CHAPTER- V

ORGANIZING
• Presented By
• Dr. VENKATESHWAR RAO
Professor-
Department of Management
 ORGANIZING

Koontz and O'Donnell, "Organization involves

the grouping of activities necessary to
accomplish goals and plans, the assignment of
these activities to appropriate departments and
the provision of authority, delegation and co-
ordination."
• Organization involves division of work among people
whose efforts must be co-ordinate to achieve specific
objectives and to implement pre-determined
strategies.
• Organizing is the managerial function of designing
and maintaining a system of roles. An organizational
role must include: objectives; major activities of role;
authority; availability of necessary information and
other resources.
• Organizing: is the process of creating a
structure for the organization.
• Organizational Structure: is the basic
framework of formal relationships among
responsibilities, tasks and people in the
organization.
• Organizational Design: design of an
organizational structure involves the task of
dividing up the work, allocating responsibility
and establishing chains of command.
• Organizational Chart: Is a diagrammatic
explanation of an organization’s structure. It
depicts the organization as a whole, the
various components and their
CHARACTERISTICS OF ORGANIZING
(1) Division of Work
(2) Co-ordination
(3) Plurality of Persons
(4) Common Objectives
(5) Authority and Responsibility
(6) Structure of Relationship
(7) Machine of Management
(8) Universal Process
 REASONS FOR ORGANIZING

1. Organizing is necessary to avoid confusion of

roles, tasks etc
2. Organizing clarifies the responsibilities of the
employees
3. It allocates accountability to each employee
4. It establishes clear channels of communication
5. It enables managers to deploy resources
6. It enables monitoring of organizational
activities
7. Allows for co-ordination of different parts of the
organization and different areas of work
8. It provides the flexibility needed to respond to
future demands and developments
 PRINCIPLES OF ORGANIZING

[Link] of work and

specialization
[Link]
[Link]
[Link] of Command
[Link] Of Command
[Link] of Control
[Link]-centralization and
Centralization
 FORMAL AND INFORMAL ORGANIZA TION
Formal Organization refers to the structure of jobs and positions with clearly defined
functions and relationships as prescribed by the top management
Informal organization, which does not appear on the organization chart, supplements
the formal organization in achieving organizational goals effectively and efficiently.
 Formal Organization Informal Organization
established with the explicit aim of achieving well- Informal organization springs on its own. Its goals are ill
defined goals defined and intangible.

Formal organization is bound together by authority Informal organization is characterized by a generalized

relationships among members sort of power relationships.

Formal organization recognizes certain tasks which are Informal organization does not have any well-defined
to be carried out to achieve its goals. tasks.

The roles and relationships of people in formal In informal organization the relationships among people
organization are impersonally defined are interpersonal.

In formal organization, much emphasis is placed on Informal organization is characterized by relative

efficiency, discipline, conformity, consistency and freedom, spontaneity, homeliness and warmth.
control.

In formal organization, the social and psychological In informal organization the socio psychological needs,
needs and interests of members of the organization get interests and aspirations of members get priority.
little attention.
The communication system in formal organization In informal organization, the communication pattern is
follows certain pre-determined patterns and paths. haphazard, intricate and natural.

Formal organization is relatively slow to respond and Informal organization is dynamic and very vigilant. It is
adapt to changing situations and realities. sensitive to its surroundings.
 SPAN OF CONTROL

span of management or span of control

refers to the number of subordinates
that a superior can supervise effectively.
Factors Determining Span
1. Capacity of Superior
2. Capacity of subordinates
3. Nature of work
4. Degree of decentralization and
delegation
5. Staff assistance provided
 Types of Span of Control:
Narrow span of control: single manager or supervisor
oversees few subordinates. This gives rise to a tall
organizational structure.

