3.

Balance of Authority with Responsibility - This should be the parity between the responsibility and
authority delegated to the subordinate for effective delegation. He will be unable to complete the
task if there is no authority to carry out the responsibility. Without any responsibility will make
him very irresponsible and very ineffective.
4. Absoluteness of Responsibility - The manager remains responsible for the work and also the
performance of the subordinates even after delegating the authority. On the other hand, the
subordinates are also very much responsible for their respective work to their superiors.
5. Unity of Command - Unity of command is very important in an organization or in a company.
There should be only one superior for each and every subordinate. Receiving instructions from
more than one superior will lead the subordinate to confusion. The subordinate will then have to
pick up whom to listen and this may have a very negative impact on the company. This will also
lead to divided loyalties.
6. Defining the Limits of Authority - The manager of the company or the organization must ensure
that all the subordinates have a very well defined authority. This will prevent any overlapping of
authority on any subordinate and will also enable each subordinate to carry out the assigned work
efficiently. If there is any work outside this scope of authority, the subordinate is bound to refer the
work to his superiors. The manager at every level of the organization or the company must make
use of their authority. They are expected to avoid referring to their respective superiors for the
matters that come under their authority. Only the matters that are outside of their scope should be
referred to as upper-level management.
7. Authority Level Principle - The managers of the company are expected to make their own decision
at each and every level. They must avoid referring to their respective superior’s decision all the
time. And are also expected to make their decision which they are authorized to. But they can refer
to their superior’s decision only if the decisions are out of their scope.

Module-3: Organizing and Staffing

Module-3: Organizing and Staffing 10 Hrs Organizing: Nature and Purpose of Organization – Principles of
Organization– Organization structure and types – Departmentation – Committees – Centralization vs.
Decentralization of Authority – Span of Control – Meaning - Factors affecting span. Staffing: Nature and
Process of Staffing
As a managerial function, organizing aims at bringing together the necessary physical and human resources
to achieve the organizational goals and plans. If organizational goals and plans define what to do,
organizing defines how to do it. The primary purpose of organizing is to bring order to the organization so
that there is no confusion and commotion in the conduct of the business.

“Organizing is the process of designing jobs, grouping jobs into units and establishing pattern of authority
between jobs and units.” —Ricky W. Griffin.

“Organizing may be defined as arranging and structuring work to accomplish an organization’s goals.” —
Stephen P. Robbins.

“Organizing is the process of engaging two or more people working together in structured way to achieve
a specific goal or set of goals.” —James Stoner.

“Organizing is defined as the deployment of organizational resources to achieve strategic goals.” —

Richard L. Daft

Characteristics of Organizing Based on the definitions, the following are the characteristic

1. Organizing is a goal-directed activity, i.e. the common purpose of organizing is the

accomplishment of organizational goals and objectives. .
2. Organizing is a differentiating activity. This is because it involves the identification and
classification of activities into a variety of processes and activities for accomplishing the larger
task (namely the goals) of the organization.
3. It is a grouping activity as organizing involves the grouping of activities into manageable units
like department, teams, etc.
4. It is assigning or delegating activity as organizing involves the assignment of groups to different
competent authorities (such as managers and supervisors) with necessary authority to oversee their
performance.
5. Organizing is an integrating activity as it involves proper coordination of the efforts of various
manageable units to achieve the organization’s overall purpose.
6. It is a dynamic and constantly evolving activity as organizing likely to change intermittently
depending upon the significant changes in an organization’s environment.

