Organizing

 Definition

 “ The process of identifying and grouping the work to

be performed, defining and delegating responsibility
and authority, and establishing relationships for the
purpose of enabling people to work most effectively
together in accomplishing objectives.”
- L A Allen
Importance
 It facilitates proper division of work
 It facilitates growth and diversification
 It facilitates adoption of technology
 It facilitates optimum use of physical
resources
 It facilitates co-ordination and control
 It brings unity in direction
 It increases management efficiency
Benefits of Organising
 To develop a clear picture of the tasks
which is expected to accomplish
 Supports planning and control activities
 Creates channels of communciation and
supports decision-making and control
 Maintains logical flow of work activities
 Efficient use of the resources
 Coordinates activities and helps build
harmonious relationships among members
 Managers can focus on task efforts
Principles of Organising
 Division of labour
 Functional or departmentation
 Scalar chain
 Unity of command
 Span of control
 Unity of objective
 Balance
 Flexibility
 Continuity
 Delegation
 Correspondence
 Exception
 Realizing the importance of things: You
should be able set your priorities straight so that
you know which task requires your attention the
most and which one is unnecessary.
Keep things in order: You have to keep things
in order so that you’re quickly able to find them
in need.
Establish a pattern: You should make a
pattern of your activities and that pattern should
be such that it requires the least of your time.
After you have established a pattern, you should
perform activities according to that instead of
doing things randomly.
Keep on reviewing: You have to keep
reviewing the way you’re working and how
things are going and you have to analyze new
ways for delegating tasks and making your
organizing better
 Closed System Vs Open System
 Open System Model

Inputs Organisation
Outputs

Technical Subsystem
Capital Goods
Raw Material Boundary –Spanning Services
Labour Subsystem Waste Material
Machinery Profits or losses
Market Information Managerial Subsystem
 Process of Organizing

Enterprise
Objectives Horizontal Staffing
Identification & Grouping of
& vertical
Classification Activities Delegation
Coordination
of in light Of
Of Authority
Required Of resources & authority
& Infor
Supporting Obj, activities Situations Leading
relationships
policies
And plans

Controlling
Points to be kept in mind
 The structure must be compatible
with the objectives and plans of the
organisation

 The structure must indicate the

extent of authority available to the
management of the organisation.

 The org. must take into account the

external environment
 Bases of Departmentation
 Simple Numbers
 Time
 Process of Equipment
Departmentation by
Simple Numbers
 It is diminishing
 Technology, which needs specialised
skills

 Specialised personnel are efficient

than only numbers

 Useful only at the lowest level

Departmentation by Time
 Advantages
 Efficient utilisation of human
resources
 More customer oriented
 Helps in continuous cycle without
interruption
 Expensive capital is efficiently utilised
 Convenient for some people
 Disadvantages

Lack of supervision

Switching of shifts is difficult

Coordination & communication may
hamper

Postponement of the work to get
benefit

Workers may concentrate on narrow
aspect than ‘Total system’
Departmentation by
Process or Equipment
 Advantages
 Specialisation and optimum use of
resources
 Beneficial as specialised operating
skills are required
 Makes Series of operations feasible
and economic
 Disadvantages
 Hinders coordination of various
functions due to the limitations that
arise from specialisation
 Results in conflict between different
managers in case of allocation of
funds, providing facilities to different
processes, etc.
Strategic Organisation
Design

 Span of Management

 “ The span of management or span of control is the

number of subordinates who report directly to a
specific manager.”

 Tall Vs Flat Structure

 Span of mngt has two important
implications:-

It influences the complexity of individual
manager’s job


It determines the shape of an org, fewer
the subordinates reporting, larger the
number of superiors required.
 Traditional Vs Modern view

 Direct Single relationship = n

 Direct group relationship = n(2 * n-
1+n-1)
 Cross relationship = n(2*n/2 + n-1)
 Factors determining an effective Span
 Trained Subordinates
 Clarity of delegation of authority
 Clarity of plans
 Feedback mechanism
 Communication techniques
 Amount of personal contact needed
 Organisation levels
 Use of staff assistance
Authority and Power
 Authority
 “ The power to make decisions, which guide
the actions of others.”

