THE ORGANIZING PROCESS
MS AMNA MUNIR
WHILE ORGANIZING IS DECIDING HOW BEST TO
GROUP ORGANIZATIONAL RESOURCES:
• An Organizational Structure is a set of six basic
building blocks or elements that managers may use
to configure and construct an organization.
SIX BASIC BUILDING BLOCKS FOR ORGANIZATION
STRUCTURE
1. Designing jobs
2. Grouping Jobs
3. Establishing reporting relationships between jobs
4. Distributing authority among jobs
5. Coordinating activities among jobs
6. Differentiating among positions
1. DESIGNING JOBS
• Job design is the determination of an individual’s work-
related responsibilities.
• Job specialization is the degree to which the overall task of
the organization is broken down and divided into smaller
component parts. Sometimes referred to as the division of
labor.
• Work Team allows an entire group to design the work system
it will use to perform an interrelated set of tasks.
• The team itself decides how jobs will be allocated and
assigns specific tasks to members, monitors and controls its
own performance and has autonomy over work scheduling.
2. GROUPING JOBS: DEPARTMENTALIZATION
• Departmentalization is the process of grouping jobs
according to some logical arrangement.
• In smaller organizations, the owner-manager/partner may
be able to personally oversee everyone who works there.
• As an organization grows, new managerial positions are
created to supervise work of others grouped according to
some plan which leads to the creation of departments.
CONT.
• Functional Departmentalization groups jobs involving the
same or similar activities.
• Product Departmentalization groups activities around
products or product groups.
• Customer Departmentalization occurs when the
organization structures its activities to respond to and
interact with specific customers or customer groups.
• Location Departmentalization groups jobs on the basis of
defined geographic sites or areas.
CONT.
Other Considerations for Departmentalization:
• In some large organization, departments may be referred to
as Divisions, Units, Sections and Bureaus.
• Regardless of the label used, they represent groups of jobs
that have been tied together according to some unifying
principle.
• Almost all organizations are likely to use multiple bases of
departmentalization, depending on level.
• It is quite common that organizations use a variety of bases
of departmentalization for different levels and different sets
of activities.
DEPARTMENTALIZATION
3. ESTABLISHING REPORTING RELATIONSHIPS
Chain of Command is a clear and distinct line of authority
among the positions in an organization that has two
components:
• Unity of Command
• Scalar Principle
TALL VERSUS FLAT ORGANIZATIONS:
• Flat structures seem to lead to higher levels of
employee morale and productivity.
• A wider span of management in a flat structure may
result in a manager’s having more administrative and
supervisory responsibilities.
• If these responsibilities become excessive, the flat
organization may suffer.
CONT.
• A tall structure is more expensive because of the
larger number of managers.
• Communication in a tall structure seems to suffer
due to the increased number of people through
whom information must pass.
DETERMINING THE APPROPRIATE SPAN:
• The relative importance of each factor varies in
different settings.
• Managers must determine the importance of each
factor or set of factors when deciding the optimal
span of management for their unique situation.
4. DISTRIBUTING AUTHORITY AMONG JOBS
Authority Is the Right to Perform or Command
• It allows its holder to act in certain designated ways
and to directly influence the actions of others
through orders.
• It also allows its holder to allocate the organization’s
resources to achieve organizational objectives.
RESPONSIBILITY IS COMMENSURATE WITH
AUTHORITY
• A subordinate assigned a particular job should be
given sufficient authority to enable him to carry out
the job.
WHAT IS DELEGATION OF AUTHORITY?
• Delegation of authority means division of authority
and powers downwards to the subordinate.
• Delegation is about entrusting someone else to do
parts of your job.
WHAT IS ACCOUNTABILITY?
• When a subordinate is assigned some duties to be
performed, he will be accountable to his superior for
doing or not doing that work.
DELEGATION OF AUTHORITY
• The term ‘delegation’ refers to the process by which
a superior gives a subordinate the authority to do a
particular task.
THREE ESSENTIAL ELEMENTS OF DELEGATION
1. Assignment of responsibility to subordinates;
2. Granting of some authority to subordinates to
enable them to perform the duties assigned;
3. Creating an obligation on the part of subordinates
to perform the duties assigned to them.
KOONTZ AND O’DONNEL 7 PRINCIPLES
1. PRINCIPLE OF DELEGATION BY RESULTS
EXPECTED:
• Authority is delegated to achieve the enterprise
objectives.
• ‘Delegation by results expected implies that goals
have been set and plans made, that these are
communicated and understood, and that jobs have
been set up to fit in with them’.
2. PRINCIPLE OF FUNCTIONAL DEFINITION:
• The functions undertaken by managers are clearly
explained.
• ‘The more a position or a department has clear
definitions of results expected, activities to be
undertaken, organization, authority delegated, and
authority and informational relationships with other
positions, the more adequately individuals
responsible can contribute –toward accomplishing
enterprise objectives’.
3. SCALAR PRINCIPLES:
• This refers to the chain of authority relationships from
superior to subordinate throughout the organization.
• ‘As the scalar principle indicates, this clearer thin line
is from the top of the bottom of the organization
structure, the better delegation and orderly decision
making are facilitated’.
4. AUTHORITY LEVEL PRINCIPLES:
• Each manager can take his own decision within his
authority and only matters not within his authority
must be referred to his superior.
