PGPM Organisng
Transcript of PGPM Organisng
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Unit3
Organizing
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Organizing:The process of coordinating and
allocating a firms resources so that
the firm can carry out its plans andachieve its goals
(one of the four activities of management)
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What is Organizing?
Organizing
Theprocess of
determining:
The tasks to be done.
Who will do them.
How those tasks will be
managed and coordinated.
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The Process of Organizing
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Purposes of Organizing
Divides work to be done into specific jobs and
departments.
Assigns tasks and responsibilities associated with
individual jobs.
Coordinates diverse organizational tasks.
Clusters jobs into units.
Establishes relationships among individuals, groups, and
departments.
Establishes formal lines of authority.
Allocates and deploys organizational resources.
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Levels in Organisation
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Managerial Hierarchy:
the levels of management within
an organization; typically includes
top, middle, and supervisory levels.
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Managerial Pyramid
Top Management
Middle Management
Supervisory
Management
Power
Numb
erofEmploye
es
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Organization Types
1.Formal Org
2.Informal Org
3.Matrix Org4.Project Org
5.Virtual Org.
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Forms of Juridical Organizations
1.Sole trading proprietorship2.Partnerships
3.Joint stock companies with limited
liability4.Co-operatives
5.Societies and Trusts.
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Types of Organisation
Formal Prescribed structure of roles & relationships
Goals oriented towardsproductivity, growthetc
Hierarchical & bureaucratic
Emphasis on status differentials
Prescribed behaviour. Rewards for desired andpunishments for undesired behaviour.
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Advantages ofFormal Organisation:
Reduces conflicts among the workers
No overlapping of responsibilities
No shirking of responsibilities(No passing thebuck )
There is a sense ofsecurity
No scope for favoritism
Less dependent on one man.
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Disadvantage ofFormal Organisation
Formal organization may reduce thespirit ofinitiative
Sometime authority is used for thesake of
convenience of theemployee It does not consider thesentiments and values of
employees
Formal organization reduces thespeed of informal
communication. It can createproblem of communication.
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Informal Organisation
Natural and spontaneousstructure arising
from social tendencies
Goals centred around groupsatisfaction,affiliation etc
Shapeless and uncharitable
Based on friendship, common valuesetc. Unwritten norms of behaviour.
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Benefits of informal organisation
To its members Sense of belonging
Safety valve for emotional problems
Aid on the job
Breeding ground for innovation andoriginality
Important channel of communication
Social control
Check on authority.
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Benefits of informal organisation
ToManagement Selfpolicing
Fills in gaps in managers abilities
Gives the manager feedback about
employees and their work.
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Disadvantages ofInformal Organisation
Resistance to change
Organization objectives may be affected
RumourGroup-thinkphilosophy.
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Difference between formal and
informal organization
Formal It arises due to
delegation of authority
It gives importance toterms of authority andfunction
Rules, Rights, duties aregiven in writing
Authority flows fromupwards to downwards
Formal organisation isstable and permanent
Informal It arises due to social
interaction
It gives importance topeople and relationship
No written code ofconduct
No structured flow ofauthority
It is not permanent.
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Stakeholders in Organization
1.Customers
2.Society
3.Government
4.Owners & Shareholders
5.Employees
6.BusinessPartners.
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Defining Organizational Structure
Organizational Structure
The formal arrangement of jobs within anorganization.
Organizational Design
Aprocess involving decisions about six key elements:
Workspecialization
Departmentalization
Chain of command
Span of control
Centralization and decentralization
Formalization.
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FACTORSINFLUENCING ORGANIZATIONAL
STRUCTURES
1. SIZE OFSIZE OFTHE UNIT
2. JOB DESIGN
3. GROUPING OFACTIVITIES
4. SPAN OFCONTROL
5. DELEGATION OFAUTHORITY
6. UNITY OFCOMMAND.
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Organizational Structure
Work Specialization
The degree to which tasks in the organization aredivided into separate jobs with each step completed bya different person.
Overspecialization can result in human diseconomiesfrom boredom, fatigue, stress, poor quality, increasedabsenteeism, and higher turnover.
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Departmentalization::
the process of grouping jobs
together so that similar orassociated tasks and activities can
be coordinated.
