ORGANIZING

Charlene E. Cadenas
Teacher II
ABM
 ORGANIZING

The goals and objectives established during planning

will all go to waste without effective organizing, through the
development of a designed structure of roles for effective
performance. It requires an interlacing of decision and
communication work units to coordinate efforts toward the
organizational goals and objectives that were set earlier.

To function well, organization structures and their

specific roles must be understood by all members of the
organization. Rules and regulation principles must also be put
into practice. However, that organizing depends on the
specific situation of the firm.
 ORGANIZING

As you read and study this chapter, concentrate on the

following objectives, and at the end of the chapter be able to:

1. discuss the nature of organizations;

2. distinguish the various types of organization structures;
3. apply organization theories in solving business cases;
4. identify the different elements of delegation; and
5. differentiate formal from informal organizations.
 Nature of Organizations

Differentiation of the Organization’s Internal Environment

Differentiation in organization involves division of labor and

specialization according to Bateman and Snell (2008) These
necessarily result form the organization’s composition – many
different work units with different kinds of tasks, using different
skills and work activities coordination with one another for a
common end.
Division of labor involves assigning different task to
different people in the organization’s different work units.
Cont…

Nature of Organizations

Differentiation of the Organization’s Internal Environment

Differentiation in organization involves division of labor and

specialization according to Bateman and Snell (2008) These
necessarily result form the organization’s composition – many
different work units with different kinds of tasks, using different
skills and work activities coordination with one another for a
common end.
Division of labor involves assigning different task to
different people in the organization’s different work units.
Related to specialization, the process in which different
individuals and units to perform different tasks.
Cont…

Nature of Organizations

Integration of Work Units

Integration is another process in the organization’s internal

environment which involves the collaboration and coordination
of its different work units or work divisions.

Coordination refers to the procedures that connect the work

activities of the different work divisions/units of the firm in
order to achieve its overall goals.
 Fast Learning Review

[Link] the importance of organizing in business companies.

[Link] is the negative effect of not having division of labor in
organizations?
[Link] should organizations be encouraged to have an
organization chart?
[Link] the term “specialization” synonymous with the term
“differentiation?” Explain
Types of Organization Structures

Definition of Terms
Vertical Organization Structures – clears
out issues related to authority rights,
responsibilities, and reporting relationships.

Horizontal Organization Chart – refers to a

selection of independent, usually single-function
organizations that work together to produce a
product or service.
Types of Organization Structures

An organization structure is a system made up of tasks to

be accomplished, work movements from one work level to
other work levels in the system, reporting relationships, and
communication passageways that unite the work of
different individuals persons and groups. These types of
organizational structures include:
a. vertical structure
b. horizontal structure
c. network structure
Cont…

Types of Organization Structures

According to Bateman and Snell (2008), a vertical structure

clears out issues related to authority rights, responsibilities,
and reporting relationships.

Authority rights refer to the legitimate rights of individuals,

appointed in positions like president, vice president,
manager, and the like, to give orders to their subordinates,
who in turn, report to them what they have done.
Cont…
Types of Organization Structures

Figure 4.1 Organizational Chart with Vertical Structure

Cont…
Types of Organization Structures

Figure 4.1.1 Organizational Chart with Horizontal Structure

Cont…
Types of Organization Structures

Figure 4.2 Sample of Functional Organization

Cont…

Types of Organization Structures

Owners of private business companies are said to

have absolute authority, even if other persons are
appointed as managers in their companies. In corporations,
the owners are the stockholders and they elect a board of
directors to manage the organization’s activities. The board
has a chairman who acts as the leader, while the members
act as the corporation’s authority figures, responsible for
making major decisions affecting their organizations,
subject to the corporation’s constitution and by law
provisions.
Cont…

Types of Organization Structures

Besides the chairman of the board, a chief executive officer
(CEO) is appointed to occupy the top post in the
organization pyramid and is personally accountable to the
members of the board and other owners for the
organizational performance.
Below the top level managers are the middle
managers in charge of departments who, as earlier
mentioned, report to them. Under the middle level
managers are the lower-level managers which include
office managers, sales managers, and supervisors who
directly report to the former. Employees under the lower-
level managers also have reporting relationships with their
respective department managers.
Cont…

