PoM- Module 2

Organising
 Organizing
Important managerial function
1. Formalizing – making rules and regulation
2. Departmentalization- grouping of
activities
3. Staffing- recruitment and selection
4. Fixing responsibility and accountability
5. Providing authority- power to give orders
and get the work.
6. Delegating- empowering
7. Control- supervision
8. Direction- source of instruction
Characteristics of organizations

1. Organizations are social entities

2. Organizations are goals directed
3. Organizations are relatively
permanent
4. Organizations have structure-
horizontal & vertical
5. Organizations interact with
environment as open systems
6. Organizations are pyramidical in shape
 Types of organizations
1. Mutual benefit organizations-
cooperative societies, social clubs
2. Business organization- profit making
3. Social service organizations –
charities, religious places
4. Public service organizations- police,
military, postal service
5. Formal organizations – defined
structure and authority
6. Informal organizations- without
defined structure or authority
 Importance of organization
1. Helps people to work together
2. Facilitates performance
3. Helps growth and
diversification
4. Optimum use of resources
5. Stimulates creativity
6. Delegates-authority
7. Fixes accountability
8. Brings order/system
Why form organizations
•To eliminate the individual
limitations
•To compress the time needed for
performance
•To benefit by accumulated expertise
•To create economy of scale
•To help and to be helped by one
another
 Scope of organization

 Multiple levels-top, middle,

bottom
 Multiple functions- finance,
HR, marketing
 Multiple vocations-commerce,
politics, social service, religion
 Wherever there is organized
activities by groups of people
 Informal organization

1. Natural union of people

without any formal structure
It is based on
 Common characteristics of
members as well as
 Uniqueness of certain
members.
 Informal organization
• Spontaneous and flexible structure
• It is not different from its members
• Fluid- may not last longer
• Unwritten rules- lot of flexibility
• Small and temporary

01/14/2021 Dr.Meera Uday 9

 Why people form informal
organizations

Propinquity- proximity
Similarity – of needs, attitudes,
priorities
Complementarities-
complementary needs
Interaction – communicating more
often
Frequent meetings- often coming
together
 Why people form informal
organizations

Social overlays- similarities

Functional overlays- special
expertise
Decision overlays- Age, maturity,
judgement
Power overlays: More power than
(officially granted) authority
Communication overlays: more
options for communication
 How do members benefit from
informal organization?

Sense of belongingness
Safety
Aid on the job
Recreation
Communication
Social control
Check on the authority
Drawback of informal organization

Resistance to change
Sub optimization –common
goals difficult to achieve
Rumour-grapevine
Group thinking
Organizational structure

Ways, in which tasks are formally

divided, grouped and coordinated
 Types of structure

1. Simple structure
2. Bureaucracy
3. Matrix structure
4. Team structure
5. Virtual organisation
6. Boundary less orgainsation
 Simple structure

Owner

textiles Steel Cement Tea

01/14/2021 Dr.Meera Uday 16

 Bureaucracy
Routine tasks
High specialization
Formal rules and regulations
Departmentalization
Centralised authority
Narrow span of control
Decisions are through chain of
command.
 Bureaucracy

Chairman

01/14/2021 Dr.Meera Uday 18

 Matrix structure

Dual lines of authority

Combination of functional and
product departmentalization
 Matrix structure
Project Engineering Sales
Manager Mfg Manager Manager Manager
Project A Anand Bharath Chethan
Manager
Project B Dinesh Eshwar Mahesh
Manager
Project C Girish Harish Rajesh
Manager

01/14/2021 Dr.Meera Uday 20

 Team structure
 Use of
teams as
 the central
device
 to
coordinate
work
activities
01/14/2021 Dr.Meera Uday 21
 Virtual organizations

A small core organization that

out sources major business
functions
Boundary less organization

No chain of command

Larger span of control
No departmentalization
Work with empowered teams.
 Boundary less structure

01/14/2021 Dr.Meera Uday 24

 What factors determine the
organizational structure?

