UNIT 3: Organizing

Learning Outcomes:
 Students will be able to understand and appreciate the concept of
organizing.
 Students will have clarity over the need and scope of learning the principle
of organizing.
 Students will be able to understand the overview of the application of
organizing in workplace situations.
Structure:
3.1- Nature and purpose of organizing
3.2- Organization structure
o Knowledge Check 1
o Outcome-Based Activities 1

3.3- Span of control

3.4- Centralization and Decentralization
3.5- Delegation of authority
o Knowledge Check 2
o Outcome-Based Activities 2

3.6- Staffing
3.7- Selection and Recruitment – Sources of Recruitment
o Knowledge Check 3
o Outcome-Based Activities 3

3.8-Orientation, Induction - Training and development

3.9- Summary
3.10- Self Assessment Questions
3.11- References/ Reference Readings
3.1- Nature and purpose of organizing
As per the popular authors named Koontz and O'Donnell. Organization can be
defined as “Organization involves the grouping of activities necessary to
accomplish goals and plans, the assignment of these activities to appropriate
departments and the provision of authority, delegation and coordination."
What is an organization?
An organization is an institution or representation of a group of people, which can
channelize the set of activities to fulfil the defined goals and plans.
Moreover, the organization incorporates many divisions of work and functions
between the teams and groups of people whose combined endeavors must be
integrated and coordinated to obtain the specific goals and execute the planned
strategies.
Henceforth, organizations infuse the organizing skills in their people and teams
to accomplish the task and strategies.
What is the specific nature of the organization?
After the analysis of the various literature work of the expert, few specific
characteristics are identified for the organizing function of the managers in the
following ways.
(1) It divides the work or task:
Division of work needs to be properly performed otherwise results can have
inverse effects on the organization. The organization completely lied on the
divisional work. It is hard to find an organization which does not have the work
division function. Generally, the Manager divides the whole work of the
organization into several parts under the different departments with matching
criteria of objectives. Moreover, departments may be divided into the subdivision
to smoothen the function of the organization. In this way, a manager can avoid
the repetition and wastage of the time of the organization. So, the organizing
function is very much focused on the division of the work to avoid duplicity and
confusion
2- It Coordinate all other sub-function of the organization:
Under the Organizing function, coordination is automatically infused. While
organizing different people in an organization, managers need to be assured that
a multitude of works that happened under his supervision should follow the one
direction of the objectives. Everybody’s work is linked with each other.
Someone’s ending time of the task can affects the other’s starting time of the
task. Henceforth, it is quite necessary to get a task on time from everyone in the
organization to establish the best coordination.
3- Association of the group of the people not individual:
Organizing functions is not individual-oriented. It is a group or team-oriented
function. Therefore, organizing tasks is completely focus on the group and team
to ascertain the decided division of work and responsibility.
4- Uniformity of the objective in the organization:
By organizing, a manager can make all individuals of teamwork and believe in
one direction and one objective. Uniformity in the objective is important in one
organization. Otherwise, an organization will face confusion in the allocation of
work and operations.
5- Single authority and responsibility:
The single line of control is always meant to smoothen the task and avoiding
confusion in instruction. A chain is set in the organization to communicate with
each other to provide necessary instruction from top to bottom of the
management. This chain is established based on position and post in the
organization. The person allotted these positions and posts is also provided with
the authority to get the accountability of the task. Therefore, these posts and
authority assured the satisfactory work performance of the employee in the
organization.
6- Develop the structural relationship in the organization:
Managers can develop a professional relationship in the organization by
establishing effective and efficient organizing committees and task forces.
Defining in another way, by organizing the activities and work in the organization
from the top level of the management and all subordinated, a well-defined
structured relationship can be developed.
7- Mechanize the organization:
With the help of organizing functions, a manager can bring the systematic
mechanism into the organization. Once the topmost activity is set then the rest
will follow accordingly and can create a mechanism in the organization. By
developing the mechanism in the organization, employees and workers can
improve their efficiency gradually by learning and reducing their variation in the
work and output.
Here all the seven characteristics are important for organizing any intuition and
company to ascertain the maximum productivity system.
Significance of the Organizing:
A manager can use organizing as an instrument to establish a relationship
between different teams and individuals of the company that can assist them to
assess their interdependency of the working mechanism and professional
relation and reporting system. Figure-1 depicts the summary of the significance
of the organization.
Figure:1- elements of organizing function which can play important role in
organizational development. The following is the significance, due to what the
organizing function along with its elements plays an important role.
1- Enhancing the managerial efficiency:
By organizing activities of the organization, a manager can establish an
efficient working system. By proper allocation of the work and task among
the employees as per their capabilities and qualification, a manager can
have optimum utilization capacity of the resources and can enhance the
managerial efficiency.
2- Optimum utilization of the resources:
Resource’s availability and utilization of resources are two different aspects.
Sometimes, despite having abundant resources, a manager can face failure in
the cost and product of the organization. Therefore, optimum utilization of the
resources is important. Utilization of the resources based on the following terms:
1- Size of the organization.
2- Number of the employees functioning in the organization.
3- Assignment of the work and task to the employees of the organization.
4- Ability and skills of the workforce.
5- Size of the production plant.
6- Nature of the goods and services served in the markets.
3- Effective communication in the organization:
With an effective and sound organizing system, Communication of the
organization can be handled to get a healthy working environment. It
cannot be denied that communication has a key role to get the right
decision at right time. With the help of the following steps, an effective
communication channel can be established in the organization.
1- Defining the direction of the authority and the accountability.
2- Deciding the time of the communication
3- Collecting the responses of the employees for every
communication as feedback.
The above steps are useful to assure the information dissemination among the
employees and the concerned authority to make the decisions.
4- Facilitate the universal direction:
The manager can organize and provide the set of instructions among the
employees. To get the defined objectives, coordination among the different
activities is important. Developing coordination is only possible with a good
organizing system. Under organizing function, all working structure is designed in
that way, so they can complement each other rather contradicting each other.
Organizing task assures fruitful interdependency between the works and
employees.

