IP AND MANAGEMENT STUDY LEADERSH| MEANING mining the work arrangement of the firm. It involves identifying the larger and complex task for the organization, breaking it down into FS manageable components, assigning individuals to specific responsibilities, giving te the necessary authority, creating structure of relationships and coordinating the Vatious activities of the firm in order to achieve the organizational goals. It is concerned with combining people, work to be done and physical resources into a meaningful relationship Organizing involves deter to achieve organizational goals. PURPOSE AND IMPORTANCE OF ORGANISING arly defines each job of each . Definition of jobs: The process of organizii organizational member. . Allocation of responsibilities: Orgari and gives the authority to each positian to facilitate fulfillment of responsibility, ugh job definition and allocation of ountable for their 2, assigns responsibilities to each positio, N be To enhance accountability responsibility and authority-<; performance results that is ttride to explain the outcome of their work, To establish clear channels of communication: organizing process establishes channels of communication which enhances organizational efficiency and h member can be held a > effectiveness. For resource deployment: organizing process involves determining the job requirements and allocation of the required human and non-human resources to “ achieve the objectives 6. The principle of synergy and to avoid duplication: through organizing, similar activities are grouped together which eliminates duplication and leads to synergy, 7. Division of work: the larger and complex task is broken down into components and individuals are 2 8. To achieve co-ordina of the firm are synchronized to ensure smooth flow signed specific duties, this leads to specialization. on: Through organizing the seemingly different activitiesTHE PROCE: PRINCIPLES OF ORGANIZING 1. Principle of objective: The overall purpose of the organization should direct all the efforts of the organization. 2. Principle of Specialization: The work of the organization should be divided and allocated to individuals of groups,, who focus on that particular function. 3. Principle of Authority: In every organized group supreme authority must be located somewhere and there should be a clear line of flow of authority to every member of the group. 4. Responsibility: A superior should be held accountable for the actions of his subordinates. 5, Principle of defi defined. 6. Principle of correspondence: Authority should commensurate responsibility. 7. Span of control: The span of control refers to the number of subordinates wild report directly to a single manager. The span of control should not be loo wide. 8. Principle of coordination: The [Link] of yy nizing it to facilitate coordination. 9. Principle of balance: No area of the orgatvaition should be given excessively ion: Duties, jobs, relationships and authority should be clearly undue attention at the expense of the 10.P 1 provision should be made for that) her areas, iple of continuity: Organizing and reorganizing is a continuous process and 11. Principle of unity of commaird? In c ing structures of relationships a worker should only report directly ta)a single manager with no conflicting reporting lines. S OF ORGANISING The process of organizing which is the second basic managerial function and which mainly refers to the way work is divided and allocated among members of the organization with the aim of goal attainment. The process of organizing involves balancing a company's needs for both stability and change. It is the structure of an organization that gives stability to the actions of its members. Change is adapted by altering an organizations structure. This lesson is going to focus on the process of organizing with particular attention to the basic elements of the process of organizing which include: Division of work, departmentation, co-ordination, span of management, authority and power, line and staff relations and organizational design. ea ia eg i oe a eeeEADERSHIP AND MANAGEMENT STUDY TEXT The Key Organizing Components and Concepts ‘The process of organizing involves certain key components/elements and concepts which actually constitute various aspects of an organizational structure. These include: . Job design . Grouping of jobs Assignment of responsibility and authority. . Coordination. Span of control. . Line of staff relations. Avswne 1. JOB DESIGN This is the process of determining the tasks, procedures and operations to be performed by employees in each position. The basis of all job design activities is job specialization which involves definition of tasks that distinguisheso%e job from another. When ajob becomes over specialized however it becomes monetonous and hence has no motivational potential. There are three alternative job redesigntrategies (hat can be employed to reverse the trend towards overspecialization: - «Job rotation: Moving a worker from one job to another to break monotony. © Job enlargement: This is horizontal loading of the job. It involves combining a number of related operations. It involves combining Iwo or more specialized tasks in a workflow sequence into a single job. This creates variety in the job. Job environment: This is vertical loading of the job which builds more complexity and depth into a job by introducing planning and decision-making responsibility which was previously done at higher levels. 