ORGANIZING

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What is an Organization?

Importance of Organizations

– Bring together resources to achieve desired goals and

outcomes

– Produce goods and services efficiently

– Facilitate innovation

– Use modern manufacturing and information

technologies

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Importance of Organizations

Importance of Organizations (cont’d)

– Adapt to and influence a changing environment

– Create value for owners, customers and employees

– Accommodate ongoing challenges of diversity, ethics,

and the motivation and coordination of employees

Nature and Purpose of Organizing

Verifiable objectives

A clear idea of the major duties and activities involved

An understood area of discretion or authority so that the

person filling the role knows what he can do to accomplish

goals

Organization implies a formalized, intentional internal

structure of roles and positions.

Steps in organizing are :

The identification and classification of required activities

The grouping of activities necessary to attain the

objectives.

The assignment of each grouping to a manager with the

authority necessary to supervise it.

The provision for co-ordination horizontally and vertically in

the organizational structure.

Formal & Informal Organization structures

Formal organization means the intentional structure of

roles in a formally organized enterprise.

Informal organization is a network of personal and

social relations not established/required by the formal

organization but arising spontaneously as people

associate with one another.

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Tall and Flat Organizations

Tall structures have many levels of authority and narrow

spans of control

Flat structures have fewer levels and wide spans of

control

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Span of Control Refers to the number of subordinates who report

directly to an executive or supervisor

The differences in the span of control have direct

implications on the shape of the organization

Organizations must find the optimal span of control to

be effective– Narrow enough to permit managers to maintain control over

subordinates– Wide enough so that the possibility of micromanaging is

minimized

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The optimal span of control is dependent on the following

factors

Is the work clearly defined

Are subordinates highly trained and do they have access to

information

Is the manager highly capable and supportive

Are jobs similar and performance measures comparable

Do subordinates prefer autonomy to close supervisory control

Clarity of delegation of authority.`

Clarity of plans

Use of objective standards

Rate of change of organization

Communication Techniques

Amount of personal contact needed

Variation by organization level

A manager who is competent and well trained can effectively supervise

more people.

Positive attitude of subordinates towards assumption of responsibility as

well as their willingness to take reasonable risk.

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Problems with organizational levels :

Expensive

Complicates communication

Complicates planning and control

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Factors Affecting Organizational Structure

Five Basic Parts of an Organization

TopManagement

TechnicalSupport

Technical Core

AdministrativeSupport

MiddleManagement

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Goals and Strategy

Environment Size

Culture TechnologyStructure

1. Formalization2. Specialization3. Hierarchy of Authority4. Centralization5. Professionalism6. Personnel Ratios

Differences Between Large and Small Organizations

• LARGE– Economies of scale– Global reach– Vertical hierarchy– Mechanistic– Complex– Stable market– Career longevity and stability

• SMALL– Responsive– Flexible– Regional reach– Flat structure– Organic– Simple– Niche finding– Entrepreneurs

Departmentalization

Process of establishing department in organization

Basic patterns of Departmentation

1. Departmentation by Simple numbers

2. Departmentation by Time

3. Departmentation by Enterprise functions

4. Departmentation by Territory/Geography

5. Departmentation by Product

6. Process/Equipment Departmentation

7. Customer Departmentation

8. Matrix Departmentation

Departmentation by Simple Numbers

This is structural departmentation include – tolling off

persons who are to perform the same duties and functions and

putting them together under the supervision of a manager.

Age old method and rapidly falling into disuse

Reason for this are

1.The technology is advancing very fast, demanding more

specialized and different skills.

2.Groups composed of specialized personnel are more frequently

more efficient than merely based on numbers.

It is useful only at the lowest level of the organization structure.

Departmentation by time

Suitable for lower level of the organization

Oldest form structuring organization

Grouping of activities according to basis of time

The use of shifts is common in many enterprise because

normal workloads become insufficient and ineffective

E.g.: Hospital, Steel mill

Advantages

1. Services offered 24X7 instead of 8 hrs shift

2. Process need not be interrupted which needs a

continuous cycle of operation

3. Expensive capital equipments can be used more than

8hrs/day

4. Students attending classes during the day’s time can

work in night shift to sustain their living.

Dis-advantages

1. Supervising during night shift becomes difficult

2. There is fatigue factor, since it is difficult for most

employees to change their biological clock

3. Having several shifts may cause problems with

coordination and communication

4. Payment of overtime can increase the cost of production

or services rendered.