Organizing

ABM I- Organization and Management

Expectations
After reading this module, you are expected to know:
• The concept of organizing
• The three dimension of organizing
• Why organization is important
• The twin concepts of organizing
• The five steps of organizing process
• The functions of organizing
• How organizing is achieved
• The division of labor; its advantage and disadvantage
• Specialization, work simplification, and standardization
• Potential problems of specialization and some solutions.
• Coordinating mechanisms of divided tasks.
Expectations
• Five possible ways and guidelines to departmentalization
• Seven habits to stay organized
• Formal organizations and standardization
• Bureaucratic and organic structure.
• Forms of restructuring and designing the organization
• New organizational forms and structures within organization
• Evolution of organization
• Characteristics of service organization
• Staffing, concepts, theories, and practices.
Chain of Command
• An unbroken line of authority that links all individuals in the
organization and specifies who reports to whom.
• Unity of command- one employee is held accountable to only one
supervisor.
• Scalar principle- clearly defined line of authority in the organization
that includes all employees.
Authority, Responsibility, Accountability
• Authority- formal and legitimate right of a manager to make
decisions, issue orders, and allocate resources to achieve
organizationally desired outcomes.
• Responsibility- duty to perform the task or activity an employee has
been assigned.
• Accountability- the fact that the people with authority and
responsibility are subject to reporting and justifying task outcomes to
those above them in the chain of command.
Delegation
• The process managers use to transfer authority and responsibility to
positions below them in the hierarchy.
• Organizations today tend to encourage delegation from highest to
lowest possible levels.
• Can improve flexibility to meet customers’ needs and adaptation to
competitive environments.
• Managers often find delegation difficult.
Types of Authority
• Line authority- in which individuals in management positions have the
formal power to direct and control immediate subordinates.
• Staff authority- granted to staff specialists in their areas of expertise.
Narrower than line authority and includes the right to advise,
recommend, and counsel in the staff specialists’ area of expertise. It is a
communication relationship with management. It has an influence that
derives indirectly from line authority at a higher level.
• Functional authority- in which individuals in management positions have
formal power over a specific subset of activities. A legal department, for
instance, may have functional authority to interfere in any activity that
could have legal consequences.
Span of Management
• Factors including larger span of management.
1. Work performed by subordinates is stable and routine.
2. Subordinates perform similar work tasks.
3. Subordinates are concentrated in a single location.
4. Subordinates are highly trained and need little direction in performing tasks.
5. Rules and procedures defining task activities are available.
6. Support systems and personnel are available for the managers.
7. Little time is required in non- supervisory activities such as coordination with
other departments or planning.
8. Managers’ personal preferences and styles favor a large span.
Tall versus flat structure
• Tall- a management structure characterized by an overall narrow span
of management and a relatively large number of hierarchical level.
Tight control.
• Flat- a management structure characterized by a wide span of control
and relatively few hierarchical levels. Loose controls. Facilitates
delegation.
Centralization, Decentralization,
Formalization
• Centralization- the location of decision making authority near top
organizational levels.
• Decentralization- the location of decision making authority near lower
organizational levels.
• Formalization- the written documentation used to direct and control
employees.
Departmentalization
• The basis on which individuals are grouped into departments and
departments into total organizations.
Approach options include-
1. Functional- by common skills and work tasks.
2. Divisional- common product, program or geographical location
3. Matrix- combination of functional and divisional.
4. Team- to accomplish specific tasks.
5. Network- departments are independent providing functions for a
central core breaker.
Concept of Organizing
Organizing is the process of building relationships among functions,
material, and people for a common purpose. Organizing answers these
questions”
1. What needs to be done and how? Logical extension of planning
activities. Task required to achieve the objectives.
2. Who’s involved and how? Authority, knowledge, and responsibility to
complete the tasks.
3. Who needs resources and when? Resource allocation at the right time.
4. What are the relationships among people, tasks, places things, and
outcomes?
Three Dimensions of Organizing
• The form or configuration of the organization that describes the
management hierarchy and formal channels of communications.
• Task definition and structuring of jobs.
• A philosophy of organization that influences how coordination is
achieved.
Why Organizing is Important
• Effective organization of both human and material resources
ultimately increases productivity.
• This is done through synergy- a process whereby an organization’s
members combine their efforts to collectively accomplish tasks that
would far exceed the simple sum of their individual efforts.
• Synergy is achieved through the integration of specialized tasks.
“Synergy means the interaction or cooperation of two or more