2. GROUPING OF JOBS This is referred to as differentiation which is vertical and horizontal differentiation,EADERSHIP AND MANAGEMENT STUDY TEXT a) Vertical differentiation This involves grouping of jobs based on the amount of authority held by the job: holder. This yields the organizational hierarchy or pyramid. The shape of the organizational pyramid is a function of two main factors: * Scalar chain - chain of command from the most senior person to the most junior person. * Span of control - number of people reporting directly to a single manager. Factors that influence the span of control and the number of levels of management in the hierarchy a) Size of the firm b) Competence and the experience of the subordinates, ©) Financial resources of the firm. d) Experience of the manager. c) Technology. : f) Nature of the activities of the entity. OSD 2) Geographical dispersion of the activities of the entity. h) Degree of interaction between thé organizational members. i) Systems of control. Delayering Thi is the process of reducing the number of levels of management in the hierarchy. Reasons for dels ering 1) Cost reduction or economy. 2) To eliminate unnecessary bureaucracy and entrance efficiency. 3) To enhance quicker decisions. 4) Information technology. 5) It has become fashionable on the trend. 6) Flatter structures are considered to be more flexible. 7) Empowerment.LEADERSHIP AND MANAGEMENT STUDY TEXT. a Advantages of delayering + Ioffers opportunities for better delegation, empowerment and motivation as number of managers is reduced and more authority passed down the hieraiehy + Ifcan improve communication within the business as messages have to pass through fewer levels of hierarchy © It can remove departmental rivalry if department heads are removed and the workforce is organized more in teams. * It can reduce costs as fewer (expensive) managers arc required. * It can encourage innovation as employees get more empowered. It brings managers into closer contact with the business’ customers resulting into better customer service Disadvantages * Notall organizations are suited to flatter organizational structures * Delayering can have a negative impact on motivation due to job losses, especially if it Disruption over a period as people takein néw responsibilities. © The remaining managers will have ajwivier span of control which, if it is too wide, can A * Damage communication withif ihe business. * There is also a danger of irfatpasing the workload of the remaining managers beyond that which is reasonable. + Delayering may create loss of skills within the business s really just an excuse for redundancies) b) Horizontal Differentiation This entails departmentation and divisionalization. ORGANIZATIONAL STRUCTURE Departmentation Departmentation is the process of breaking down the organization into smaller administrative units known as departments.LEADERSHIP AND MANAGEMENT STUDY TEXT Basis of Departmentation Functional departmentation « By product «By region « By customer « By process « Matrix structure Functional departmentation A functional structure involves first identifying functional activities of the entity and each then organizing each functional activity as a separate department. Functional activities are those basic j activities whose performance is vital for the survival of the firm. Each functional department is further subdivided into “ae CEO > Ao" a ‘Accounting Marky i [ Finance [__ Hama Resouce Functional structure 1. Iteliminates duplication of efforts and facilities making it cheaper than other structures. ._Itenhances specialization. . Synergistic benefits are enjoyed. AAW eYD It contributes to organizational simy . It is more logical since similar activities are amie Each basic activity is given due attention. . Available manpower in the department is hilly utilized.LEADERSHIP AND MANAG! rUDY TEXT Disadvantages 1, 2. CrernaAwaw Failure in one department can paralyze the whole system. Due to the high degree of interdependence between the departments interdepartmental conflicts are high. . Difficulties in aligning priorities across the enterprise. .. The organizational members lack a broader view of the entity. . Difficulties in developing general managers. . Delayed decisions. . Difficulties in embedding and managing change across departments It is difficult to compare the performance of the different departments . The departmental managers may build their own functional empires. Product departmentation Each produ major product is organized as a separate depaRRert to take care of its own ction, marketing research etc. S oS ‘Research Computers Business Computers Home Computing Finance Acconating Accounting, [ Finance Accounting Finance Advyai 1 2 oe 4 w intages . Better quality goods and services . Failure in one department will not affect the other areas. It is easy to identify the loss-making products in the portfolio. . It encourages inter departmental competition which is healthy for the entity as a whole. . Ibis easy to develop general managers. . There are fewer conflicts.LEADERSHIP AND MANAG: MENT STUDY ils 7. Faster decision making, 8. It leads to specialization of physical facilities. Disadvantages , Duplication of efforts and facilities hence expensive. Synergy is lost, ee to underutilization of the corporate resources. s i ae the ie has — products in their product portfolio. 