Organizing Organizing is the managerial function of arranging people and resources to work toward a goal.

The purposes of organizing include but are not limited to determining the tasks to be performed in order to achieve objectives, dividing tasks into specific jobs, grouping jobs into departments, specifying reporting and authority relationships, delegating the authority necessary for task accomplishment, and allocating and deploying resources in a coordinated fashion. Fundamentals of Organizing Organization group of two or more people working together to achieve a common set of goals, implies structure to facilitate coordination. Organizational Theory The study of how organizations function and how they affect and are affected by the environment in which the operate. Organizational Design The process of constructing and adjusting an organization's structure to achieve it's goals. Organizing Arranging into coherent unity or functional whole. Alfred D Chandler: structure is the design of organizations through which the enterprise is administered. Two aspects of:

John Child structure is the formal allocation of work roles and the administrative mechanism to control and integrate work activity, including those that cross formal organizational boundaries. Galbraith and Nathanson structure is: les such as production, finance, marketing etc. Organizational Structure The formal system of task and authority relationships that control how people coordinate their actions and use resources to achieve organizational goals.

Structure:

Dimensions of Structure

specialization standardization complexity formalization

hierarchy centralization

Four Basic Elements of Structure - how much focus on specific and limited set of activities; varies for differentiate positions and at different levels in the hierarchy. - uniform and consistent procedures that employees are to follow in doing their job. Written procedures, job descriptions, instructions, rules and regulations - formal & informal procedures that integrate the activities of separate individual, teams, departments

mutual adjustment direct supervision standardization of work process standardization of output standardization of skills - right to decide and act

centralized decentralized Mintzberg Questions to answer with regard to structure standardized should the work content be of each position

f control how standardized is the output of each position Organizational structure provides for effective and efficient use of resources Traditional Principles of Organization

Organizational chart: a picture of the organizations structure, showing: on of labor

Hierarchy A classification of people according to authority and rank. Horizontal Differentiation grouping of jobs at the same level in the hierarchy according to their function, customer, product, process, geographic area. Vertical Design of hierarchy of authority and creates reporting relationships within the organization. Chain of Command line of authority/ responsibility that flow throughout the organization and define the superior subordinate relations, governs decisions. Unity of command: an employees should be held accountable to one and only one supervisor. Scalar chain: clearly defined lines of authority in the organization. Delegation the process by which authority passes from one level of the organization to another. Delegation is three step process: y Responsibility

The duty to perform a given task. (entrust work to another for performance) Authority The power to hold people accountable for their actions and to directly influence what they do and how they do it.

Classical View & Weber's Bureaucracy (Top Down) Authority is a right inherent in a managerial position, to give orders and expect the orders to be followed. Authority was delegated downward giving to those subordinates certain rights while providing certain and specific limits in which they might operate. Acceptance Theory of Authority Bottom-up Chester Barnard Authority comes from below because subordinates can always reject a directive. "Authority is then determined by those to who it was addressed not those who gave". Zone of Acceptance ves the order is consistent with organization goals

Barnard believed that subordinates would accept orders given by superiors provided the orders meet four conditions. These conditions defined was acceptable to the subordinate, thus creating a zone of acceptance within which authority could be exercised. The four conditions: Accountability The requirement to show results of assigned duties; to complete or accomplish a task. Managers may delegate authority and responsibility, but they can not delegate accountability. Managers do not reduce their own accountability by delegating. Parity of authority and responsibility: No one should be expected to shoulder responsibility without being given commensurate authority. Authority must be equal to responsibility. Parity of authority and responsibility:

"the responsibility for actions cannot be greater than that implied by authority delegated, nor should it be less." Principle of Absoluteness of Accountability: Although responsibility and authority may be delegated to subordinates, accountability to one's superior cannot be delegated. Related to delegation then is who should make the decisions, or How much and to what level should a manager delegate. Centralization An organizational setup whereby the authority to make important decisions is retained by managers at the top of the hierarchy. Centralized management make decisions over a wide scope of activities Decentralization an organizational setup whereby the authority to make important decisions about organizational resources and to initiate new projects is delegated to managers at all levels in the organization. Decentralized