Advantages: Disadvantages:
• Close supervision • Too much control
• Many levels of
• Close control of management
subordinates • High costs
• Fast communication • Excessive distance
between lowest level and
highest level
 Wide Span of Control:
Wide span of control means a single manager or
supervisor oversees a large number of
subordinates. This gives rise to a flat
organizational structure.
• Advantages: Disadvantages:
• Overloaded supervisors
• More Delegation of
• Danger of superior’s loss
Authority of control
• Development of • Requirement of highly
Managers trained managerial
• Clear policies personnel
• Block in decision making
 LINE AND STAFF AUTHORITY

In an organization, the line authority flows from top to

bottom and the staff authority is exercised by the
specialists over the line managers who advise them on
important matters.
The staff officers do not have any power of command in the
organization as they are employed to provide expert
advice to the line officers.
The line gets out the production, the staffs carries on the
research, planning, scheduling, establishing of standards
and recording of performance.
line officers who have authority and command over the
subordinates and are accountable for the tasks entrusted
to them. The staff officers are specialists who offer expert
advice to the line officers to perform their tasks efficiently.
The line and staff organization is based on the principle of
specialization
 CHAPTER-VI

DEPARTMENTATION
DECENTRALIZATIOND
ELIGATION
 DEPARTMENTATION
Departmentation is a means of dividing a large and complex
organization into smaller, flexible administrative units. It is
the organization wide division of work into various
manageable units or departments.
• Departmentation -Reasons:
1. It permits an organization to take advantage of
specialization.
2. enables each person to know the particular part
which he is expected to play in the total activities of
the company.
3. It facilitates communication, coordination and control
4. loyalists of organizational members may be built.
5. It enables a manager to locate the sources of
information, skills and competence to take certain
vital managerial decisions.
 FUNCTIONAL DEPARTMENTATION
process of grouping activities by functions performed.
Activities can be grouped according to function (work
being done).

Advantages: Disadvantages:
•Advantage of • Lack of responsibility for
specialization the end result
• Easy control over • Overspecialization or lack
functions of general management
• Pinpointing training • It leads to increase
needs of manager conflicts and coordination
• It is very simple process problems among
of grouping activities departments
 TYPES OF DEPARTMENTATION

• Functional : Each major function reports to the CEO and other

sub functions report to the major functional heads. The idea is to
group specialists with similar interests and training together e.g.
marketing, HRM, finance or IT. This is the most common design

• Product : this is common in organizations that deal in multiple

products. It is a modification of the functional design. Each
major product or line is managed by an executive who reports to
the CEO. The product manager has control over the functions in
his division such as sales, marketing, HR and finance.

• Geographical Where an organization operates in a wide

geographical area, territorial groupings are designed. A
company’s activities are divided into regions with a manager for
each with a home office for coordinating the activities of the
geographical units.
 TYPES OF DEPARTMENTATION
• Customer: Activities are structured to respond
to specific groups of customers. For example,
the lending activities in banks that are tailored
to meet the needs of different customers say
business/corporate clients, personal, mortgage
or small business.
• Matrix : This involves a grid or matrix of
authority flows. Authority flows both vertically
and horizontally while vertical authority is
exercised by functional managers, horizontal
authority is vested in project managers so that
some employees find themselves reporting to
two managers. Project managers have formal
authority over budgetary funds, time and tasks.
 CENTRALIZATION AND DECENTRALIZATION

CENTRALIZATION: It is the process of transferring

and assigning decision-making authority to higher
levels of an organizational hierarchy.
• Advantages
– Provide Power and prestige for manager
– Promote uniformity of policies, practices and
decisions
– Minimal extensive controlling procedures and
practices
– Minimize duplication of function
• Disadvantages
– Neglected functions for mid-level and less motivated
beside personnel.
– Nursing supervisor functions as a link officer
between nursing director and first-line management.
 DECENTRALIZATION:

The process of transferring and assigning decision-making authority to

lower levels of an organizational hierarchy.

• Advantages
1. Raise morale and promote interpersonal relationships
2. Relieve from the daily administration
3. Bring decision-making close to action
4. Develop Second-line managers
5. Promote employee’s enthusiasm and coordination
6. Facilitate actions by lower-level managers

• Disadvantages
1. Top-level administration may feel it would decrease their
status
2. Managers may not permit full and maximum utilization of
highly qualified personnel
3. Increased costs. It requires more managers and large staff
4. It may lead to overlapping and duplication of effort
 DELEGATION OF AUTHORITY

Delegation of Authority means division of authority and

powers downwards to the subordinate. Delegation is
about entrusting someone else to do parts of your
job. Delegation of authority can be defined as
subdivision and sub- allocation of powers to the
subordinates in order to achieve effective results.
Elements of Delegation
• 1. Authority
• 2. Responsibility
• 3. Accountability
DELEGATION PROCESS
 STAFFING
Staffing involves filling the positions needed in the
organization structure by appointing competent and
qualified persons for the job.
The staffing process encompasses man power planning,
recruitment, selection, and training.
THE END
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