Functions Of Management: Organizing

Functions of Management:Organizing

Part One: Introduction 1.1 Meaning of organization 1.2 Process of Organization 1.3 Principles of Organization3/20/2017POM/Chapter 4 - Organizing2

Definition of Organizing Activities:––––– Resources:Identification of– Determining theactivitiesspecific need ofGrouping of ActivitiesresourcesAssignment of jobs to–Allocationofformal groupsresources intoEstablishing a network ofspecific groupsauthority andresponsibility– Evaluation andcontrol of use of theProviding framework formeasurement,resourcesevaluation and control3/20/2017POM/Chapter 4 - Organizing3

Organizing Organizing is the process ofarranging and allocating work,authority, and resources among anorganization’s members so that theycan achieve organizational goal.–Stoner, Freeman and Gilbert3/20/2017POM/Chapter 4 - Organizing4

Process of Organizing Division of WorkGrouping of WorkDelegation of AuthorityCoordination of Work3/20/2017POM/Chapter 4 - Organizing5

Process of Organizing Simplified3/20/2017POM/Chapter 4 - Organizing6

Principles of Organizing1. Unity of Objective2.Specialization3.Coordination4.Authority andResponsibility5.Unity of Command6.Scalar Chain7.Span of 1.Homogeneity12.Continuity13.SimplicityPOM/Chapter 4 - Organizing7

Part Two: OrganizationalArchitecture– 2.1 Vertical differentiation Tall versus Flat Structure– 2.2 Horizontal differentiation Functional Structure Multidivisional Structure Geographic Structure Matrix Structure3/20/2017POM/Chapter 4 - Organizing8

Tall Versus Flat OrganizationsTall OrganizationFlat OrganizationPresidentPresidentCopyright by Houghton Mifflin Company.All rights reserved.6–9

Organizational architecture - Verticalintegration Tall Organization: Flat organization: This type oforganizationalarchitecture hasmany layers andnarrow span ofcontrol. This type oforganizationalarchitecture hasfew layers andwide span ofcontrol.3/20/2017POM/Chapter 4 - Organizing10

Establishing Reporting Relationships:Tall Versus Flat Organizations Flat Organizations Tall Organizations– Are more expensivebecause of the numberof managers involved.– Foster morecommunicationproblems because ofthe number of peoplethrough whominformation must pass.– Lead to higher levels ofemployee morale andproductivity.– Create more administrativeresponsibility for therelatively few managers.– Create more supervisoryresponsibility for managersdue to wider spans ofcontrol.Copyright by Houghton Mifflin Company.All rights reserved.6–11

SM Prime Holdings, Inc.3/20/2017POM/Chapter 4 - Organizing12

Ayala Corporation3/20/2017POM/Chapter 4 - Organizing13

Clarmil, Inc.3/20/2017POM/Chapter 4 - Organizing14

Apple Inc.3/20/2017POM/Chapter 4 - Organizing15

ORGANIZATIONAL ARCHITECTURE – HORIZONTALDIFFERENTIATION1. Functional structure:General ManagerProductionDeptFinanceDeptMarketingDeptHR DeprtmentStructure is created based on the variousfunctions of an organization.3/20/2017POM/Chapter 4 - Organizing16

ORGANIZATIONAL ARCHITECTURE – HORIZONTALDIFFERENTIATION2. Multi-Division structureGeneral ManagerDivision IDivision IIDivision III Multiple divisions are created in arelated industry.3/20/2017POM/Chapter 4 - Organizing17

Organizational Architecture –Horizontal Differentiation Divisional or M-form (Multidivisional) Design– An organizational arrangement based on multiplebusinesses in related areas operating within alarger organizational framework; following astrategy of related diversification.– Activities are decentralized down to thedivisional level; others are centralized at thecorporate level.– The largest advantages of the M-form design arethe opportunities for coordination and sharing ofresources.