5- Enhancing the specialization:

By organizing, a manager can stratify large work onto the small piece of
task which can be achievable. In this procedure, managers get assured that the
division and the subdivision of the work are assigned the most capable person in
the organization. By doing so, a manager can develop a sense of specialization
among the subordinates. Furthermore, it can enable employees to perform at
their best at the minimum cost and time.
6- Handling the competition:
Organizing function is not only important within the organization, it also
works outside of the organization. The managed and well-organized strategy can
enable an organization to fight the toughest and roughest competition of the
market. It provides the following idea to handle the market competition
1- It assists in creating a budget plan to invest in the advertisement to
increase the market share to compete against the competitors.
2- It empowers the managers to decide whether an aggressive or
accommodating strategy is useful.
3- It also helps to tackle the pricing issues while competition in price was
by the same industrial competitors.
7- Enhancing the plant size:
Good organizing functions provides efficiency in expanding the size of the
plant. It helps a firm to make available goods and services as per the demand of
the products at a fair price. In the case of seasonal demand, the organizing
function can help a manager to expand its productivity by economies of scale.
Organizing Process
While discussing the process, Continuation in the term always gets
infused. The process is not a static term. It is dynamic and keeps moving and
changing with time and scenario. Here prasad in his book mentioned that
“organization is the process of establishing relationship among the members of
the enterprise. The relationships are created in terms of authority and
responsibility.”
The organizational process includes various other elements and
channelizes them into a line so that a healthy professional relationship can be
established among the member of the institutions. Coordination, arranging tasks
in, logical and systematic manner, assignment of the work and duties, all are the
parts of the organizational process. These all are incorporated and bent in the
organizational functions.
As per Louis A Allen, "Organizing involves identification and grouping the
activities to be performed and dividing them among the individuals and creating
authority and responsibility relationships among them for the accomplishment of
organizational objectives."
The various steps are involved in the organizing process, depicted in
figure-2.

here is the full description of the organizing process.

