Fundamentals of Organizing

Fundamental 1: Standardization Fundamental 2: SpecializationFundamental 3: CentralizationFundamental 4: Departmentalization

Introduction to Organizing

• The management function of organizing refers to ensuring that tasks have been assigned and a structure of relationships created that facilitates meeting organizational goals.

• According to Max Weber, the essence of organizing involves managing four fundamental issues which are:

- Ensuring that the work activities are completed in the best way.

- Ensuring that each member’s subtasks contribute to the whole.

- Ensuring that there is orderly deference among organizational members.

- Ensuring that members work together harmoniously.

The Four Mainstream Fundamentals of Organizing

Mainstream managers emphasize four basic elements of organizational structure, each of which corresponds to one of the fundamental

elements identified by Weber:• Standardization – emphasizes on developing uniform practices for

organizational members to follow in doing their jobs• Specialization – emphasizes on grouping standardized organizational

tasks into separate jobs• Centralization – is having the decision-making authority rest with

managers• Departmentalization – refers to grouping organizational members and

resources together to achieve the work of the larger organization.

Fundamental 1: Standardization

Standardization is a way for managers to design basic work activities so that members perform tasks in the best way to accomplish the overall work of the organization, and to spend their time productively.

Mainstream managers try to ensure that members perform the activities that are most appropriate for achieving overarching organizational goals.

When we thinks of standards, we think of formal standards. The more written documentation there is, the higher the degree of formalization. Informal standards that govern and give meaning to members’ behaviour are also important.

Fundamental 1: Standardization

Standards serve as guidelines for decision making, and they provide an overarching framework that gives members confidence and ensures coordinated decision making across departments and over time.

- Standards also provide direction and motivation for members.

Having too few standards may result in haphazard decision making, and may lead to endless debates on which goals should be pursued and how tasks should be performed.

Having too many standards may also leave members feeling suffocated, and may also undermine the organization’s credibility and legitimacy.

Fundamental 2: Specialization

• Specialization involves ensuring that all organizational members know the specific subtasks they are required to perform.

• Specialization entails taking standardized organizational tasks and allocating them into separate jobs that can be “narrow” or “broad”.

• Optimal levels of specialization are evident when each member’s specific tasks are clear and help to maximize productivity.

Fundamental 2: Specialization

- Too little specialization means that tasks are not being performed as efficiently as possible, which results in underperformance. It may also lead to ambiguity in terms of decision making, and may also create difficulties in recruitment and training members.

- Too much specialization can lead to situations where specialized tasks displace the overarching work of the organization, cause a gradual shift in the overall goals of the organization, result in jobs that are repetitive and boring which leads to increased turnover and absenteeism, and can cause members to focus only on completing narrow tasks.

Fundamental 3: Centralization

• emphasizes top-down decision making, with managers and top executives making decisions to ensure order deference among members

Authority - the formal power given to specific members to arrange resources, assign tasks, and direct activities of other members

a) Line authority = formal power to direct and control immediate subordinates

b) Staff authority = formal power to advise and provide technical support for

others, but not to tell them what to do

Fundamental 3: Centralization

Delegation - the process of giving authority to a person or group to make decisions in a specified sphere of activity

Span of control - the number of members over whom a given manager has authority

Responsibility - the obligation or duty of members to perform assigned tasks

Accountability - the expectation that members will have compelling reasons for decisions they make

An optimal level of centralization aids timely and coordinated decision making, facilitates interpersonal relationships among members and organizational commitment

Fundamental 4: Departmentalization

Departmentalization: groups members and resources in a way that achieves the work of the larger organization as efficiently and harmoniously as possible.

Two key dimensions of departmentalization

1. Focus-is concerned with the content of what each department is assigned to do. Four basic structures:

• Functional • Hybrid• Divisional• Matrix

Fundamental 4: Departmentalization

2. Department membership refers to the degree of permanence or stability of different departments, teams, and groups

Network structure - organizations enter fairly stable and complex relationships with a variety of other organizations that provide essential services, including manufacturing and distribution

Virtual organization - characterized by having members who come and go on an “as-needed” basis and are networked together by information technology • Switching = the extent to which membership in a virtual organization changes over time

The Four Multistream Fundamentals of

OrganizingFundamental 1: ExperimentationFundamental 2: SensitizationFundamental 3: DignificationFundamental 4: Participation

Fundamental 1: Experimentation(versus Standardization)

-the emphasis on an ongoing voluntary implementation of new ways of performing tasks on a trial basis.

a) Ensures that work activities are completed in the best way

b) Focus on dynamic process of organizing (experimenting) rather than on the

static outcome of organizing (standards)

c) Concern for multiple stakeholders and multiple forms of well-being

d) Problems with too little experimentation: stagnation, rigidity, complacency,

lack of growth and new knowledge

e) Problems with too much experimentation: chaos, uncoordinated efforts

Fundamental 2: Sensitization(versus Specialization)

-the emphasis on searching for and responding to needs and opportunities to improve the status quo

a) Ensures that members know what subtasks they should perform

b) Encourages members to be sensitive to new needs and opportunities and to

continuously adapt and improve how they do their jobs in harmony with

others

c) When tasks are divided into separate jobs, Multistream managers tend to do so

at the group level while Mainstream managers tend to do so at the individual job-holder level

d) Optimal levels of sensitization yield greater feelings of purpose, meaningful

work, and loyalty; increases in team performance

Fundamental 3: Dignification(versus Centralization)

-the emphasis on treating everyone with dignity and respect in

community

a) Ensures orderly deference among members

b) Providing people with appropriate choice and freedom

c) Dignification is more likely in relatively decentralized organizations where

authority resides in groups rather than in a few individuals

d) Optimal dignification enhances decision making, encourages connectedness

between and across organizational levels, and motivates members

Fundamental 4: Participation (versus Departmentalization)

• The emphasis on mutuality and giving stakheholders a voice in how the organization is managed and how jobs are performed

a) Ensures that members work together harmoniously b) Focus

1. Multistream managers tend to prefer divisional rather than functional structure

2. Multistream managers tend to prefer relatively small (120-150 members) divisions where each member has a sense of the overall goals of the unit and how members’ roles fit together

Fundamental 4: Participation (versus Departmentalization)

c) Membership1) Multistream managers include and invite participation of external stakeholders

a) Participation refers to the emphasis on mutual discernment and giving stakeholders a voice in how the organization is managed and how jobs are performed

2) Virtual departments can facilitate communication among members across the organization

d) Optimal level of participation is needed1. Problems with too little participation: dictatorship, less enthusiastic following

of members, poorer decision because fewer perspectives included2. Problems with too much participation: death-by-meetings or inefficiency from

seeking input for every minor decision, and some members may wish not to participate