focus types of organization-cousework test
delegation until last slide is final exam
types of power
the centralization and decentralization
CHAPTER 4
ORGANIZING
Organizing is a pattern of relationship whereby managers
and employees attempt to achieve the same goals. These
goals are the result of the decision making process
performed by managers at the early stages of planning.
The five basic functions of management in an organization
are planning, organizing, leading, controlling, and staffing.
Therefore, after each plan is made, managers must
arrange or organize all the planned activities in order to
successfully achieve the set goals.
DEFINITION OF ORGANIZING
Organizing is an efficient way of managing
organizational resources in order to achieve the
planned goals and objectives.
Organizing is needed to achieve the organization's
desired goals. Organizing refers to the coordination of
human resources and organizational resources
whereby jobs, physical resources, or financial
resources are allocated within the organization.
There are several definitions of organizing given by management book
authors, as follows:
(a) According to Robbins and Coulter (1996), organizing is a process of
forming an organizational structure.
(b) According to Stoner and Wankel (1986), organizing is a process whereby
work activities are arranged and allocated to employees in order to achieve
the organizational goals and objectives.
(c) According to Jaafar Muhammad (1992), organizing is the effective
arrangement of organizational resources to be in unity in order to achieve the
organization's planned goals and objectives.
(d) According to Certo (1997), organizing is to determine each activity which
is performed by the human resources of an organization and how these
resources are best coordinated or combined to achieve organizational goals.
From the definitions given above, it can be concluded do
grouping
that organizing emphasizes the process of dividing
jobs that are in line with organizational goals and
directions. Organizations must practise a structured
system to describe how employees should perform and
coordinate their tasks and responsibilities.
IMPORTANCE OF ORGANIZING
The importance of organizing is as follows:
It shows the job division or specialization whereby a unit or
department bears a specific job burden and responsibilities in
an organization.
It shows the duties and responsibilities of each department in
an organization.
It shows the reporting relationship between managers and
subordinates.
It shows the types of jobs performed in an organization.
It shows the grouping of work segments in an organization.
It shows the departments or units at each management level in
the organizational hierarchy.
FIVE STEPS OF ORGANISING PROCESS
Step 1: Reviewing plans and goals
Step 2: Determining works activities
Step 3: Classifying work activities
Step 4: Assigning work and delegating authority
Step 5: Designing a hierarchy of relationship
ORGANIZATIONAL STRUCTURE
diagram to show how the organization function
The organizational structure depicts the way each activity
in an organization is performed, the way formal jobs
are allocated, the way resources are optimally
allocated, and the way departments are coordinated.
Organizational structure shows the position of a unit or
division in the organization and the relationship
between each division in the organization.
Organizational structure also shows the types of jobs
performed in an organization and the relationship
between each job.
Marketing Assistance- diploma and below
Marketing Executive- degree and above
An organisation chart has several characteristics as
follow:
(a) Each box – show the individual’s position, department,
division or unit
(b) Line that link the rectangles – shows the
communication relationship between individuals,
department, units or divisions according to the chain of
command.
Types of organisation chart/structure
Functional Organization
In a functional organization, activities or tasks are
grouped according to organizational functions
such as production, marketing, and finance.
For example, the marketing manager is responsible to
market all products produced by the organization and
perform other duties related to marketing.
Advantages Disadvantages
1 Emphasizes job specialization in each 1 Involves the implementation of routine and
department. monotonous tasks. keep repeating the same job
2 Lack of communication via meetings among
2 Avoids conflicts in resource allocation.
employees in different departments.
3 The problem-solving process is more
3 Career and personal development is limited to
effective due to specialization of skills
certain areas.
among employees.
4 Decision-making process is more
4 Employees tend to concentrate on achieving
effective because the authority of making
departmental objectives.
decisions is centralized.
5 Cannot produce employees who are skilled in
5 Easier to control the employees as
many areas due to job specialization in specific
managers practise job specialization.
areas.