1- Determination of Objectives-
At the very first phase, Objectives are a must to define. Without objective
determination, an organization might be directionless and won’t be able to work
properly. Because the team and the people of the organization would not be clear
about the instruction and the specific task. Consequently, determination of the
objective is the very first step performed by the managers to enter the
organization process. This step is very helpful to manage the organizational
structure and frame the objective function with its associated constrained in the
organization.
2- Phrasing and listing all the objectives:
 In the previous section of the objective, where the nature of the objective
function was discussed, the division of tasks into sub-task was prioritized.
Therefore, it is important to pool all the efforts of the employees which were
divided by the managers at the initial phase. Subsequently, this part becomes
more important in the organizing process. All job divisions should be cohesively
followed by the list of sub-objectives. These lists of sub-objectives should be
merged at the one main organizational objective. For this, managers need to
phrase and list the objectives very carefully.
3- Classification of the activities:
After listing the objectives for the several categories, managers need to
decide the activities and tasks as per the homogeneity of the work task. The
cluster of the workforce should be assigned one plan at a time to bring them
more clarity about the task and strategy. For example, for maximizing
productivity, the production department should be getting instruction from the
manager to perform their production activities. Likewise, all the departments
should be allocated for their resources with associated functions.

4- Assignment of Duties:
After classifying the activities, a manager should assign their duties and
responsibilities. They should be clear about their roles in the organization. In the
words of Kimball and Kimball (discussed in many books of the principle of
management) “Organization embraces the duties of designating the
departments and the personnel that are to carry on the work, defining their
functions and specifying the relations that are to exist between department and
individuals."
5- Delegation of Authority:
Duties without authority are like enterprises without any funds. They have
everything but are available with nothing. So, focusing on the delegation of
authority, a manager can empower his team to participate in the decision-
making role of the organization. Managers can enable them to resolve the
problem at the budding point. Delegation of authority has proven an effective
tool to enhance the employee’s performance. By assigned authority, employees
can contribute to the organizational structure which can clarify the line of control
and supervision.
3.2- Organization structure:
An organizational structure can be defined as a framework that allocates a
specific space to a specific department or individual. The organizational structure
reflects the relationship between the department and a group of people
concerning their work and responsibilities. Furthermore, with organizational
structure, Authority and designated subordinates are linked and have a clear
idea about their role and responsibility between the different positions and
persons.
 With the development of the management theories, the organizational
structure also gets evolved and establishes a transparent pattern between the
components of the organization.
In this context, Haynes and Mukherjee (2005) stated that “Organization
structure consists simply of those aspects of the pattern of behavior in the
organization that are relatively stable and change only slowly."
Generally, an organizational structure is presented in the chart with the
flow of the control from top to bottom or as per the organizational policies. In
different organizations, different positions and posts are designed because their
nature of handling the market and their enterprises are completely different.
Consequently, the organizational chart also gets the difference in the terms of
presenting the organization.
- Importance of the Organization Structure
A systematically designed organization can enhance the people’s
performance and improve teamwork by providing an outline of the control and
authority. The following points describe how the organizational structure is good
for the organization.
1- It improves the quality of work in the organization.
2- An organizational structure defines the location of the strategic plan
and decision making.
3- Good quality of organizational structure inspires the creative ideas and
thinking between the team members by giving a well-defined authority.
4- It enhances the communication channel and responds immediately to
take the action in an organization.
5- It facilitates the expansion of the business by enhancing organizational
capacity to manage each level of authority in the organization.
6- A sound organizational structure develops and smoothens the
coordination level.
7- Organizational structure clarifies the roles and responsibilities among
the employees and workforce. So, they all have a clear idea of whom and when
to report their assigned task.
Principles Of Organization Structure
In the modern scenario, the organizational structure has evolved with
experiments and scientific implications. Henceforth, certain principles of the
organizational structure have also been identified.
Purpose of formal organization:
1- To communicate with all the colleagues and subordinates formally in the
organization.
2- To act accordingly
3- To share a common goal in an organization
Pillars of formal organization:
It does not matter what kind of organization a manager is handling; they need to
have support to establish the organizational system. Here, four pillars are
identified, and they are as follow:
What are the features of formal organization?
Few points are given below, is explaining the characteristics of the Formal
organization
1- Formal organization is under the control and regulation of the top
management to achieve organizational goals.
2- Formal organization represents the interdependency between the
employees and workers.
3- Formal organization is structured to empower the person working in the
