2OrganizingProcess off determining the activities to be performed, arranging these activities to administrative units, as well as assigning managerial authority and responsibilities to people employed in the organization.
3Organizing Definition “Organizing is the process of identifying and grouping the work to be performed, defining and delegating responsibility and authority and establishing relationships for the purpose of enabling people to work more effectively together in accomplishing objectives”.Louis Allen
4Importance of Organizing Focus to facilitate the attaining of objectivesArrangement of positions and jobs within the HierarchyDefine responsibilities and line of authority of all levelsCreating relationships that will minimize frictionClassification of work and assigning it to different departments helps in bringing specialization in managerial functions
5Characteristics of Organization Division of labour :Organization deals with task of the business as a whole. The work is assigned to different persons for efficient accomplishment and specialization with the help of Organization structure.Co-ordination :It helps in integrating and harmonizing various activities which in turn avoids duplication and delays.
6Well defined Authority and responsibility relationship : An Organization consists of various positions arranged in a hierarchy with well defined authority and responsibility.Co-operative Relationship :Relationship should be both vertical and horizontal among members.Successful Goal AchievementThe organization has the will and means for maintaining Clarity of Direction
7Constituents of Organizing 1. OrganizationOrganization DesignOrganization StructureDepartmentationOrganizational Relationship2. Span of Control3. Employee EmpowermentCentralization and DecentralizationPower an d AuthorityDelegation4. Organization Culture
8Centralization and Decentralization Centralization is the concentration of decision- making and action at high level management.Decentralization is the consistent delegation of authority to the lower levels where the work is performed.
9Delegation:Process off assigning work from a top organizational level to a lower one or from superior to subordinate, and giving that person the authority to accomplish them.Allocation of dutiesDelegation of authorityAssignment of responsibilityCreation of accountability
10Barriers to successful delegation Lack of superior's ability to direct the subordinatesLack of confidence in subordinateAbsence of control
11Major causes of managers’ refusal to delegate Tendency to do things personallyDesire to dominate the knowledge, information, and skillsUnwillingness to accept risks of wrongs
12Principles of delegation Responsibility can not be delegatedAuthority and responsibility should be delegated in equal proportion.
13Authority :The right to take final decisions,, to act or to command action off othersIt moves in a downward directiion.
14Types of authority Ultimate authority Legal authority Technical authorityOperational authority
15Responsibility:The obligation involved when one accepts an assignment.It cannot be delegated, it may be continued or it may be terminated with the accomplishment of the goal.
16Span of Control:Number of subordinates that can be adequately supervised by one supervisor.Dimensions of span of controlNarrow span of controlWide span of control
17Narrow span of control Advantages: Close supervision. Close control. Fast communication between subordinates and superiors.Disadvantages:Superiors tend to get too involved in subordinates’ work.Many levels of management.High costs due to many levels.
18Wide span of control Advantages: Superiors are forced to delegate. Clear policies must be made.Subordinates must be carefully selected.Disadvantages:Tendency of overload superiors to take most or all decisions.Danger of superior’s loss of control.Requires exceptional quality of managers.
20Formal and Informal Organization Organizations can be categorized as informal or formal, depending on the degree of formalization of rules within their structures.
21Formal OrganizationManagement has determined that a comparatively impersonal relationship between individuals and the company for which the work is viewed as the best environment for achieving organizational goals.Subordinates have less influence over the process in which they participate, with their duties more clearly defined
22Informal organizations Informal organizations, on the other hand, are less likely to adopt or adhere to a significant code of written rules or policies.Individuals are more likely to adopt patterns of behaviour that are influenced by a number of social and personal factors.Changes in the organization are less often the result of authoritative dictate and more often an outcome of collective agreement by members.Informal organizations tend to be more flexible and more reactive to outside influences.
23STEPS IN ORGANIZING 1. Division of labour 2. Departmentalization 3. Appointing Suitable persons4. Delegation of Authority
25DIVISION OF LABOURDivision of labour is the breakdown of labour into specific, circumscribed tasks for maximum efficiency of output, particularly in the context of manufacturing.
26DepartmentalizationDepartmentalization refers to the process of grouping activities into departments.Division of labour creates specialists who need coordination. This coordination is facilitated by grouping specialists together in departments.
27Types of Departmentalization Functional departmentalization - Grouping activities by functions performed.Product departmentalization - Grouping activities by product line.Customer departmentalization - Grouping activities on the basis of common customers.Geographic departmentalization - Grouping activities on the basis of territory.Process departmentalization – Grouping activities on the basis of different steps involved in the process of manufacturing or delivery of a product or service.
29Functional departmentalization Functional departmentalization groups people by expertise and resources used. It is the most widely used and accepted form of departmentalization .This approach also enhances career development and training within the department, while also allowing superiors and subordinates to share common expertise.
31Product departmentalization Product departmentalization arranges your business along “product” lines .Product departmentalization can allow for quicker changes in a product line , more concern for customer demand, as the impact of customer demand can more easily be traced to a particular department.
32Place departmentalization Place departmentalization is based on geographic area, and groups all functions for the area at one location under one manager.Advantages to the place approach are that managers develop expertise in solving problems unique to their location and get to know their local customer's very well.
33Customer departmentalization Customer departmentalization breaks the organization into groups based on the type of customer served.It is usedto ensure a focus on customer’s needsexpertise in solving problems unique to their location,know their local customer’s problemsdefinitive identification of key customers
34Process departmentalization Departmentalization by process groups jobs on the basis of product or customer flow. Each process requires particular skills and offers a basis for homogeneous categorizing of work activities.
35Appointing Suitable persons When activities are divided into different functions , the next step will be to appoint suitable persons for various jobs. Experts are appointed as a head of Departments.
36Delegation of Authority A person will be able to perform duty only when he is given adequate authority required for that job. If the work is assigned without delegating it is meaningless. Authority and responsibility always go together.
37Forms of Organization Structure Line OrganizationFunctional OrganizationDivisional OrganizationMatrix OrganizationVirtual organizations
38Line OrganizationAn authority relationship in organizational positions where one person (a manager) has responsibility for the activities of another person (the subordinate). In such organization, top management has complete control, and the chain of command is clear and simple.
39Line Structure Convenience Store Owner Manager Assistant Manager Hourly Employee
40Staff OrganizationStaff refers to those members who perform purely advisory functions.Staff personnel use their technical expertise to indirectly assist line personnel, aid top management and provide support, advice, and knowledge to other individuals in the chain of command.For example, Human Resource department employees help other departments by selecting and developing a qualified workforce.
42FUNCTIONAL ORGANIZATION Functional authority is referred to as limited line authority. It gives a staff person power over a particular function. It is given to specific staff personnel with expertise in a certain area. For example, members of an accounting department might have authority to request documents they need to prepare financial reportsFunctional authority is a special type of authority for staff personnel, which must be designated by top management.