MGT 101 MODULE 8

• Organizing


  Process of identifying activities to be done to accomplish a goal
• Organizing


  Grouping these activities into meaningful units
• Organizing 


  Assigning authority and responsibility to people for their accomplishments
• Importance of Organizing

  1. Divides work to be done into specific jobs and departments
  2. Assigns tasks and responsibilities associated with individual jobs
  3. Coordinates diverse organizational tasks
  4. Clusters jobs into units
  5. Establishes relationships among individuals, groups, and departments
  6. Establishes formal lines of authority
  7. Allocates and deploys organizational resources
• 3 Organizing Concepts

  1. Organizational Designing
  2. Organizational Structure
  3. Organizational Chart
• Organizational Design


  Determination of the most appropriate organizational structure is important in organizational designing
• 6 Elements of Organizational Design

  1. Work Specialization
  2. Departmentalization
  3. Chain of Command
  4. Span of Control
  5. Centralization and Decentralization
  6. Formalization
• Work Specialization

  • Known as Division of Labor
  • The degree to which the work necessary to achieve organizational goals is broken into various unit
• Work Specialization


  Increases efficiency but may lead to boredom, fatigue, stress, poor quality, increased absenteeism, reduced performance and increased turnover
• Work Specialization: Job Designing


  Specification of task activities associated with a particular job
• Work Specialization: Today's View


  Most managers today continue to see work specialization as important because it helps employees be more efficient.
• Departmentalization


  Clustering of individuals into units and units into larger units to facilitate achievement of organizational goals
• Departmentalization


  Large organizations are using a combination of the different forms of departmentalization
• Departmentalization: Today's View 


  Customer departmentalization has become a popular choice for better understanding of their needs and use of cross functional teams - composed of members from the various functional departments
• 5 Types of Departmentalization

  1. Functional
  2. Product
  3. Geographical
  4. Process
  5. Customer
• Functional Departmentalization - PROS

  • Efficiencies from putting together similar specialties and people with common skills, knowledge and orientations
  • Coordination with functional area
  • In-depth specialization
• Functional Departmentalization - CONS

  • Poor communication across functional areas
  • Limited view of organizational goals
• Product Departmentalization - PROS

  • Allows specialization in particular products and services
  • Managers can become experts in their industry
  • Closer to customers
• Product Departmentalization - CONS

  • Duplication of functions
  • Limited view of organizational goals
• Geographical Departmentalization - PROS

  • More effective and efficient handling of specific regional issues that arise
  • Serve needs of unique geographic markets better
• Geographical Departmentalization - CONS

  • Duplication of functions
  • Can feel isolated from other organizational areas
• Process Departmentalization- PROS


  More efficient flow of work activities
• Process Departmentalization - CONS

  • Can only be used with certain types of products
• Customer Departmentalization - PROS

  • Customers needs and problems can be met by specialists
• Customer Departmentalization - CONS

  • Duplication of functions
  • Limited view of organizational goals
• Chain of Command


  Unbroken line of authority that ultimately link each individual with top organizational position through a managerial position at each successive layer in between
• Chain of Command


  Line of authority extending from the top management to the lowest management level
• Chain of Command


  Defines who reports to whom
• Chain of Command: Today's View


  Although early management theorists (Fayol, Weber, Taylor, Barnard, and others) believed that chain of command, authority (line and staff), responsibility, and unity of command were essential, times have changed as those elements are considered far less important today
• Chain of Command - AUTHORITY


  Refers to the rights inherent in a managerial position to tell people what to do and to expect them to do it
• Parity of Authority and Responsibility


  If a person is responsible for accomplishing a certain task in the organization, he should be given sufficient authority to accomplish that task
• Chain of Command - RESPONSIBILITY


  An obligation to perform any assigned duties
• Absoluteness of Responsibility


  Though a superior in an organization may delegate a portion of his authority to his subordinates, he does not reduce his responsibility or accountability for the performance of the tasks under his jurisdiction
• Chain of Command - UNITY OF COMMAND


  A person should report to only one manager
• Span of Control

  • The number of employees a manager can effectively and efficiently handle
  • Managers should have neither too many nor too few subordinates
• Span of Control


  Span of management depends on the circumstances of each managerial job
• Span of Control: Today's View


  The trend in the recent years is larger spans of control. With wider span, the employees know their jobs well and when employees understand organizational processes
• Tall Structure - Narrow span

  • Many hierarchical levels
  • Raise administrative cost, slow communication and decision-making
• Flat Structure - Broader span

  • Few hierarchical levels
• Narrow Span

  • Close supervision and directed control
  • Many levels of management
  • High cost of management staff
  • Less independence and decision authority for subordinates
  • Large distance between top management and bottom staff
  • Poor executive communication and visibility