Divisional Organization
The divisional organization is a form of
departmentalization whereby activities are grouped
according to similarities in terms of products,
market, and geographical location.
A divisional organization can be divided into three types
of departmentalization: product, geographical, and
customer.
(a) Product departmentalization
(i) Product departmentalization involves the grouping of
activities or tasks based on the products produced by the
organization.
(ii) The organization chart as shown in Figure 3.4 shows three
product divisions: fresh milk products, beef, and butter. Each
division has its own functional departments such as marketing
and finance departments.
(iii) Each manager will report to the general manager.
(iv) Product departmentalization is usually practised by
organizations producing multiple products or when a
functional organization is not suitable due to difficulties in
controlling the organization. Com A
Types of icecream
Com B
Multiple different
type of product
(b) Geographical departmentalization
(i) Geographical departmentalization is performed based
on location.
(ii) For example, when companies operating in Kuala
Lumpur open branches in other locations such as Johor,
Perak, and Sarawak, the general manager in Kuala Lumpur
is responsible for managing all the branches with the
assistance of branch managers in Johor, Perak, and
Sarawak.
(iii) Every division is responsible for the production and
marketing of products in their location.
(c) Customer departmentalization
(i) Customer departmentalization, as depicted in Figure 3.6 is
based on customer groups who purchase the organization's
products such as industrial customers, ordinary customers, and
office customers.
(ii) Each division will be managed by a manager responsible to
the services general manager. The services general manager
will control all the decisions made by the manager of each
division.
(iii) Each division is responsible for producing and marketing
the products that will be used by consumers in their market.
This type of departmentalization can fulfil customer needs and
requirements
Advantages and Disadvantages of Divisional Organization
The advantages of a divisional organization
Facilitates coordination and cooperation of functions in
every division.
Reacts fast to any changes in the external environment.
Emphasizes customer demands and needs.
Fulfils customer needs quickly and accurately.
Major project coordination can be performed more
effectively.
The disadvantages of a divisional organization:
Conflicting resource allocation in every division.
Focus towards divisional objectives.
Knowledge and skills are not shared among divisions.
The purchase of new technology involves high costs.
Feelings of anger might arise between departments due
to the fight for positions.
Matrix Organization Project (handling a task in a time duration
fixed to them)
The matrix organization operates in a horizontal and
vertical organizational structure whereby an
employee reports to two supervisors such as the
division or line managers and the functional or
project managers. -lead by 2 manager
-same level of power
-but different responsibilities
In a matrix organization, human resources are used
efficiently because the skills possessed by each employee
is combined to develop a new product and perform
functional duties.
In order to enable the matrix organization to operate
effectively and efficiently, communication, flexibility, and
cooperation between departments is essential.
The matrix organization operates in an environment that
is always changing due to tight competition and
technological changes. For example, competition in the
market forces the organization to make changes to the
products and services offered by the organization. The
effort and creativity of employees must be combined in
order for the organization to maintain a competitive
advantage in the industry.
The matrix organization is also suitable for organizations
with limited resources.
Not many organizations can conduct an effective and fast
transition from a product or functional
departmentalization to a matrix departmentalization. A
lot of time and effort is required for a successful
implementation of the matrix organization.
Not all employees can adjust themselves with the matrix
organization. In order to form an effective matrix
structure, cooperation from all employees at all levels is
required.
Advantages of Matrix Organiztion:
1 Objectives are set before any project Is started.
2 The roles of managers and team members are clearly defined. This enables the
management to identify the person who is responsible when a problem occurs.
3 Managers are selected based on their knowledge of the business environment and
current issues, rather than status and position.
4 Experienced managers can handle any project satisfactorily.
5 Rewards and benefits are allocated fairly to managers and team members.
6 Team members are given authority to make decisions.
7 Activities of each project are coordinated more effectively and efficiently.
Disadvantages of Matrix Organization:
1 Conflicts might occur between functional managers and project managers due to
the competition to obtain limited resources.
