BATANGAS STATE UNIVERSITY

The National Engineering University

COLLEGE OF ENGINEERING
Alangilan Campus

Module 6
Function of
Management:
Organizing
Learning Outcomes

➢Analyze the different

forms of organization.
➢Explain the different
organizational
structures.
➢The engineer manager needs
to acquire various skills in
management, including those
for organizing technical
activities.
[Link]
➢In this highly competitive
environment, the unskilled
manager will not be able to
bring his unit, or his
company, as the case may
be, to success.
➢The value of a superior organizational set-
up has been proven dramatically during
the Second World War when a smaller
American naval force confronted the
tough Japanese navy at Midway Military.
➢Historians indicated that the Americans
emerged victorious because of the
superior organizational skills of their
leaders.
➢Even today, skills in organizing
contribute largely to the
accomplishment of the
objectives of many
organizations, whether they are
private businesses or otherwise.
➢The positive effects of
business success becomes
more pronounced when
they come as a result of
international operations.
➢International businesses,
however, cannot hope to
make huge profits unless
they are properly organized
to implement their plans.
➢The opportunities offered
by skillful organizing are
too important for the
engineer manager to
ignore.
[Link]
Reasons for Organizing

➢Organizing is undertaken to
facilitate the implementation of
plans.
➢In effective organizing, steps are
undertaken to breakdown the total
job into more manageable man-size
jobs.
[Link]
➢Doing this will make it possible
to assign particular tasks to
particular person.
➢In turn, these will facilitate the
assignment of authority,
responsibility, and accountability
for certain functions and tasks.
What is ORGANIZING?

➢a management function
which refers to “the structuring
of resources and activities to
accomplish objectives in an
efficient and effective manner.”
[Link]
➢Weihrich and Koontz believe that people
“will work together most effectively if
they know the parts they are to play in
any team operation and how their roles
relate to one another. . . . Designing and
maintaining these systems of roles is
basically the managerial function of
organizing.”
➢ They continue:
➢ For an organizational role to exist and be
meaningful to people, it must incorporate
(1) verifiable objectives, which . . . are a major part of
planning;
(2) a clear idea of the major duties or activities involved; and
(3) an understood area of discretion or authority, so that
the person filling the role knows what he or she can do to
accomplish goals.
➢ In addition, to make a role work out effectively,
provision should be made for supplying needed
information and other tools necessary for performance
in that role.
➢ It is in this sense that we think of organizing as
(1) the identification and classification of required
activities,
(2) the grouping of activities necessary to attain
objectives,
(3) the assignment of each grouping to a manager with
the authority (delegation) necessary to supervise it,
and
(4) the provision for coordination horizontally (on the
same or similar organizational level) and vertically (for
example, corporate headquarters, division, and
department) in the organization structure.
➢The arrangement or
relationship of positions within
an organization is called the
structure.
➢The result of the organizing
process is the structure.
The Purpose of the STRUCTURE

1. It defines the relationships

between tasks and authority for
individuals and departments.
2. It defines formal reporting
relationships, the number of levels
in the hierarchy of the organization,
and the span of control.
3. It defines the groupings of
individuals into departments and
departments into organization.
4. It defines the system to effect
coordination of effort in both
vertical (authority) and horizontal
(tasks) directions.
When structuring an organization, the
engineer manager must be concerned with
the following:
➢Division of labor
➢Delegation of authority
➢Departmentation
➢Span of control
➢Coordination
1. Division of labor
➢ determining the scope of work and how it is
combined in a job.
2. Delegation of authority
➢ the process of assigning various degrees of decision-
making authority to subordinates.
3. Departmentation
➢ the grouping of related jobs, activities, or
processes into major organizational subunits.
4. Span of control
➢ the number of people who report directly to a given
manager.
5. Coordination
➢ the linking of activities in the organization that serves
to achieve a common goal or objective.
The FORMAL ORGANIZATION

