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Organizing-Basic Concepts

Departmentation- Functional, Project, Matrix and Virtual

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Organising isIdentification & classification of required activitiesGrouping of activities necessary to attain objectivesAssignment of each grouping to a manager with the authority necessary to supervise it.Provision for coordination horizontally & vertically in the organizational structure.

organizational structure - the formal framework by which job tasks are divided, grouped, and coordinated

Organization, as a structure, has the following features:Two or more personsCommon goalsCooperative effortsDivision of workCommunicationRules and regulations

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Organisation as a Process (Organising)

Organising is the process by which employees, facilities and tasks are related to each other, with a view to achieve specific goals.

It refers to the way, work is arranged and allocated among members of the organization, so as to achieve the goals. , the assignment of these activities to appropriate departments & the provision for authority delegation & coordination.

The process of organising, thus, involves the following steps:

Identifying the work Grouping the work Establishing relationships Delegating authority Providing for coordination and control

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Importance of organization

Facilitates administration & management.Helps in growthEnsures optimum use of human resourcesStimulates creativityProper use of improved technologyHelps in coordinationHelps in executive developmentEnsures co-operationJob satisfaction

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Features of good organization structure

SimplicityFlexibilityClear line of authorityApplication of ultimate responsibilityProper delegation of authorityMinimum possible managerial levels

It is a structure of well defined jobs, each bearing a definite measure of authority, responsibility and accountability.

The structure is consciously designed to enable the people of an organization to work together for accomplishing common objectives.

Formal and Informal Organization

According to classical theorists, the formal organization is built on four pillars:

Division of Labour

Span of Control

Structure

Scalar and Functional Process

Principles of Organization

Characteristics Organizational Structure is designed by

top management to fulfill certain requirement- performance of necessary activities thereby achieving organizational goals.

Based on principle of division of labor and efficiency.

Concentrates more on performance of jobs and not on individuals performing the jobs.

Authority and responsibility assigned to each job have to be adhered by job holders. Based on authority and responsibility people are placed in hierarchy and their status is determined.

Coordination & control specified through procedures & rules.

Must be flexible. There should be room for discretion, for utilization of creative talents

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It is any joint personal activity, without conscious joint purpose, even though contributing to joint results.

A network of personal and social relations not established or required by the formal organization but arising spontaneously as people associate with one another.

It refers to the relationship between people in an organization, based on personal attitudes, emotions, likes, dislikes, etc.

These groups are not pre-planned but develop automatically within an organization

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It is a natural outcome at the workplace. Not designed and planned.

Created on the basis of some similarity among its members; it may be age, sex, place of origin, caste, religion, personality characteristics, etc.

Membership is voluntary. A person may become member of several informal organizations at the same time.

Behavior is coordinated and controlled by group norms and not by norms of formal organization.

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To employees: Sense of belongingness.

Value for emotional problems

Aid on the job.

Innovation and originality.

Important channel of communication. News travels quickly via informal groups. They are secret transmitters and receivers of information before it is officially released.

Social Control. Informal groups provide all its members a set of norms or guides to correct behavior. Members are expected to conform to those norms.

Check on authority. Informal organization is a check and balance on unlimited use of authority by a manager

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To Management: Less supervision.

An aid to management. Management gets feedback about employees and their work experience. It makes up for any management failures in communication.

Resistance to change. Role conflict and sub-optimization. Rumours. Group Think philosophy- Workers

become loyal to their groups. They believe what they seek must be good because the group has decided so.

Social cost- gossiping, joke, idle conversation.

Basis of ComparisonBasis of Comparison Formal OrganizationFormal Organization Informal OrganizationInformal Organization

FormationFormation Planned & deliberatePlanned & deliberate SpontaneousSpontaneous

PurposePurpose Well-set goalsWell-set goals Social InteractionSocial Interaction

StructureStructure Well-structuredWell-structured UnstructuredUnstructured

NatureNature Official and stableOfficial and stable Unofficial and unstableUnofficial and unstable

FocusFocus PositionsPositions PersonsPersons

LeadershipLeadership SuperiorSuperior AnyoneAnyone

Source of powerSource of power DelegatedDelegated Given by groupGiven by group

Guidelines for behaviourGuidelines for behaviour Rules and proceduresRules and procedures Group normsGroup norms

Sources of controlSources of control Reward/ PunishmentReward/ Punishment SanctionsSanctions

SizeSize LargeLarge SmallSmall

NumberNumber Comparatively small Comparatively small Large overlapping of Large overlapping of membership.membership.

