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Chapter 4: Organizing: A Function of Management .

Organizing involves classifying work, designing work units, assigning tasks, and establishing coordination between units. The organizing process includes reviewing plans, determining activities, creating jobs, departmentation, and determining authority structures. Organization involves groups working together structurally to achieve goals. Common organizational designs include functional organization by specialty, divisional organization by autonomous divisions, matrix organization combining functional and divisional structures, strategic business units treated as separate businesses, and virtual organizations forming temporarily for projects. Line authority represents command over key objectives while staff provides advisory support. Departmentation groups activities into units by function, product, geography, process, or customer group.

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311 views26 pages

Chapter 4: Organizing: A Function of Management .

Organizing involves classifying work, designing work units, assigning tasks, and establishing coordination between units. The organizing process includes reviewing plans, determining activities, creating jobs, departmentation, and determining authority structures. Organization involves groups working together structurally to achieve goals. Common organizational designs include functional organization by specialty, divisional organization by autonomous divisions, matrix organization combining functional and divisional structures, strategic business units treated as separate businesses, and virtual organizations forming temporarily for projects. Line authority represents command over key objectives while staff provides advisory support. Departmentation groups activities into units by function, product, geography, process, or customer group.

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Chapter 4: Organizing

A function of Management …..


Concept of organizing

 The word ‘organise’ means placement of ideas,


objects or people in a correct order so that they are
easily available whenever required.

 In management, it represents all those activities that


result in the formal assignment of tasks, authority &
responsibility to groups and individuals.
Organizing
 It involves:

 Classification of work
 Designing of different work units
 Assigning different tasks.
 Establishing co-ordination and relationship amongst
the different units and positions.
Organizing Process
 Step I: Review of Strategic and Operational Plans

 Step II: Determination of the activities to be


performed to implement the Plans
 Step III: Creation of a job

 Step IV: Departmentation

 Step V: Organization Structure

 Step VI: Determination of Authority


Organization
 Organization involves two or more people with
ideas and resources, working together in a
structured, formal environment to achieve
common goals.

 It is a social and managerial system with a


clearly defined boundary, which pursues
collective goals through planning, hiring the
human resources, directing their effort and
controlling the performance.
Basic Organizational Designs:
 Functional Organization
 Divisional Organization
 Matrix Organization
 Strategic business Unit. (SBU)
 Virtual Organization
Functional Organization

 This structure is based on


occupational specialisation.

 Finance, manufacturing,
marketing, accounts,
research etc.

 It leads to efficiency and


economy.
Divisional Organization
 In this design, the corporate
house or group is divided
into different divisions.

 These divisions are


relatively autonomous.
Divisional Organization

 These operate as self contained business units.

 Various divisions can be totally unrelated but


work under the single corporate umbrella.

 The central headquarter focuses on all the


divisions.
Matrix Organization

 This structure
utilises both
the functional
and divisional
chains of
command
simultaneously
in the same
part of the
organisation.
Matrix Organisation
 This structure assigns specialists from different functional units
to work together on a project as a cross functional team.

 The team is led by a project manager.

 Project managers have the authority over activities geared


towards achieving organisational goals while functional managers
have authority over tasks related to their department.
Strategic business Unit. (SBU)
 SBUs are distinct business units within a large company.
 They are treated as separate business as they have
adequate size and mission.

 A manager is appointed to head an SBU and made fully


accountable for its profitability and operations.

 The main advantage here is that SBUs can be provided


with specific focus and their heads can manage them
with entrepreneurial zeal.
Virtual Organization
 This comprises of a
group of independent
people or
organisations that
come together to
execute a project and
then disperse.
 This is made possible
by telecommuting and
customer organisation
linkages.
Virtual Organisation

 Virtual organisations appear for the execution of


tasks and disband after the successful execution of
the task.

 The only disadvantage is that the focus is specific


on the task and there is little sense of
belongingness and ownership.
Line Authority

 Line authority represents superior-subordinate


relationships for functions, which are directly
responsible for accomplishing the key
objectives of the enterprise.

 The line identifies those positions that possess


command and authority to make decisions.
Staff Relationship
 Staff identifies those positions in an organisation that
do not command a decision making authority.

 These are support positions providing services, advice,


assistance and support to the line authority to enable
them to perform their duties.

 It is for the line managers to decide whether to take


some decision with respect to the given advice.
Line & Staff Relationship
Departmentation
 A department is a distinct area or a branch of
the organisation which handles tasks of similar
nature.

 The process of grouping of activities into units


for the purpose of administration is called
departmentation.
Types/Basis of Departmentation

 Departmentation by Function
 Departmentation by Product
 Departmentation by Geographical
Regions
 Departmentation by Process
 Departmentation by Customer Group
1. Departmentation by Function

 In this type, similar occupational specialties are


grouped together under functional system units
of finance, manufacturing, marketing,
accounts, research etc.
2. Departmentation by Product
 This form assembles different activities of an
organisation in accordance with different
product types that it manufactures.

 This form of departmentation enables


organisations to focus on different products
simultaneously which sell a large number of
products simultaneously.

 Eg: Cosmetics, Clothing etc


3. Departmentation by
Geographical Regions

 In this form, different jobs are grouped on the


basis of territory.

 South Asia, Europe, North America etc.


4. Deparmentation by Process

 Activities are grouped on the basis of different


steps involved in the process of manufacturing.

 Eg. Bottling, capping, labeling, filling etc.


5. Departmentation by
Customer Group
 Some organisations serve different market
segments by offering different types of
products.

 These markets or customers can be served


effectively with different channels.

 This forms of departmentation groups jobs on


the basis of a common set of needs or
problems of specific customers
All
a t ’ s
Th

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