After a plan is adapted,

management will proceed
to form an organization to
carry out the activities
indicated in the plan.
➢The formal
organization is “the
structure that details
lines of responsibilities,
authority, and position.”
➢What is depicted in the
organization chart is the formal
organization.
➢It is “the planned structure” and it
“represents the deliberate attempt to
establish patterned relationships
among components that will meet
the objectives effectively.”
➢The formal structure is described
by management through:
1. organization chart
2. organizational
manual and
3. policy manuals.
➢ The organization chart is a diagram of the organization's official positions and formal lines of
authority.
➢The organizational manual
provides written descriptions
of authority relationships,
details the functions of major
organizational units, and
describes job procedures.
➢ The policy manual describes personnel
activities and company policies.
➢Formal organizations require the
formation of formal groups
which will be assigned to
perform specific tasks aimed at
achieving organizational
objectives.
➢The formal group is a part of the
organization structure.
INFORMAL GROUPS
➢There are instances when members
of an organization spontaneously
form a group with friendship as a
principal reason for belonging.
➢This group is called an informal
group.
➢It is not a part of the formal
organization and it does not have a
formal performance purpose.
➢Informal groups are
oftentimes very useful in the
accomplishment of major
tasks, especially if these tasks
conform with the expectations
of the members of the
informal group
➢The informal organization,
useful as it is, is “vulnerable
to expediency,
manipulation, and
opportunism,” according to
Valentine.
➢“Its low visibility makes it
difficult for management to
detect these
misrepresentations, and
considerable harm can be
done to the company”
according to Valentine.
➢The engineer manager is, therefore,
warned that he must be on the
lookout for the possible difficulties
that the informal groups may do to
the organization.
➢It will be to his best interest if he
could make the informal groups work
for the organization.
Reasons or Factors for Joining or Forming a Group
Types of Organizational Structures

➢Before the commencement of

activities, the decision makers in an
organization will have to decide on
what structure to adapt.
➢Depending on the size and type of
operations, a certain structural type
may best fit the requirements.
[Link]
1. Functional
organization
➢ this is a form of
departmentalization
in which everyone
engaged in one
functional activity,
such as engineering
or marketing, is
grouped into one
unit.
[Link]
 [Link]

2. Product or market
organization
➢ this refers to the
organization of a
company by
divisions that brings
together all those
involved with a
certain type of
product or
customer.
3. Matrix organization
➢ an organizational structure in which each employee reports
to both a functional or division manager and to a project or
group manager.

[Link]
Functional Organization
➢Functional organization
structures are very effective in
smaller firms, especially
“single-business firms where
key activities revolve around
well-defined skills and areas of
specialization”.
Advantages of Functional Organization

1. The grouping of
employees who perform
a common task permit
economies of scale and
efficient resource use.
Advantages of Functional Organization

2. Since the chain of

command meets at the top
of the organization, decision-
making is centralized,
providing a unified direction
from the top.
Advantages of Functional Organization

3. Communication and
coordination among employees
within each department are
excellent.
4. The structure promotes high-
quality technical problem-
solving.
5. The organization is provided
with in depth skill specialization
and development.
6. Employees are provided with
career progress within
functional departments.
Disadvantages of Functional Organization

1. Communication and
coordination between the
departments are often poor.
2. Decisions involving more than
one department pile up at the
top management level and are
often delayed.
Disadvantages of Functional Organization
3. Work specialization and division of
labor, which are stressed in a
functional organization, produce
routine, non-motivating employee
tasks.
4. It is difficult to identify which
section or group is responsible for
certain problems.
Disadvantages of Functional Organization

5. There is limited view of

organizational goals by
employees.
6. There is limited general
management training for
employees
Product or Market Organization
➢The product or market
organization, with its feature of
operating by divisions, is
“appropriate for a large
corporation with many product
lines in several related
industries.”
Advantages of Product or Market Organization

