Chapter 03 organization and organizing

ORGANIZATION AND ORGANIZING

CHAPTER-3

AUTHORS:DR. K IRAN NERKARDR. VILAS CHOPDE

An organization comes into existence when there are a number of persons in communication and relationship to each other and are willing to contribute to a common endeavor. ---Barnard

A social relationship which is either closed or limits the admission of outsiders by rules, will be called a 'corporate group' (Verband) so far as its order is enforced by the action of specific individuals whose regular function this is, of a chief or 'head' (Leiter) and usually also an administrative staff. These functionaries will normally also have representative authorities. --- Weber

DEFINE ORGANIZATION

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Strong Employee Involvement

Forming Alliances

Developing Team Culture

Mindfulness towards the Change in Environments

Resources

Influence

Security

Tenacity


CHARACTERISTICS OF AN ORGANIZATION

Bureaucratic Organization•Performs routine-driven operations and specialized tasks.

Democratic Organization•Emphasizes upon open relationships and reporting authorities.

Participative Organization•Lies somewhere between democratic and bureaucratic setup as it takes the middle route and positive features of both.

Pyramid Organization•Contains various levels of management. In the pyramid organization, the decision-making process is highly centralized; therefore, takes time.

Simple Organization•Constitutes the features, such as existence of low degree of specialization, presence of wide span of control, centralization of authority in a single person, and little formalization.

Matrix Organization•Creates dual lines of authority. In such an organization, the work is done on the basis of various projects.

Strategic Business Unit (SBU)•Refers to a small part of an organizational set up that performs a specific task.

Virtual Organization•Emphasizes on outsourcing its operations and keeping assets to the minimum.


TYPES OF ORGANIZATION


ORGANIZATIONAL THEORIES

Classical Theory Based on a traditional assumption that the effi ciency and

productivity can be improved by enhancing the effi ciency of its human resource.

It was advocated by F. W. Taylor, Max Weber, and Henri Fayol. Neoclassical Theory

Based on an assumption that an organization is a social system composed of a group of individuals sharing a common objective.

It was advocated by Elton Mayo and its associates. Modern Theory

Based on the assumption that organization is a system that needs to adapt changes in its environment.

It was advocated by Hicks and Gullet, Chester Irving Barnard and Von Bertalanffy.

Vision refers to the statement that consists of the vision of the organization in a written form.

It should be clear, concise, and inspiring to provide a base to form the strategies for achieving the vision of the organization.

The features of vision statement include: Creating an identity and a sense of purpose for an

organization Inspiring the organization to achieve its aim Fostering long-term thinking in an organization Making sense in the marketplace by being competitive,

unique, and original Fostering experimentation and innovation in the organization Elevating the energy and self-esteem of all the employees in

the organization


CONCEPT OF VISION

Mission states the reason for the existence of an organization and defi nes the path to achieve the vision.

A mission is forward-looking view of an organization; whereas, mission is what an organization is and why it exists.

The features of the mission statement are as follows: Feasible

Implies that a mission statement should be realistic in nature. Clear

States that a mission statement should be transparent that is, it should not be complex and unclear in nature.

Motivational Implies that a mission statement should encourage the members of the

organization to work towards the organizational goal. Unique

Implies that a mission statement should be unique and distinctive to attract the attention of the society.


CONCEPT OF MISSION

Understandable Implies that objectives should have clarity and use simple

language. Specifi c time-horizon

Refers that objectives should be designed in a particular time frame.

Set within the constraints Mean that an organization faces various constraints internally,

such as scarcity of resources and externally, such as legal restrictions.

Measurable and controllable Implies that an objective should be quantifiable in nature.

Form a hierarchy Refers that an objective should begin with the vision and mission,

and end with the key goals.


FEATURES OF ORGANIZATIONAL OBJECTIVES

Refers to a process of setting the discrete and specific goals for the entire organization.

The features of MBO are given as follows: Emphasizes participation in setting definite and measurable

goals Lays emphasis on what is to be accomplished rather than

how it is to be accomplished Provides systematic and rational approach to management

and helps in crisis management Concentrates on key result areas


MANAGEMENT BY OBJECTIVES (MBO)

1• Establishing Long-Term Goals

2

• Establishing Specific Performance Objectives

3• Developing Action Plans

4• Appraising Results

5• Taking Corrective Actions


MBO PROCESS

Organizing is one of the basic managerial functions preceded by the planning function of the management.

Once the planning is done, managers are required to establish a suitable organizational structure and organize resources to implement the planning eff ectively.

Organizing function of managers involves creating an organizational structure and organizing resources for various activities.


ORGANIZING FUNCTION OF MANAGEMENT

1• Determining Activities

2• Grouping Activities

3• Assigning Duties

4• Delegating Authority


ORGANIZING PROCESS

Principle of Division of LaborPrinciple of Work SpecializationPrinciple of DepartmentationPrinciple of Authority and ResponsibilityPrinciple of Unity of CommandPrinciple of Span of ManagementPrinciple of a Scalar ChainPrinciple of Unity of PurposePrinciple of NavigationPrinciple of SynergyPrinciple of Team Spirit


PRINCIPLES OF ORGANIZING

Departmentation Involves creating different departments based on different

functions that are carried out in an organization. Coordination

Involves creating synchronization between all the activities of an organization.

Work Simplification and Specialization Involves breaking up the whole organizational work into

several smaller parts known as tasks or jobs. Organizational Hierarchy

Refers to the fact that organizing involves clearly defining the authority and responsibility of every individual at different positions.


PURPOSE OF ORGANIZING

Organizational structure is an outline that determines the level at which the roles and responsibilities are delegated to individuals to fulfi ll the goals of an organization.

An organization needs to consider the following aspects while determining its structure: The strengths and weaknesses of different organizational

forms The legal aspects of all available organizational structures The growth patterns of the organization The relationship between the manager and its subordinates The flow of information and the frequency of communication The number of subordinates under a manager The autonomy given to employees at various levels of the

organization


CONCEPT OF ORGANIZATIONAL STRUCTURE

Line Organizational Structure

Line and Staff Organizational Structure

Functional Organizational Structure

Divisional Organizational Structure

Project Organization Structure

Matrix Organizational Structure


TYPES OF ORGANIZATIONAL STRUCTURE

Departmentation Refers to an organizational tool that is used to divide large

activities into units and subunits, known as departments. Span of Management

Refers to the number of employees supervised by a superior or manager.

Delegation of Authority Refers to the allocation of power to the respective heads,

so that they can make independent decisions toward the accomplishment of organizational objectives and goals.

Assigning Responsibility Refers to the foremost element to achieve the objective and

goals assigned to individuals working at different positions in an organization.


ELEMENTS OF ORGANIZATIONAL STRUCTURE

Refers to modifying the existing structure of an organization to increase its effi ciency.

Corporate restructuring can be classified into three forms:


CORPORATE RESTRUCTURING

Ownership Restructuri

ng

Business Restructuri

ng

Asset Restructuri

ng

Staffi ng aims at managing the organization structure eff ectively by selecting effi cient employees and developing them.

The main objectives of the staffi ng function of an organization: Filling vacant positions Developing employee competencies Retaining employees


STAFFING

The vision statement of an organization describes the objectives that an organization aspires to achieve in the future.

The mission statement defines the means to achieve the vision.

The organizing function of management is mainly concerned with the proper delegation of roles and responsibilities among individuals.

It is necessary for the organization to have an effi cient structure to accomplish its goals and objectives successfully.


RECAP

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