ORGANIZING AND STAFFING

Meaning:
To the sociologists, Organization means a study of interactions of people,
classes or hierarchy of an enterprise.
To the psychologists, Organization means an attempt to explain, predict and
influence the behavior of individuals in an enterprise
According to Amitai “An org is a social unit or human grouping deliberately
structured for the purpose of attaining specific goals”
NATURE OF ORGANIZATION
PURPOSE OF ORGANIZATION
• To make use of technological improvements
• To facilitate pattern of communication
• To allocate authority and responsibility
• To locate decision centers
• To create proper balance
• To stimulate creativity
• To encourage growth
PRINCIPLES OF ORGANIZATION
✔Objectives
✔Specialization
✔Span of control
✔Exception
✔Scalar principle
✔Unity of command
✔Delegation
✔Simplicity
✔Flexibility
✔Personal abilities
✔ Efficiency
✔ Acceptability
Line, Military or Scalar Organization
Types/Structures/Forms of Organization
• Line, Military or Scalar Organization
• Functional Organization
• Line and Staff Organization
• Committee Organization
• Matrix Organization
• Tall Organization
• Flat Organization
✔ It is originated in the military
✔Simple and oldest type of organization
✔Top to bottom approach
✔The Quantum of authority is highest at the top and reduces at each
successive level.
✔ E.g. Government companies
Advantages Disadvantages
Simplicity Rigid & Inflexible

Quick decision and speed of action Autocratic system

Unity of control favor-ism and nepotism

Clear division of authority and responsibility Lack of specialization

Discipline and better coordination Red-tape and bureaucracy

Functional Organization
✔ Enterprise are classified according to certain functions like production,
marketing, finance, personnel etc.
✔A functional in charge directs the subordinates throughout the organization
✔ Advantages
◦ Efficient use of resources
◦ In depth skills
◦ Specialized career development
◦ Coordination within functions
◦ Excellent technical problems solving
✔ Disadvantages
◦ Poor communications across functions
◦ Slow response to external changes
◦ Requires high level coordination
◦ Limited general management training
Line and Staff Organization

✔Combination of Line & Functional Org

✔Line departments perform the organization’s primary tasks (Delegation
of authority)
✔ Production, marketing, sales, R&D
✔Staff Departments provide specialized skills in support of line
departments
◦ Engineering, Human Resources, Legal,
◦ Advise and council in areas of expertise
Committee Organization
✔ A committee is a group of persons performing a group task with the object of
solving certain problems.
✔ It may formulate, plans, review the performance of certain units
✔ Committees can be broadly classified into advisory committees and executive
committees
✔Advisory committees have only a recommender’s role and cannot
enforce implementation of their advice or recommendation E.g. works
committees, finance committees etc.
✔Executive committees are assigned with line authority., Executive
committees not only take decisions but also enforce decisions and thus
perform a double role of taking decision and ordering its executive.
Advantages & Weaknesses of Committee Organization
• Advantages of Committees
(1) Committees provide a forum for the pooling of knowledge and experience of many persons of
different skills, ages and backgrounds.
(2) Committees are excellent means of transmitting information and ideas both upward and downward.
(3) Committees are impersonal in action and hence their decisions are generally unbiased and are based
on facts.
(4) When departmental heads are members of committee, people get an opportunity to understand each
others problems and hence improve coordination.