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Departmentalization by Type
Functional
Grouping jobs by
functions performed
Product Grouping jobs by
product line
Geographical
Grouping jobs on the
basis of territory or
geography
Process
Grouping jobs on the
basis of product or
customer flow Customer
Grouping jobs by type of
customer and needs.
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Functional Departmentalization
Advantages
Efficiencies from putting together similar specialties and
people with common skills,knowledge, and orientations
Coordination within functional areaIn-depthspecialization
Disadvantages
Poor communication across functional areas
Limited view of organizational goals.
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Geographical Departmentalization
Advantages
More effective and efficient handling of specific
regional issues that arise
Serve needs of unique geographic markets better
Disadvantages
Duplication of functions
Can feel isolated from other organizational areas.
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Product Departmentalization
+ Allowsspecialization in particular products and services
+ Managers can becomeexperts in their industry
+ Closer to customers
Duplication of functions
Limited view of organizational goals.
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Process Departmentalization
+Moreefficient flow of work activities
Can only be used with certain types ofproducts.
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Customer Departmentalization
+ Customers needs and problems can be met by specialists
- Duplication of functions
- Limited view of organizational goals.
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Organization Structure(contd)
Chain ofCommand
The continuous line of authority that extends
from upper levels of an organization to the
lowest levels of the organization and clarifies
who reports to who.
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Organization Structure(contd)
Authority
The rights inherent in a managerial position to tell
people what to do and to expect themtodoit.
Responsibility
The obligation or expectation to perform.
Unity ofCommand
The concept that a person should have one boss
and should report only to that person.
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Organization Structure(contd)
Span ofControl The number ofemployees who can beeffectively
and efficiently supervised by a manager.
Width ofspan is affected by:
Skills and abilities of the manager
Employee characteristics
Characteristics of the work being done
Similarity of tasks
Complexity of tasks
Physical proximity ofsubordinates
Standardization of tasks.
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Contrasting Spans ofControl
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Organization Structure(contd)
Centralization
The degree to which decision-making is concentrated at a
singlepoint in the organizations.
Organizations in which top managers make all the decisions and
lower-level employeessimply carry out those orders.
Decentralization
Organizations in which decision-making ispushed down
to the managers who are closest to the action.
EmployeeEmpowerment Increasing the decision-making authority (power) of
employees.
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Factors that Influence theAmount ofCentralization
More Centralization
Environment is stable.
Lower-level managers are not as capable or experienced at
making decisions as upper-level managers.
Lower-level managers do not want to have a say in
decisions.
Decisions are relatively minor.
Organization is facing a crisis or the risk of company failure.
Company is large.
Effective implementation of company strategies depends on
managers retaining say over what happens.
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Factors that Influence theAmount ofCentralization
More DecentralizationEnvironment is complex, uncertain.
Lower-level managers are capable and experienced at
making decisions.
Lower-level managers want a voice in decisions.
Decisions are significant.
Corporate culture is open to allowing managers to have a
say in what happens.
Company is geographically dispersed.
Effective implementation of company strategies depends on
managers having involvement and flexibility to make
decisions.
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Organization Structure(contd)
Formalization
The degree to whichjobs within the organization
are standardized and the extent to which
employee behavior is guided by rules and
procedures.
Highly formalized jobs offer little discretion over what
is to be done.
Low formalization means fewer constraints on how
employees do their work.
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Organizational Design Decisions
Mechanistic Organization
A rigid and tightly
controlled structure
Highspecialization Rigid departmentalization
Narrow spans of control
High formalization
Limited informationnetwork(downward)
Low decision participation
Organic Organization
Highly flexible and adaptable
structure
Non-standardized jobs
Fluid team-based structure
Little direct supervision
Minimal formal rules
Open communication network
Empowered employees.
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Mechanistic versus Organic Organization
Highspecialization
Rigid departmentalization
Clear chain of command
Narrow spans of control
Centralization
High formalization
Cross-functional teams
Cross-hierarchical teams
Free flow of information
Widespans of control
Decentralization
Low formalization.
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Common Organizational Designs
Traditional Designs
Simplestructure
Low departmentalization, widespans of control,
centralized authority, little formalization
Functional structure
Departmentalization by function
Operations, finance,human resources, and product research
and development
Divisional structure
Composed ofseparate business units or divisions with
limited autonomy under the coordination and control
theparent corporation.