organization to fulfil the requirements of the common objectives and
goals.
4- The formal organization is used to serve the teamwork and group
objective rather than individual interest.
5- Formal organizations fulfil the organizational objectives by assigning
jobs to individuals. Hence, its strong focus always remains on the job
performance.
6- In a formal organization, a clear prescription is provided to the whole
people on the very first day about their job responsibility, role, authority
and accountability.
7- Formal organizational structure is based on the specialization and
division of labor to operate in an efficient environment.
8- A formal organizational structure needs to be followed by everyone in
the organization.
Benefits of formal organization
1- Job oriented:
Formal organization is job oriented. Therefore, every person in the organization is
responsible for their job performance.
2- Set of rules and regulations create transparency in the system:
Due to predefined rules and regulations, everybody is clear about actions and
reactions in the organization.
3- Empower the people working in the organization:
The formal organization provide the designation to their employees in the
market. Therefore, people feel empowered while performing their tasks and take
decisions in favor of the company.
Limitations of the formal Organization:
1- The formal organization mostly avoids the humans’ sentiments and
emotions as it always focuses on the job output.
2- Formal organization hardly serves the individual interest. Hence
organizational growth gets ensured but not the employees working over there.
3- Formal organization is rigid and has very little scope of the amendments
of the strategies.
 Knowledge Check 1
Fill in the Blanks:
1- Organizing is the process of _________
2- Formal organization is the __________ oriented
3- Formal organization is _________
4- Organizational structure defines the ___________ of the strategy plan
5- Formal organization id under the control and regulation of the __________
 Outcome Based Activities 1
1- Students are suggested to Find out the organizing function in the
organization with the small survey (their nearby companies)
2- Students are required to explore the categories of Formal and Informal
organizations in the manufacturing and retail sectors.
Purpose of the informal organization:
1- To manage the relationship between people in the organization based
on personal attitudes, emotions, prejudices, likes, dislikes etc.
2- To develop a social linkage in an organization.
3- To bring easiness in the work accomplished.
4- To develop understanding among the employees.
Characteristics features of informal organization
1- Informal organization is not developed and governed by any formal
authority.
2- Informal organization based on human relationships and focuses on
equality at workplace.
 3- Informal organizations do not follow any line of control and sense of
authority.
4- Informal organization is not developed forcefully or legally, it is created
atomically based on the convenience of the people working in it.
5- Informal organizations do not have any chart reflecting the hierarchy of
control.
6- Every member has their way to perform the task.
7- Informal organizations are mostly inviting the volunteering provision to
work with them.
8- Informal organization, people used to have their decision-making
process without conflicting others’ self-interests.
Advantages of the informal organization:
1- Sometimes, the informal organization blends with the formal one to
make that more comfortable for the employees.
2- Some time informal organizations can make out things that are not
possible with the formal organization.
3- Informal organizations never have any communication barriers to
convey the information.
4- Informal organization reduces the burden of those who are not or facing
some time the challenges to cope with the competitive scenarios.
5- The informal organization has a positive influence on the employees,
and they have high job satisfaction.
6- Informal organizations easily transfer job responsibility and fill the gap
of managers’ ability.
7- The informal organization mostly experience fast communication and
human satisfaction in jobs.
8- The informal organization mostly serves the social and community
needs to manage their human requirements.
Limitations of the informal organization:
1- Sometimes informal organization creates problems in coordination.
2- In an informal organization, there are higher chances of a mis
controlling system.
3- An informal system can delay the completion of the task.
4- In an informal organization, no one takes responsibility for the failure or
can say the manager is not accountable for failing the projects.
5- The informal organization have higher chances of misallocation of the
resources if people are not enough mature to take the responsibility.
3.3- Span of control
Control means having complete holding over the organization. In the principle of
management, the Control word is associated with Span, which implies span of
control, which can be defined as the number of subordinates who can be
supervised and managed by the higher authority of the organization (Singh &
Singh). Moreover, it recommends that the status of the relations and structure
between the employees and managers. It provides the guidelines in the
organization how their relationship should be and followed the institutional rules.
Span of Control means the number of subordinates that can be managed
efficiently and effectively by a superior in an organization. It suggests how the
relations are designed between a superior and a subordinate in an organization.
Functions of the span of control:
1- it allows the managers to get work done by /her employees.
2- It provides guidelines on how managers need to regulate his/her
subordinates.
3- It assists to develop the flow of communication and instruction from
managers to subordinates.
4- It creates an outline for organizational structure.
5- It develops the sense of authority and makes managers empowered to
decide on the organization
Factors Affecting Span of control:
The following figure explains the factors that can affect the span of control of the
organization.
Category of Span of Control:
There are two major categories of the Span of control which is depicted by the
following diagram:

