1. Organizing
For an organizational role to exist and be meaningful to people, it must incorporate:
(1) verifiable objectives, which, are a major part of planning.
(2) a clear idea of the major duties or activities involved.
(3) an understood area of discretion or authority so that the person filling the role knows what he can do to accomplish goals.
Organizing includes:
the identification and classification of required activities.
the grouping of activities necessary to attain objectives.
the assignment of each grouping to a manager with the authority horizontally and vertically .

2. CONTINUED
Organization is a total system of social and cultural relationships.
For managers, the term organization implies a formalized intentional structure of roles or positions.
People working together must fill certain roles.
the roles people are asked to fill should be intentionally designed to ensure that required activities are done and people can work smoothly, effectively, and efficiently in groups.
Example: corporate headquarters, division, and department) in the organization structure.

3. Formal and Informal Organisation
Formal Organization
Formal organization means the intentional structure of roles in a formally organized enterprise.
The structure must furnish an environment in which individual performance, both present and future, contributes most effectively to group goals.
Formal organization must be flexible.
There should be room for discretion, for advantageous utilization of creative talents, and for recognition of individual capacities.

4. Informal Organization
CONTINUED
Informal Organization
Chester Barnard described informal organization as any joint personal activity without conscious joint purpose, even though contributing to joint results.
It is a network of personal and social relations not established or required by the formal organization but arising spontaneously as people associate with one another.
Example: It might include the machine-shop group, the sixth floor crowd, the Friday evening bowling gang.

5. Organisational Division: The Department
The word department designates a distinct area, division, or branch of an organization over which a manager has authority for the performance of specified activities.
It may be the production division, the sales department, the West Coast branch, the market research section.

6. Organisation Levels and The Span Of Management
Organization levels exist because there is a limit to the number of persons a manager can supervise effectively.
A wide span of management is associated with few organizational levels; a narrow span, with many levels.

7. Choosing the Span
In every organisation, it must be decided how many subordinates a superior can manage.
Lyndall Urwick found the ideal number of subordinates for all superior authorities to be four, while at the lowest level of organization, the number may be eight or twelve.

8. THE FORMAL AND INFORMAL ORGANISATION

9. Organisation with Narrow Spans
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
Excessive distance between lowest level and top level

10. Organisation with Wide Spans
ADVANTAGES
Superiors are forced to delegate
Clear policies must be made
Subordinates must be carefully selected
DISADVANTAGES
Tendency of overloaded superiors to become decision bottlenecks
Danger of superior’s loss of control
Requires exceptional quality of managers

11. Problems with Organisation Levels
Levels are expensive as they increase, more and more effort and money are devoted to managing.
Due to additional managers, the staffs to assist them, and of coordinating departmental activities, plus the costs of facilities for the personnel.
Departmental levels complicate communication.
An enterprise with many levels has greater difficulty communicating objectives, plans, and policies downward through the structure.
Omissions and misinterpretations occur as information passes down the line.
Numerous departments and levels complicate planning and control.
A plan that may be definite and complete at the top level loses coordination and clarity as it is subdivided at lower levels.

12. Operational-Management Position - A Situational Approach
The classical school approach to the span of management deals with specifying numbers of subordinates for an effective span.
The principle of the span of management states that there is a limit to the number of subordinates a manager can effectively supervise, but the exact number will depend on the impact of various factors.

13. Factors Determining An Effective Span
Subordinate Training
The better the training of subordinates, the fewer the number of necessary superior-subordinate relationships.
Well-trained subordinates require not only less of their managers’ time but also less contact with their managers.

14. Factors Influencing the Span of Management
Narrow span (a great deal of time spent with subordinates) related to:
Little or no training
Inadequate or unclear authority delegation
Unclear plans for non-repetitive operations
Non verifiable objectives and standards
Fast changes in external and internal environments
Use of poor or inappropriate communication techniques, including vague instructions
Ineffective interaction of superior and subordinate
Ineffective meetings
Greater number of specialties at lower and middle levels
Incompetent and untrained manager
Complex task
Subordinates’ unwillingness to assume responsibility and reasonable risks
Immature subordinates
Wide spans (very little time spent with subordinates) related to:
Thorough subordinate training
Clear delegation to undertake well- defined tasks
Well-defined plans for repetitive operations
Verifiable objectives used as standards.
Slow changes in external and internal environments
Use of appropriate techniques such as proper organization structure, written and oral communication
Effective interaction between superior and subordinate
Effective meetings
Number of specialties at upper levels (top managers concerned with external environment)
Competent and trained manager
Simple task
Subordinates’ willingness to assume responsibility and reasonable risks
Mature subordinates