2 The extra workload will create
pressure among managers and team members.
3 The authority and power of functional managers and project managers are not
aligned.
4 Involves lengthy communication and discussion sessions which may hinder the effort
to perform duties effectively.
5 Individuals performing important tasks must have skills in specific area.
6 Increases administration costs and work pressure because the tasks of each team
must be coordinated.
7 Differences in opinion among team members on ways to perform a task may result
in conflict.
second part coursework test
DELEGATION representative team chp1 no question
chp2important
chp3important
final exam but not coursework test
chp4 important first part
Delegation is a process whereby leaders or managers give the right
or power and responsibility to lower-level employees to perform
certain duties on their behalf.
According to Stoner and Wankel (1986), delegation is the action of
allocating authority and formal responsibilities to another party.
Managers cannot perform all of their duties in an organization. Some of the
duties must be delegated to others to be performed on their behalf.
Managers must cooperate with their employees to ensure that all delegated
duties are completed.
How far managers delegate their duties is influenced by factors such as the
organization's culture, condition, or situation, as well as the relationship,
personality, and ability of their employees.
Principles of Delegation
The delegated authority from top-level management to
lower-level management must be shown clearly.
Authority must be aligned with responsibility.
Areas under control must be established and must be
suitable with the number of employees and duties.
The levels of management must be shown clearly.
An effective horizontal and vertical communication
channel must be practised. 2 ways
Division of jobs must be practised fully.
Control of power is maintained by top-level management.
Delegation Concepts Power: right to make decisions and take
Power and authority actions
(a) Authority is the managers' right to make decisions or
take actions in order to complete their given duties. authority
(b) Authority enables managers to give orders to their
employees and delegate some of their power to the
subordinates.
(c) Authority and responsibility must exist at the same time.
In other words, when an employee is given responsibility,
the power or authority to perform the responsibility should
be given simultaneously.
There are three types of authority:
functional authority, line authority, and
staff authority.
Functional authority gives managers the power to control
other department's activities.
Managers who have staff authority cannot give commands to other
employees through the chain of commands. These managers are given
power by individuals or groups of individuals to provide advice and
suggestions, conduct research, and share their knowledge or expertise
with others.
Line authority is owned by managers who have the right and
power to give direct instructions
direct responsibility to command and control subordinates
who perform important activities in order to accomplish
organizational goals. Line authority flows to lower level of the
organization through the chain of commands.
There are several types of power, as follows:
(i) Coercive power
Coercive power refers to the ability to punish and fine an
individual because they do not fulfil the requirements,
wants, or instructions.
give points only
[Link] the 5 types of power that can be delegated to managers.(10m)
[Link] any three types of power poses by the manager.(15m)
(ii) Reward power
Reward power refers to the ability to give
acknowledgement or rewards to an individual who has
performed the duties entrusted to them thoroughly.
(iii) Legitimate power
Legitimate power refers to the right to give commands
and orders as allowed by law. Legitimate power cannot be
questioned. Individuals receiving orders must perform the
order. For example, a judge has legitimate power to
sentence a criminal for the crime that falls under his
jurisdiction.
(iv) Expert power
Managers with expert power possess wide knowledge
and specific skills in a certain area. Normally, this skill is
not possessed by others.
(v) Referent power
An individual with referent power is usually made a role
model or is copied by others.
Individuals who possess referent power are parents,
teachers, singers, actors and actresses, and public figures.
The Delegation Process
1 Allocate duties
Duties will be allocated to employees according to their
skills and abilities. Each employee will perform his duties
as directed by the managers in the organization.
2 Give authority
Managers must give authority to the employees in order
for them to perform the duties well.
3 Give responsibility
Responsibility is an individual's obligation to perform a
given task which has been entrusted to him. Responsibility
is given right after the duties have been assigned in order
for employees to know what needs to be done to
complete the tasks successfully.
4 Establish accountability
Managers play an important role in the delegation
process. Managers have to establish accountability of their
employees in order for them to be responsible for their
jobs. Employees must be aware that they are accountable
for a task and accept the responsibility and authority for
performing it.