Principles of Organizing
Principles of organizing refer to the basic assumptions or beliefs underlying the organizing function.
Most of these principles are drawn from the famous management thinker and practitioner Henri
Fayol’s fourteen principles of management. the important principles of organizing are as follows:
1. Principle of chain of command—The chain of command refers to the line of authority or reporting
relationship that exists within an organization. The principle of chain of command states that the
line of authority should be hierarchical and the authority flows from the top to the bottom. This
principle also states that an unbroken and clear chain should connect all the employees with their
higher authorities all the way to the highest levels. This principle usually favour a mechanistic
structure with a centralized authority. It also ensures that all employees know whom they report
to and also who reports to them. (
2. Principle of unity of command—This principle states that every employee of the organization
should report to one boss or superior only. They should also be answerable and accountable to
that boss for all their activities. Similarly, this superior should be responsible for giving orders
and information to employees, evaluate their performance and assist them in performing their
duties well. Further, the superior must be responsible for encouraging and motivating the
employees to do better.
3. Principle of unity of direction—The principle of unity of direction states that all the activities of
the organization should be directed towards the accomplishment of the same objectives. It also
advocates that all activities that have similar goals should be placed under a single supervisor.7
Further, this principle insists that every organization should have only one master plan or one set
of overriding goals.8 This principle is violated when, for instance, purchase department buys
materials which are low cost and low quality while the overall commitment of the organization is
to sell quality goods.
4. Principle of span of control—This principle deals with the number of employees a supervisor can
effectively manage. This principle states that there is limit to the number of persons reporting to
one supervisor. The more the number of employees supervised by a supervisor, the wider the span
of control. Similarly, the fewer the number of employees supervised, the narrower the span of
control.
5. Principle of specialization—This principle states that each employee should perform one leading
function. According to this principle, when employees carry out limited number of tasks assigned
to them, they eventually acquire specialization in those tasks. Division of labour is an important
prerequisite for specialization. In this regard, all related functions are grouped together under one
manager.
 6. Principle of coordination—This principle states that the organizational resources and activities
should be coordinated through collaborative relationships. Combining and correlating all the
organizational activities is the essence of coordination. The principle of coordination aims at
ensuring that different departments, teams and individuals of the organization work collectively
for the common purpose. Normally, the degree of coordination between various tasks depends on
their interdependence. The greater the interdependence between departments, the greater the
coordination required.
7. Principle of delegation—Delegation is the process of allocating authority and responsibility for
the goal achievement of an organization. Delegation of authority means the downward transfer of
the right to act, to decide and to fulfil the job responsibilities. The purpose of delegation is to get
the work done more efficiently by another. The principle of delegation assumes that organizational
tasks will be distributed to members according to their skills, knowledge, experience, training and
other relevant qualities.
8. Principle of flexibility—Flexibility means the adaptability to changes in an environment. The
principle of flexibility insists that some exceptions to rule must be permitted. This is important
because of the uncertain and unpredictable nature of the organizational environment. Therefore,
organizational structure must be sufficiently flexible to accept the changes in its internal and
external environments.
9. Principle of parity of authority and responsibility—The principle of parity states that the authority
delegated to employees should equal the responsibility entrusted with them.

Types of Organizations
Based on how authority is distributed, decisions are made and tasks are performed, organizations
can be classified into three fundamental types. They are: (i) line organization, (ii) line−staff
organization and (iii) committee organization. Even though several other forms of organizations
may exist, they are only the variation or combination of these three basic forms.
1. Line Organization Line organization is the oldest and simplest method of organization. This type
of organization is found to be suitable mostly for smaller firms. However, the true form of line
organization mostly exists in military systems. Line organizations are also called ‘doing’
organizations where all activities from the production to marketing of goods are controlled by the
managers/owners. In the case of companies with line authority, managers maintain direct control
over all the activities carried out in their respective departments. They are also directly responsible
for achieving the organizational goals and plans.
2. Line−Staff Organization A line–staff organization is one in which the line manager gets advice
and assistance from the staff manager (also called advisor). This kind of organization includes
both line and staff positions in its structure. Large and more complex organizations normally
prefer line−staff setup to improve the quality of the managerial decisions
3. Committee Organization When groups of individuals are given the authority and responsibility
necessary for performing certain tasks or for making decisions on certain matters, it is called a
committee organization. This type of organization is often viewed as another form of line−staff
organization. In committee organizations, certain specific tasks will be performed not by an
individual manager but by a group of individuals.
4. Matrix Organization Matrix organization is usually formed when employees from different
functional departments are required collectively for the execution of a project. The primary
purpose of matrix organizations is to get the advantages and eliminate the disadvantages of other
forms of organizations. Matrix organization usually has a grid form of organizational structure,
where employees from different departments are linked.
Span of Control
The term ‘span of control’ is also known as ‘span of supervision’ or ‘span of authority’. Simply
stated it refers to the number of individuals a manager can effectively supervise. Thus, it is
expected that the span of control, that is, the number of subordinates directly reporting to a superior
should be limited so as to make supervision and control effective. This is because executives have
limited time and ability
Factors affecting Span of Control
 1. Nature of the work: If the work is simple and repetitive, the span of control can be wider.
However, if the work requires close supervision the span of control must be narrow.
2. Ability of the manager: Some managers are more capable of supervising large numbers of
people than others. Thus for a manager who possesses qualities of leadership, decision-making
ability, and communication skill in greater degree the span of control may be wider.
3. Efficiency of the organisation: Organisations with efficient working systems and competent
personnel can have larger span of control.
4. Staff assistants: When staff assistants are employed, contact between Organising supervisors
and subordinates can be reduced and the span broadened.
5. Time available for supervision: The span of control should be narrowed at higher levels
because top managers have less time available for supervision. They have to devote the major
part of their work time in planning, organising, directing and controlling.
6. Ability of the subordinates: Fresh entrants to jobs take more of a supervisor’s time than
trained persons who have acquired experience in the job. Subordinates who have good
judgement, initiative, and a sense of obligation seek less guidance from the supervisor.
7. Degree of decentralisation: An executive who personally takes many decisions is able to
supervise fewer people than an executive who merely provides encouragement and occasional
direction.

