Organizing

Function
The way in which jobs are
arranged and allocated
among members of the
organization so that required
activities are done and that
activities fit together so that
people can work smoothly,
effectively and efficiently in
Effectively means achieving the
desired results (doing the right
things)

Efficiently means using the

least resources or effort (doing
things right).
 Basic Elements of
organizing
1. Work specialization
Refers to the manner in which work in an
organization is divided.
An organization may have:
High degree specialization:
This is where individuals focus on one or few
tasks e.g. in production of automobiles
workers specialize in specific tasks.
Low degree specialization:
Is where individuals perform many different
tasks in an organization e.g. a manager who
hires and fires, keeps financial records,
contacts suppliers etc
 Departmentation.

• This refers to the grouping of jobs in a

manner likely to contribute to effective
coordination.
• Jobs may be grouped according to the
functional units created in the
organization e.g. human resource
department, production department,
marketing, finance etc.
 Pattern of authority
An organization may have centralized or
decentralized
authority system.
• Centralized authority
Under this system the top managers retain
decision-making
rights.
• Decentralized authority
This is where decision-making rights have
been granted to middle or low level
positions.
Span of control
It can be defined as the number of
subordinates
reporting directly to a given
manager/supervision.
An organization may have a wide or
narrow span to control.
Wide span of control.
With wide span of control we have less
supervisory
levels of management.
Benefits
1. Lower Management Costs
2. Faster Decision-Making
3. Improved Coordination and Team Spirit
4. Greater Autonomy for Employees
5. Shorter Chain of Command
6. Encourages Employee Development
Limitations
1. May overload managers with too many
responsibilities.
2. Supervision quality might decrease.
3. Works best where subordinates are skilled,
self-motivated, and tasks are routine.
Narrow span of control
Organizations with a narrow span of control have many
levels of management. Few subordinate reports to a
single manager. This results in a tall structured
system/organization.
Benefits
1. Closer Supervision and Control
2. Better Communication with Subordinates
3. Easier for Training and Development
4. Higher Work Quality
5. Suitable for Complex or Specialized Tasks
6. Easier Discipline and Performance Management
Limitations
1. More management layers → slower decision-making.
2. Higher administrative costs.
3. Risk of communication distortion as messages pass
through many levels.
Ideal optimum span of
control
The type of span which is neither too
wide nor too narrow.
Organizations should aim at having
optimum number of subordinates to
be supervised by one manager.
Therefore ideal/optimum span of
control is one that leads to efficient
utilization of managers and effective
performance of subordinates.
Benefits
1. Effective Supervision and
Guidance
2. Efficient Communication Flow
3. Balanced Workload for Managers
4. Improved Decision-Making
5. Enhanced Employee Motivation
and Support
6. Cost Efficiency
7. Greater Team Cohesion and
Coordination
• Too wide a span may mean that
managers are overworked and
that their subordinates are
receiving too little
guidance/supervision.
• Too narrow a span may mean that
managers are under utilized.
• It is therefore the factors prevailing
in an organization which should
determine the type of span to be
implemented
i.e. narrow or wide span which is
 What are the
factors that
influence the
choice of span of
Control
Factors determining the choice of span
control /level of management in an
organization.
1. Similarity of functions to be
supervised.
• Less similar functions-narrow span of
control.
• Similar functions-wide span of control.
1. Geographic dispersion of functions
• Geographically dispersed functions-
narrow span of control
• Centralized functions –wide span of
3. Complexity of functions to be
supervised
• Complex functions-narrow span of control
• Less complex functions-wide span of
control.
4. Direction and control needed by
subordinates
• The higher the degree of supervision
required by subordinates –narrow span of
control
5. Coordination needed by
managers /supervisors
• The higher the degree of coordination
needed to integrate departmental
function/tasks within the sub- units –
narrow span of control
• Less coordination needed by a superior-
wide span of
control.
6. Training and qualifications of
subordinates
• Well-trained and qualified subordinates-
wide span of
control.
• Less qualified subordinates-narrow
span of control.
7. The management style adopted by the
organization.
• Managers who prefer loose style/democratic
style of
leadership- wide span of control
• Managers who prefers tight authoritarian
type of leadership- narrow span of control.
8. The degree to which work is routine or
stable
• Managers in charge of stable working
environment-wide span of control
• Less routine and unstable work environment –
narrow span of control.
DELEGATION OF AUTHORITY

