ORGANIZING A process of designing an organization’s structure and coordinating its managerial practices. An organizational structure is a pattern of relationships through which people under the direction of a given manager pursue common goals.

ORGANIZING cont... Organizational Structures show among other things: Positions in the organization Division of work activities incl levels of specialization Reporting relationships Link between different functions

Types of organizational structures Flat structure This is a structure with less formalisation and has its authority centralized in a single person.

flat structure cont… General Manager Employee

flat structure cont… Merits Enhances production Makes decision making faster. Promotes employee loyalty to the company owner. It reduces boredom and monotony since employees vary their duties.

flat structure cont… Demerits Poor decisions are made Discourages innovation Lack of accountability and responsibility Poor quality products and services

Functional structure This groups people by common function

Functional structure cont... General Manager Accounting Manager Credit controller Projects Officer Production Manager Artisan A Artisan B

Functional structure cont... Merits Enhances career development and training within departments Makes supervision easier Efficiency in the use of specialised resources

Functional structure cont... Demerits Employee loyalty to own departments. Promotes boredom and monotony since employees will be doing routine duties.

Divisional structure Brings together all the functions related to a certain type of product or service. Each division resembles a separate business unit and may be self contained.

DIVISIONAL STRUCTURE cont... Managing Director GM Div A Production Manager Procurement Manager GM Div B Marketing Finance

Basis for division Geographical based divisions are based on physical location. Merits It lowers costs of operation since costs are for a specific unit. Decentralisation of authority, which attracts quality decisions. Knowledge of local social patterns may help in decision making. It enhances commitment by members.

Basis for division cont… Lack of control of the organization as a whole. Employees may fail to see the divisions as part of the whole organization.

Basis for division cont… Customer division is based on the type of customers or Markets being serviced. It is designed when an organization has a diverse set of customers that can be grouped around common interests. Merit: high customer satisfaction Demerit: increases costs through duplication.

Basis for division cont… Production process/equipment division is done according to the type of process being done, where each process require different skills and specialized equipment Its major merit is its high specialization in the use of machines and personnel.

Matrix structure An organization employs or sets aside from within specialist functions when new services or goods are being developed. Some employees are allocated to assist the projects manager.

Matrix structure cont... Projects Manager CEO Div A G.M Manager Finance Marketing Manager Div B Production Procurement Manager Projects Manager

Matrix structure cont... Merits It enhances flexibility as teams can be created, refined and dissolved as needed. Employees can learn new skills from projects members. It motivates employees as they will be identified with end products

Matrix structure cont... Demerits It is costly to implement Encourages power struggles Leads to more discussions than actions It demands good interpersonal skills Creates employee confusion.  

Managers’ Powers Authority is the right in a manager’s position to command or give orders. Power is the leader’s ability to influence the behaviour of others.

Types of power Legitimate power Authority that an organization grants to its positions. Reward power the right to give or withhold benefits or to provide subordinates with things they desire or value. Rewards may be tangible (financial), symbolic (promotion), or social (praise, recognition).

Types of power cont... Expert power comes from one’s experiences, skills or knowledge Coercive power Ability to enforce compliance through fear. Referent power This is when a leader is followed, trusted, liked or respected because of his/her desirable personal traits..

DELEGATION The assignment to another person of formal authority and responsibility for the completion of a specific task.

Reasons for delegation To enable managers get more work done. Subordinates often have specialised knowledge required for a given task. Helps subordinates improve their managerial skills.

Barriers to delegation Fear that subordinates may fail to perform the task properly Fear that delegating may reduce their authority Fear that subordinates may excel and perform better than the manager.

Barriers to delegation cont... Some tasks may be too complex and confidential to be delegated. Some subordinates are afraid of challenges associated with responsibilities. General rigidity by some managers. Lack of incentives for completing delegated tasks.

Guidelines to effective delegation The manager should decide on the duties to be delegated Select appropriate subordinates to get the assignment Provide sufficient resources for carrying out delegated duties Specify the associated rules and regulations Establish feedback systems Reward effective delegation..