Staffing
The term ‘Staffing’ relates to the recruitment, selection, development, training and compensation of the
managerial personnel. Staffing, like all other managerial functions, is the duty which the apex management
performs at all times. In a newly created enterprise, the staffing would come as a. third step—next to
planning and organizing—but in a going enterprise the staffing process is continuous.

“The managerial function of staffing involves manning the organisational structure through effective and
proper selection, appraisal, and development of personnel to fill the roles designed into the structure.” —
Koontz and O’Donnell

The nature of staffing function is discussed below:

1. People Centred:
Staffing is people centred and is relevant in all types of organisations. It is concerned with all categories of
personnel from top to bottom of the organisation.
The broad classification of personnel may be as follows
(i) Blue collar workers (i.e., those working on the machines and engaged in loading, unloading etc.) and
white collar workers (i.e., clerical employees).
(ii) Managerial and non-managerial personnel.
(iii) Professionals (such as Chartered Accountant, Company Secretary, Lawyer, etc.).
2. Responsibility of Every Manager:
Staffing is a basic function of management. Every manager is continuously engaged in performing the
staffing function. He is actively associated with recruitment, selection, training and appraisal of his
subordinates. These activities are performed by the chief executive, departmental managers and foremen in
relation to their subordinates. Thus, staffing is a pervasive function of management and is performed by the
managers at all levels.
3. Human Skills
Staffing function is concerned with training and development of human resources. Every manager should
use human relations skill in providing guidance and training to the subordinates. Human relations skills are
also required in performance appraisal, transfer and promotion of subordinates. If the staffing function is
performed properly, the human relations in the organisation will be cordial.
4. Continuous Function:
Staffing function is to be performed continuously. It is equally important in the established organisations
and the new organisations. In a new organisation, there has to be recruitment, selection and training of
personnel. In a running organisation, every manager is engaged in various staffing activities. He is to guide
and train the workers and also evaluate their performance on a continuous basis.

Following are the important steps involved in the process of staffing:

1. Estimating Manpower Requirements/Manpower Planning:

The process of manpower planning can be divided into two parts. One is an analysis for determining the
quantitative needs of the organisation, i.e., how many people will be needed in the future. The other part
is the qualitative analysis to determine what qualities and characteristics are required for performing a job.
2. Recruitment and Selection:
The second step after manpower planning is recruitment and selection. These are two separate functions,
which usually go together. Recruitment aims at stimulating and attracting job applicants for positions in
the organisation. Selection consists of making choice among applicants. To choose those which are most
suited to the job requirement keeping in view the job analysis information.
3. Placement and Orientation:
Placement refers to place the right person on the right job. Once the job offer has been accepted by the
selected candidate, he is placed on his new job. Proper placement of an employee reduces absenteeism,
employee’s turnover and accident rates. Orientation/Induction is concerned with the process of
introduction or orienting a new employee to the organisation.
4. Training and Development:
It is more accurately considered as a process of skill formation and behavioural change. It is a continuous
process of the staffing function. Training is more effectively conducted when the actual content of jobs for
which people are being trained and developed is known.
5. Performance Appraisal:
It means evaluating a performance employee’s current and past performance as against certain
predetermined standards. This process includes defining the job, appraising performance and providing
feedback.
6. Promotion and Career Planning:
Managers must encourage employees to grow and realise their full potential. Promotions are an integral
part of people’s career. They usually mean more pay, responsibility and job satisfaction.
7. 7. Compensation:
It refers to all forms of pay or rewards paid to employees by the employer/firm. It may be in the form of
direct financial payments (Time based or Performance based) like salaries and indirect payments like paid
leaves.