'y arise in building a consistent corporate image. - There may be focus on short term goals at the expense of the long- term goals. UPwWNe a Regional departmentation This Structure is appropriate where the entity has activities spread to different Seographical locations e.g. locally or intemationally. A regional office is established in cach geographical location. Each of the regional offideias its own functional areas such as marketing, human resource, finance, productjoriand marketing frictions. (a) oO. | | | Coast Region Rift Valley Region Mt Kenya Region Marketing haa Marketing Quality Marketing Quality EUROS Assurance Assurance Advantages Staff maintenance costs arc minimized. Better customer service because the staff is conversant with the local needs. Savings in terms of freight and other charges. . It facilitates expansion of the business in the different regions, Better co-ordination of activities. VaneLEADERSHIP AND MANAGEMENT STUDY TE 6. Itis easy to develop general managers. Disadvantages 1. Synergy is lost. 2. Establishing and maintaining a branch is expensive. 3. The head office may base control over some of the branches. Process departmentation This is where the production process is broken down into discrete stages. Each of the stages is then organized as a separate department. The departments may include processing, assembly, quality control, and packaging. Advantages 1. Experts can be appointed at each stage. 2. Economical in terms of repairs and maintendacey 3. Facilitates the use of heavy and costly equiprent in an efficient manner. 4. It follows the principle of specializatibing’s each department is specializes in doing a special type of work. This increases efficiency. Disadvantages 1. Comparison of the different departments is difficult. 2. There are coordination problems. 3. There is little scope for managers. 4. Interdepartmental conflicts are likely to be high Customer departmentation This is where different departments are created to serve each different customer group e.g. end user customers, industrial customers, institutional customers, reseller market, ani domestic/export market.LEADERSHIP AND MANAGEMENT STUDY TEXT Advantages of customer departmentation tensures full attention to major customer groups and helps the entity to earn goodwill. Demerits 1. It may result in underutilization of resources and facilities in some department. 2. There may be duplication of facilities Matrix structure ‘A matrix structure is alas known as a two-boss structure. The matrix structure is a hybrid ofa functional and a product or project structure. It is also known as a two-boss structure as workers at the intersection of authority end up reporting to two bosses. Matrix Organisational Structure Chart. <> fee IEUrT Cg Cay coe ed ; 3 Conta Manager DST og re pe ho Project A } Production Fiance ican Marketing Personal Manager) group ad i group group Se Project & Production oe Marketing ‘Manager group ; me. group See eee Marketing eroup Project € Production Pee 4 Manager group ecogoeLEADERSHIP AND MANAGEMENT STUDY TEXT Advantages of a matrix structure 1. Resources are utilized efficiently since they can be shared across projects, 2. The firm enjoys the dual benefits of a product and functional structure, 3. Different specialists assist in solving complex problems with maximum efficiency. 4. Itallows for flexibility as each project is assigned to only the number of people it needs, 5. It stimulates and enhances inter disciplinary cooperation. 6. It motivates and challenges people for better performance. 7. It eliminated duplication of efforts and facilities. 8. Employees get more exposure as they receive instructions from different managers, 9. It enables the organization to respond promptly to the changes in the environment, 10. It allows for cross fertili 11.8 12. It allows the top management time to foet ation of ideas. ervices of professionals are better utilized, son strategic issues. Disadvantages of a matrix structure 0 a 1. it violates the principle of unity of command. 2. Itis difficult to design and implement. 3. It leads to complex relationships 4. It may be expensive due to its complexity. 5. Divided loyally on the part of the workers. 6. Confusion on where the final responsibility rests. 7. Difficulties in assigning consequences and rewards and hence it does not provide any motivation. 8. Lack of trust may develop. 9. Delayed decisions. 10. Lack of clarity on the areas of accountability. 11. Conflict is likely to be high due to the complex relationships.