1. ORGANIZING
Chapter Four

2. PART ONE: INTRODUCTION
1/8/2012
 1.1 Meaning of organization
POM/Chapter 4 - Organizing
 1.2 Process of Organization
 1.3 Principles of Organization
2

3. DEFINITION OF ORGANIZING
1/8/2012
 Activities:  Resources:
 Identification of  Determining the
POM/Chapter 4 - Organizing
activities
 Grouping of Activities
specific need of
 Assignment of jobs to resources
formal groups  Allocation of
 Establishing a network resources into
of authority and
responsibility specific groups
 Providing framework for  Evaluation and
measurement, evaluati control of use of
on and control
the resources 3

4. ORGANIZING
1/8/2012
Organizing is the process of
arranging and allocating
POM/Chapter 4 - Organizing
work, authority, and resources
among an organization’s
members so that they can
achieve organizational goal.
 Stoner, Freeman and Gilbert
4

5. PROCESS OF ORGANIZING
1/8/2012
 Division of Work
 Grouping of Work
POM/Chapter 4 - Organizing
 Delegation of Authority
 Coordination of Work
5

6. 1/8/2012 POM/Chapter 4 - Organizing
6
PROCESS OF ORGANIZING SIMPLIFIED

7. PRINCIPLES OF ORGANIZING
8.Exception
1/8/2012
1. Unity of Objective
2. Specialization
9.Efficiency
POM/Chapter 4 - Organizing
3. Coordination
4. Authority and 10.Balance
Responsibility
11.Homogeneity
5. Unity of Command
6. Scalar Chain 12.Continuity
7. Span of Control
13.Simplicity 7

8. PART TWO: ORGANIZATIONAL ARCHITECTURE
1/8/2012
 2.1 Vertical differentiation
 Tall versus Flat Structure
POM/Chapter 4 - Organizing
 2.2 Horizontal differentiation
Functional Structure
Multidivisional Structure
Geographic Structure
Matrix Structure
8

9. TALL VERSUS FLAT ORGANIZATIONS
Tall Organization
President
All rights reserved.
Copyright © by Houghton Mifflin Company.
Flat Organization
President
6–9

10. ORGANIZATIONAL ARCHITECTURE -
VERTICAL INTEGRATION
1/8/2012
 Tall Organization:  Flat organization:
 This type of This type of
POM/Chapter 4 - Organizing
organizational organizational
architecture has architecture
many layers and
has few layers
narrow span of
control. and wide span
of control.
10

11. ESTABLISHING REPORTING RELATIONSHIPS:
TALL VERSUS FLAT ORGANIZATIONS
 Tall Organizations  Flat Organizations
 Are more expensive  Lead to higher levels of
employee morale and
All rights reserved.
Copyright © by Houghton Mifflin Company.
because of the number
of managers involved. productivity.
 Foster more  Create more administrative
communication responsibility for the
problems because of relatively few managers.
the number of people  Create more supervisory
through whom responsibility for managers
information must pass. due to wider spans of
control.
6–11

12. ORGANIZATIONAL ARCHITECTURE – HORIZONTAL
DIFFERENTIATION
1. FUNCTIONAL STRUCTURE:
1/8/2012
General Manager
POM/Chapter 4 - Organizing
Production Finance Marketing HR
Dept Dept Dept Deprtment
Structure is created based on the
various functions of an organization.
12

13. ORGANIZATIONAL ARCHITECTURE – HORIZONTAL
DIFFERENTIATION
2. MULTI-DIVISION STRUCTURE
1/8/2012
General Manager
POM/Chapter 4 - Organizing
Division I Division II Division III
 Multiple divisions are created in a
related industry.
13

14. ORGANIZATIONAL ARCHITECTURE – HORIZONTAL
DIFFERENTIATION
 Divisional or M-form (Multidivisional) Design
 An organizational arrangement based on multiple
businesses in related areas operating within a larger
organizational framework; following a strategy of
related diversification.
 Activities are decentralized down to the divisional
level; others are centralized at the corporate level.
 The largest advantages of the M-form design are the
opportunities for coordination and sharing of
resources.