organizations, substances, or other agents to produce a combined
effect greater than the sum of their separate effects.”
Twin Concepts of Sound Organizing
• Efficiency- doing things right with minimum use of resources. We use
its tools to achieve effectiveness. It disciplines the pursuit of
effectiveness, so the price paid isn’t too high. Efficiency emphasizes
form and process. It addresses how well we accomplished something
but not necessarily its substance. Efficiency is improved by using the
most productive combinations of material and human resources.
• Examples: Clearly defined procedures; Streamlined operations; Timely
and accurate information; well- maintained equipment.
Twin Concepts of Sound Organizing
• A manager does things right. He/ she is in charge of efficiency.
Organizing is usually the function associated with the manager as a
natural extension of the planning efforts, which involve the following:
• A manager: analyzes the activities, decisions, and relations needed.
• Classifies the work, divides it into manageable activities, and further
divides the activities into manageable jobs;
• Groups these units and jobs into an organization structure;
• Selects people to manage those unit and jobs to be done
Twin Concepts of Sound Organizing
• Effectiveness- means doing the right things. It stresses substance of
the outcome. It means producing an intended result with a striking
effect. A leader is one who does the right things.
• Examples: a worthy vision/ mission; challenging goals and objectives
that support the mission; focus on priorities; quality products
(outcome) that customers want and accept.
Five Steps of the Organizing Process
1. Identify Tasks- Describe what people must do to reach objectives.
Focus on this and you’ll pick the right tasks and avoid doing the
wrong things; accepting impossible tasks because of misdirected
“can do” attitude; accepting inappropriate tasks because of inability
to say “No!”
2. Establish Structure- use formal organizational documents to align
task with functions, resources, and people. Examples:
Organizational charts, manpower authorization documents, and
position descriptions.
Five Steps of the Organizing Process
• Fit people to tasks- Assign the right person to the right task. No
square pegs in round holes. Consider position description but be
flexible. If they don’t fit the tasks, re- write.
• Establish relationship- People are the key to success in organizing.
Use three tools to insure people cooperate: Authority- empower
people to do their job. Responsibility- ensure they know what’s
expected of them. Accountability- hold them answerable for results.
• Allocate resources- Direct most resources to major efforts. Apply
minimum resources to secondary efforts. Give people
Functions of Organizing
• Clarifies who is to perform which jobs and how these jobs should be
divided.
• Clarifies lines of authority, specifying who reports to whom.
• Creates the mechanism for coordinating across the different groups
and levels of the organization.
How Organizing is Achieved
• Fayol’s classic principles of management can be applied to Organizing
and can thus be considered an indispensable code for managers:
Principles Fayol’s Comment
Division of Work Individuals and managers work the same part or task
Authority and Responsibility Authority- right to give orders; power to exact obedience; goes with
responsibility for reward and punishment
Discipline Obedience, application, energy, behavior agreement between firm and
individual
Unity of Command Employee receives orders from one superior
Unity of Direction One head and one plan for activities with the same objective
Subordination of individual Objectives of the organization come before objectives of the individual
interest to general interest
How Organizing is Achieved
Principle Fayol’s Comment
Remuneration Pay should be fair to organization and the individual; discussed various forms
Centralization Proportion of discretion held by the manager compared to that allowed to
subordinates
Scalar Chain Line of Authority from lowest to top
Order A place for everyone and everyone in their place
Equity Combination of kindness and justice; Equality of treatment
Stability of tenure of personnel Stability of managerial personnel; time to get used to work
Espirit de Corps Harmony and union among personnel is strength
Centralization and Decentralization
• Centralization and decentralization relate to the vertical organization
of management authority. In a centralized firm, a single executive or a
small cadre of executives’ controls the majority of decisions,
delegating little authority to lower- level managers. Decentralized
firms have more managers with greater authority diffused to lower
operational levels.
Defining Delegation
As organization grow increasingly complex, duties and responsibilities
across the workforce can become less well defined. Often it seems as
though everyone is doing everyone else’s job. Delegation is the
manager’s key to efficiency, and benefits all.

Delegating for managerial success

An effective manager must monitor a delegated project, assuming
responsibility while allowing the delegate autonomy.
Explaining Delegation
• Delegation involves entrusting another person with a task for which
the delegator remains ultimately responsible. Delegation can range
from a major appointment, such as the leadership of a team
developing a new product, to one of any number of smaller tasks in
the everyday life of any organization- from arranging an annual outing
to interviewing a job candidate. Examining the overall structure of an
organization will reveal a complex web of delegated authority, usually
in the form of management chains, providing a mechanism for
reporting and control.