Organizing

• Wipro Technologies, one of India's largest IT solutions providers, is taking on the likes of IBM and Accenture in its effort to be included among the largest and most successful technology services companies in the world
• Restructuring Wipro


  • Considered the most important step in becoming a global giant
  • Driven by the goal towards improved customer-orientation
• Wipro's restructuring


  1. Separated into several subsidiaries by product line: telecommunications, engineering, financial services

  2. Each subsidiary brings in about $300 million in annual earnings and is self-sufficient with their own accounting books, personnel and administrative functions
• Decentralised management system


  All responsibilities for growth lay with the management of each entity
• Azim Premji: '"We tried to de-layer the organisation and empower our business leaders with a much higher degree of growth responsibility. We removed an entire layer [of executives]"'
• Organising plays a significant role in implementation of plans
• Organising


  A process which coordinates human efforts, assembles resources and integrates both into a unified whole to be utilised for achieving specified objectives
• Steps in the process of organising

  1. Identification and division of work

  2. Departmentalisation

  3. Assignment of duties

  4. Establishing authority and reporting relationships
• Organisation structure


  • The framework within which managerial and operating tasks are performed
  • Specifies the relationships between people, work and resources
• Span of management


  The number of subordinates that can be effectively managed by a superior
• Functional structure


  • Grouping of jobs of similar nature under functional and organising these major functions as separate departments
  • All departments report to a coordinating head
• Divisional structure


  • Grouping of activities on the basis of products, territories or customers
  • Each division is self-contained with its own functional departments
• Utility


  Satisfaction gained from consumption of a product
• Personnel


  Employees of an organisation
• Division of work on the basis of functions

  Results in an organisational structure specifying the line of authority and responsibility
• Types of organisational structures

  • Functional structure
  • Divisional structure
• Functional structure


  • Grouping of jobs of similar nature under functional departments
  • Departments report to a coordinating head
• Divisional structure


  • Organisation structure comprises of separate business units or divisions
  • Each division is self-contained and multifunctional
• Divisional structure is suitable for business enterprises with a large variety of products manufactured using different productive resources
• Enterprises must continuously review their organisational structure to adapt to a changing environment
• Formal organisation refers to the structure designed by management to accomplish a task
• Formal organisation


  • Specifies relationships among job positions
  • Lays down rules and procedures to achieve objectives
  • Coordinates and integrates efforts of various departments
  • Deliberately designed by top management
  • Places emphasis on work to be performed
• Informal organisation


  Network of social relationships among employees that emerges within the formal organisation
• Formal organisation


  Structure of authority relationships created by the management
• Informal organisation


  Network of social relationships arising out of interaction among employees
• Informal organisation


  • Originates from within the formal organisation as a result of personal interaction among employees
  • Standards of behaviour evolve from group norms rather than officially laid down rules and regulations
  • Independent channels of communication without specified direction of flow of information are developed by group members
  • Emerges spontaneously and is not deliberately created by the management
  • Has no definite structure or form because it is a complex network of social relationships among members
• Informal organisation is an aggregate of interpersonal relationships without any conscious purpose but which may contribute to joint results
• Informal organisation is a network of personal and social relations not established or required by the formal organisation but arising spontaneously as people associate with one another
• Comparison of formal and informal organisation


  • Meaning
  • Origin
  • Authority
  • Behaviour
  • Flow of Communication
  • Nature
  • Leadership
• Informal organisation cannot be altogether eliminated, so it would be in the best interest of the organisation if the existence of such groups is recognised and the roles that their members play are identified
• Delegation


  Downward transfer of authority from a superior to a subordinate
• Delegation is a pre-requisite to the efficient functioning of an organisation because it enables a manager to use his time on high priority activities and satisfies the subordinate's need for recognition and provides them with opportunities to develop and exercise initiative
• Delegation helps a manager to extend his area of operations as without it, his activities would be restricted to only what he himself can do
• Delegation does not mean abdication, the manager shall still be accountable for the performance of the assigned tasks
• The authority granted to a subordinate can be taken back and redelegated to another person, so the manager shall still be accountable to the same extent as before delegation
• Authority


  The right of an individual to command his subordinates and to take action within the scope of his position
• Responsibility


  The obligation of a subordinate to properly perform the assigned duty
• Accountability


  Answerability for the outcome of the assigned task
• Overview of the elements of delegation

  • Authority
  • Responsibility
  • Accountability
• Centralisation


  Decision-making authority is retained by higher management levels