15. ORGANIZATIONAL ARCHITECTURE – HORIZONTAL
DIFFERENTIATION
3. GEOGRAPHIC STRUCTURE:
1/8/2012
General
POM/Chapter 4 - Organizing
Manager  Departments are
created based on
geographic regions.
 All the activities in one
Eastern Central Western geographic region is
Region Region Region categorized into one
unit.
15

16. ORGANIZATIONAL ARCHITECTURE – HORIZONTAL
DIFFERENTIATION
4. MATRIX ORGANIZATION
CEO
Vice president, Vice president, Vice president, Vice president,
engineering production finance marketing
Employees
Project
manager A
Project
manager B
Project
manager C
6–16

17. MATRIX STRUCTURE:
1/8/2012
 Advantages:  Disadvantages:
 Enhances organizational  Employees are uncertain
POM/Chapter 4 - Organizing
flexibility. about reporting
 Team members have the relationships.
opportunity to learn new  The dynamics of group
skills. behavior may lead to
 Provides an efficient way for slower decision
the organization to use its making, one-person
human resources. domination, compromise
 Team members serve as decisions, or a loss of
bridges to their departments focus.
for the team.  More time may be required
for coordinating task- 17
related activities.

18. PART THREE: RESPONSIBILITY
1/8/2012
3.1 Meaning of Responsibility
POM/Chapter 4 - Organizing
3.2Establishing Task and
Reporting Relationships
3.3 Creating Accountability
18

19. RESPONSIBILITY:
1/8/2012
Responsibility is the
POM/Chapter 4 - Organizing
obligation to perform
or
duty to carryout certain
activities
19

20. ESTABLISHING TASK AND REPORTING
RELATIONSHIP:
1/8/2012
 Task Relationship:
 How activities related to each other in an
POM/Chapter 4 - Organizing
organization.
 How the basic units of an organization are
formed.
 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.
20

21. ESTABLISHING TASK AND REPORTING
RELATIONSHIP:
1/8/2012
 Establishing Reporting Relationship:
 It is finding out
POM/Chapter 4 - Organizing
 Chain of command
 Span of control or span of management
1. Who reports to whom?
2. How many subordinates will a supervisor have?
(Relate it to tall vs flat organizational architecture.)
21

22. CREATING ACCOUNTABILITY
1/8/2012
 Accountability:
 Requirement to report
POM/Chapter 4 - Organizing
22

23. PART FOUR: AUTHORITY
1/8/2012
POM/Chapter 4 - Organizing
4.1 Line and Staff Authority
4.2 Delegation of Authority
23

24. AUTHORITY:
1/8/2012
 Right to take decisions that arises due to
position in organizational structure.
POM/Chapter 4 - Organizing
 Authority is the right to perform or
command. It allows its holder to act in
certain designated ways and to directly
influence the actions of others through
orders.
 Types of Authority:
 Line Authority
 Staff Authority 24

25. LINE AUTHORITY
1/8/2012
The chain of command in the
organizational structure that flows
POM/Chapter 4 - Organizing
major decision making power.
The officially
sanctioned ability to issue orders t
o subordinate employees within
an organization.
25

26. STAFF AUTHORITY
1/8/2012
 Staff authority consists of the right to
advise or assist those who possess
POM/Chapter 4 - Organizing
line authority as well as other staff
personnel.
 The Advisory or Counseling
Role :
 The Service Role
26
 The Control Role

27. DELEGATION OF AUTHORITY
1/8/2012
Assigning work to subordinates
and giving them necessary
POM/Chapter 4 - Organizing
authority to do the assigned work
effectively.
Simple terms,
GRANTING AUTHORITY TO SUBORDINATES
27

28. FEATURES OF DELEGATION OF
AUTHORITY:
1/8/2012
 No delegation of total authority
 Delegation of only that authority a
POM/Chapter 4 - Organizing
manager has
 Representation of the superior
 Delegation for organizational purpose
 Restoration of delegated authority
 Balance of authority and responsibility
 No delegation of responsibility
28

29. CONFLICT BETWEEN LINE – STAFF EMPLOYEES
1/8/2012
Assume Line Authority
POM/Chapter 4 - Organizing
Do not give Sound Advice
Steal Credit for Success
Fail to Keep line
personnel informed of their
activities
Do not see the whole picture. 29

30. PART FIVE:
CENTRALIZATION AND DECENTRALIZATION
1/8/2012
 Meaning : Centralization and Decentralization
POM/Chapter 4 - Organizing
 Reasons: In which case which is needed
 Advantages and Disadvantages: of both
30

31. EMERGING ISSUES IN ORGANIZATION DESIGN
1/8/2012
POM/Chapter 4 - Organizing
31

32. STAFFING: CONCEPT AND IMPORTANCE
1/8/2012
POM/Chapter 4 - Organizing
32