Centralized vs. Decentralized Centralized Vs. Decentralized Centralization vs.. decentralization: Companies may use a combination of styles i.e.. centralized as to vision, decentralized as to how individual units act within their role. centralized or decentralized 1. decentralized -- the greater the complexity and uncertainty of the environment 2. centralized -- the costlier and riskier the decision 3. should fit the strategy of the company Example: Johnson & Johnson - decentralized BancOne - centralized Positions and Authority can be classified as: Line --

ectly to the production of goods or service. Staff --

Line Staff Line Line departments direct responsibility for production of goods or service. Line authority means that managers have formal authority to direct and control immediate subordinates Staff Staff departments include all those who provide specialized skills in support of line departments, specific organizational function i.e. sales, R&D, finance. Staff authority includes the right to advise, recommend, and counsel in the staff specialists' area of expertise To determine if a position is line or staff the key is does it directly accomplish the goal of the organization. Ex. of an auditor in manufacturing firm vs.. a CPA firm. Span of Control (management): the number of people a manager has reporting directly to them. Span of Control (management) Span of Management (control) The increasing complexity of a manager's job as the Span of Control increases Factors which affect the span of control 1. manager's personality 2. managers capabilities 3. subordinates capabilities 4. non-supervisory activities 5. standardization of activities supervised 6. complexity of work 7. availability of assistance 8. location Key factors in Span of Control: more involvement required with subordinates: narrow

Hierarchy Wide/Flat: Flat structure has a wide span of management , is horizontally dispersed

fewer levels in its hierarchy relative to its size levels fewer managers to direct and control employees activities. large number of subordinates Hierarchy Narrow/Tall: Tall structure has an overall narrow span of management many levels relative to the size of the organization more managers to direct and control employees actions. few number of subordinates Tall Versus Flat Structure The trend is toward larger spans of management as a way to facilitate delegation What is wrong with the following organizational structures? if anything? Company A Span of Management Is Too Large Company B Violates Unity of Command Company C Person I Reports to No One-- Break in the Chain of Command. Company D Span of Management Is Too Narrow or Small Company E This structure seems okay! Company F The use of too many organizational bridges as indicated by the horizontal lines--violates chain of command. Horizontal Division of labor - Adam Smith ation -- breaking the job into it's simplest form. Pin Factory. Work Specialization Degree to which tasks are subdivided into individual jobs Organization achieves standardization across tasks When specialization is carried to an extreme, workers tend to become bored and alienated Many companies are moving away from this principle Organizational Roles the set of task related behaviors required of a person by the organization. Functional unit a sub-unit composed of a group of people, working together, who possess similar skills or use the same kind of knowledge, tools, or techniques to perform their jobs Division

A sub-unit that consists of a collection of functions or departments that share responsibility for producing a particular good or service Departmentalization Basis for grouping positions into departments and departments into the total organization. Primary organizing structures: Functional grouping by functional areas, combining like skills Advantage: Functional

Problem: Functional

sight of finished product as focus on functional contribution. Functional: Effective in: small single product operations mass production facilities Market - orientation Divisional Grouping by common product, program or geographic location; Autonomous units (within parameters). advantage Divisional

Problem: Divisional

th focus on results.