5. PRINCIPLE OF UNITY OF COMMAND:
• This means that a subordinate is answerable to only
one boss.
• ‘The more completely an individual has a
relationship to a single superior, the less the problem
of conflict in instructions and the greater the feeling
of personal responsibility for results’.
6. PRINCIPLE OF ABSOLUTENESS OF RESPONSIBILITY:
• The responsibility of the subordinate to his superior for
the assigned responsibility is absolute.
7. PRINCIPLE OF PARITY OF AUTHORITY AND
STABILITY:
• This principle states that authority should correspond
to the responsibility.
• ‘The responsibility for action cannot be greater than
that implied by a authority delegated, nor can it be
less’.
DISTRIBUTING AUTHORITY
• Authority is the power that has been legitimized
(approved) by the organization.
DISTRIBUTING AUTHORITY
• Delegation is the process by which managers assign
a portion of their total workload to others.
DISTRIBUTING AUTHORITY
Steps in the Delegation Process:
• Manager should assign responsibility or give the subordinate
a job to do.
• Manager must give the subordinate the authority to do the
job.
• Manager must establish the subordinate’s accountability –
‘willingness to accept an obligation to carry out the task
assigned”.
STEPS IN THE DELEGATION PROCESS
DISTRIBUTING AUTHORITY
Decentralization:
The process of systematically delegating power and authority
throughout the organization to middle and lower-level
managers.
DISTRIBUTING AUTHORITY
Centralization:
The process of systematically retaining power and authority in
the hands of higher-level managers.
DISTRIBUTING AUTHORITY – WHICH WAY TO GO?
No organization is ever completely decentralized or
centralized; some firms tend toward one or the other.
• Usually, the greater the complexity and uncertainty of the
external environment, the greater the tendency to
decentralize.
• An organization’s history will play a role – firms tend to do
what they have done in the past.
• The costlier and riskier the decisions, the more pressure there
is to centralize.
• If lower-level managers are well qualified, there is a
tendency to decentralize and vice versa.
COORDINATING ACTIVITIES
• Coordination is the process of linking the
activities of the various departments of the
organization.
• Pooled Interdependence exists when units
operate with little interaction and their output
is simply pooled.
• Sequential Interdependence occurs when the
output of one unit becomes the input for
another in sequential fashion.
• Reciprocal interdependence occurs when
activities flow both ways between units.
STRUCTURAL COORDINATION TECHNIQUES
These techniques were designed to achieve and
maintain coordination among interdependent units.
They include:
• The Managerial Hierarchy
• Rules And Procedures
• Liaison Roles
• Task Forces
• Integrating Departments
THE MANAGERIAL HIERARCHY
One manager is placed in charge of interdependent
departments or units.
Rules and Procedures
• Routine coordination activities may be handled by
rules and standard procedures.
• However, complex or unusual problems may have to
be handled independently.
LIAISON ROLES
• A manager acts as a common point of contact but
has no formal authority over the interdependent
groups.
• He/she simply serves as a facilitator of information
flow between the units.
• He/she maintains familiarity with each unit and can
answer questions and otherwise serve to integrate
the activities.
TASK FORCES
• A task force may be needed when interdependence is
complex and several interdependent units are involved.
• It is created by drawing one representative from each
unit.
• Coordination function is then spread across several
individuals, each of whom has special information
about one of the units involved.
• When coordination of project is completed, the task
force is dissolved.
INTEGRATED DEPARTMENTS
• Similar to a task force but is more permanent.
• Usually has more authority than a task force and
may even be given some budgetary control.
• Generally has some permanent members as well as
members who are assigned temporarily from units
that are particularly in need of coordination.
• Firms characterized by complex and dynamic
environments tend to use integrated departments to
maintain internal integration and coordination.
ELECTRONIC COORDINATION
• E-mail makes it easier for people to communicate at all
levels.
• Electronic scheduling is used and makes it easier for
individuals’ schedules to be coordinated to set
meetings and know when individuals are otherwise
available.
• Some organizations require project contractors,
subcontractors and suppliers to use a common web-
based communication/reporting system to make
coordination easier among the units.
DIFFERENTIATING BETWEEN POSITIONS
• Line position is in the direct chain of command that
is responsible for achieving an organization’s goals.
DIFFERENTIATING BETWEEN POSITIONS
• Staff position is one intended to provide expertise,
advice and support for line positions.
DIFFERENCES BETWEEN LINE AND STAFF
• Line managers work toward organizational goals; staff
managers advise and assist.
• Line managers have formal and legitimate authority;
staff authority is less concrete and may take a variety
of forms:
• Compulsory authority – line manager must listen to advice of
staff manager, but can choose to take it or ignore it.
• Functional authority – formal or legitimate authority given to
staff managers over activities related to their specialties.
ADMINISTRATIVE INTENSITY
• Administrative intensity is the degree to which
managerial positions are concentrated in staff
positions.
• An organization with ‘high’ administrative
intensity is one with many staff positions relative
to the number of line positions.
ADMINISTRATIVE INTENSITY
• Relative ‘low’ administrative intensity reflects more
line positions relative to staff positions.
• Organizations would generally like to devote most of
their HR investment to line managers because they
contribute directly to the organization’s basic goals.
• Practice today is leading toward reducing staff
positions.