Advantages of narrow span of control in the organization:

1- It has very close supervision over the subordinates.
 2- It has very tight control over the subordinates.
3- It has very fast communication in the organization.
4- It has the quick accomplishment of the objectives.
Disadvantages of narrow span of control in the organization:
1- It gets a very rigid structure.
2- It consists of many the hierarchy.
3- It involves a high cost of management.
4- It faces communication delays due to the involvement of multiple levels
of management.
Advantages of wide span of control in the organization:
1- It has more delegation of authority
2- It has clear policies for work management
3- It has policies to develop parallel skills for managers.
Disadvantages of wide span of control in the organization:
1- It consists of double-barreled supervision of the managers
2- It always has the fear of loosening the control of the superiors over the
subordinates.
3- In a wide span of controls, managers should be more qualified and
skilled.
4- It creates obstacles in the quick decision-making process.
3.4- - Centralization and Decentralization
Centralization:
Prasad (2007) defined centralization as a process where the focus of any decision
making is based on a few people, or they are under the control of few people.
The decision of the organization is being catered at the lower level of the
organization, and all subjects, actions and decisions are supposed to have
approval from the top management.
As per Knooze, centralization is the well-defined and continuous reservation of
authority at a central part of the organization.
Features of Centralizations:
1-Under centralization, the essential and major decisions are taken by the
top management, and the other levels are into implementations as per the
directions of the top-level.
2- Centralization is the inclusive approach, considered at all levels of the
management.
4- Centralization is framed based on a holistic system of the organization.
Decentralization:
Unlike centralization, Decentralization is defined as a systematic delegation of
authority at all levels of the managers and executives in the organization.
The major concern in the decentralization approach is that authority is retained
by the top management for taking important decisions and formulating policies
related to the whole concern. The remaining authority of the organization might
be assigned to the middle level and lower level of the task and strategic
planning.
Degree of centralization and decentralization:
It is completely based on the number of authorities delegated to the lowest level.
The researcher has explored many facts about the centralization and
decentralization concepts. As per Allen, decentralization is the delegation of
efforts to the lowest level of the authority excluding those who are meant to be
controlled and exercised at a central point.
After many works of literature review, many authors suggested that
decentralization is not like delegation, but it is an expansion of the delegation
term. Decentralization is the broader approach to diffuse the authorities to the
lowest level of the management in the organization.
Features of the Decentralization:
1- Delegation of authority is a complete process and takes place from one
person to another.
2- Decentralization is broader in scope and the subordinate’s responsibility
gets expanded.
3- In the delegation process, the managers remain accountable for the
acts of subordinates to their superiors.
Fundamentals of centralization and decentralization:
As per Singh and Mukharjee:
1- Everything that increases the role of subordinates is decentralization.
2- Everything that decreases the role is centralization
Implications of Decentralization
1- It reduces the workload of the Chief executives.
2- It provides the chances for the subordinates to participate in the
organizational strategy formulation and implementation.
3- It diversifies the work and tasks among the subordinates and makes
easy ways to implement the plans.
4- In diversification, there is more scope for developing new departments.
5- It helps to expand the organizational size and bring economies of scale.
6- It develops the motivation among the employees concerning their job
and projects.
7- It provides more flexibility in the working system.
8- It brings more coordination among the employees and is subordinated
to get the smooth completion of the task.
3.5- Delegation of authority:
Manage and operate all the tasks of the organization. Therefore, to achieve his
target he needs to delegate authority. In simple words, a manager needs to
bifurcate the task and responsibility to accomplish the goal on time. Hence, a
delegation of Authority can be defined as a division of authority and power in a
downward direction to the subordinates (Gupta, 2005)
When to use the delegation of authority:
1- The large size of the organization
2- Huge management goal
3- Less time to finish the project
4- Good networking and a sense of responsibility in an organization
5- A large amount of the sub-objectives in the organization
6- Multiple tasks to perform.
Elements of Delegation
· Authority
· Responsibility and
· Accountability.
The following figure is explaining the three principles in detail.
DELEGATION PROCESS
In the following diagram, the Delegation process is defined in detail.
  Knowledge check-2
State true and false:
1- Centralization is the process of concentrating on one point. (T/F)
2- Decentralization is the expansion of the organization (T/F)
3- The degree of centralization does not depend on the delegation
in the organization (T/F)
4- The span of control is More authoritative (T/F)
5- Narrow span of control has a faster communication process (T/F)
 Outcome-based activities
1- Students are suggested to review the literature about the Span
on Control and its impact on organizational performance.
2- Students are suggested to conduct a study nearby them to
understand the centralization and decentralization concepts.
3.6- Staffing
Staffing is the process or set of actions to perform for filling the position required
in the organization by appointing a competent, skilled and qualified candidate for
the job position.
The following is the process for the staffing function:

