship and information flows.
 Organization Structure
Tall Structure:
• As number of levels increase, the effort and
expenditure involved in managing them also increase.
(Overheads)
• Comprises many hierarchical levels with narrow span
of control
• Communications (objectives, policies, plans,
procedures) get unduly complicated
• Numerous departments and levels make the planning
and controlling tasks complicated as plans made at
top levels may be definite but as it is subdivided at
lower level, it may lose it’s clarity
 Cont…
Flat Structure:
• Wide span of control and fewer hierarchical levels
• Tasks are highly interrelated as a result control and
coordination negatively affected
• Factors that determine an organization’s span of control
are the amount of time spent by the supervisor with his
subordinates, the flow of communication in the
organization and the capability of the supervisor.
• Poor span poses problems such as over supervision,
delay in decisions, problem in communication, decrease
level of initiative and moral, less opportunity for
responsibility and development and higher costs.
 Line and Staff Relationship
• Line functions are those which directly influence
the accomplishment of organizational objectives.
• Staff functions are those which facilitates the
work of the line personnel.
• In manufacturing firm, production, sales and
finance are considered as line functions while
purchasing, accounting, personnel, plant
maintenance and quality control are considered
staff functions.
 Cont..
• Line and staff functions are defined on the basis of two
view points. The functional and Authority relationship
viewpoint
• Line functions have direct responsibility for
accomplishing organizational objective and staff
functions is to help line to work more effectively in
achieving objectives.
• Line authority is the direct authority exercised by a
superior over his subordinate so that his orders and
instructions are carried out in proper manner. Thus
line managers have right to decide and right to direct.
 Cont…
• Organizational objective determine the line
and the staff function.
• What is considered as staff function in one
organization can be line function in
another.
• Example recruitment in manufacturing
company and placement agency.
 Centralization and
Decentralization
• Important aspect in managerial function of
organizing is the degree to which centralization
or Decentralization exists in formal organization
structure.
• Centralization refers to retention of control by top
management in the area of decision making.
• Decentralization refers to the participation of
employees in decision making process.
 Cont..
• The terms centralization & decentralization can
also be used in a different context to refer the
organizational aspects such as administrative
processes, location of the firm, different
functions that are being carried out, and the
extent to which authority is delegated.
• Centralization is the systematic and consistent
reservation of authority at central points within
organization and Decentralization applies to the
systematic delegation of authority. Louis A. Allen
 Factors Influencing Centralization
and Decentralization
History of an organization:
• The manner in which organization has built up
over time.
• Organization that is primarily built by an
individual’s efforts tend to have highly
centralized structures.
• Organizations that have grown through
number of mergers and consolidations tend to
stay decentralized.
 Cont..
Availability of competent managers:
• The degree of decentralization is
influenced by availability of competent
managers.
• Competent managers have a higher need
of autonomy.
• Decentralization provides a training base
for managers and improve their ability to
manage under various situations.
 Cont…
Size of the Organization:
• As organization grows in size, there is an increasing
tendency to decentralize it’s operations.
• In large organizations numerous decisions have to be
taken at different places and thus it becomes difficult to
coordinate the functions of different departments.
• Particular decision requiring interaction of managers at
various levels is a time consuming process and may
prove costly for organization.
• Thus to avoid slow decision making Decentralization is
imp.
• Decentralization in large organization enables them to
operate as a group of small independent units thus
reducing the workloads of managers.
 Cont..
Geographical Dispersion:
• Decentralization is effective for
organizations which have operations in
different locations.
• Top management may not be aware of
local conditions and problems.
• Control exercised by the top management
from the headquarters may be ineffective.
 Cont…
Technical complexity of Task:
• Technology has changed rapidly over the years
and there is a growing need of specialist who
can understand it.
• It is impossible for top level management to
keep track of all technological advances and
handle technology related issues.
• Authority in such cases can be given to experts
in the concerned fields.
 Cont…
Time Importance of Decision:
• Decisions which involving high risk and costs are
made by top management.
• Decisions involving routine and low risk activities
are delegated to subordinates.
Time Frame of Decision:
• In decentralized organizations , the authority to
make decision lies with head of unit and
therefore decisions can be made faster.
 Cont..
Planning and control procedures:
• To be effective, decentralization should be supported
by a well defined system of control procedures.
• Greater the degree of development and use of control
techniques, the better are the chances of effective
decentralization.
Views of Subordinates:
• Willingness to take higher responsibilities.
• Some may try to make best use of abilities while some
may take it as a threat.