Chapter 3_Organizing and Staffing

11

Organizing and Staffing

22

Agenda Nature and scope of organization Principles of organizations Types of organization Departmentation Committee centralization vs. Decentralization Span of control MBO and MBE Nature and importance of Staffing Process of Selection and Recruitment

33

Goal inputs of claimants1. Employees2. Consumers3. Suppliers4. Stock holders

5. Governments6. Community7. Other

Inputs1.Human2.Capital 3.Managerial 4.Technological

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EXTERNAL ENVIRONMENT

EXTERNAL ENVIRONMENT

Managerial Knowledge,Goals of claimants and use of inputs(Part1 The Basis of Management Theory and

Science)

Planning (Part 2)

Organizing (Part 3)

STAFFING (Part 4)

Leading (Part 5)

Controlling (Part 6)

To produce outputs

Facilitated by communication that also link

the organization

with the external

environment (Part 1 & 7.

Domestic and internal

environment)

Reenergizing the system

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System Approach to Management “Organizing and Staffing”

44

Objectives

Analyze the different forms of an organization

Determine different organizational structures

55

Organization

An Organization is a social unit or human grouping deliberately structured for the purpose of attaining specific goals.

… Amitai Etizoni

The rational coordination of the activities of a number of people for the achievement of some common explicit purpose or goal, through division of labour and function, and through a hierarchy of authority and reponsibility.

… Sehein

66

Organization

The process of identifying and grouping of the

work to be performed, defining and delegating

responsibility and authority and establishing

relationships for the purpose of enabling people to

work most effectively together in accomplishing

their objectives.

… Allen

77

Organization

An organization is the pattern of ways in which large

numbers of people, too many to have intimate face to

face contact with all others, and engaged in a

complexity of tasks, relate themselves to each other in

the conscious, systematic establishment and

accomplishment of mutually agreed purposes.

…Pfiffner & Sherwood

88

Nature of Organization

A clear concept of the major duties or

activities required to achieve the purpose.

Classification of activities into jobs

Establishment of relationships between

these jobs.

99

Purpose of Organizing The organizing function of mgmt. naturally &

logically follows the planning function. Through organizing managers decide how the

strategy & planned objectives will be accomplished.

Involves managers in decisions which result in a system of specialized coordinated jobs.

To achieve coordinated effort through the design of a structure of task & authority relationships.

1010

Principles of organization

Objectives

Specialization

Span of Control

Exception

Scalar Principle

Unity of Command

Delegation

Responsibility Authority Efficiency Simplicity Flexibility Balance Unity of Direction Personal ability

1111

Organization as a System

INPUT

Land Labour Capital Management

INPUT

Land Labour Capital Management

Conversion Process Conversion Process OUTPUT

Products Services

OUTPUT

Products Services

Feedback InformationComparison: Actual Vs Desired

Feedback InformationComparison: Actual Vs Desired

Environment Environment Environment Environment

1212

Types of organizations

Line: Line, Military or Scalar Organization

Functional Organization

Line and Staff Organization

Product / Project Organization or

Departmentation

Matrix or Grid Organization

Committee Organization

1313

Line: Line, Military or Scalar Organization

Corporate Organization

General Manager

Sales Manager

Production Manager

Chief Accounts Officer

Salesman

Foreman Foundry

Workers

Foreman Workshop

Workers

Foreman Assembly

Workers

Clerks

1414

Line: Line, Military or Scalar Organization

Merits – Simple– Flexible– Clear-cur division of

authority – Quick decision &

speedy action– Strong in discipline – All rounder executive

Limitations – Overload of work – Lack Specialization – Dictatorial way – Scope for favoritism – Lack of growth – Unsuitable for large