Territorial (Geographic) - groups by geographic or regions where boundaries are determined by distance; legal; cultural; natural; or political reasons. geographical advantages:

Geographical Problems: - each vertical branch look the same Divisional Effective:

Matrix grouping of functional departments superimposed on a product departments. Dual lines of authority. Matrix Approach Functional and divisional chains of command simultaneously Dual lines of authority Functional hierarchy of authority runs vertically Divisional hierarchy runs laterally Violates the unity of command concept Project manager: priorities Advantage: matrix

responsive to new possibilities in market Problem Matrix:

loss in meetings and discussions; more time is spent in discussions than in action Matrix is Effective: ause its crosses disciplinary interaction

Cluster (team)

Rosabeth Moss Kanter (Harvard) - collaborative organization Cross functional teams, flexible groups change as organizations needs change; group emphasize market focus; individuals multi skilled move from team to team as project dictate Advantages of Teams

Disadvantages of Teams

Network "Virtual Corporation, Boundariless organization". built on a set of alliances with other organizations that serve a wide variety of functions. 3 Primary network structures - internal entrepreneur ventures that are driven by market forces (competition) - some degree of outsourcing; partnership relationship - extensive use of outsourcing; partnerships less frequent, central focus on some core skill, contracts other functions of product delivery. Network Approach Organization divides major functions into separate companies brokered by a small headquarters organization "Where is the organization?" Especially appropriate for international operations Held together with phones, faxes, and other electronic technology Advantage of Network:

Problem with Network:

Symptoms of structural problems

response times

Responsibility : When responsibility is clear and clearly broadcast, so that people responsible and those observing them all understand wherein it lies, it does a great deal for maintaining the focus and energy of those who bear its burden.Authority : Authority directs the focus given by responsibility, and allows it to find productive and not merely bureaucratic outlets. Responsibility without authority lends itself to joyless days spent passing the buck, documenting that one has done so, and reporting on how it was passed. Similarly, authority without responsibility lends itself to abuse of power, and the direction of personal creative energies in directions quite orthogonal to a groups stated goals.Delegation : Organizations of more than one or two people develop formal and informal heirarchies and spheres of influence. Without explicit delegation of authority and responsibility for individual projects, even the smallest project can be held up indefinitely in the backwash of conflicting priorities. Nevertheless, it is a natural impulse for those with influence to be wary of delegating it, particularly when they have only part of their attention to devote to exercising said influence and are more concerned with usurpation than with organizational success. Those who make influence their life often discover how delegation can be used to increase influence, rather than diminishing it. Henri Fayol : Guide to Organizing Effectively IMPORTANCE OF ORGANIZING:The organizing function is extremely important to the management system because it is the primary mechanism mangers use to activate plans.Organizing creates and maintains relationships between all organizational resources by indicating which resources are to be used for specified activities and when,where, and how they are to be used.A thorough organizing efforts helps managers to minimize costly weaknesses, such as duplication of effort and idle organizational resources. If there were to be an organizing department, it's responsibilities will include:

Reorganization plans that make the management system more effective and efficient. Plans to improve managerial skills to fit current management system Needs. An advantageous Organizational climate within the Management System.

Henri Fayol developed 16 general guidelines for organizing resources: 1. Judiciously prepare and execute the operating plan.

2. Organize the human and material facets so that they are consistent with objectives, resources and requirements of the concern. 3. Establish a single component, energetic guiding authority i.e. a Formal Management Structure. 4. Co-ordinate all activities and efforts. 5. Formulate clear, distinct and precise decisions. 6. Arrange for efficient selection so that each department is headed by a component, energetic manager and all employees are placed where they can render the greatest service. 7. Define duties. 8. Encourage initiative and responsibility. 9. Offer fair and suitable rewards for services rendered. 10. Make use of sanctions against faults and errors. 11. Maintain discipline. 12. Ensure that individual interests are consistent with the general interests of the organization. 13. Recognize the Unity of Command. 14. Promote both material and human coordination. 15. Institute and Effect Controls. 16. Avoid regulations, red tape and (excessive) paper work. 5 Step Organizing Process: 1. 2. 3. 4. 5. Reflect on Plans and Objectives. Establish major Tasks. Divide major tasks into sub tasks Allocate resources and directives for sub tasks. Evaluate the results of implemented organizing strategy.