Chapter 3_Organizing and Staffing
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Transcript of Chapter 3_Organizing and Staffing
11
Organizing and Staffing
22
Agenda Nature and scope of organization Principles of organizations Types of organization Departmentation Committee centralization vs. Decentralization Span of control MBO and MBE Nature and importance of Staffing Process of Selection and Recruitment
33
Goal inputs of claimants1. Employees2. Consumers3. Suppliers4. Stock holders
5. Governments6. Community7. Other
Inputs1.Human2.Capital 3.Managerial 4.Technological
EXTE
RNAL
EN
VIRO
NM
ENT
EXTERNAL ENVIRONMENT
EXTERNAL ENVIRONMENT
Managerial Knowledge,Goals of claimants and use of inputs(Part1 The Basis of Management Theory and
Science)
Planning (Part 2)
Organizing (Part 3)
STAFFING (Part 4)
Leading (Part 5)
Controlling (Part 6)
To produce outputs
Facilitated by communication that also link
the organization
with the external
environment (Part 1 & 7.
Domestic and internal
environment)
Reenergizing the system
EXTE
RNAL
EN
VIRO
NM
ENT
System Approach to Management “Organizing and Staffing”
44
Objectives
Analyze the different forms of an organization
Determine different organizational structures
55
Organization
An Organization is a social unit or human grouping deliberately structured for the purpose of attaining specific goals.
… Amitai Etizoni
The rational coordination of the activities of a number of people for the achievement of some common explicit purpose or goal, through division of labour and function, and through a hierarchy of authority and reponsibility.
… Sehein
66
Organization
The process of identifying and grouping of 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
their objectives.
… Allen
77
Organization
An organization is the pattern of ways in which large
numbers of people, too many to have intimate face to
face contact with all others, and engaged in a
complexity of tasks, relate themselves to each other in
the conscious, systematic establishment and
accomplishment of mutually agreed purposes.
…Pfiffner & Sherwood
88
Nature of Organization
A clear concept of the major duties or
activities required to achieve the purpose.
Classification of activities into jobs
Establishment of relationships between
these jobs.
99
Purpose of Organizing The organizing function of mgmt. naturally &
logically follows the planning function. Through organizing managers decide how the
strategy & planned objectives will be accomplished.
Involves managers in decisions which result in a system of specialized coordinated jobs.
To achieve coordinated effort through the design of a structure of task & authority relationships.
1010
Principles of organization
Objectives
Specialization
Span of Control
Exception
Scalar Principle
Unity of Command
Delegation
Responsibility Authority Efficiency Simplicity Flexibility Balance Unity of Direction Personal ability
1111
Organization as a System
INPUT
Land Labour Capital Management
INPUT
Land Labour Capital Management
Conversion Process Conversion Process OUTPUT
Products Services
OUTPUT
Products Services
Feedback InformationComparison: Actual Vs Desired
Feedback InformationComparison: Actual Vs Desired
Environment Environment Environment Environment
1212
Types of organizations
Line: Line, Military or Scalar Organization
Functional Organization
Line and Staff Organization
Product / Project Organization or
Departmentation
Matrix or Grid Organization
Committee Organization
1313
Line: Line, Military or Scalar Organization
Corporate Organization
General Manager
Sales Manager
Production Manager
Chief Accounts Officer
Salesman
Foreman Foundry
Workers
Foreman Workshop
Workers
Foreman Assembly
Workers
Clerks
1414
Line: Line, Military or Scalar Organization
Merits – Simple– Flexible– Clear-cur division of
authority – Quick decision &
speedy action– Strong in discipline – All rounder executive
Limitations – Overload of work – Lack Specialization – Dictatorial way – Scope for favoritism – Lack of growth – Unsuitable for large
corner
1515
Functional Organization
W O R K E R S
Route Clerk
Instruction Clerk
Time & Cost Clerk
Disciplinarian
Inspector
Speed Boss
Repair Boss
Gang Boss
Office Shop
General Manager
W O R K E R S
1616
Functional Organization
Merits – Specialization
– Cost Reduction
– Mass Production
– No need for all round
executives
Limitations – Indiscipline
– Fixing of Responsibility
– Kills the initiative of workers
– Indifference of foremen