1. The organization is
flexible and responsive to
change.
2. The organization provides
a high concern for
customer's needs.
3. The organization provides
excellent coordination across
functional departments.
4. There is easy pinpointing
of responsibility for product
problems is provided.
5. There is emphasis on
overall product and
division goals.
6. The opportunity for the
development of general
management skills
Disadvantages of a Product or Market Organization

1. There is a high possibility

of duplication of resources
across divisions.
2. There is less technical
depth and specialization in
divisions.
3. There is poor coordination
across divisions.
4. There is less top
management control.
5. There is competition for
corporate resources.
Matrix Organization
 THE PLANNING PROCESS
➢ A matrix organization, according to Thompson and Strickland,
“is a structure with two (or more) channels of command, two lines
of budget authority, and two sources of performance and reward.”
➢Higgins declared that “the
matrix structure was designed
to keep employees in a central
pool and to allocate them to
various projects in the firm
according to the length of time
they were needed.”
Advantages of Matrix Organization

1. There is more efficient use

of resources than the
divisional structure.
2. There is flexibility and
adaptability to changing
environment.
Advantages of Matrix Organization

3. The development of both

general and functional
management skills are present.
4. There is interdisciplinary
cooperation and any expertise
is available to all divisions.
Advantages of Matrix Organization

5. There are enlarged

tasks for employees
which motivate
them better
Disadvantages of Matrix Organization

1. There is frustration and

confusion from dual chain of
command.
2. There is high conflict between
divisional and functional interests.
3. There are many meetings and
more discussion than action.
Disadvantages of Matrix Organization

4. There is a need for human

relations training for key
employees and managers.
5. There is a tendency for
power dominance by one
side of the matrix.
Types of AUTHORITY
1. Line
authority
➢a manager's
right to tell
subordinates
what to do
and then see
that they do
it.
Types of AUTHORITY

2. Staff
authority
➢a staff
specialist's
right to
give advice
to a
superior
Types of AUTHORITY
3. Functional
Authority
➢ A specialist’s
right to oversee
lower level
personnel
involved in that
specialty,
regardless of
where the
personnel are in
the
organization.
➢LINE DEPARTMENTS
performs tasks that
reflect the
organization’s primary
goal and mission.
➢STAFF DEPARTMENTS include all
those that provide specialized
skills in support of line
departments.
Examples :
➢those which perform strategic
planning, labor relations, research,
accounting and personnel.
Staff officers may be classified as:
1. Personnel Staff
➢Those individuals assigned
to a specific manager to
provide needed staff and
services.
2. Specialized Staff
➢Those individuals
providing needed staff
services for the whole
organization.
➢FUNCTIONAL AUTHORITY is one
given to a person or a work group
to make decisions related to their
expertise even if these decisions
concern other departments.
➢This authority is given to most
budget officers of organizations, as
well as other officers.
Line and Staff Organization
The Purpose of COMMITTEE
➢When certain formal groups are
deemed inappropriate to meet
expectations, committees are
oftentimes harnessed to achieve
organizational goals.
➢Many organizations, small or
large, make use of committees.
A COMMITTEE is a formal group of
persons formed for a specific purpose.
Product Planning committee
➢often staffed by top executives from
marketing, production, research,
engineering, and finance who work
part time to evaluate and approve
product lines - Millevo
➢Committees are very useful most
especially to engineering and
manufacturing firms.
➢When a certain concern, like product
development, is under consideration,
a committee is usually formed to
provide the necessary line-up of
expertise needed to achieve certain
objectives.
Classification of Committees
1. Ad Hoc Committee
One created for a short-term
purpose and have a limited life.
Example:
➢committee created to manage
the anniversary festivities of a
certain firm.
2. Standing Committee
➢It is relatively permanent
committee that deals with issues
on an ongoing basis.
Example :
➢Grievance Committee set up to
handle initially complaints from
employees of the organization