Delegation of authority can be defined

as the assignment to other person
formal authority or decision-making
rights for carrying out specific
responsibilities or activities. While
managers delegate authority, they
retain accountability for the actions of
the delegates.
Need/importance of delegation
• Speeds up the process of goal
achievement through
the distribution of workload
• Speeds up the decision making
process in the organization
• Assistance to management is expanded
• Enables managers to seek and
accept increased responsibility
from higher positions
• Makes training and development of
subordinates a necessity i.e. it
improves the need for training and
development in the organization.
• Leads to effective development and
implementation of activity delegated i.e.
improves the implementation of tasks
since they are performed by experts.
• It improves teamwork in the
organization.
• Leads to efficient and effective time
So why do
managers
fear
delegation?
Barriers to effective delegation of
authority.
• Lack of trust and confidence in
subordinates.
• Lack of ability to delegate i.e. inability
by a manager to determine what
should be delegated.
• Feeling that subordinate do not have
experience to implement delegation
• Fear that subordinate may outshine the boss.
Managers feel
threatened.
• Fear of losing control of delegation.
• Fear of sharing secrets with subordinates.
• A manager does not appreciate the
benefits/importance of
delegation.
• Expert syndrome where a manager considers
himself as the sole expert (I know it all attitude).
• Reluctance of subordinates to accept delegation
for fear of
• Lack of incentives/rewards to motivate
subordinates to accept delegation.
• Lack of effective controls i.e.
appropriate feedback mechanisms to
monitor delegation.
• Insufficient support by the boss e.g. not
providing enough resources. Including
information required to effectively
implement delegation.
• Poor communication by managers.
 Measures to improve delegation
of authority

• The manager should put in place adequate

controls to monitor
delegation e.g. feedback or reporting system.
• The manager should define clearly the authority
and task to be
delegated.
• Select subordinates who are qualified and
willing to accept responsibility.
• Train subordinates and equip them with
necessary skills required
for effective implementation of departmental
• Offer guidance/help needed by
subordinates e.g. any information and
other resources required.
• Offer rewards/incentives to
subordinates to motivate them to accept
delegation.
• Create open lines of communication to
allow free exchange of information to
the delegate.
• Discuss the results with subordinates
• Allow subordinates to put in their own
skill (expertise) on the delegated
tasks i.e. the necessary inputs to
implement effectively the delegated
activities.
Factors for
centralizati
on of
authority?
 Centralization and
Decentralization
Centralization ofOf Authority
Authority.
• This refers to the retention of decision-making
rights by the top
management.
Factors influencing centralization of
authority.
• Cost of the decisions to be made
The more costly the actions to be decided on or to
be undertaken the more probable it is that the
decisions will be made at the upper level of
management.
Cost may be assessed directly in monetary
terms or in such intangibles as the company’s
reputation, its competitiveness and employee
Top management philosophy.
• The character and philosophy of top
executives have an important influence on
the extent to which authority is
centralized. Top managers may retain
authority for status and power.
Sensitivity of the decision to be made.
• The more sensitive the decision to be made
the more
likely that it will be centralized with the
top management.
Desire for uniformity in decisions
/policies made
• Uniformity ensures consistency in
policies applied in undertaking
organization activities. Uniformity of
policies ensures that customers will be
treated equally with respect to quality,
price, credit, delivery and service. This
calls for centralization of authority for
decision making.
Training and level of qualifications of
managers at middle and lower level
positions.
A real shortage of qualified managers could
limit decentralization of authority since in
order to decentralize superiors must have
qualified managers to give authority. But too
often, the scarcity of good managers has
made it impossible for several organizations
to decentralize.
Size of the organization.
• In small to medium sized organizations
there is tendency
 History and culture of the
enterprise.

