Chapter 8
Organising and delegating
8.1 Introduction
- reorganisation: inevitable to reflect new strategies, formulated for
changing management environment
-> changing market conditions, innovations, disruptive technology
- planning: what to do in an organisation to attain its mission and goals
- organising: defines how to do it
-> process of creating a structure for the organisation that will enable its
people to work effectively towards its vision, mission and goals
- organising structure: took for reaching strategic goals and a strategy’s
success is often determined by its alignment and fit with organisational
structure
8.2 Organising, organisation and organisational structure
- organising: the process of creating a structure for the organisation that
will enable its people to work effectively towards its vision, mission and
goals
- change in the environment -> need to change organisation’s plans and
strategy -> structure will have to be realigned with new realities
- organisation changes structure -> needs to adapt its strategy to fit its
new structure
- organising: seen as an ongoing, interactive process that occurs
throughout the life of an organisation
- organisation is the result of the organising process
- process of organising consists of assigning the tasks necessary to
achieve the organisation’s goals to the relevant business units,
departments or sections, and then providing necessary co-ordination to
ensure that these business units, departments or sections work together
- small organisation or small department: usually a matter of deciding
which tasks need to be done and allocating them to various subordinates
- large organisations: process of organising becomes complex
-> need to divide the work of the organisation, allocating it logically to
business units, departments and sections, delegating authority, and
establishing co-ordination, communication and information systems to
ensure everyone working together to achieve the goals
- dividing up work, allocating responsibility -> design on the organisational
structure
- organisational structure: basic framework of formal relationships
between responsibilities, tasks and people in the organisation
-> organisational structure: provides blueprint for deploying organisational
resources
-> illustration -> organisational chart -> graphic representation of the way
in which an organisation is put together
-> vertical hierarchy: chain of command, who reports to whom
-> horizontal hierarchy: specialisation establishes the division of labour
and allows for specialisation
8.3 Reasons for organising
- plans devised and strategies formulated will never become a reality if
human and other resources are not properly deployed and the relevant
activities suitably co-ordinated
- management not possible if lines of authority and responsibility not clear
Organising imperative function for the following reasons:
- Allocation of responsibilities: leads to an organisational structure
that indicates clearly who is responsible for which tasks
- Accountability: implies that the responsible employees will be
expected to account for the outcomes, positive or negative, for that
portion of the work directly under their control
Links results directly to the actions of an individual, section,
department or business unit
Responsibility can be shared but accountability cannot
Accountable: being answerable to your actions
- Establishing clear channel of communication
- Resource deployment: organising helps managers to deploy
resources meaningfully
Organisation helps manager to optimise the utilisation of
resources across the organisation, in all business units,
departments, sections and by all individuals
- Principle of synergy enhances the effectiveness and quality of the
work performed: business units, departments, sections and
individuals in an organisation must work together to ensure that
planned goals are attained
Organised organisation can lead to synergy -> co-operation of 2
or more departments or sections to produce output greater than
the sum of separate effects
Synergy effect enhances effectiveness and quality of the overall
work performed in the organisation
Will contribute to overall effectiveness and efficiency of the
organisation
- Division of work: total workload divided into activities to be
performed by individual or group of individuals
Organising: systematically grouping variety of tasks, procedures
and resources
Possible -> organising process entails an in-depth analysis of the
work to be done, everyone aware of their duties
- Departmentalisation: related tasks and activities of individual
employees are grouped together meaningfully is specialised
sections, departments or business units so that experts in various
fields can deal with their specialised tasks
- Co-ordination: organisation structure responsible for creating
mechanism to co-ordinate activities in the entire organisation
Each individual employee, unit and department need to work in a
co-ordinated fashion to attain overall goals, mission and vision of
the organisation
8.4 The Organising Process
- point of departure in the organising process is the vision, mission, goals
and strategies of the organisation that were formulated during the
strategic planning phase
Step 1: Outline the tasks and activities to be completed to achieve
organisational goals
- Outlining the tasks and activities to be completed to achieve
organisational goals
- Jobs designed and assigned to individual employees within the
organisation
Step 2: Develop an organisation structure
- Develop organisational structure that will support strategic, tactical
and operational plans
- Group the organisation members into work units or departments
Develop integrating mechanism to co-ordinate the efforts of
diverse work groups, and determining the extent to which