15. Clarity of Delegation of Authority
If a manager clearly delegates authority to undertake a well-defined task, a well-trained subordinate can get it done with a minimum of the manager’s time and attention.
But if the subordinate’s task is not clearly defined, or if the subordinate does not have the authority to undertake it effectively.
Either the task will not be performed.
Or the manager will have to spend a disproportionate amount of time supervising and guiding the subordinate’s efforts.

16. Clarity of Plans
If plans are well defined, if they are workable, if the authority to undertake them has been delegated.
And if the subordinate understands what is expected, little of a supervisor’s time will be required.
Example:
In one large-volume work-clothing manufacturer’s plant, production supervisors operated satisfactorily with as many as thirty subordinates.
If plans cannot be drawn accurately and subordinates must do much of their own planning, they may require considerable guidance.

17. Use of Objective Standards
A manager must find out through use of objective standards, whether subordinates are following plans.
Good objective standards, revealing with ease need to be selected.
Any deviations from plans, enable managers to avoid many time-consuming contacts.
Enables to direct attention to exceptions at points critical to the successful execution of plans.

18. Rate of Change
Certain enterprises change much more rapidly than others.
The rate of change is an important determinant of the degree to which policies can be formulated and the stability of can be maintained.
The effect of slow change on policy formulation and on subordinate training is dramatically shown in the organization of the Roman Catholic Church.
This organization, in terms of durability and stability, can probably be regarded as the most successful in the history of Western civilization.

19. Communication Techniques
If every plan, instruction, order, or direction has to be communicated by personal contact and if a staffing problem has to be handled orally, a manager’s time will obviously be heavily burdened.
Busy top executives widen their span of management by insisting upon summary presentation of written recommendations, even when these involved enormously important decisions.
An ability to communicate plans and instructions clearly and concisely also tends to increase a manager’s span.
The subordinate's job is greatly facilitated by superiors who can express themselves well.

20. Continue….. In many instances, face-to-face meetings are necessary.
Many situations cannot be completely handled with written reports, memorandums, policy statements, planning documents, that do not involve personal contact.
Other best way of communicating a problem, or “getting a feel” for how people really think on some matter is to spend time in personal contact.
Percentage of executive’s time spent can be reduced by better training, better policymaking and planning.
Clearer delegation, more thorough staff work, better control systems and objectives standards, are better application of sound principles of management.

21. Example:
Merit ratings, insurance programs, grievance procedures, and other personnel matters now requiring supervisors’ time in face-to- face relationships have reduced their traditionally wide spans.

22. Variation by Organization Level
Several research projects have found that the size of the most effective span differs by organization level.
The degree of specialization by individuals (“person specialization”) was the most important variable affecting span.
When a greater number of specialties was supervised, effective spans were narrower at lower and middle levels of organization but were increased at upper levels.
Because top-level managers were most concerned with the interface of the enterprise with its external environment, strategic planning, and major policy matters.
Routineness of an operation appeared to have little effect at any level, and size (in terms of personnel) had little effect at lower levels but a positive effect of middle levels.

23. Other Factors
Example: A manager who is competent and well trained can effectively supervise more people than one who is not.
Positive attitudes of subordinates toward assumption of responsibility, as well as their willingness to take reasonable risks.
Personal capacities as comprehending quickly, getting along with people.
Commanding loyalty and respect.
Manager’s ability to reduce the time he or she spends with subordinates.

24. The Structure and Process of Organising
The structure must reflect objectives and plans, because activities derive from them.
It must reflect the authority available to an enterprises management.
Authority in a given organization is a socially determined right to exercise discretion.
Organization structure, like any plan, must reflect its environment. Just as the premises of a plan.
It must be designed to work, to permit contributions by members of a group, and to help people gain objectives efficiently in a changing future. A workable organization structure can never be static.
Since the organization is staffed with people, the organization structure must take into account people’s limitations and customs.

25. The Logic of Organising
Organisation process consists of:
Establishing enterprise objectives
Formulating supporting objectives, policies and plans
Identifying and classifying the activities necessary to accomplish these objectives.
Grouping these activities in the light of the human and material resources available and the best way, under the circumstances, of using them.
Delegating to the head of each group the authority necessary to perform the activities.
Tying the groups together horizontally and vertically, through authority relationships and information flows.