• Weaknesses of Committees
(1) In case a wrong decision is taken by committee, no one is held responsible which may results in
irresponsibility among members.
(2) Committees delay action
(3) Committees are expensive form of organization.
(4) Decisions are generally arrived at on the basis of compromise and hence they are not best decision.
(5) As committee consists of large number of persons, it is difficult to maintain secrecy.
How to make Committee effective?
• Members of a committee should not be large
• Committee’s authority should be carefully spelt out, activities correctly
chosen and closely defined.
• Members should interact with each other freely
• Precedence should be given for organization interests than dept
interests, should be prepared in advance on issues to be discussed.
• The chairman of the committee should plan and conduct the meetings
with firmness and fairness
• Periodic review to determine if the committee works effectively, in terms
of the purpose and the validity of the purpose currently.
 Matrix Organization
✔ Matrix Organization was introduced in USA in the early 1960's. It was used to solve
management problems in the Aerospace industry.
✔ Matrix Organization is a combination of two or more organization structures. For example,
Functional Organization and Project Organization.
✔ The organization 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 organization 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 Manager flows across (side
wards). So, the authority flows downwards and across. Therefore, it is called "Matrix
Organization".
Tall Organization
It is called as a Mechanistic or classical org structure is usually pyramid
shaped
[Link] from top to bottom
[Link] Communication Lines
[Link]
[Link] span of control
[Link]
Flat organization
It is also called as organic or Behavioral structure
Characteristics :
[Link] levels of decentralization
[Link] span of control
[Link] extended communication lines
DEPARTMENTATION
✔The horizontal differentiation of tasks or activities into discrete
segments is called as departmentalization or departmentation.
✔Departmentation involves grouping of operating tasks into jobs,
combining of jobs into effective work group and combining of
groups into divisions often termed as ‘departments’.
Need & Importance of Departmentation
✔It increases the operating efficiency of the employees.
✔It makes the executive alert & responsible in his duties.
✔It increases the prestige & skill of the departmental heads.
✔It helps in better co-ordination among the managerial personnel.
Types/ Bases/ Forms of Departmentation
Departmentation by functions
The activities are grouped on the basis of functions which are to be performed.
Each department is headed by one responsible person who is directly responsible
to the General Manager.
Advantages
✔ It is simple and suitable for small organization which manufactures limited
number of products.
✔ It promotes specialization.
✔Manpower and other resources of the company are effectively used.
✔ It leads to improve planning and control.
Drawbacks (of Departmentation)
✔ It fosters sub-goal loyalty. Department goal becomes important than
organizational goal resulting into interdepartmental conflicts.
✔ Difficult to set up specific accountability and profit centers within
functional departments with the result that performance cannot be
accurately measured.
Drawbacks (of Departmentation)
✔ It fosters sub-goal loyalty. Department goal becomes important than
organizational goal resulting into interdepartmental conflicts.
✔ Difficult to set up specific accountability and profit centers within
functional departments with the result that performance cannot be
accurately measured.
Depart mentation by product
The grouping of activity on the basis of product or product lines is followed
in multi-lines large scale organizations.
Advantages
(1) It focuses individual attention on each product line.
(2) It leads to specialization of physical facilities on the basis of product
which results in economy.
(3) It is easier to evaluate and compare the performance of various
product division.
(4) It keeps problems of production isolated from others.
Depart mentation by territory
✔The market area is broken up into sales territories and a responsible
executive is put in-charge of each territory.
✔The territory may be known as district, division or region.
✔ Sales person will report to their respective territory heads.
Depart mentation by Process
✔It is done on the basis of several discrete process or technologies
involved in the manufacture of a product.
✔E.g. Vegetable company - crushing, refining & finishing
Textile Mil-ginning, spinning, weaving & dyeing.
CENTRALIZATION AND DECENTRALIZATION
CENTRALIZATION
✔Centralization is a common occurrence in small enterprise.
✔ Controlled by dynamic manager who single-handedly commands the running of the
concern,
✔ He also takes all the decision himself and entrust only implementation to the
subordinates, there is a direct link between the proprietor and his employees.
Merits Demerits
•Standardization of procedure • Destroys individuals initiative
and system • Over burden
• Facilitates evaluation • Slow down the operation
• Economies • Distance from customer
• Co-ordination of activities
• No scope for specialization
 DECENTRALIZATION
⚫“It refers to the systematic efforts to delegate to the lowest levels all authority
except that which can only be exercised at the central points”
⚫“It refers to the division of a group of function and activities into relatively
autonomous units with overall authority and responsibility for their operation
delegated to a head of each unit”
⚫“the process of pushing downward the appropriate amount of decision-making
authority, all organizations practice a certain degree of decentralization
Advantages Disadvantages
[Link] burden of top [Link] of co-ordination
executives [Link] in control
[Link] decision 3. Increases administrative
[Link] diversification expenses
[Link] of subordinates
[Link] of competition
5. Division of risk
DELEGATION OF AUTHORITY, POWER AND RESPONSIBILITY
⚫ Authority is a legal or rightful power, a right to command or to act.
⚫ According to Henry Fayol “Authority is the right to order or command and is delegated
from the superior to the subordinate to discharge his responsibilities.
Advantages of delegation of authority.
(1) It relieves the manager of his heavy work load.
(2) It leads to better decision. This is because, the subordinates are closest to the
situation and have the best view of the facts, are in better positions to make decision.
(3) It speeds up decision-making.
(4) It helps to train the subordinates and builds moral.
(5) It helps to create formal organization structure.
Power may be defined as the capacity or ability to influence the behavior
of other individuals.