corner

1515

Functional Organization

W O R K E R S

Route Clerk

Instruction Clerk

Time & Cost Clerk

Disciplinarian

Inspector

Speed Boss

Repair Boss

Gang Boss

Office Shop

General Manager

W O R K E R S

1616

Functional Organization

Merits – Specialization

– Cost Reduction

– Mass Production

– No need for all round

executives

Limitations – Indiscipline

– Fixing of Responsibility

– Kills the initiative of workers

– Indifference of foremen

– Personal relationship

– No all-round executives

1717

Line and Staff Organization

Board of Directors

General Manager

Sales Manager

Production Manager

Chief Accounts Officer

Foreman Machine Shop

Workers

Foreman Foundry

Workers

Foreman Assembly

Workers

Company Secretary

Market Research

Other Consultants

Legal Advisor

Purchase Manager

HRD Manager

Design Engineer

Safety Officer

Industrial Engineer

Safety Officer

1818

Line and Staff Organization

Merits

– Expert advice

– Relieving Line executives

– Well defined authority and

Responsibility as well as

specialization

– Less Wastage

– Improved Quality

– No confusion or conflicts

Limitations – Cost increase

– Chances of mis-interpretation

– Chances of friction

– Loss of initiative

– Accountability

1919

Product Organization Chart Board of Directors

Managing Director

General Manager Small Car Division

• 800 CC• Zen• Wagon-

R• Van• Alto

• Esteem• Baleno

General Manager Large Car Division

Production Departme

nt

Sales Departmen

t

Accounts Departme

nt

Production Departme

nt

Sales Departmen

t

Accounts Departme

nt

2020

Project Organization Chart Chairman

Managing Director

General Manager Finance Software Vertical 1

General Manager Production Software Vertical 2

General Manager Business & Accounting Software Vertical 3

General Manager Internet & Telecom Software Vertical 3

CAD / CAM Project

Robotics Project

GIC Projec

t

Stock Exchang

e Project

ICICI Projec

t

Indya.Com Project

Airtel Mobile Service Project

Citi Bank Debit Card

Project

KSRTC Reservation Project

2121

Product / Project Organization Chart

Merits

– Specialization

– Increase in efficiency

– No interference

– Competitive Spirit

– Initiative to Managers

– Easy evaluation

– Ease of Budgeting

– Flexibility

Limitations – Duplication of work

– Inadequate Centralization

– Clamour for the same department

– Narrow thinking

– Only for big organization

– Under Utilization.

2222

Matrix or Grid Organization Chart

Director of Engineering

Chief Design

Manager Project A

Manager Project B

Manager Project C

Manager Project D

Chief Mechanica

l Engineerin

g

Chief Electrical Engineerin

g

Chief Mechanica

l Engineerin

g

2323

Matrix or Grid Organization Chart

Merits

– Flexible and Versatile

– Oriented towards end results.

– Responsibility of each project is clearly defined and

fixed with respective project managers, who control

the project from start to finish.

– The cost of projects is reduced because of sharing of

manpower and other resources.

– Better professional identification is maintained.

2424

Matrix or Grid Organization Chart

Limitations

– Chance of conflict in organization authority exists.

– Unit of command principles is violated where the

chief’s of each department are responsibility to

more than one project manager.

– Work may get piled up at any one department

while other departments may not have much work.

2525

Matrix or Grid Organization Chart

Limitations

– Requires extreme planning for optimum utilization

of resources.

– Better relationships may not exist between the

members of project group because they have

been temporarily gathered only for that project.

– Professional management skills are required to

make this type of organization work.

2626

Committee Organization

A committee organization is not exactly a type of

organization structure different from the other types.

Smaller structure within a larger organization

consisting of a few individuals and having its own

objectives.

A Committee is formed when a group of individuals

come together to discuss, decide and recommend

solution to certain problems of organization.

2727

Types of Committees

Ad-hoc Committee

Standing or permanent Committee

Advisory Committee

Education Committee

2828

Committee Organization Merits

– Decision are taken based on the collective wisdom of the

committee members.

– Provides integration of ideas of various experts.

– Different department are represented in the committee to

safeguard their interests and the decisions this taken will be

acceptable to all

– Helps in throwing up new ideas, innovations and new

scheme

– Committees promote mutual understanding of the members

drawn from various disciplines.

2929

Committee Organization

Limitations

– Sometimes a committee may take a week or two

to arrive at a decision where as competent

individual would have taken a day for the same.

– In a committee, no individual can be held

responsibility for anything.

– Final decision may not be fully acceptable to

everyone on the committee.