• Whether authority will be centralized

frequently depends on the way the business
has been built. Certain enterprises expand
under the direction of their
owners/founders e.g. Ford Motors
Corporation has the tendency to centralize
authority.
 Pros of Centralized Structure
1 . Strong Leadership and Clear Direction
2. Uniform Policies and Procedures
3. Easier Coordination and Control
4. Quick Implementation of Top-Level Decisions
5. Lower Risk of Miscommunication and Errors
6. Economies of Scale
7. Suitable for Small or Stable Organizations
 Cons of Centralized Structure
1. Slow Decision-Making
2. Overburdened Top Management
3. Low Employee Motivation and Initiative
4. Poor Adaptability to Local Conditions
5. Limited Management Development
6. Inefficiency in Dynamic Environments
7. Employee Dissatisfaction and High Turnover
Decentralizat
ion of
authority
Decentralization of Authority.
Decentralization of authority refers to
dispersion of decision making rights to
middle or lower levels of organization
(operational level).
 Factors Influencing Decentralization
of Authority.
• Size of the organization e.g. large scale
organizations have
the tendency to decentralize authority.
• Need to relieve top management off
some burden of decisions making.
• Need to encourage decisions making and
assumption of authority and responsibility
by middle level managers.
• Need to promote development of
managers.
• Need to motivate managers by making
them to be in charge of certain
decisions.
• Need to adapt the organization to the
fast changing environment e.g.
meeting specific needs of consumers
etc.
 Benefits of Decentralization of
Authority.
1. Faster Decision-Making
2. Reduces Burden on Top Management
3. Promotes Managerial Development
4. Improves Motivation and Morale
5. Encourages Innovation and Creativity
6. Enhances Accountability
7. Facilitates Growth and Expansion
 Cons of Decentralization of
Authority.
1. Possibility of Uncoordinated Decisions
2. Duplication of Effort and Resources
3. Risk of Poor Decision-Making
4. Higher Administrative Costs
5. Difficulty in Maintaining Uniform Policies
6. Potential for Misuse of Authority
7. Limited Control by Top Management
Organizati
onal
design
 FUNCTIONAL
DESIGN
This is the most common and basic form of
organizational design.
Employees are grouped together according
to similarity of tasks, skills or activities.
This type of design utilizes a centralized
authority system
E.g. sales personnel allocated in the
marketing department, engineers in the
research and development department,
accountants in the finance department etc.
This type of design is commonly used in
small to middle sized organizations with
few products or where there is need of a
high level of work specialization.
Advantages of a functional
structure
• It leads to efficient utilization of resources. by
grouping common tasks together economies of scale
are possible.
• Indepth skill development - more intensive training of
members is possible
within departments due to the similarity of knowledge.
• Clear career path; employees have a clear
understanding of job requirements and paths
that will lead to promotion.
• Strategic decisions are made at the top. A centralized
decision structure facilitates unity of direction as top
management provides coordination and control to the
organization.
• Enhance coordination within functional units:-common
backgrounds of members within a department facilitate
communication and coordination.
 Demerits

• Slow decision-making. Centralized decision

making delays decision making process in the
organization.
• Less innovative; Members may become less innovative
because they focus
mainly on departmental goals rather than the overall
organizational goals.
• Poor coordination across functions-members of
each department may feel isolated and even hostile to
those in other departments.
• Limited management training: While functional
departments excel at training members to solve
problems related to specific skills they do poorly at
developing broader skills.
• Management skills: Top management is required
to have an understanding of how departments can
 DIVISIONAL
DESIGN.
Should be implemented when the
organization growth is accompanied by
expanded production lines, more
customers or geographic expansion,
production, customer or geographic
divisions may be created to improve
coordination of organizations activities.
Product Division.
In a product division each unit is responsible for single
product or a group of related products. Division by
product is usually created where products or group of
products is a production process and requires marketing
methods that are different from the other products in the
organization.
Customer Division.
When the organization sells products to diverse group of
customers, customers division may be the appropriate
design. a single product may have diverse customers or
managers may believe there are group of customers with
special needs to be met. By instituting a customer division
a close relationship can be established between a division
and its customers.
Geographic Division

Large organizations that distribute their

outputs nationally or internationally often
develop divisions based on geography e.g.
multinational corporations.
Geographic division is advantageous when
it’s necessary to locate facilities close to
customers who may have differences in
regional tastes and needs.
By creating geographic division the
organization can
 CEO

Div A Div B Div C

R&D HR Mkt R&D HR Mkt Pdt R&D HR Mkt Pdt

Pdt
 Example of a division
based on a
product CEO

Cosmetics Household goods Garden supplies

R&D Mkt R&D Mkt A/CS R&D HR Mkt A/CS

HR A/CS HR
 Example of divisional
design based on
customer ( A computer
firms) CEO