ORGANIZATIONAL ARCHITECTURE – HORIZONTALDIFFERENTIATION3. Geographic ralRegionWesternRegion Departments arecreated based ongeographic regions. All the activities inone geographic regionis categorized into oneunit.POM/Chapter 4 - Organizing19

ORGANIZATIONAL ARCHITECTURE – HORIZONTALDIFFERENTIATION4. Matrix OrganizationCEOVice president,engineeringVice president,productionVice president,financeVice president,marketingEmployeesProjectmanager AProjectmanager BProjectmanager C6–20

Matrix Structure Advantages: Disadvantages:– Enhances organizational flexibility.– Team members have theopportunity to learn new skills.– Provides an efficient way for theorganization to use its humanresources.– Team members serve as bridges totheir departments for the team.3/20/2017– Employees are uncertainabout reportingrelationships.– The dynamics of groupbehavior may lead toslower decision making,one-person domination,compromise decisions, or aloss of focus.– More time may berequired for coordinatingtask-related activities.POM/Chapter 4 - Organizing21

Part Three: Responsibility 3.1 Meaning of Responsibility 3.2 Establishing Task and ReportingRelationships 3.3 Creating Accountability3/20/2017POM/Chapter 4 - Organizing22

Responsibility: Responsibility is theobligation to performorduty to carryout certain activities3/20/2017POM/Chapter 4 - Organizing23

Establishing Task and ReportingRelationship Task Relationship:– How activities related to each other in anorganization.– How the basic units of an organization are formed.– Establishment of job description and jobspecification Job Specification: Prerequisites of job. Various skills andexperiences needed to perform certain job. Job Description: The activities that have to be carriedout at certain position in a job. It describes the job.3/20/2017POM/Chapter 4 - Organizing24

Establishing Task and ReportingRelationship Establishing Reporting Relationship:– It is finding out Chain of command Span of control or span of management1. Who reports to whom?2. How many subordinates will a supervisor have?(Relate it to tall vs flat organizational architecture.)3/20/2017POM/Chapter 4 - Organizing25

Creating accountability Accountability:– Requirement to report3/20/2017POM/Chapter 4 - Organizing26

Part Four: Authority 4.1 Line and Staff Authority 4.2 Delegation of Authority3/20/2017POM/Chapter 4 - Organizing27

Authority Right to take decisions that arises due to position inorganizational structure. Authority is the right to perform or command. Itallows its holder to act in certain designated waysand to directly influence the actions of othersthrough orders. Types of Authority:– Line Authority– Staff Authority3/20/2017POM/Chapter 4 - Organizing28

Line Authority The chain of command in theorganizational structure that flows majordecision making power. The officially sanctioned ability to issueorders to subordinate employees withinan organization.3/20/2017POM/Chapter 4 - Organizing29

Staff Authority Staff authority consists of the right to adviseor assist those who possess line authority aswell as other staff personnel. The Advisory or Counseling Role : The Service Role The Control Role3/20/2017POM/Chapter 4 - Organizing30

Delegation of Authority Assigning work to subordinates andgiving them necessary authority to dothe assigned work effectively.Simple terms,GRANTING AUTHORITY TO SUBORDINATES3/20/2017POM/Chapter 4 - Organizing31

FEATURES OF DELEGATION OFAUTHORITY: No delegation of total authorityDelegation of only that authority a manager hasRepresentation of the superiorDelegation for organizational purposeRestoration of delegated authorityBalance of authority and responsibilityNo delegation of responsibility3/20/2017POM/Chapter 4 - Organizing32

Conflict between line – staffemployees Assume Line AuthorityDo not give Sound AdviceSteal Credit for SuccessFail to Keep line personnel informedof their activities Do not see the whole picture.3/20/2017POM/Chapter 4 - Organizing33

Part Five:Centralization and Decentralization Meaning : Centralization and Decentralization Reasons: In which case which is needed Advantages and Disadvantages: of both3/20/2017POM/Chapter 4 - Organizing34

–Establishment of job description and job specification Job Specification: Prerequisites of job. Various skills and experiences needed to perform certain job. Job Description: The activities that have to be carried out at certain position in a job. It describes the job. 3/20/2017 POM/Chapter 4 - Organizing 24