3030

Committee Organization

Limitations

– Very often aggressive members in the committee

may influence the final decision similarly some

weak members may fail to understand and

analyse the problems and surrender to other

members.

3131

Virtual Organizations

IT has made it possible for an individual to work for an organization and live anywhere

Virtual organization structure is “networked”.

– Extensive collaboration takes place electronically (e-mail).

Managers in a virtual environment monitor results, not progress

Forms are electronic, tech. support through a web interface

Business processes are designed differently.

3232

Virtual Teams Virtual Teams are geographically and/or

organizationally dispersed co-workers assembled using telecommunications and IT to accomplish an organizational task.

Several reasons explain their growing popularity:

– As information needs mushroom, firms rely on the skills and knowledge of individuals dispersed across countries/time zones, etc

– Enhanced bandwidths promote the use of networks linking individuals, internal and external to the organization

3333

Virtual Teams

– Technology (group support systems, groupware,

etc) is available to assist collaboration

– Difficulties in getting relevant stakeholders together

physically are relaxed

– Growing pressures for off-shoring has resulted in

systems development by global virtual teams

whose members are located around the world.

3434

Departmentation

The horizontal differentiation of tasks or activities

into discrete segments is called Departmentation.

Departmentalization is one important step of

building an organization.

The aim is to take advantage of the division of

labour and specialization upto certain limit.

3535

Several Basis of Departmentation

Functions

Products

Customers

Regions or Territory

Divisional Structures

Time

Process Combined Base

3636

Centralization - Decentralization

Centralization : Decreasing the role of

subordinates in decision making is centralization.

Decentralization: is the tendency to disperse

decision – making authority in an organized

structure. It is fundamental aspect of delegation.

3737

Centralization and

Decentralization as tendencies

Authority delegated

Authority not delegated

Complete centralization (no

organization structure)

Complete decentralization (no

organization structure)

3838

Span of Management Control

The number of subordinates reporting directly to

given managers.

The following two types shows the relationship

between the span of management & other

organizational level.

– Organization with Narrow Spans

– Organization with Wide Spans

3939

Organization with Narrow Spans

4040

Organization with Narrow Spans

Merits

– Close Supervision

– Close Control

– Fast Communication

between subordinates

and superiors

Limitations– Superiors tend to get too

involved in subordinates work

– Manly levels of management

– High costs due to many levels

– Excessive distance between lowest level and top level

4141

Organization with wide Spans

4242

Organization with Wide Spans

Merits

– Superiors are forced to

delegate

– Clear policies must be

made

– Subordinates must be

carefully selected

Limitations– Tendency of overload

superiors to become decision bottlenecks

– Danger of superior’s loss of control

– Requires exceptional quality of managers

4343

Management by Objectives (MBO)

The concept of MBO was first proposed by Peter Drucker in

1954.

For each employee and then comparing and directing their

performance against the objectives which have been set.

Aims to increase organizational performance by aligning

goals and subordinate objectives throughout the

organization.

MBO includes ongoing tracking and feedback in the process

to reach objectives.

4444

Management by Objectives (MBO)

One of the concepts of MBO was that instead of just a few

top-managers, all managers of a firm should participate in

the strategic planning process, in order to improve the

implementability of the plan.

Another concept of MBO was the managers should

implement a range of performance systems, designed to

help the organizations stay on the right track.

MBO can thus be seen as a predecessor of Value Based

Management.

4545

Management by Exception

A Management style wherein managers intervene only

when their employees fail to meet their performance

standards.

If the personal are performing as expected, the

manager will take no action.

The term is also used to describe provision of

information to management in which only significant

deviations from budgets or plans are reviewed as the

basis of corrective action.

4646

Management by Exception

The object is to reduce the quality of detail contained

in manager reports and statistics to date on which

action can be taken.

An organizational system in which managers delegate

as much responsibility and activity as possible to

those below them, stepping in only when absolutely

necessary.