3.7- Selection and Recruitment – Sources of Recruitment

What is recruitment:
Recruitment is the function that is performed to search and attract a job
applicant who is potentially fit and suitable for the job vacancies. Human
resources efficiency is completely dependent on the procedure of recruitment.
Before heading towards the steps in the recruitment process, one should know
what the sources for recruitment are.
The following figure depicts the sources of the recruitment.
RECRUITMENT PROCESS

SELECTION PROCESS
After recruitment, Selection is another function that needs to be performed to fill
the vacancy in the organization.
Here are the 7 steps in the selection process:

JOB ANALYSIS
As per Knooz (2204) Job analysis can be observed as the process of explaining,
detailing and recording the aspects of jobs. Moreover, Job analysis also specifies
the skills and other requirements of the job to be performed.
Motives for Job analysis:
1- To get the Job Description
2- 2- To assess the Job specification.

Job Description
As per Prasad, (2007) job description is the announcement of the role and
responsibility of the jobholders. It consists of all the guidelines about how to do
it, when to do and terms and conditions.
Features of the job description:
1- Descriptive in nature
2- It defines the objectives and boundaries of the jobs.
3- It details the job environment.
Contents of the Job description:
The following is the contents of the job description:

Job Specification
As per Singh & Singh, (1999) job specification is the technique to review and
summarize the human characteristics that are required to satisfy the Job
contents and completion of the task. Furthermore, Job specification also tries to
explain the key qualification of the person who needs to perform the job without
any failure. It considers the important characteristics and specialty of the job
performer in terms of academic qualification, professional experience, technical
skills, and adopting the ability to accomplish the job target. It helps the
organization to explore the qualification and technical skills of a person
appointed at that job.
  Outcome-based activities
1- Students need to create a file of the Recruitment and selection process
in an MNC.
2- Students suggested designing a job for an accountant in an
organization.
3.8-Orientation, Induction - Training and development
As per the explanation of Reddy and Tripathi (2012) “Orientation or induction is
the process of introducing new employees to an organization, to their specific
jobs & departments, and in some instances, to their community.”
Main objectives of the orientation:
 It reduces the Anxiety of the employee at the time of joining and the initial

phase of the job.

 It helps to provide a guideline for the employee behavior in the

organization.

 It shows the organizational values for its employees.

 It saves time to the superiors and authority to provide instruction to the

new joining daily.

 It develops a sense of belongingness in the organization and constructs a

positive attitude.
  It provides an opportunity for the Employee to explore more about the job

and organization.

 At this time employees can have a review of the history.

 An employee can get an introduction to the management and working

policies and ethics.

Two Kinds of Orientation

3.9- Summary
 An organization is an institution or representation of a group of people,
which can channelize the set of activities to fulfil the defined goals and
plans.
 The organizational process includes various other elements and
channelizes them into a line so that a healthy professional relationship can
be established among the member of the institutions.
 An organizational structure can be defined as a framework that allocates a
specific space to a specific department or individual. The organizational
structure reflects the relationship between the department and a group of
people concerning their work and responsibilities.
 Job specification is the technique to review and summarize the human
characteristics that are required to satisfy the Job contents and completion
of the task.
 Orientation or induction is the process of introducing new employees to an
organization, to their specific jobs & departments, and in some instances,
to their community
3.10- self-assessment questions
1- What do you mean by organizing and why it is important in an organization.
2- what is the recruitment and selection procedure?
3- 3-Explain the sources of recruitment.
4- Why Job description is important in an organization.
5- Differentiate between Centralization and decentralization.
3.11- References/ suggested readings
· Reddy and Tripathi (2012). Principle of management. 5th edition. Mcgraw hills
publication New Delhi.