Types of Organization Structures

A horizontal structure refers to the departmentalization of

an organization into smaller work units as tasks become
increasingly varied and numerous.
Types of Department:
Line departments – deal directly with the firm’s
primary goods and services; responsible for manufacturing,
selling, and providing services to clients.
Staff departments – support the activities of the line
departments by doing research, attending to legal matters,
performing public relations duties, etc.
Cont…

Types of Organization Structures

Meanwhile departmentalization may be done using three

approaches:
Functional approach – where the subdivisions are
formed based on specialized activities such as marketing,
production, financial management, and human resource
management.
Divisional approach – where departments are formed
based on management of their products, customers, or
geographic areas covered.
Matrix approach – is a hybrid form of
departmentalization where managers and staff personnel
report to the superiors, the functional manager, and the
divisional manager
Cont…

Types of Organization Structures

Finally, a network structure is a collection of independent,

usually single function organizations/companies that work
together in order to produce a product or service. Such
network organizations are each capable of doing their own
specialized work activities independently, like producing,
distributing, designing, etc., but are capable of working
effectively at the same time with other network members.
Cont…
Types of Organization Structures

Figure 4.3 Example of Organizational Chart with Divisional Structure

Cont…

Types of Organization Structures

Often their communications is by electronic means where

sharing of information is speedy. This results to their ability to
respond at once to their customers’ demands. Organizational
structure are needed to keep employees needed, to build a
learning organization and to manage global structural
problems.
 Fast Learning Review

[Link] are the types of organization structures? Briefly define

each.
[Link] how authority operates in the vertical
organization structure.
[Link] the difference between a line department and staff
department.
[Link] your opinion, who have greater responsibilities, the line
department managers or the staff department managers?
Explain your choice?
 Exercise

[Link] on the CEO’s work details. What are the

advantages and disadvantages of being a CEO?

[Link] one of your school’s department heads. Discuss

his/her perspectives on role, authority, responsibilities, and
accountability to superiors.
 Organizational Theories and
Applications
Definition of Terms
Organizational design– the manner in which a
management achieves the right combination of
differentiation and integration of the organization’s
operations, in response to the level of uncertainty in its
external environment.
Traditional Theories– are the usual, old fashioned
ways
Modern Theories – are contemporary or new
design theories

[Link]
 Organizational Theories and
Applications
There are two main classification of theories regarding
organizational design according to Robbins and Coulter
(2009): traditional and modern. Traditional pertains to the
usual old-fashioned ways, while modern refers to
contemporary or new design theories.
Traditional organizational design theories include:
❑ Simple
❑ Functional
❑ Divisional
Cont…
Organizational Theories and
Applications

Simple
This organizational design has few departments, wide
spans of control, or a big number of subordinates directly
reporting to a manager; has a centralized authority figure
and has very litter formalization of work; usually used by
companies that start out as entrepreneurial ventures.
When applied, its strength and weaknesses are
revealed
Cont…
Organizational Theories and
Applications
Table 4.1

Simple Organizational Designs

Strengths Weaknesses
❖ flexible ❖ risk that overdependence with over-
❖ fast decision-making and results dependence on a single-person
❖ clear accountability ❖ no longer appropriate as the
company grows
Cont…
Organizational Theories and
Applications
Functional
This organizational design groups together similar or
related specialties. Generally, functional
departmentalization is utilized and put into practice in an
entire organization. For example: A marketing firm that
markets cars and related products like tires, car, batteries,
and accessories.
It also has strengths and weaknesses.
Cont…
Organizational Theories and
Applications
Table 4.2

Functional Organizational Designs

Strengths Weaknesses
❖ cost-saving advantages ❖ managers have little knowledge of
❖ management is facilitated other units’ functions
because workers with similar
tasks are grouped together
Cont…
Organizational Theories and
Applications

Divisional
This organizational is made up of separate business
divisions or units, where the parent corporation acts as
overseer to coordinate and control the different divisions
and provide financial and legal support services.
Cont…
Organizational Theories and
Applications
Table 4.3