decision-making in the organisation is centralised or
decentralised
Step 3: Implement a controlling mechanism
- Control mechanism should be put in place to ensure that chosen
organisation structure does enable organisation to attain its vision,
mission and goals
- organisation should adapt structure to fit its strategy
- organising process should be guided by certain organising principles to
ensure that structure is sound
8.5 The Principles of Organising
8.5.1 Unity of Command and Direction
- each employee should report to only one supervisor
- report to more than one supervisor can be confusing to employees as
different supervisors may focus on different aspects of the work
8.5.2 Chain of Command
- clear, unbroken chain of command should link every employee with
someone at a higher level, all the way to the top of the organisation
8.5.3 Span of Control
- number of subordinates reporting to a manager
- humanly possible for manager to deal with only a certain number of
employees
- fewer employees supervised -> smaller, narrower span of control
- more employees supervised -> greater, wider span of control
- span of control is in proportion to the height of the organisation
- flat organisation -> few levels with wide spans of control
- tall organisation -> many levels with narrow spans of control
8.5.4 Division of work
- related jobs can be grouped together in section or department
- employees generally have specialised jobs in functional areas
8.5.5 Standardisation
- employ principle of standardisation when structuring an organisation
- standardisation is process of developing uniform practices of employees
are to follow in doing their jobs
- purpose is to develop a certain level of conformity
8.5.6 Co-ordination
- co-ordination: all departments, sections and individuals within the
organisation should work together to accomplish the strategic, tactical
and operational goals of the organisation
- entails integrating all organisational tasks and resources to meet
organisation goals
- degree of co-ordination between tasks depends on their
interdependence
Forms of interdependence
- Pooled interdependence: operations co-exist with little
interaction, the outputs of the units are pooled at organisational
level
Failure of any unit could threaten the entire organisation
- Sequential interdependence: output of one department or
section becomes the input for the next
Second department or section directly dependent upon the first
to finish its work before the second can begin its assigned task
Typically found in production-line set-up
- Reciprocal interdependence: situation in which outputs of one
department or section become the inputs for the second
department
8.5.7 Responsibility, authority, and accountability
- responsibility: obligation to achieve goals by performing required
activities
-> when strategic, tactical and operational goals are set, the managers
and other individuals responsible for achieving them should be clearly
identified
- authority: right to make decisions, issue orders and use resources
- accountability: evaluation of how well individuals meet their
responsibilities
-> managers accountable for everything that happens in their
departments or sections
-> they delegate responsibility and authority but never accountability
8.5.8 Power
- power: ability to influence the behaviour of others in an organisation
- legitimate power: authority that the organisation grants to a particular
position
- power of reward: the power to give or withhold rewards, can be
financial or non-financial nature
- coercive power: power to enforce compliance through fear, either
psychological or physical
-> ability to influence a person’s decision-making by taking something
away as punishment or threatening punishment if the person does not
follow instructions
- referent power: personal power an is a somewhat abstract concept
-> people follow because they like, respect or identify with them
- expert power: based on knowledge and expertise and a leader who
possesses it has special power over those who need their knowledge
8.5.9 Delegation
- delegation: process of assigning responsibility and authority for
attaining goals
- responsibility and authority are delegated down the chain of
command from a person at a higher level in the organisation to a
person at a lower level
8.5.10 Downsizing and delayering
- downsizing: managerial activity aimed at reducing the size of an
organisation’s workforce
-> downsizing: process of reducing the size of an organisation’s
workforce
-> achieved by reducing the number of employees in one or more
departments
-> leaving the organisational unit intact
-> through eliminating a departmental unit, outsourcing in activities
- delayering: process of reducing the number of layers in the vertical
management hierarchy
-> delayering: process of reducing the number of layers in the vertical
management hierarchy and a reduction in the size of an organisation’s
workforce
-> traditional way to achieve a flatter organisational structure
-> can improve business communication -> messages have to pass
through fewer levels of management
-> downside of delayering: case of downsizing, a reduction in the
workforce and an increase in job losses
8.6 Authority
- authority: right to make decisions, issue orders and use resources
- includes the right to take action to compel the performance of duties and
to punish default or negligence
- appoint board of directors and give them authority to manage their
investments in the organisation
- directors appoint managers, who give certain authority to subordinates
-> authority flows down the hierarchical line
- authority resides in positions rather than in people -> managers acquire
authority through hierarchical position in the organisation
- manager steps down from their position -> authority is relinquished