4747

Organizational Structure for different

Organizations

4848

1.ORGANIZATION STUDY1.ORGANIZATION STUDY Organization Structure Organization Structure

H R F IN A N C E M A R K E T IN G P U R C H A S E LEGALAND

GENERALADM INISTRATION

D M D

P M E D(p roject m f g .

an d en gg .d iv ision )

P R O D U C T IO N P L C P(p lan t log istics

an d con tro ld iv ision )

Q U A L IT Y P D D(p rod u ct

d esign an dd evelop m en t)

D M D

M D

TOYOTA KIRLOSKAR MOTOR, Bidadi, BangaloreTOYOTA KIRLOSKAR MOTOR, Bidadi, Bangalore

4949

ORGANIZATION STRUCTURE

General manager

ManagerQuality

ManagerExtraction/

Asawarishta

ManagerSyrup/

Liniment

ManagerTabs/caps/gel

Manager despatch/ stores

OM Pharmaceuticals, Bangalore OM Pharmaceuticals, Bangalore

5050

Organization structureOrganization structureGM

(Aerospace)

AGM (Mfg) DGM (Fin) CM (IM) CM (Plan) CM (QC) SM (MS)

DGM (Mfg) SM(IT) SM (TP) SM(TD) CM (Prod)

CMCNC & Weld

CMAssembly

CMMaintenance

SMNew Projects

SMPrithvi

SMLp Engine

SMCarnation Weld

SMPSLV Assy

SMPrithvi Assy

M (OS)

Aerospace DivisionHindustan Aeronautics Limited

Aerospace DivisionHindustan Aeronautics Limited

5151

Staffing

Filling and keeping the positions provided for

by the organizations structure filled with the right

people is the staffing.

5252

It includes

• identifying workforce requirements

• inventorying the people available and

• recruiting, selecting, placing, promoting, apprising,

planning the careers.

• Staffing is closely linked with organizing.

Nature of Staffing

5353

• Recruiting or getting applicants for jobs as they open

up.

• Selection of best qualified from those who seek the job

• Transfer and Promotions

• Training those who need further instructions to perform

their work effectively or to qualify for promotions

Nature of Staffing

5454

Importance of Staffing

Helps in discovering talented and competent

workers and developing them to move up the

corporate ladder

Ensures greater productions by putting the right

man in right job

5555

Provide sudden disruption of an enterprise’s production run

by indicating shortages of personnel, if any, in advance.

Prevent under utilization of personnel through over manning

and resultant high labour cost and low profit margin

Provides information to management for the internal

succession of managerial personnel in the event of an un

anticipated turn over

Importance of Staffing contd..

5656

Process of Selection

Selection is the process of differentiating

between applicants in order to identify and

hire those with a greater likelihood of

success in a job.

5757

Process of Selection

Preliminary interview Selection tests Employment interview Reference and background analysis Selection decision physical examination Job offer Employment contract Evaluation

5858

Recruitment

• It can be defined as the process of identifying the

sources for prospective candidates and to stimulates

them to apply for the jobs.

• Generating of applications or applicants for specific

positions.

• Attracting potential of employees to the company.

5959

Recruitment

• The management should have a proper plan

of recruitment regarding the quantity and

quality of personnel required and the time

when it is needed.

6060

Sources of Recruitment

• There are basically two broad sources of

recruitment.

• Internal sources i.e, recruitment within the

organization.

• External sources i.e, recruitment from outside.

6161

Internal Source Recruitment

• Internal source refers to people currently

working in the organization. From this source,

Position are filled either through

• Promotion

• Through transfer from other positions.

6262

External Source Recruitment

• Following are the different sources external to organization.

• Former Employees

• Recommendations

• Employment exchange

• Campus Interview

• Advertisement

• Voluntary or Walk-in applicants

• Private Employment Agencies of HR Consultants

• Labour Unions

6363

TraditionalTraditionalRecruitingRecruitingSourcesSources

InternalInternalSearchesSearches

EmployeeEmployeeReferralsReferrals

EmployeeEmployeeLeasingLeasing

TempTempServicesServices

EmploymentEmploymentAgenciesAgencies

AdvertisementsAdvertisements

SchoolSchoolPlacementPlacement

6464

References

Ess ential of Management, Harold Koontz, Heinz

Weihrich, Tata McGraw hill

Management – James A F Stoner, R Edward

Freeman, Daniel R Gilbert, PHI

Principles of Management-P C Tripathi, P N

Reddy; TMH

6565