 Power
 “ Is the ability of individuals or groups to
induce or influence the beliefs or actions of
other persons and groups.”
Power : Bases of Power
 Legitimate Power
 Expert Power
 Referent Power
 Reward Power
 Coercive Power
 Authority
Authority Power

Authority is the right to Power is the ability to do

do something something

Authority is derived only Power is derived from

through position many sources

Authority is a narrow term Power is a broader

and is a major source of concept that creates
power actions when authority
fails to achieve results
 Line and Staff Relationships

 “ Line functions are those functions which

have direct responsibility for accomplishing
the objectives of the enterprise, and staff
refers to those elements of the organisation
that help the line to work more effectively in
accomplishing the primary objectives of the
enterprise.”
 Concept of Line & Staff

 Line & Staff Conflicts

 Viewpoint of line managers

Lack of accountability

Encroachment of line authority

Dilution of authority

Theoretical bias
 Distinction between Line & Staff

Line Manager Staff Manager

 Is a generalist Is a specialist
 Directs others Assists others
 Delegates responsibilities Serves
responsibilities
 Exerts control Makes plans
 Makes operating decisions Provides ideas to
line managers
Line & Staff Conflicts
 Viewpoint of Staff managers

Lack of proper use of staff

Resistance to new ideas

Lack of proper authority

 Nature of Line and staff relationship


Different backgrounds

Lack of demarcation between line and
staff authority

Lack of proper understanding of authority
 Avoidance of Line and Staff
Conflicts
 Clarity in relationship
 Proper use of staff
 Completed staff work
 Hold staff accountable for the result
Centralisation Vs
Decentralisation

 Availability of Competent Managers

 Size of the Organisation
 Geographical dispersion
 Technological complexity
 Time frame of decisions
 The importance of a decisions
 Planning and control procedures
 Views of subordinates
 Environmental influences
Delegation of Authority

 “ The delegation of authority is the delivery by

one individual to another of the right to act, to
make decisions, to requisition resources and to
perform other tasks in order to fulfill job
responsibilities.”

 SMARTER
 Elements of delegation

 Authority
 Responsibility
 Accountability
Reasons for failure of
delegation
 Superior’s love for authority
 To maintain tight control
 Fear of subordinates
 Fear of exposure
 Negative attitude
 Personality factors
Effective Delegation
 Security
 Awareness through Education & training
 Determining decisions & tasks to be
delegated
 Culture
 Choice of delegant
 Tying with planning
 Delegating for the whole job
 Developing control techniques
Decentralisation

 “refers to the systematic effort to delegate to

the lowest levels all authority except that
which can only be excercised at central
points.”
Reasons for
decentralisation

 Reduction of top management burden

 Facilitates growth & diversification
 Good philosophy to motivate
managers
 Encourages development
Types of Decentralisation
 Political
 Administrative
 Fiscal
 Economic or Market
Distinction
 Delegation Vs Decentralisation
 Nature
 Control
 Need
 Responisibility
Strategic Organisation
Structure
 Introduction


What is organisational Structure?


Ensuring Understanding & Nature of Org
Sturcture


Importance of the Informal Organisation
& Grapevine
 Which comes first :

 Strategy or Structure ?
 Factors Influencing Organisation Design
 Formulation of Vision, Mission and goals
 Contingency factors (Tech, Envirn)
 Strategy
 Organisation structure

Functional

Divisional

Hybrid

Matrix
 Attainment of Goals
Organization

National Sales
Manager

Field Sales Manager Telemarketing Sales

Manager

Regional Sales Managers District Sales Managers

(4) (2)
District Sales Managers Salespeople (40)
(16)