8.6.1 Formal and informal authority
- formal authority: specified relationship amongst employees
-> sanctioned way of getting things done
- informal authority: patterns of relationship and communication that
evolve as employees interact and communicate
-> unsanctioned way of getting things done
8.6.2 Line and staff authority
- line authority: responsibility to make decisions and issue orders down the
chain of command
-> line managers: managers in organisation who are directly responsible
for attaining the organisation’s goals
-> line authority originates at top management level, with directors, and
is delegated to heads of different departments, or sections
- staff authority: entails having the responsibility to advise and assist other
personnel
- conflict often arises between people in line and staff positions
-> line managers regard staff managers as a threat to their authority
-> staff managers are not consulted and complain that they are
underutilised
-> line manager obliged to reply too heavily on the advice of staff
managers -> feel dependent on the expertise of others -> feel threatened
-> differences in perception conflict -> if line managers feel that staff
managers are infringing on lines of authority
- functional authority: staff personnel have the right to issue orders to line
personnel in established areas of responsibility
- staff managers many have both line and staff authority -> dual-line
authority
8.6.3 Centralised and decentralised authority
- difference between centralised and decentralised authority is in who
makes the important decisions in an organisation
- centralised authority: important decisions are made by top managers
- decentralised authority: important decisions are also made by middle
and lower management
- decentralising power and authority -> more democratic organisation is
created in which managers at the lower levels can decide on issues
Whether to centralise or decentralise authority following factors
considered:
- The external environment: more complex the environment and the
greater the uncertainty, the greater the tendency is to decentralise
- History of the organisation: organisations tend to do whatever they
have done in the past
Will be a tendency to follow the history of the organisation when
comes to centralised or decentralised
Have to be able to recognise the need for change in a changing
environment with new strategies and plans
- The nature of the decision: riskier the decision and the higher the
costs involved, the more pressure there will be to centralise
decision-making
- The strategy of the organisation: determines the types of market,
technological development and any competition to which the
organisation is subject
- Skills of lower-level managers: if lower-level management is not in a
position to make sound decisions, decision-making in the
organisation will probably be centralised
If lower-level management are well qualified, top management
can make the most of their skills by decentralising
- The size and growth rate of the organisation: impossible to manage
very large organisation without decentralising
Larger and more complex an organisation is, greater the need for
decentralisation will be
An organisation that is growing rapidly management will have to
bear the burden of an increasing workload and therefore be
obliged to shift some of the decision-making authority to lower
levels
Advantages of decentralisation Disadvantages of decentralisation
Reduced workload for top Defeats integration of sub-units
managers
Improved decision-making Potential loss of control
Improved training, morale and Danger of duplication
initiative
Faster and more flexible decision- More expensive and intensive
making training required
Fostering of a competitive climate Demands sophisticated planning
and reporting methods
- More individual authority at middle- and lower-management levels
requires thorough management training and development
- Managers need to be aware of the impact that their decisions could
have on survival of the organisation
8.7 Organisational design
- organisational design: arrangement of positions into work units or
departments and the interrelationship amongst them within an
organisation
8.7.1 Organisational Chart
- graphic representation of the way in which an organisation is put
together
- shows authority and communication relationships between jobs and
units
8.7.2 Departmentalisation
- departmentalisation: grouping related activities into units or
departments
- various departments created constitute the organisational structure
appear on the organisation chart
Vertical functional departmentalisation
- Functional structure -> U or unitary- form
- Dividing tasks into specialist areas enables personnel to focus on
their areas of expertise only
- Structure poses major challenges in terms of co-ordination of
specialist functions
- Specialists may view the organisation solely from their own
perspective
Divisional departmentalisation
- Product departmentalisation -> m-form or multidivisional or
decentralised form
Product structure, programme structure or self-contained unit
structure
- People grouped by common skills and resources
- Grouped together based on similar organisational outputs
- Separate divisions can be formed with the responsibility for
individual products, services, product groups, major projects,
divisions or profit centres
- difference between functional and divisional structures:
-> chain of command from each function converges lower in the hierarchy
-> divisional structure, problems will be solved and decisions will be made
at the divisional level
-> divisional structure encourages decentralisation and decision-making is
pushed down at least one level in the hierarchy
Geographic and customer-based divisions
- Customer-based divisions are appropriate when an organisation
