structural design

1. Structural Designs
Organizational structures

2. Nature and purpose of
organizing
• Organizing means arranging the activities required to
complete a task and assigning the necessary resources.
• Organizing is the process of arranging, and allocating
work, authority, and resources among an organization’s
members so that they can achieve organization goals.
• When more than two people are working toward an
objective, organizing coordinates their efforts and keeps
their activities focused on the task.
• Skills required consider whole tasks, how tasks may be
divided, what is needed to accomplish the tasks, and
how to arrange activities for the most effective results.

3. Breaking Down the Definition of
Organizing
Activities
• Identification of
activities
• Grouping of activities
• Assignment of jobs to
formal groups
• Establishing a network of
authority and
responsibility
• Providing a framework
for evaluation,
measurement and
control.
Resources
• Determining the specific
need for resources
• Allocation of resources
into specific groups
• Evaluation and control of
use of resources.

4. • Therefore, organizing is simply put as a process of
dividing and combining activities.
• Organization thus weaves a neat pattern of
relationships among personnel (efforts), jobs
(duties), and activities (work) for ensuring
harmonious teamwork towards the fulfillment of
common goals.
• Organizing provides the framework within which
managerial functions of planning, direction and
control take place for successful performance of
operating work.

5. Reasons for dividing work
• First, the total work is too big to be done by a few
people;
• Second, economies of specialization can be derived
and staffing becomes practicable only when the
work is divided on a logical basis;
• Third, the speed of work performance can be
improved by distributing the work over a larger
number of persons; and
• Finally, the process of dividing work permits to place
a greater emphasis upon certain activities in
reference to others.

6. Steps in organizing
• 1. Determination and enumeration of activities
• The required activities are spelled out from the objectives of the
enterprise. The total work, operating and managerial is broken
down into component activities that are to be performed by all
personnel. The breakdown is carried as far down as to determine
the jobs of each individual.

7. • 2. Grouping and assignment of activities.
• Correlated and similar activities are usually grouped into divisions
or departments first. Then further divided into sections and jobs.
Different bases are adopted for subdividing activities into
different blocks or groups of work i.e., functions, products,
territories for primary grouping. Secondary grouping is made on
the basis of areas, types f customers, etc.

8. • 3. Allocation of fixed duties to definite persons.
• Definite job assignments are made to different
employees for ensuring certainty of work
performance. These job assignments are first made to
different management members who, in turn allocate
the jobs among their subordinates. To make any
systematic recruitment and selection, job
requirements are first ascertained by the allocation of
duties to different positions, and on this basis job
descriptions, job specifications and person
specifications are prepared.

9. • 4. Delegation of authority
• Corresponding to the nature of duties, commensurate authority
must be granted to subordinates for enabling them to make
adequate work performance. Delegation is a three-tier concept
that calls for assigning duties and delegating authority to
subordinates and demanding accountability from subordinates.

10. Span of management
• Is the limitation on the number of subordinates that one
manager can effectively supervise in the discharge of his/her
managerial responsibility.
• It is also called span of control, span of authority, span of
responsibility.
• It defines the job of a manager, allows him/her to work by
setting limits to relationships and signifies his/her place in the
structure.

11. Graicunas’s theory of span of
management
• This theory shows mathematically that a number of
direct, group, and cross relationships exist between
a superior and his subordinates.
• The number of cross and group relationships
increases in a mathematical relation as the number
of subordinates assigned to an executive increases.
• Example, an executive with 4 subordinates deals with 4
“direct” relationships; with 5 subordinates the total
relationships go to 100, 6 = 222 relationships, 7 = 490, and
8 = 1080.

12. • Graicunas prescribes 6 subordinates as the maximum span of
supervision with 222 relationships.
• Other experts are for between 4-8 subordinates at the top
and 20-40 at the foreman’s level.

13. Factors determining the span
• Ability of executives
• Capability to comprehend problems quickly, get along with
people, command respect and loyalty from subordinates, and
good communication skills.
• Time available for superior
• The manager has other activities apart from supervision i.e.,
planning, organizing and controlling. The lesser the time available
the lesser the span.

14. • Nature and importance of work
• For example, routine operations and affecting a smaller number
of employees requires less attention from superiors. The lower
levels can have a wider span.
• Use of standing plans
• They relieve the executives burdens by way of making blanket
decisions for guidance of subordinates. These are applicable in
repetitive actions and cover all recurring problems.

15. • Capacity of subordinates
• Subordinates who are trained, developed and experienced can
discharge their duties satisfactorily without much help and
direction from the supervisor.
• Degree of decentralization
• If an executive is free from the task of taking too many decisions
because of the higher degree of decentralization he can
successfully supervise a larger number of subordinates and vise
versa.

16. • Facility of staff assistance
• As staff persons share managerial work for reducing the
workload of executives, subordinates can get guidance or advice
from staff persons on many facets of management. Wherever,
staff assistance is readily available to subordinates, executives
can supervise more subordinates.
• Control practice
• Those who require written reports can have a larger span as
compared to those who prefer personal observation.

17. Authority relationships in
organization
• Line authority – is a direct authority exercised by a
superior over his subordinates and the flow of this
authority is always downward.
• Staff authority – exists for giving necessary advice to
line managers and the flow of this authority can be
upward, sideways and downward.
• Functional authority – it is the right which is
delegated to an individual or a department to
control specified processes, practices, policies or
other matters relating to activities in other
departments.

18. • Functions of line authority
• Provides the basis for team work on the part of employees
engaged in basic functions of the enterprise.
• It identifies an overall picture of the organization by designating
“who is to do what work”.
• It identifies, connects, and directs the operating personnel
towards the attainment of predetermined and common aims of
the organization.

19. • Unity of command arising from the operation of one line
authority helps to maintain unity of direction in the firm.
• Because of the fixed responsibility and directness of control, line
authority encourages quick decision making and high work
performance.
• Overall – it is the carrier of command, communication, co-ordination
and accountability in the firm.

20. Kinds of staff
• Normally organized in tow different ways:
• Personal staff – is created by sideways delegation of authority
from the concerned line manager. He/she is the “thought
person” of the line manager. They are normally used at the top
to extend the limited personal capacity of a line manager.
Normally referred to “Assistant to”, Special Assistant”, or
“Personal Assistant”.
• Specialized staff – is meant for providing staff advice, counsel or
service to all on a company wide basis, e.g., market research,
R&D, HRM…

21. Centralization and
Decentralization
• Centralization - is the extent to which power and
authority are systematically retained by higher level
managers.
• Decentralization – is the extent to which power and
authority are systematically delegated throughout
the organization structure to middle and lower level
managers.
• A decentralized organization is one in which decision
making power and authority are delegated as far
down the chain of command as possible.

22. Major determinants
• The external environment - the greater the
complexity and uncertainty of environment the
greater the tendency to decentralize.
• History of the organization – firms have a tendency
to do what they have done in the past.
• Size and growth rate – in terms of number of
employees, territorial expanse.
• Nature of the decision – the costlier and riskier the
decision, the more pressure to centralize.
• Abilities of the managers – if very able there is a
tendency to decentralize and vise versa.

23. Limitations of
decentralization
• High cost of operation
• Absence f well-rounded executives
• Problem of policy control
• Risk of emergency situations
• Disintegration tendencies.