– Personal relationship
– No all-round executives
1717
Line and Staff Organization
Board of Directors
General Manager
Sales Manager
Production Manager
Chief Accounts Officer
Foreman Machine Shop
Workers
Foreman Foundry
Workers
Foreman Assembly
Workers
Company Secretary
Market Research
Other Consultants
Legal Advisor
Purchase Manager
HRD Manager
Design Engineer
Safety Officer
Industrial Engineer
Safety Officer
1818
Line and Staff Organization
Merits
– Expert advice
– Relieving Line executives
– Well defined authority and
Responsibility as well as
specialization
– Less Wastage
– Improved Quality
– No confusion or conflicts
Limitations – Cost increase
– Chances of mis-interpretation
– Chances of friction
– Loss of initiative
– Accountability
1919
Product Organization Chart Board of Directors
Managing Director
General Manager Small Car Division
• 800 CC• Zen• Wagon-
R• Van• Alto
• Esteem• Baleno
General Manager Large Car Division
Production Departme
nt
Sales Departmen
t
Accounts Departme
nt
Production Departme
nt
Sales Departmen
t
Accounts Departme
nt
2020
Project Organization Chart Chairman
Managing Director
General Manager Finance Software Vertical 1
General Manager Production Software Vertical 2
General Manager Business & Accounting Software Vertical 3
General Manager Internet & Telecom Software Vertical 3
CAD / CAM Project
Robotics Project
GIC Projec
t
Stock Exchang
e Project
ICICI Projec
t
Indya.Com Project
Airtel Mobile Service Project
Citi Bank Debit Card
Project
KSRTC Reservation Project
2121
Product / Project Organization Chart
Merits
– Specialization
– Increase in efficiency
– No interference
– Competitive Spirit
– Initiative to Managers
– Easy evaluation
– Ease of Budgeting
– Flexibility
Limitations – Duplication of work
– Inadequate Centralization
– Clamour for the same department
– Narrow thinking
– Only for big organization
– Under Utilization.
2222
Matrix or Grid Organization Chart
Director of Engineering
Chief Design
Manager Project A
Manager Project B
Manager Project C
Manager Project D
Chief Mechanica
l Engineerin
g
Chief Electrical Engineerin
g
Chief Mechanica
l Engineerin
g
2323
Matrix or Grid Organization Chart
Merits
– Flexible and Versatile
– Oriented towards end results.
– Responsibility of each project is clearly defined and
fixed with respective project managers, who control
the project from start to finish.
– The cost of projects is reduced because of sharing of
manpower and other resources.
– Better professional identification is maintained.
2424
Matrix or Grid Organization Chart
Limitations
– Chance of conflict in organization authority exists.
– Unit of command principles is violated where the
chief’s of each department are responsibility to
more than one project manager.
– Work may get piled up at any one department
while other departments may not have much work.
2525
Matrix or Grid Organization Chart
Limitations
– Requires extreme planning for optimum utilization
of resources.
– Better relationships may not exist between the
members of project group because they have
been temporarily gathered only for that project.
– Professional management skills are required to
make this type of organization work.
2626
Committee Organization
A committee organization is not exactly a type of
organization structure different from the other types.
Smaller structure within a larger organization
consisting of a few individuals and having its own
objectives.
A Committee is formed when a group of individuals
come together to discuss, decide and recommend
solution to certain problems of organization.
2727
Types of Committees
Ad-hoc Committee
Standing or permanent Committee
Advisory Committee
Education Committee
2828
Committee Organization Merits
– Decision are taken based on the collective wisdom of the
committee members.
– Provides integration of ideas of various experts.
– Different department are represented in the committee to
safeguard their interests and the decisions this taken will be
acceptable to all
– Helps in throwing up new ideas, innovations and new
scheme
– Committees promote mutual understanding of the members
drawn from various disciplines.
2929
Committee Organization
Limitations
– Sometimes a committee may take a week or two
to arrive at a decision where as competent
individual would have taken a day for the same.
– In a committee, no individual can be held
responsibility for anything.
– Final decision may not be fully acceptable to
everyone on the committee.