26. ORGANISING PROCESS

27. Departmentation by Simple Numbers
The method of departmentising is achieved by tolling off persons who are to perform the same duties and putting them under the supervision of a manager.
Technology has advanced, demanding more specialised and different skills.
Second reason is that groups composed of specialised personnel are frequently more efficient than those based merely on numbers.
Third reason – it is useful only at the lowest level of the organisation structure.
Limitation:
As soon as any factor other than pure human power becomes important, the simple-numbers basis of departmentation fails to produce good results.

28. Departmentation by Time
The oldest forms of departmentation, is grouping activities on the basis of time.
The use of shifts is common in many enterprises where for economic, technological, or other reasons the normal workday will not suffice. Examples:1. hospitals, where round-the-clock patient care is essential.
2. Fire department has to be ready to respond to emergencies.
3. A steel furnace cannot be turned on and off at will; the process of making steel is continuous and requires workers to work in three shifts.

29. It is possible to use processes that require a continuing cycle.
Advantages
Services can be rendered that go beyond the typical 8-hour day, extending to 24 hours a day.
It is possible to use processes that require a continuing cycle.
Expensive capital equipment can be used more than 8 hours a day when workers in several shifts use the same machines.
Students attending classes during the day, for instance – find it convenient to work at night.

30. Disadvantages Supervision may be lacking during the night shift.
There is the fatigue factor; it is difficult for most people to switch, from a day shift to a night shift and vice versa.
Having several shifts may cause problems in coordination and communication.
The payment of overtime rates can increase the cost of the product or service.

31. Departmentation By Enterprise Function
Grouping activities in accordance with the functions of an enterprise – functional departmentation.
Basic enterprise functions are production (creating utility or adding utility to a good or service),
Selling (finding customers, patients, clients, students, or members who will agree to accept the good or service at a price or for a cost).
Financing (raising and collecting, safeguarding, and expending the funds of the enterprise).
It has been logical to group these activities into such departments as engineering, production, sales or marketing, and finance.

32. A FUNCTIONAL ORGANISATION GROUPING (MANUFACTURING COMPANY)

33. Is logical reflection of functions.
ADVANTAGES
Is logical reflection of functions.
Maintains power and prestige of major functions
Follows principle of occupational specialisation
Simplifies training
Furnishes means of tight control at top
DISADVANTAGES
Deemphasise of overall company objectives
Overspecialises and narrows viewpoints of key personnel
Reduces coordination between functions
Responsibility for profits is at the top only
Slow adaptation to changes in environment
Limits development of general managers

34. It is the most widely employed basis for organizing activities and is present in almost every enterprise at some level in the structure.
They are the basis not only of departmental organization but also of departmentation at the top level.
Coordination of activities may be achieved through rules and procedures.
Also various aspects of planning, the organizational hierarchy, personal contacts and liaison departments has been used here.

35. DEPARTMENT BY TERRITORY OR GEOGRAPHY
Is common in enterprises that operate over wide geographic areas.
Activities in a given area or territory be grouped and assigned to a manager.

36. A TERRITORIAL, OR GEOGRAPHIC, ORGANISATION GROUPING (MANUFACTURING COMPANY)

37. GEOGRAPHIC, ORGANISATION GROUPING (MANUFACTURING COMPANY)
ADVANTAGES
Places responsibility at a lower level
Places emphasis on local markets and problems
Improves coordination in a region
Takes advantage of economies of local operations
Better face-to-face communication with local interests
Furnishes measurable training ground for general managers
DISADVANTAGES
Requires more persons with general manager abilities
Tends to make maintenance of economical central services difficult and may require services such as personnel at the regional level
Increases problem of top management control

38. Is most often used in sales and in production.
Extent of use
It is especially attractive to large-scale firms or other enterprises whose activities are physically or geographically dispersed.
Is most often used in sales and in production.
It is not used in finance, which is usually concentrated at the headquarters.
Disadvantages
Tends to lead to duplication of services

39. CUSTOMER DEPARTMENTATION
Customers are the key to the way activities are grouped when each of the different things an enterprise does is managed by one department head.
Example: I The industrial sales department of a wholesaler to cater to the requirements of clearly defined customer groups.
2.Educational institutions offering regular and extension courses to serve different groups of students.
Example: II the great central cash markets for agricultural products
Loan officers of commercial banks frequently specialize in fruit, vegetables, or grain