Salespeople (160)
Functional Structure

 Widely accepted terminology

 Activities differ from Org to Org

Advantages
 Clarity about Career paths
 Economies of scale within function
 Specialisation
 Coordination
 In-depth skill development
 Power and prestige
 Other benefits
Disadvantages
 Boredom and monotony
 Poor decision-making
 Sub-unit conflicts
 Managerial Vacuum
 Uses of functional structure
  PRODUCT BASED STRUCTURE
President

VP -Mobile VP – VP -
Phones Home Computers
Appliance
s
Refrigerato Air- Microwave Washing
rs Conditione Ovens Machines
rs
Procuremen
t

Manufacturing

Maketing/
Sales
R&D
Advantages
 Product divisions facilitate the use of specialised
equipment (Optimum use of resources)
 This form of structure facilitates the growth and
diversity of products and services offered by the
organisation
 The performance of each product lines can be
compared and analysed
 Facilitate additional product lines
 Helps in coodination as all functions are carried
out in department itself
Disadvantages
 Product divisions require people with general
managerial abilities

 Cost increases due to duplication of central

service and staff activities

 This method poses certain problems in

coordination, decision-making and control
Organization

National Sales
Manager
Sales Training
Manager

Eastern Region Sales Western Region Sales

Manager Manager

Zone Sales Managers (4) Zone Sales Managers (4)

District Sales Managers (20) District Sales Managers (20)

Salespeople (100) Salespeople (100)

Advantages
 Helps in providing special attention to the
needs and problems of the local markets.
 Helps in utilising local talent
 Improves organisation’s relationship with
customers
 Helps managers to gain extensive
knowledge of diverse activities
Disadvantages
 Requires more people with managerial
capabilities and often there is a shortage of
managers.

 Communication problem may arise

 Cost of operations is high

 Top level management becomes difficult

 Customer Based Structure

CEO -
Insurance

VP - VP – Cor- VP – Direct
Bancasuranc porates Sales Sales
e

Axis Bank

HDFC Bank

ICICI Bank
Advantages
 Customer divisions can address the
differing needs of customers

 Customer divisions are more

specialised

 Helpful for the organisations who

serve different types of customers.
Disadvantages

 Coordination becomes difficult

between sales and other functions

 Demands and pressures can be

put on management, may create
conflict
Hybrid Sales Organization
Structure
National Sales Manager

Commercial Government
Accounts Accounts
Sales Manager Sales Manager

Major Accounts Regular Accounts Office Office Supplies

Sales Manager Sales Manager Equipment Sales Manager
Sales Manager

Field Sales Telemarketing

Manager Sales Manager

Western Eastern
Sales Manager Sales Manager
 Advantages
 Help in achieving specific competency and
economies of scale in prime fucntional areas
with focus on products services and markets

 Helps to strike balance between divisional and

corporate goals

 Facilitates adaptability and flexibility in handling

diverse product or service lines, territories, or
differing needs of customers, through a partially
divisional structure
Disadvantages
 Hybrid structures are inclined to
develop large staffs in the
corporate levels functional depts,
this may lead to a discord

 Coordination may become slow

between functional and division
Matrix Structure
President

VP VP VP
Product Product B Product C
A
 Strategic Business Units
Effective Organising and
Organisational Culture
 Prerequisites for Effective Organising
 The Span of management and the levels of
organisation are clearly defined
 The factors determining the basic framework of
departmentation, along with their strength and
weaknesses, are taken into consideration
 The different kinds of authority and responsibility
relationships that exist in an organisation are
understood
 The way authority is delegated throughout the
organisation structure, along with the degree of
delegation, is taken into consideration
 The way the manager implements organisation theory
is considered
 Environment A Environment
B
 Planning

Goals are set in an Goals are set with
autocratic manner participation

 Organising

Authority is Centralised Decentalised and

Authority is narrowly broadly
defined

Staffing

People are selected Performance criteria
on the basis of friend
ship

Leading

Directive leadership Pariticipative

Top-down Commun. Bottom-up

Controlling

Strict control Self-control