3030
Committee Organization
Limitations
– Very often aggressive members in the committee
may influence the final decision similarly some
weak members may fail to understand and
analyse the problems and surrender to other
members.
3131
Virtual Organizations
IT has made it possible for an individual to work for an organization and live anywhere
Virtual organization structure is “networked”.
– Extensive collaboration takes place electronically (e-mail).
Managers in a virtual environment monitor results, not progress
Forms are electronic, tech. support through a web interface
Business processes are designed differently.
3232
Virtual Teams Virtual Teams are geographically and/or
organizationally dispersed co-workers assembled using telecommunications and IT to accomplish an organizational task.
Several reasons explain their growing popularity:
– As information needs mushroom, firms rely on the skills and knowledge of individuals dispersed across countries/time zones, etc
– Enhanced bandwidths promote the use of networks linking individuals, internal and external to the organization
3333
Virtual Teams
– Technology (group support systems, groupware,
etc) is available to assist collaboration
– Difficulties in getting relevant stakeholders together
physically are relaxed
– Growing pressures for off-shoring has resulted in
systems development by global virtual teams
whose members are located around the world.
3434
Departmentation
The horizontal differentiation of tasks or activities
into discrete segments is called Departmentation.
Departmentalization is one important step of
building an organization.
The aim is to take advantage of the division of
labour and specialization upto certain limit.
3535
Several Basis of Departmentation
Functions
Products
Customers
Regions or Territory
Divisional Structures
Time
Process Combined Base
3636
Centralization - Decentralization
Centralization : Decreasing the role of
subordinates in decision making is centralization.
Decentralization: is the tendency to disperse
decision – making authority in an organized
structure. It is fundamental aspect of delegation.
3737
Centralization and
Decentralization as tendencies
Authority delegated
Authority not delegated
Complete centralization (no
organization structure)
Complete decentralization (no
organization structure)
3838
Span of Management Control
The number of subordinates reporting directly to
given managers.
The following two types shows the relationship
between the span of management & other
organizational level.
– Organization with Narrow Spans
– Organization with Wide Spans
3939
Organization with Narrow Spans
4040
Organization with Narrow Spans
Merits
– Close Supervision
– Close Control
– Fast Communication
between subordinates
and superiors
Limitations– Superiors tend to get too
involved in subordinates work
– Manly levels of management
– High costs due to many levels
– Excessive distance between lowest level and top level
4141
Organization with wide Spans
4242
Organization with Wide Spans
Merits
– Superiors are forced to
delegate
– Clear policies must be
made
– Subordinates must be
carefully selected
Limitations– Tendency of overload
superiors to become decision bottlenecks
– Danger of superior’s loss of control
– Requires exceptional quality of managers
4343
Management by Objectives (MBO)
The concept of MBO was first proposed by Peter Drucker in
1954.
For each employee and then comparing and directing their
performance against the objectives which have been set.
Aims to increase organizational performance by aligning
goals and subordinate objectives throughout the
organization.
MBO includes ongoing tracking and feedback in the process
to reach objectives.
4444
Management by Objectives (MBO)
One of the concepts of MBO was that instead of just a few
top-managers, all managers of a firm should participate in
the strategic planning process, in order to improve the
implementability of the plan.
Another concept of MBO was the managers should
implement a range of performance systems, designed to
help the organizations stay on the right track.
MBO can thus be seen as a predecessor of Value Based
Management.
4545
Management by Exception
A Management style wherein managers intervene only
when their employees fail to meet their performance
standards.
If the personal are performing as expected, the
manager will take no action.
The term is also used to describe provision of
information to management in which only significant
deviations from budgets or plans are reviewed as the
basis of corrective action.
4646
Management by Exception
The object is to reduce the quality of detail contained
in manager reports and statistics to date on which
action can be taken.
An organizational system in which managers delegate
as much responsibility and activity as possible to
those below them, stepping in only when absolutely
necessary.