40. CUSTOMER DEPARTMENTATION IN A LARGE BANK
DISADVANTAGES
May be difficult to coordinate operations between competing customer demands
Requires managers and staff expert in customers’ problems
Customer groups may not always be clearly defined (for example, large corporate firms vs. other corporate businesses)
ADVANTAGES
Encourages concentration on customer needs
Gives customers feeling that they have an understanding supplier (banker)
Develops expertness in customer area

41. Advantages
The extension services of universities such as night-school divisions, are arranged, with respect to time, subject matter, to appeal to an entirely different group of students.

42. PROCESS OR EQUIPMENT DEPARTMENTATION
Manufacturing firms group activities around a process or a type of equipment. Such a basis can be found in paint or electroplating process grouping. In this kind, people and materials are brought together in order to carry out a particular operation.
It is the electronic data processing department. As data processing have become expensive and complex, they have tended to be organised in a separate department.

43. PROCESS OR EQUIPMENT DEPARTMENTATION
DISADVANTAGES
Coordination of departments is difficult
Responsibility for profit is at the top
Is unsuitable for developing general managers
ADVANTAGES
Achieves economic advantage
Uses specialised technology
Utilises special skills

44. DEPARTMENTATION BY PRODUCT
Grouping activities on the basis of product or product lines has long been growing in importance in multiline, large-scale enterprises.
Enterprises adopting this form were organised by enterprise functions. Product managers, sales and service managers and engineering executives encountered problems of size.
Permits top management to delegate to a division executive extensive authority over the manufacturing, sales, service, and engineering functions that relate to a product to exact a considerable degree of profit responsibility from each of these managers.

45. It facilitates the use of specialised capital permits the maximum use of personal skills and specialised knowledge.

46. A PRODUCT ORGANISATION GROUPING (MANUFACTURING COMPANY)

47. ADVANTAGES
Places attention and effort on product line
Facilitates use of specialised capital, facilities, skills, and knowledge
Permits growth and diversity of products and services
Improves coordination of functional activities
Places responsibility for profits at the division level
Furnishes measurable training ground for general managers
DISADVANTAGES
Requires more persons with general manager abilities
Tends to make maintenance of economical central services difficult
Presents increased problem of top management control

48. Product-line managers with heavy overhead costs, allocated from the expense of operating the office, perhaps a central research division, many central service divisions.

49. Matrix Organisation
Matrix organisation normally is the combining of functional and product patterns of departmentation in the same organisation structure. Matrix organisation in an engineering functions and an overlay of project managers responsible for the end product. While this form has been common I engineering and in research and development.
This kind of organisation occurs frequently in construction (e.g., building a bridge), in aerospace (e.g., designing and launching a weather satellite). In marketing, installation of an electronic data processing system in which professional experts work together on a project.

50. MATRIX ORGANISATION IN ENGINEERING

51. ADVANTAGES
Is oriented toward and results
Professional identification is maintained
Pinpoints product-profit responsibility
DISADVANTAGES
Conflict in organisation authority exists
Possibility of disunity of command exists
Requires manager effective in human relations

52. Use of Matrix Management
To establish responsibility for ensuring such end results
A project manager is put in charge of all the engineering and support personnel necessary to accomplish an entire project.
But pure project organisation may not be feasible for a number of reasons. For example, the project may not be able to utilise certain specialised engineering personnel or equipment full time: a solid-state physicist may be needed only occasionally or the project may need only part-time use of an expensive environmental test laboratory.
Another reason is highly trained professionals. Generally prefer to be allied organisationally with their professional group.