Nature of work
Business strategy –innovation,
cost, speed, quality
Organizational size
Technology
Environmental factors
Maturity of people capability
Locational advantages
 DEPARTMENT
• A DISTINCT AREA, DIVISION OR BRANCH OF
AN ORGANISATION OVER WHICH A MANAGER
HAS AUTHORITY FOR THE PERFORMANCE OF
SPECIFIED ACTIVITIES

• EG: FINANCE DEPARTMENT PRODUCTION

DEPARTMENT, HR DEPARTMENT, MARKETING
DEPARTMENT

01/14/2021 Dr.Meera Uday 26

Types of departmentalization

1. Functional departmentalization
2. Product departmentalization
3. Customer departmentalization
4. Geographical departmentalization
5. Matrix departmentalization- functional
and product
6. Divisional departmentalization – profit
centres/ business divisions
 1.Functional Department

CEO

HR Marketing Finance Production

Department Department Department Dperatment

01/14/2021 Dr.Meera Uday 28

 2.Product Departmentalization
Eg: LG Products
Consumer Electronics

Washing
TV Mobile
Machines

01/14/2021 Dr.Meera Uday 29

 3.Customer Departmentalization

Life style Products

High End Middle class Low end

Customers Customers Customers

01/14/2021 Dr.Meera Uday 30

 4.Geographical Departmentalization

Asian Sales Region

South east
West Asia Asia Pacific South Asia
Asia

01/14/2021 Dr.Meera Uday 31

 5.Matrix Departmentalization
Manageme B.Com BBM MBA
nt and
Commerce
HOD
Marketing A B C
HR D E F
Finance G H I

01/14/2021 Dr.Meera Uday 32

 6.Divisional Departmentalization

Banking Industry

Urban Semi urban

Rural Customers
Customers Customers

01/14/2021 Dr.Meera Uday 33

Purpose of departmentalization

Streamlining processes
Utilization of specialization
Simplifying the work
Increasing focus
Improving efficiency
Ensuring success
Fixing accountability and
responsibility
 Unity of command
• Unity of Command
• Each individual participating in the operation reports
to only one supervisor. This eliminates the potential
for individuals to receive conflicting orders from a
variety of supervisors, thus increasing accountability,
preventing freelancing, improving the flow of
information, helping with the coordination of
operational efforts, and enhancing operational
safety.

01/14/2021 Dr.Meera Uday 35

 Chain of command
• It is the continuous line of authority that extends
from the higher organizational levels to the lowest
levels and clarifies who reports to whom. The
concepts related to chain of command are:
authority, responsibility and unity of command.
• Authority refers to the right entrusted to managers
to enable them to tell their subordinates what to
do and expect them to do it.
• Responsibility is the obligation to perform any
assigned duties.

01/14/2021 Dr.Meera Uday 36

 The Chain of Command
Chief Executive
Officer

Executive Executive
President
Vice President Vice President

Vice Vice Vice Vice Vice

President President President President President

Region Region Region Region Region

1 2 3 4 5

District District District District District District District

A B C D E F G

01/14/2021 Dr.Meera Uday 37

 Span of control

The number of subordinates any

manager can control
Narrow span of control- lesser
number of subordinates to control
Wider span of control- larger
number of subordinates to control
 Span of control-determining
factors

Similarity of functions
Complexity of functions
Geographical distance
Nature and Extent of coordination
Capability of subordinates
Risk level –high or low
 ORGANISATION WITH NARROW SPAN OF
CONTROL

General Manager

Sr. Manager Sr. Manager

Sr. Manager

01/14/2021 Dr.Meera Uday 40

 ORGANISATION WITH NARROW SPAN OF
CONTROL
DISADVANTAGES
ADVANTAGES • TOO MUCH OF
• CLOSE SUPERVISION
SUPERVISION • MANY LEVELS OF
• CLOSE CONTROL MANAGEMENT
• FAST • HIGH COSTS DUE TO
COMMUNICATION MANY LEVELS
BETWEEN • EXCESSIVE
SUBORDINATES DISTANCE BETWEEN
AND SUPERIORS LOWEST AND
HIGHEST LEVEL