4747
Organizational Structure for different
Organizations
4848
1.ORGANIZATION STUDY1.ORGANIZATION STUDY Organization Structure Organization Structure
H R F IN A N C E M A R K E T IN G P U R C H A S E LEGALAND
GENERALADM INISTRATION
D M D
P M E D(p roject m f g .
an d en gg .d iv ision )
P R O D U C T IO N P L C P(p lan t log istics
an d con tro ld iv ision )
Q U A L IT Y P D D(p rod u ct
d esign an dd evelop m en t)
D M D
M D
TOYOTA KIRLOSKAR MOTOR, Bidadi, BangaloreTOYOTA KIRLOSKAR MOTOR, Bidadi, Bangalore
4949
ORGANIZATION STRUCTURE
General manager
ManagerQuality
ManagerExtraction/
Asawarishta
ManagerSyrup/
Liniment
ManagerTabs/caps/gel
Manager despatch/ stores
OM Pharmaceuticals, Bangalore OM Pharmaceuticals, Bangalore
5050
Organization structureOrganization structureGM
(Aerospace)
AGM (Mfg) DGM (Fin) CM (IM) CM (Plan) CM (QC) SM (MS)
DGM (Mfg) SM(IT) SM (TP) SM(TD) CM (Prod)
CMCNC & Weld
CMAssembly
CMMaintenance
SMNew Projects
SMPrithvi
SMLp Engine
SMCarnation Weld
SMPSLV Assy
SMPrithvi Assy
M (OS)
Aerospace DivisionHindustan Aeronautics Limited
Aerospace DivisionHindustan Aeronautics Limited
5151
Staffing
Filling and keeping the positions provided for
by the organizations structure filled with the right
people is the staffing.
5252
It includes
• identifying workforce requirements
• inventorying the people available and
• recruiting, selecting, placing, promoting, apprising,
planning the careers.
• Staffing is closely linked with organizing.
Nature of Staffing
5353
• Recruiting or getting applicants for jobs as they open
up.
• Selection of best qualified from those who seek the job
• Transfer and Promotions
• Training those who need further instructions to perform
their work effectively or to qualify for promotions
Nature of Staffing
5454
Importance of Staffing
Helps in discovering talented and competent
workers and developing them to move up the
corporate ladder
Ensures greater productions by putting the right
man in right job
5555
Provide sudden disruption of an enterprise’s production run
by indicating shortages of personnel, if any, in advance.
Prevent under utilization of personnel through over manning
and resultant high labour cost and low profit margin
Provides information to management for the internal
succession of managerial personnel in the event of an un
anticipated turn over
Importance of Staffing contd..
5656
Process of Selection
Selection is the process of differentiating
between applicants in order to identify and
hire those with a greater likelihood of
success in a job.
5757
Process of Selection
Preliminary interview Selection tests Employment interview Reference and background analysis Selection decision physical examination Job offer Employment contract Evaluation
5858
Recruitment
• It can be defined as the process of identifying the
sources for prospective candidates and to stimulates
them to apply for the jobs.
• Generating of applications or applicants for specific
positions.
• Attracting potential of employees to the company.
5959
Recruitment
• The management should have a proper plan
of recruitment regarding the quantity and
quality of personnel required and the time
when it is needed.
6060
Sources of Recruitment
• There are basically two broad sources of
recruitment.
• Internal sources i.e, recruitment within the
organization.
• External sources i.e, recruitment from outside.
6161
Internal Source Recruitment
• Internal source refers to people currently
working in the organization. From this source,
Position are filled either through
• Promotion
• Through transfer from other positions.
6262
External Source Recruitment
• Following are the different sources external to organization.
• Former Employees
• Recommendations
• Employment exchange
• Campus Interview
• Advertisement
• Voluntary or Walk-in applicants
• Private Employment Agencies of HR Consultants
• Labour Unions
6363
TraditionalTraditionalRecruitingRecruitingSourcesSources
InternalInternalSearchesSearches
EmployeeEmployeeReferralsReferrals
EmployeeEmployeeLeasingLeasing
TempTempServicesServices
EmploymentEmploymentAgenciesAgencies
AdvertisementsAdvertisements
SchoolSchoolPlacementPlacement
6464
References
Ess ential of Management, Harold Koontz, Heinz
Weihrich, Tata McGraw hill
Management – James A F Stoner, R Edward
Freeman, Daniel R Gilbert, PHI
Principles of Management-P C Tripathi, P N
Reddy; TMH
6565