Divisional Organizational Designs

Strengths Weaknesses
❖ focused on results ❖ possible duplication of activities and
❖ managers are responsible for resources
what happens to their products ❖ increased cost and reduced
and services efficiency
Cont…
Organizational Theories and
Applications
Modern organizational design theories include:

❑ Team Design
❑ Matrix-Project Design
❑ Boundary-less Design
Cont…
Organizational Theories and
Applications
Team Design

In team design, the entire organization is made up of work

groups or teams. Its advantages include empowerment of
team members and reduced barriers among functional
areas. It also has disadvantages, including a clear chain of
command and great pressure on teams to perform.
Cont…
Organizational Theories and
Applications
Matrix-Project Design

Matrix design refers to an organization design where

specialists form different departments work on projects that
are supervised by a project manager. This design results in
a double chain of command wherein workers have two
managers-their functional area manager and their project
manager-who share authority over them.
Advantage: specialists are involved in the project.
Disadvantage: task and personality conflicts.
Cont…
Organizational Theories and
Applications
Matrix-Project Design

Project design refers to an organizational design where

employees continuously work on a project.
Advantages: flexible designs and fast decision-making
Disadvantages: complexity of assigning people to projects
and task and personality conflicts
Cont…
Organizational Theories and
Applications
Figure 4.4 Teamwork and cooperation are two essential factors for an organization’s success
Cont…
Organizational Theories and
Applications
Boundary-less Design
This is another modern organizational design where the design
is not defined or limited by vertical, horizontal, and external
boundaries. In other words, there are no hierarchical levels that
separate employees, no departmentalization, and no boundaries
that separate the organization from customers, supplier, and
other stakeholders. Virtual organization design are often used in
this design; small groups of full-time employees and outside
specialist are temporarily hired to work on projects.
Advantages: include being highly flexible and responsive
Disadvantages: are lack of control and problems in
communication.
 Fast Learning Review

1. What are the three traditional organizational design

theories? Briefly define each.
2. What are the advantages and disadvantages of the simple
organizational design? Do you agree or disagree with
these advantages and disadvantages? Explain your
answer.
3. Name the different modern organizational design theories.
Briefly define each.
4. Task and personality conflicts are said to be
disadvantages to the use of the matrix-project design.
Explain the rationale of this stamen.
 Exercises

1. Choose one popular fasts food chain company. Name

some teams that may be organized within the company to
help achieve its goals.

2. Give two of your won examples of a functional

organizational design.
 Delegation

Definition of Terms

Delegation – refers to assigning in a new or additional task

to a subordinate; or getting the work done through others
by giving them the right to make decisions or take action

Authority – the right to act legally or officially

Responsibility – the state of being answerable legally and

morally for the discharge of duty

Accountability – is to be liable to be called to explain

Cont…

Delegation

Steps in delegation include:

1. Defining the goal clearly. Managers must clearly
explain the task objective and the work or duties someone
else is expected to do.
2. Selecting the person who will be given the task. The
selected subordinate must be competent and must share
the manager’s task objectives.
3. Assigning responsibility. Managers must explain that
the responsibility assigned to the selected subordinate is
an expectation for him or her to perform the assigned tasks
well.
Cont…

Delegation

Steps in delegation include:

4. Asking the person assigned about his or her
planned approaches to accomplish the task
objectives. It is expected that the person chosen to do
the task already has a tentative plan of action that may be
presented to the manager, to assure him or her that the
person assigned could achieve the task objective.
5. Granting the assigned person the authority to act.
If the manager is satisfied with the tentative plan of action
presented, granting of the authority to act immediately
follows. Authority is a right to act in ways needed to carry
out the assigned task.
Cont…

Delegation
Figure 4.5 Kanban Board

This board is used to implement the Kanban method for a

specific project. Kanban is a Japanese word which means
“signboard” or “billboard”. David J. Anderson later on used
this term to name his own method for delegating a team’s
workload and deliverables without overloading its
members.
Cont…

Delegation

Steps in delegation include:

6. Giving the assigned person enough time and
resources to do the task, while at the same time
emphasizing his or her accountability. Accountability is
the assigned person’s willingness to complete the job, as
agreed upon.
7. Checking the task accomplishment progress.
Following up and discussing the task accomplishment
progress at regular intervals is necessary.
8. Making sure the task objective has been achieved.
The above steps of delegation were given by Weihrich
and Krontz (2005)
Cont…

Delegation
Table 4.4
Advantages of Delegation Disadvantages of Delegation
It prevents work overloading among It may cause laziness among
organization managers. organization managers.
It provides opportunities for employee
It may encourage too much
or subordinates assigned to do the task
dependence on others.
to fully utilize their talents on the job.
It leads to empowerment of employees
or subordinates assigned to do the
It may cause lack of control over priority
task, as it allows them freedom to
management problems.
contribute ideas and to perform their
job in the best possible way.
It increases job satisfaction among the
assigned employees or subordinates, It may cause low self-confidence
that may lead to better job among managers.
performance.
 Fast Learning Review

[Link] the term “delegation.”

[Link] are the steps involved in delegating tasks to others?

[Link] are the positive effects of delegating tasks?

[Link] will be the possible result if managers frequently

delegate their task to others? Justify your answer.
 Formal and Informal
Organization
Definition of Terms
Formal organizations – refer to organizations formed by the
company owner or manager to help the firm accomplish its
goals; made up of formal groups (work groups/project
team/committee) similarly formed by company authorities and
achieve their objectives.
Informal organizations – refer to organizations that exist
because of friendship or common interest; made up of
informal groups which exist for the members’ need for social
affiliation
Cont…
Formal and Informal
Organization
Whether an organization is formal and informal is
determined by the kind of relationship that prevail in each
organization type. Formal organizations are characterized by
hierarchical and reporting relationships among groups or
members. On other hand, informal organizations consist of
informal groups born out of the need for social affiliation. Both
formal and informal organizations may exist in the same
organization structure.
Formal organizations and informal organizations both
functions and advantages that benefit the organization and its
members.
Cont…
Formal and Informal
Organization
Formal organizations have the following function:

[Link] goals that require cooperation or collaboration

among formal groups in the organization;
[Link] or bring about new and creative ideas and
solutions to company problems;
[Link] interdepartmental activities;
[Link] company rules/regulations and policies; and
[Link]/train new employees
Cont…
Formal and Informal
Organization
Informal organizations’ function include the following:

[Link] the members’ need for affiliations;

[Link] the individuals members a chance to develop their self-
esteem;
[Link] individual members a chance to develop their self-
esteem;
[Link] individual members’ insecurities; and
[Link] a mechanism to solve members’ personal and
interpersonal problems.
Cont…
Formal and Informal
Organization
Table 4.5 Advantages and Disadvantages of Formal and Informal Organizations

FORMAL INFORMAL
1. Working systematically 1. Fast communication due to the absence of
Advantages

2. Established on and for the organization’s standard operating procedures and protocols
objectives 2. Gives importance to the psychological and
3. No duplication or overlapping of work social needs of employees
4. Efficient coordination among departments 3. Top managers can solicit feedback directly
5. Implementation of chain of command and from the employees on new policies and plans
professional relationship
1. Delay in feedback and action due to the 1. More susceptible to rumor mongering
Disadvantages

established chain of command 2. There is no systematic workflow in place

2. Ignores the psychological and social needs of 3. Difficulty in implementing new rules and
employees policies
3. Emphasis on work and overlooks the human 4. More emphasis on the individual interest of
relations, talents, and creativity of employees each employee rather the overall goal of the
company
 Fast Learning Review

[Link] formal and informal organizations.

[Link] specific examples of formal and informal organizations.

[Link] informal organizations help in the achievement of the

company’s set goals? Explain your answer.

[Link] could informal organizations lessens its members’

insecurities?
 References
• Organization and Management Teachers Manual, Helene, Anthony,
Riaz, Castillo pp 18-21
• Organization and Management, Helene, Anthony, Riaz, Castillo pp
39-50
• [Link]
differences/
• [Link]
chart/sample-divisional-organizational-template/