Home computers Business computers Research computers

R&D HR R&D HR A/C HR Mkt A/C R&D

Mkt A/C Mkt

 A division based on
Geography CEO

North America div. African division Far eastern division

R&D Mkt R&D Mkt Prd R&D HR Mkt Prd

HR Prd HR
 Merits
• Easy adaptation to unstable environment. Since each
division is relatively small it can adapt more easily to changes
in product development; customers or geographic regions. The
decision to change a product for example does not have to be
applied across the divisions.
• High customer’s satisfaction-customers receive more
attention under a divisional design because there is greater
detailing of the product to customer needs and wants.
• Clear performance responsibility: Each division can be made
a profit centre thus permitting assignment of specific objectives
to be achieved. Top management can access performance of
each division separately to determine where success or failure
has occurred.
• General management training: Divisional managers learn how
to control and coordinate activities among several departments
within the division hence top manager can be trained through job
rotation to head various divisions. This exposes them to broader
managerial experiences required at the top level management.
 Demerits
Inefficient use of resources:-

This is because there is dispersion/duplication of resources across

divisions. Focus on divisional objectives:-

Members of the division may focus on divisional objectives rather than

broad
goals of the organizations. This makes coordination across divisions
difficult.
Loss of control by the top management:-

The top management may loose control of divisions. The divisions may
become radically different in their operations such that to impose a rule
or regulation by the headquarters may be difficult.
 HYBRID DESIGN.

• This type of structural design is one that uses more than

one reporting structure at the workplace. i.e. it has both
divisional units and functional departments. The
functional departments are centralized and located at
the corporate headquarters.
• E.g. a company may have the human resource
department located at the
headquarters. The department will service all other
divisions/branches by carrying out recruitment, training
and maintenance of employee’s files. In doing so the
organization is able to eliminate the need of entire human
resource staff. This type of design work best where each
 Hybrid design
CEO

Mkt Prodn Acct HR

Branch A Branch B Branch C Branch D Branch E Branch F

 Merits of hybrid
design.
• Simultaneous coordination
across and within divisions can
be achieved. Centralized
functions enable coordination’s
across divisions by establishing
activities which direct each division
towards a common purpose.
• Adaptability and efficiency of
branches:- The divisional
units/branches are able to adapt to
the opportunities and constraints of
their environments.
 Demerits of hybrid
design.
• Leads to slow response to exceptional situations when
a branch is confronted with a situation which is unique
the resolution must be obtained from the headquarters.
This can result in delays and inefficiencies as the branch
could be better equipped to handle the problem.
• Conflict between headquarters and divisions/branches
functional departments at the headquarters often does
not have supervisory authority over divisional/branches
activities. This may lead to conflicts between divisional
and functional managers at the headquarters.
• Administrative overheads of functional departments
at the headquarters have the tendency to grow as staff
is added to assist in the control of divisions/branches.
This may lead to excessive costs to the organization.
MATRIX DESIGN
 Matrix Design
• A matrix organizational structure is a
workplace format in which employees report to two
or more managers rather than one manager
overseeing every aspect of a project.
• Matrix Organisation is a combination of two
or more organisation structures. For example,
Functional Organisation and Project Organisation.
• The organisation is divided into different
functions, e.g. Purchase, Production, R & D, etc.
Each function has a Functional (Departmental)
Manager, e.g. Purchase Manager, Production
Manager, etc. The organisation is also divided on the
basis of projects e.g. Project A, Project B, etc. Each
project has a Project Manager e.g. Project A Manager,
Project B Manager, etc.
• The employee has to work under two authorities
(bosses). The authority of the Functional Manager
flows downwards while the authority of the Project
 Merits

• Individuals can be chosen according to

the needs f a project
• Project managers are directly responsible
for completing the project within a
specific deadline and budget
• Encourages resource development ie
managers and subordinates skills are
developed as they receive wider
exposure to multiple operations of the
business
• Encourages resource efficiency hence
 Demerits
• Conflicts in organizational authority
exist between functional and project
manager i.e. power struggle resulting from
equal sharing of authority.
• Role conflict and role ambiguity may result
in stress for functional and project managers
as well as the team members.
• Creates confusion: Assignment of two
superiors to one subordinate leads to
confusion and conflict between
subordinates and managers.
• Its time consuming: Matrix design requires a
large amount of time because of frequent
meetings that are necessary to integrate
 Current trends in
organizing
Contingency Approach
The contingency school has suggested
that flexibility and acceptance of change
are important because of the large
number of variables that influence
operations.
• The implication of the contingency
approach is that the organizational
design will depend on:
• Technological environment
• Diversity of tasks
• Size of the organization
• Type of personnel
• Culture of the organization