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Strengths andWeaknesses ofTraditional Organizational Designs
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Contemporary Organizational Designs
Team Structure
What it is: A structure in which the entire organization is made up of
work groups or teams.
Advantages: Employees are more involved and empowered. Reducedbarriers among functional areas.
Disadvantages: No clear chain of command. Pressure on teams to
perform.Matrix-Project Structure
What it is: A structure that assigns specialists from different
functional areas to work on projects but who return to
their areas when the project is completed. Project is a
structure in which employees continuously work on
projects. As one project is completed, employees moveon to the next project.
Advantages: Fluid and flexible design that can respond toenvironmental changes. Faster decision making.
Disadvantages: Complexity of assigning people to projects. Task and
personality conflicts.
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An Example of aMatrix Organization
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Contemporary Organizational Designs
Boundaryless Structure
What it is: A structure that is not defined by or limited to
artificial horizontal, vertical, or external
boundaries; includes virtual and network types of
organizations.
Advantages: Highly flexible and responsive. Draws on talentwherever its found..
Disadvantages: Lack of control. Communication difficulties.
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Removing External Boundaries
Virtual Organization An organization that consists of a small core of full-time
employees and that temporarily hires specialists to work
on opportunities that arise.
Network Organization
A small core organization that outsources its major
business functions (e.g., manufacturing) in order to
concentrate what it does best.
Modular Organization
A manufacturing organization that uses outside suppliers
to provide product components for its final assembly
operations.
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Organizational Designs (contd)
The Learning Organization
An organization that has developed the capacity to
continuously learn, adapt, and change through the
practice ofknowledge management by employees. Characteristics o f a learning organization:
An open team-based organization design that empowers
employees
Extensive and open information sharing
Leadership that provides a shared vision of the organizations
future, support and encouragement
A strong culture ofshared values, trust, openness, and a sense of
community.
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Delegation
DelegationThe process of transforming the
responsibility for a specific activity
or task to another member of the
organization, and
Empowering that individual to
accomplish the task effectively.
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TheProcess of Delegation
Decide which goals/tasks to delegate
Teach the department or organization mission.
Find a capable person.
Teach/train the person. Assign Responsibility
Refers to the employees obligation to complete theactivities that he or she has been assigned.
Grant Authority Authority is the right to marshal resources and make
decisions necessary to fulfill work responsibilities.
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TheProcess of Delegation (contd)
Establishing Accountability
Where there is accountability for
performance, employees understand that they
must justify their decisions and actions withregard to the tasks for which they have
assumed responsibility.
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Tips for Effective Delegation
Get over fear of losing control.
Set realistic, achievable objectives.
Let go of theeasy stuff and face the toughstuff.
Match theperson to the task.
Do it early.
y Provide training and resources needed.
y Set consistent standards for everyone.
y Give authority with the responsibility.
y Givespecific instructions.
y Identify key review points.
y Focus on results not how it is being done.
y Develop a way to trackprogress on delegated projects.
y P
raise achievement publicly.
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6 Levels of Delegation
1. Investigate and report back, you make thedecision.
2. Investigate and recommend action.
3. Investigate, plan and advise on plan, dont actuntil you say so.
4. Investigate, plan and take action unless you sayno.
5. Investigate, take action, short reporting time-line.
6. Make assignment, doesnt come back to you.
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Benefits of Delegation
Leads to a more involved and empowered workforce.
Improved response time as a result of decisions and
information not needing to be passed up and down the
organization. Leads to better decision making.
Provides opportunity for employee to develop analytical and
problem solving skills.
Provides managers the opportunity to accomplish more
complicated, difficult, or important tasks.
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Reasons for Failing to Delegate
The time crunch.
Lack of confidence in the abilities of
subordinates.
Managers try to avoid the potential pitfalls of
dual accountability.
Managers may be insecure about their own
value to the organization.
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Learning to DelegateEffectively
1. Match the employee to the task.
2. Be organized and communicate clearly.
3. Transfer authority and accountability withthe task.
4. Choose the level o f delegation carefully.
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Degree of Delegation
Source:Adapted from M. E. Haynes, Delegation: Theres More to It Than Letting Someone Else Do It! 915. Reprinted, by permission of publisher,
from Supervisory Management, January 1980. 1980, American Management Association, New York. All rights reserved.