01/14/2021 Dr.Meera Uday 41

 ORGANISATION WITH WIDE SPAN OF
CONTROL
Manager

Asst Asst Asst Asst

Asst
Manager Manager Manager Manager
Manager

01/14/2021 Dr.Meera Uday 42

 ORGANISATION WITH WIDE SPAN OF
CONTROL

ADVANTAGES DISADVANTAGES
• SUPERIORS ARE • OVERLOADED
FORCED TO SUPERIORS
DELEGATE • DECISION
• CLEAR POLICIES BOTTLENECK
MUST BE MADE • LOSS OF
• SUBORDINATES CONTROL
MUST BE • REQUIRES VERY
CAREFULLY GOOD QUALITY
SELECTED OF MANAGERS

01/14/2021 Dr.Meera Uday 43

 Centralization and Decentralization

• Centralization-authority rests
with top management
• Decentralization- authority is
delegated to lower rung
employees

01/14/2021 Dr.Meera Uday 44

 Factors determining decentralization
• Mission and vision
• Size and complexity of business
• Location of production and market
• Capability of people
• Need for involvement and creativity
• Time demands
• Communication channels
• Nature of work
• Standardization of process
• Environmental factors
01/14/2021 Dr.Meera Uday 45
 DELEGATION

DELEGATION
Fundamental aspect of manager’s job;
Transferring a task or procedure to someone else!

01/14/2021 Dr.Meera Uday 46

 Delegation:

“Transferring responsibility for the

performance of an activity from
one individual to another while
retaining the accountability for the
outcome”

01/14/2021 Dr.Meera Uday 47

 What to delegate?
• Things subordinate can do better

• Things subordinate needs to do for

growth

• Operational work

• Things for which you don’t have time

01/14/2021 Dr.Meera Uday 48

 Supervision:

“Providing guidance for the

accomplishment of a taskor activity
withdirection, periodic inspectionof
accomplishment”…“functionof
qualification”

01/14/2021 Dr.Meera Uday 49

 WHATDELEGATIONISNOT

• “dumping” work indiscriminately

• giving orders
• abdicating control or responsibility

01/14/2021 Dr.Meera Uday 50

 Delegation implies that the
subordinate is given the
authority to do the job, can
make independent decisions,
and has the responsibility for
seeing that the job is done well.

01/14/2021 Dr.Meera Uday 51

 Why delegate? (Benefits)

• Saves time

• Develop people’s skills and abilities

• Motivates people involved

01/14/2021 Dr.Meera Uday 52

 Delegation involves:
• Determination of the task to be
accomplished
• Assessment of each person’s competency
• Amount of decision making needed
• Level of supervision available

01/14/2021 Dr.Meera Uday 53

 SIX PRINCIPLES OF
DELEGATION
1. Know yourself and team members
2. Assess strengths, weaknesses, job, situation and
skills
3. Understand the state practice act, limitations, and
job descriptions
4. Know the job requirements
5. Keep communication clear, complete and constant
6. Evaluate-review what happened/measure results

01/14/2021 Dr.Meera Uday 54

 FOUR BASIC STEPS:
1. Select a capable person
2. Explain the task and outcomes to occur
3. Give the necessary authority and means for
doing the job
4. Arrange to keep in contact and give
feedback.

01/14/2021 Dr.Meera Uday 55

 VERBALANDWRITTEN
INSTRUCTIONSAND/OR
DETAILS

01/14/2021 Dr.Meera Uday 56

 PITFALLSOFDELEGATION
• Manager’s reluctance to “give away”
• Feeling that need todoit yourself
• Lack of confidence in subordinate
• Fear of losing authority
• Name others!

01/14/2021 Dr.Meera Uday 57

 ACCOUNTABILITY

“Being obligated to answer for one’s

acts, including the act of
supervision.”

01/14/2021 Dr.Meera Uday 58

 LEADERS/MANAGERS
SHOULDNEVER ATTEMPTTO
DELEGATE:
• Personal accountability
• Discipline of employees
• Recognition and praise/actions associated
with morale and related motivation

01/14/2021 Dr.Meera Uday 59

 Organizational design and configuration

• Developments in or changes to the structure

of an organization

01/14/2021 Dr.Meera Uday 60

 Organisational design can be part of the
requirement or just a consequence

01/14/2021 Dr.Meera Uday 61