53. PROJECT ORGANISATION IN ENGINEERING

54. Problems with Matrix Management
A state of conflict exists between functional and project managers, as both compete for limited resources. Members on the project team may encounter role ambiguity.
Role conflict, role ambiguity, and role overload may result in stress for the functional and project managers as well as for the team members.
An imbalance of authority and power, as well as horizontal and vertical influence of the project and functional managers also lead to problems in matrix organisation. Example: Functional manager has too much power, work on a particular project may receive a low priority, thereby delaying its completion.
Functional manager may frequently be required to change the machine setup to accommodate work on various projects.
Because of the potential conflicts, managers may want to protect themselves against blame by putting everything in writing, which increases administration costs.
Requires many time-consuming meetings

55. Guidelines for Making Matrix Management Effective
Define the objectives of the project or task
Clarify the roles, authorities, and responsibilities of managers and team members
Ensure that influence is based on knowledge and information, rather than on rank
Balance the power of functional and project managers
Select an experienced manager for the project
Undertake organisation and team development
Install appropriate cost, time, and quality controls that report deviations from standards in a timely manner
Reward project managers and team members fairly

56. STRATEGIC BUSINESS UNITS
They are distinct little businesses set up as units in a larger company to ensure that a certain product or product line is promoted and handled as though it were an independent business.
To be called an SBU, a business unit must meet specific criteria – have its own mission, distinct from the missions of other SBUs; have definable groups of competitors; prepare its own integrative plans, fairly distinct from those of other SBUs; manage its resources in key areas, and have a proper size – neither too large nor too small.
For each SBU a manger is appointed with responsibility for guiding and promoting the product from the research laboratory through product engineering.

57. TYPICAL STRATEGIC BUSINESS UNIT ORGANISATION IN A LARGE INDUSTRIAL CHEMICAL COMPANY
Positions shown in dotted lines report administratively to the Division General Manager but are functionally responsible to the Business Manager in the area of phosphate operations

58. LINE AND STAFF CONCEPTS
Authority: Is the right to give orders and power to exact obedience.
Rightful legal power to request subordinates to do certain things or to retain from doing so, and if he does not follow these instructions the manager is in a position ,if need be, to take disciplinary action, even to dismiss the subordinate.
Power is the ability of individuals or groups to induce or influence the beliefs or actions of other persons or groups.

59. Continue….
Responsibility: It means obligation,liability,or activity or accountability.
According to Koontz: It may be defined as the obligation of a subordinate, to whom a superior has assigned a task, to perform the service required.

60. LINE AND STAFF AUTHORITY
Line functions are those that have direct impact on the accomplishment of the objectives of the enterprise.
Functional authority is the right which is delegated to an individual or a department to control specified processes, practices, policies or other matters relating to activities undertaken by persons in other departments.
Staff functions are those that help the line persons work most effectively in accomplishing the objectives.

61. CONTINUE.. Example: Production and sales are line functions.
Purchasing, accounting ,personnel, plant maintenance and quality control are staff functions.
Line executives have direct control over the subordinates under them.
Staff executives have no such authority.

62. Continue…
The clearer the line of authority from the management position in an enterprise to every subordinate position ,the clearer will be the responsibility for decision making and the more effective will be organization communication.
Nature of staff relationship is advisory .
Their role is to investigate, research, and give advice to line managers.
Line and staff are characterized by relationships and not by departmental activities.

63. LINE AUTHORITY OF THE PRESIDENT AUTHORITY AFTER DELEGATION, >delegation of functional authority from president

64. Benefits of staff
Where highly specialized knowledge is required the staffs are much helpful.
Specialists are allowed the time to think, to gather data, and to analyze whereas their superiors busy managing operations, cannot do so.
Staff help line managers to be effective.
Training of young staff executives

65. LIMITATIONS OF STAFF Danger of undermining line authority.
Lack of staff responsibility
Thinking in a vacuum
Because staff people do not implement what they recommend, it is possible that staff may think in a vacuum.
Managerial problems
Too much staff activity may complicate a line executives job of leadership and control.

66. CONFLICT BETWEEN LINE AND STAFF MANAGERS
Staff managers may sometime interfere in the affairs of the line managers.
Staffs are specialists in their area and they are not well versed with the practical problems of the organization.
Line managers sometimes do not like to share with staff officers the credit of achievements.
Ambiguity about each one’s roles

67. LINE AND STAFF ORGANISATION OF A MANUFACTURING COMPANY

68. DECENTRALIZATION OF authority
Decentralization is the tendency to disperse decision making authority in an organized structure.
It is a fundamental aspect of delegation; to the extent the authority is not delegated, it is centralized.
It requires careful selection of which decisions to push down into the structure and which to hold near the top, specific policy making to guide the decision making.

69. CENTRALIZATION OF AUTHORITY
Includes withholding the authority by few persons at central points.
Definition by Louis Allen : centralization is the systematic and consistent reservation of authority at central points in the organization.
Types:
Centralization of performance
Departmental centralization
Centralization as an aspect of management