Principles of Organizing
1) Specialization
2) Functional definition
3) Span of Control
4) Chain of Command
5) Unity of Goals
6) Delegation of Responsibility
7) Flexibility
8) Exception
9) Personal Ability
10) Balance/Coordination
11) Efficiency
12) Simplicity
1) Specialization
• Division of work into
smaller parts on the basis
of skills and abilities
• Can lead to employees
becoming more productive
• But could make the work
boring and employees will
not learn anything
2) Functional Definition
• Clearly define all the functions such
as duties, responsibilities, authority
and relationships in an organization.
3) Span of Control
• It shows the number
of employees under
one person/manager
4) Chain of Command
• There must be clear line of authority
in an organization and who follows
whom must be clearly defined.
• Inversely related to Span of control
• It consists of Unity of Command and
Scaler Chain
• Unity of Command: Employees take
order from only one supervisor.
• Scaler Chain: The supervisor reports
to manager, manager reports to CEO
but in case of emergencies, the line
can be broken.
5. Unity of Objectives
• All organizational activities should be
directed towards one common
objectives.
• There should be communication of
work done among all levels of
management.
6. Delegation of Responsibility
• The top level management cannot do
everything by themselves so they must
pass down some authority and
responsibility to the juniors.
7. Flexibility
• Plans must be changed as per the
need of the environment and activities
must be organized accordingly.
8) Exception
• The managers should not always go by
the book and despite making other
plans, they must organize resources as
per the situation.
9) Personal Ability
• The ability to organize must be
developed with training programs
and development programs.
• It helps to enhance productivity
and worker commitment.
10) Balance
• There must be good communication
and coordination among all levels of
the organization so that balance can
be maintained.
11) Efficiency
• Organizing must be done at minimum
cost and maximum output
12) Simplicity
• Complex is not always good.
• Organizational structure must be simple
that can be understood by everybody.
Approaches to Organizing
• Classical Approach
• Behavioral Approach
• Contingency Approach
2. Behavioral Approach
(Same as studied before)
3. Contingency Approach
• Size of Organization (Larger the size, more difficult to organize)
• Task and technology (More tech, easy to organize)
• Environmental Uncertainty (More uncertain, difficult to manage)
• Individual difference (Eg: An autocratic leader will keep the responsibility or
organizing to himself)
Departmentalization
Types of departmentalization
1) Departmentalization by Function
2) Departmentalization by Product/Service
3) Departmentalization by Customer
4) Departmentalization by Location/Territory
5) Departmentalization by Process
6) Departmentalization by Time/Shift
1) Departmentalization by Function
2) Departmentalization by Product/Service
3) Departmentalization by Customer
4) Departmentalization by Location
5) Departmentalization by Process
6) Departmentalization by Time/Shift
Delegation
of
Authority
(Assigning formal authority
and responsibility to others)
Features of Delegation of Authority
• Authority is not “totally” delegated.
• Managers can only delegate responsibility it has.
• Delegated authority must be followed in the same way it would be done by managers.
• Delegation can only be done for organizational purpose, not for personal benefits.
• Delegation powers can be changed when needed.
• Authority and responsibility must be balanced.
• Top level managers still responsibilities for the action of lower level.
Steps in Delegation of Authority
1) Determination of need for delegation
2) Assignment of Responsibility
3) Give authority so that they can complete responsibility
4) Creation of Accountability
5) Evaluation of Performance
Types of Organizational Architectures
• Vertical Differentiation
- Tall Structure
- Flat Structure
• Horizontal Differentiation
- Functional Structure
- Multidivisional Structure
- Geographic Structure
- Matrix structure
• Modern Organizational Structures
- Team Based Structure
- Network Structure
- 360 Degree Structure
1) Vertical Differentiation
• Tall Structure
- Followed by large organizations
- Followed by mechanistic organizations
- Narrow Span of control
- Greater control, better performance
• Flat Structure
- Wide Span of Control
- Employees motivated, delegation
- Followed by Organic Organizations
- Suitable for smaller organizations
2) Horizontal Differentiation
Functional Structure
Multidivisional Structure
Geographic Structure
Matrix Structure
Modern Organizational Structure
Network/Virtual Structure
• A network/virtual structure is the
one in which more than one
organization combine to produce a
good or provide a service.
• These organizations can either get
into a partnership for a particular
venture, or one organization can
hire others to handle one or more
of its functions (outsourcing), for
example, marketing, production etc.
360 degree Structure
• 360 Degree Feedback is a system or process in which
employees receive confidential, anonymous feedback from
the people who work around them. This typically includes
the employee's manager, peers, and direct reports.