concentrates on a particular segment of the market or group of
consumers
Multiple departmentalisation
- Large and complex organisations find is necessary to use several of
the departmental structures described above to create hybrid
organisation
Matrix departmentalisation
- Combines functional and divisional structures
- Employee works for a functional department -> assigned to one or
more products, projects or programmes
- Improve horizontal co-ordination and information sharing
- Major advantage: flexibility -> allows organisation to organise
temporarily for a project or programme
- Major disadvantage: each employee reports to 2 supervisors ->
functional and project/ programme superior
- Highly effective in complex, rapidly changing environments in which
organisations need to be flexible, innovative and adaptable
Network structure
- Describes an interrelationship between different organisations
- Performs the core activities itself but subcontracts some or many of
its non-core operations to other organisations
- Challenge: co-ordinate its network partners’ activities to ensure that
they contribute to the network organisation’s mission and goals
New venture units:
- Groups of employees who volunteer to develop new products or
ventures for the organisation
- Project is complete it can be adopted into any the following
organisational structures:
New products or ventures become a part of traditional
departmentalisation
Functional, product, location, or customer
departmentalisation
Products are developed into a totally new department
New products grow into divisions
Team structure
- Most widespread trend in departmentalisation
- Vertical chain of command is a powerful means of control, but
passing all decisions up the hierarchy takes too long and keeps
responsibility at the top
- Team structure gives managers a way to delegate authority, push
responsibility to lower levels and be flexible and responsive in the
competitive global environment
The virtual network structure
- Builds on the features of the network organisation
- No longer necessary for all employees, teams, departments and
subcontractors in one office or facility
- Information technologies enable the organisation to integrate its
internal employees, teams and departments with its external
network of subcontractors to achieve specific goals
- People are spread out in remote locations work as though they were
in one place
- Virtual organisation is a streamlined model that fits the rapidly
changing environment
- Provides flexibility and efficiency -> partnerships and relationships
with other organisations can be formed or disbanded as needed
- Disadvantages: levels of reciprocal and sequential interdependence
are much higher than those of the network organisation
- Tend to be instantaneous: any time and any place, for the
networked employees, teams, departments and subcontractors
- Boundaries of the virtual organisation are also more open than in a
network organisation because of the use of advanced information
technologies that seamlessly knit all partners together
8.8 Job Design
- management must consider the design of jobs to motivate the
incumbents of the different positions in the structure to contribute
towards the organisation's goals
- job design refers to the process of combining the tasks that each
employee is responsible for
- job design is a crucial part of organising as it affects job satisfaction and
productivity
- empowering employees to be involved in designing their own jobs
motivates them and increases their productivity
8.8.1 Job Specialisation
- job specialisation: narrowing-down of activities to simple, repetitive
routines
- used in industries where many of the employees are illiterate or very
inexperienced in the workings of a business
- designing jobs, managers need to consider motivating elements
8.8.2 Job expansion
- jobs can expanded through job rotation, job enlargement and job
enrichment
- job rotation: performing different jobs for a set period
- job enlargement: increases job scope to break the monotony of a limited
routine
-> when an employee carries out a wider range of activities of
approximately the same level of skill
- job enrichment: implemented by adding depth to the job
8.9 Delegation
- neither desirable nor is it possible for managers to perform all the work
for which they are held responsible
- delegation is the process through which managers assign a portion of
their total workload to others
- authority is also passed on to an employee, who then has the authority
to deploy the necessary resources to complete the delegated task
- delegation is important from the organisation’s perspective as it
promotes succession planning
- manager’s point of view, delegation is used to enable the manager to
get more management work done
- subordinates also profit from delegation
- participating in more challenging jobs, subordinates learn to develop
their decision-making and problem-solving skills, and in the process,
improve their managerial skills
- remain accountable for the completion of the job
- they are accountable both for their own actions and for those of their
subordinates
- hold subordinates responsible for a job, but they are still accountable to
their own superiors for the work
- parity principle, neither the manager nor the subordinate should be held
responsible for things beyond their control or influence
- authority and responsibility should be co-equal
- manager assigns the responsibility for a task to be performed, they must
also give the subordinate the full authority to perform the task
8.9.1 Principles of effective delegation
- delegation process is essential to every manager, how managers get
others to share in the organisation’s drive for performance
- failing of less effective managers: they try to be responsible for