Problems Faced by Managers Who Perform Delegation
1 Managers may feel that they can perform all the jobs better than their
employees.
2 Managers may also feel that the employees do no have enough ability to
perform a job.
3 Managers worry that their importance might be weakened if they give jobs
to the employees. Managers will be responsible for the performance of their
employees and have to bear the consequences of mistakes made by them.
Managers also worry that if employees can perform jobs better, the managers'
position in the organization will be affected.
4 Managers do not have the skill to plan jobs that will be performed by the
subordinates.
5 Managers worry that subordinates do not have the skills to perform their
duties and the abuse of power may occur.
Problems Faced by Employees Who Receive Authority
1 Employees worry that their importance will be weakened
and they will be penalized if they cannot perform their
duties satisfactorily. Therefore, employees may prefer if all
the jobs are performed by the managers.
2 Employees do not have the motivation to complete a
certain duty if there are no incentives for good
performance. Employees need compliments and financial
incentives for every task because a lot of time and energy is
spent in completing the duties.
Ways to Overcome Problems in Delegation
1 Managers must give employees an appropriate amount of
freedom to complete the given duties.
2 Managers must communicate with their employees at all
times. Understanding between managers and subordinates
would enable jobs to be allocated efficiently and performed
satisfactorily.
3 Managers can allocate jobs to their employees in stages in
order to avoid confusion and communication problems.
LOCUS OF CONTROL
1 Locus of control refers to the number of subordinates who report
directly to a manager or supervisor.
2 The number of subordinates supervised or controlled by each manager is
different. Some managers have a large number of subordinates while some
only have a few.
3 Locus of control can influence the effectiveness of interaction between
managers and their subordinates, and the effectiveness of supervision by
managers or supervisors.
4 If the number of subordinates that needs to be supervised is too large, it
will be difficult for managers to perform an effective control. Interaction
between managers and subordinates will also decrease. If the number of
subordinates to be supervised is small, there would be more interaction
between managers and subordinates. However, managers may over-supervise
and as a result, employees would not be given the freedom to perform their
jobs.
5 Locus of control also influences the number of
management levels in an organization. A high or narrow
locus of control will have more management levels.
Likewise, a low or wide locus of control will have fewer
management levels.
6 A narrow locus of control is suitable for large
organizations with many management levels. Managers can
interact with their subordinates frequently. Distribution of
power is practised but bureaucracy causes the decision-
making process to become inefficient. This type of
organization is easier to control.
CENTRALIZATION AND DECENTRALIZATION
Centralization
1. Centralization refers to the situation whereby there is
no distribution of power to subordinates.
2. Managers have the full authority towards all duties
performed by employees and the employees only follow the
given orders. All decisions will be made by the top-level
management which consists of managers who control the
organization.
Decentralization
1. Decentralization involves the distribution of power
from the management to the employees. Through
decentralization, subordinates have the authority to make
decisions.
2. They also have the authority to identify any problems or
issues and suggest suitable solutions to overcome the
problems.
Advantages & Disadvantages of
Centralisation
Advantages Disadvantages
1. Facilitate the coordination of 1. Top level management takes a
organisational activities in order to longer time to make decisions.
achieve the set objectives.
2. Hinder the abuse of power by 2. Difficulties in accommodating
subordinates. organisational activities and decisions
parallel to changes in the business
environment
3. Facilitate the coordination of tasks 3. Employee are not motivated to
given to employees at different work harder because there are no
management levels. opportunities to prove their abilities.
Advantages & Disadvantages of
Decentralisation
Advantages Disadvantages
1. More flexible organisation 1. The organisation may lose control
due to the abuse of power by
subordinates.
2. Better decision making 2. Employees may give more
opportunities for middle and lower importance to their respective
level management departments.
3. Reduce the workload of top-line 3. Flaws in the decision-making
managers in decision making process due to lack of skills.