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Span of management or span of control, refers to the number of subordinates that a superior can supervise effectively.

determines the number of levels and managers in determines the number of levels and managers in an organizationan organization

Span of Control used in an organization determines whether the structure is tall or flat

Tall structure has a narrow span and more hierarchical levels

Flat structure has a wide span, is horizontally dispersed and fewer hierarchical levels

The trend has been toward wider spans of control

Span of Control used in an organization determines whether the structure is tall or flat

Tall structure has a narrow span and more hierarchical levels

Flat structure has a wide span, is horizontally dispersed and fewer hierarchical levels

The trend has been toward wider spans of control

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1

2

3

4

5

6

7

Org

aniz

atio

nal L

evel

Members at Each Level

Span of 4Operatives = 4,096Managers (levels 1-6) = 1,365

Span of 8Operatives = 4,096Managers (levels 1-4) = 585

1

4

16

64

256

1,024

4,096

1

8

64

512

4,096

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Tall and Flat Structures: Strengths and Weaknesses

Tall Structure Flat Structure

StrengthsStrengths Closer control. Better coordination where

the work is highly interlocking.

In crisis situations insures closer supervision and possibly fewer mistakes.

Some individuals work better and actually prefer closer, detailed supervision.

Forces managers to delegate, leading to development of subordinates.

Reduces overhead costs and the number of supervisors needed.

Speeds and improves communication.

For individuals who desire challenge, responsibility and autonomy, flat structures are most suitable.

WeaknessesWeaknesses Slows decision-making. Distorted communication. Costly in terms of

administrative overheads. Increases administrative

distance between the top level and worker.

Flat structures put pressure on managers and impose heavy penalties for failure.

Lack wide application due to non-availability of competent and willing subordinates; difficult to create autonomous units.

Control and coordination difficult to achieve if work is highly interlocking in nature.

Departmentalization Grouping of related jobs or processes

into major organizational units Permits coordination (integration) to

be handled in the least costly manner

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Departmentation is a means of dividing a large and complex organization into smaller, flexible administrative units.

Departmentation is necessary because it involves grouping of people or activities into a single department or unit to achieve organizational goals.

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Departmentation permits an organization to take advantage of specialization.

Departmentation enables each person to know the particular part which he is expected to play in the total activities of the company.

Departmentation facilitates communication, coordination and control contributing to the overall organizational success.

It enables a manager to locate the sources of information, skills and competence to take certain vital managerial decisions.

Traditional Organizational StructuresSIMPLE STRUCTURE – low departmentalization, wide spans of control, authority centralized in a single person, and little formalizationcommonly used by small businessesas organizations increase in size, the structure tends to become more specialized and formalized

Grouping of positions into departments based on similar skills, expertise, and resource use● Information flows up and down● Chain of command converges at the top● Managers and employees are compatible

because of similar training and expertise● Rules and procedures governing duties and

responsibilities

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Project Structure - employees work continuously on projectsall work performed by teams comprised of employees with appropriate skills and abilities

tends to be very fluid and flexibleno rigid departmentalization or organization hierarchy

managers serve as facilitators and mentors

Matrix Structure - assigns specialists from different functional departments to work on projects led by project managersadds vertical dimension to the traditional

horizontal functional departmentscreates a dual chain of command

violates unity of commandproject managers have authority in areas

relative to the project’s goalsfunctional managers retain authority over

human resource decisions (e.g., promotions)

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Virtual Organization

Consists of a small core of full time employees & that temporarily hires outside specialists to work on opportunities that arise.By relying on web for freelances around the globe, the company enjoys a network of talent without all the unnecessary overhead & structural complexity.

Learning Organization - an organizational mind-set rather than a specific organizational structurehas developed the capacity to continuously adaptall members take an active role in identifying and

resolving work-related issuespractice knowledge management by continually

acquiring and sharing new knowledgeenvironment is conducive to open

communicationempowered teams are important leadership creates a shared vision for the futureorganizational culture provides sense of

community

Organizational Design• Boundaryless• Teams• Empowerment

Organizational Culture• Strong Mutual Relationships• Sense of Community• Caring• Trust

Information Sharing• Open• Timely• Accurate

Leadership• Shared Vision• Collaboration

TheLearning

Organization