everything
- overloaded and not very efficient managers
Principles used as guidelines to help managers be more effective in
delegation:
- Explain the reason for delegation
Subordinates should understand that delegation has advantages
for themselves for the manager and for the organisation
- Set clear standards and goals
Employees should participate in the process of formulating goals
for the delegated tasks and should also agree with the criteria
laid down for measuring their performance
Participation will foster successful delegation
- Ensure clarity of authority and responsibility
Subordinates must understand the tasks and authority assigned
to them, recognise their responsibility and be held accountable
for the results
- Involve subordinates
Managers should motivate subordinates by including them in the
decision-making process, informing them of their progress and
enabling them to improve their knowledge of and skills in the
delegated task
Informed employee is more likely to accept well-designated tasks
and perform them properly
- Request the completion of tasks
Providing the necessary direction and assistance managers can
see to it that employees complete the tasks assigned to them
according to the agreed-upon standards and goals
- Provide performance training
Effectiveness of delegation depends on the workers’ ability to
perform tasks
Managers should continually evaluate the responsibilities
delegated and provide training to help workers overcome
shortcomings
- Provide feedback to the subordinate
Timely and accurate feedback should be given to subordinates on
a regular basis
Feedback should include both positive and negative feedback
regarding the subordinates on a regular basis
Feedback should include both positive and negative feedback
regarding the subordinate’s performance
The way forward should also be discussed with the subordinate
8.9.2 The advantages of delegation
- managers who train their staff to accept more responsibility are in a
good position themselves to accept more authority and responsibility from
higher levels of management
- delegation encourages employees to exercise judgment and accept
accountability
-> improves self-confidence and willingness to take the initiative and is a
great training method
- better decisions are often taken by involving employees who are close to
the action and know more about the practical executing of tasks
- quicker decision-making takes place
-> if subordinates have the necessary authority, they do not have to refer
to top management before taking certain decisions
8.9.3 Obstacles to effective delegation
- delegating the tasks that one knows best, one can move on to other
tasks that will offer further personal growth
- easy to supervise subordinates who are doing things of which one has
detailed knowledge
Review of these barriers will be helpful to managers:
- A manager may fear that their own performance evaluation will
suffer if subordinates fail to do a job properly
- The manager may also feel that the subordinate will not do the job
as well as they can do it
Stem from lack of confidence in subordinates and the perception
that they are not up to doing the job
- Managers are often too inflexible or disorganised to delegate, or
sometimes they feel that it takes too long to explain to subordinates
how to do the job and that they may as well do it themselves
- Managers may also be reluctant to delegate because they fear their
subordinates will do the job better than they can
Subordinates sometimes fear that they will fail and thus expose
themselves to disciplinary action
May try to avoid work responsibilities and risk and feel that there
are no additional rewards for completing a task
Sometimes there is confusing about who is responsible for the
job
8.9.4 Overcoming obstacles to effective delegation
- impediments to delegation can be minimised by a greater awareness on
the part of the manager that such obstacles exist
- way of overcoming obstacles to effective delegation is to create a culture
of continuous learning
- more than one way to deal with a situation, not compel subordinates to
apply their methods
- managers should state the outcome that the subordinate must deliver ->
should give subordinates maximum freedom to perform their delegated
tasks
- mistakes are made the subordinate should be assisted to find solutions
- improved communication between subordinates and managers removes
obstacles to delegation
- close communication will reveal the strengths and weaknesses of
employees, enabling managers to know which tasks can be appropriately
delegated in the knowledge that the job will be done properly
- training helps subordinates to understand their responsibilities, authority
and accountability
- subordinates should be aware of the extent of their contribution to
achieving the goals of the organisation
- analyse the organisation’s goals and task requirements and determine to
what extent employees can perform the task they wish to delegate
- should trust their employees and have faith in their ability to complete
the task successfully
8.9.5 The Delegation Process
- delegation does not take place automatically – something manager must
initiate
1. decide which tasks to be delegated
-> tasks of repetitive nature minor chores can be delegated
-> try delegate challenging tasks to develop employees and create self-
confidence
-> delegate tasks that you know best how to do
2. Decide who should perform the tasks
-> time available, competency required and experience of the subordinate
should be taken into account
-> may also want to rotate certain tasks amongst employees to create
flexible workforce
3. Provide sufficient resources to carry out the delegated task
-> human resources, financial resources, physical resources and
information resources