Difference between authority and power

✔Responsibility is defined as the obligation of a subordinate, to whom a duty
has been assigned, to perform the duty.
✔Responsibility arises from a superior subordinate relationship
✔Responsibility may be specific or continuing
✔Responsibility cannot be delegated or transferred
✔Responsibility is divided into two parts namely operating responsibility and
ultimate responsibility
✔The subordinates assumes only operating responsibility and superior retains
ultimate responsibility.
Span of Control
✔It is also known as span of management or span of supervision or span of
authority or responsibility
✔ It refers to the number of subordinates who report directly to a superior to
facilitate vertical coordination and effective supervision of subordinates.
✔ Normally 4-8 subordinates at the upper level of organization & 8-15 or more
at the Middle & lower level.
✔Factors determining an effective Span
⚫ Subordinate training.
⚫ Clarity of delegation of authority.
⚫ Clarity of plans.
⚫ Use of objective standards.
⚫ Rate of change.
⚫ Communication techniques.
⚫ Amount of personal contact needed.
Management by objectives – MBO
⚫Developed by Peter F Drucker in 1954 (Prolific Mgmt)
⚫It is also called as Results Mgmt or Mgmt by Results
⚫The Main aim is to increase the effectiveness of managers by placing
responsibility.
⚫MBO is a process whereby subordinate & superiors of An organization jointly
define common goals, define each individuals major areas of responsibility in terms
of results expected of him & use these measures as guide for operating the unit &
assessing controlling contribution of each of its members.
⚫It’s a joint participation of both the members in the establishment of clear &
specific objectives for each individual & unit of organization.
Advantages & Disadvantages of MBO
Steps in Management by Objectives
• Setting of organizational objectives
• Setting departmental objectives
• Fixing key result areas
• Setting subordinate objectives or targets
• Appraisal of activities
• Reappraisal of objectives
Management By Exception (MBE)
• It was developed by F W Taylor in 1919
• It is a mgmt. style wherein managers intervene only when their
employees fail to meet their performances standards.
• If the employees are performing as expected the managers will not take
any action.
• MBE policy is to focus on only those issues or events in which there is a
deviation from the established standards
Staffing- HRM Introduction
Staffing refers to the managerial function of employing and developing human
resources for carrying out the various managerial and non-managerial activities
in an organization.
Nature of Staffing
⚫Related to human beings.
⚫A separate managerial function.
⚫Essential at all managerial levels.
⚫Related to social responsibility.
⚫Effects to internal & external environment.
⚫It is a process Or System.
⚫Quality & Quantity.
⚫Organizational effectiveness.
⚫Acquire, Deploy, Retain
Functions of Staffing
The various steps involved in the process of staffing are as follows.
⚫Manpower Planning
⚫Job Analysis
⚫Recruitment
⚫Selection
⚫Placement
⚫Induction
⚫Training and Development
⚫Performance Appraisal
⚫Compensation
⚫Promotion and Transfer
Recruitment
Sources of Recruitment

[Link] recruitment:
Transfers, promotion, demotion

2. External recruitment: All vacancies cannot be filled up from within

the organization. Existing employees may lack the required skill,
initiative and qualification needed for the jobs involved. Hence
managers have to recruit some persons from outside the organization.
Selection
⚫Selection is the process of picking individuals who have relevant
qualifications & competencies required for the job.
⚫It involves a series of steps during which the candidates are tested for
skills, knowledge, attitude, aptitude, etc. to ensure his/ her suitability to
the job.`
Selection Process/ Steps in Selection
Case Study-Organizing-Part 1/2
Case Study-Organizing-Part 2/2
Solution for the Case Study
• As per the Organization Structure, the reporting structure is as drawn at
right. But Bishwash is reporting directly to Anil Kumar (his manager’s
manager), skipping one level. This made Rakesh Mohan upset. Anil Kumar
(Managing Director)
• Answer to Q1: Nature of Problem – The interactions between Bishwash
and Anil Kumar was going very active and Rakesh Mohan (intermediate
manager) was not involved. There was no attempt from any of the three
to make the interactions as Anil -> Rakesh -> Bishwash. Rakesh Mohan
• Answer to Q2: Yes. Rakesh Mohan could have prevented. But he was (Business Manager)
only observing and watching. He never attempted to communicate
neither to Anil nor Bishwash about what he feels and how it should have
been.
• Answer to Q3: Solution. Rakesh Mohan should call for a meeting
Bishwash
frequently with Bishwash and invite Anil too. He should make sure the (Assistant Business
line of reporting is observed as in the Org structure and Unity of Manager)
Command is followed