What Is Organizing?

Organizing: Arranging the activities of the enterprise in such a way that they systematically contribute to the enterprise’s goals.

Organization design Organization design –– management decisions and management decisions and actions that result in a specific organization structure.actions that result in a specific organization structure.

Organization structure –Organization structure – the pattern of jobs and groups the pattern of jobs and groups of jobs in an organization. It is an important cause of of jobs in an organization. It is an important cause of individual and group behavior.individual and group behavior.

Organization Structure & Design

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Organization ChartOrganization Chart: A

chart that shows the structure of the organization including the title of each manager’s position and, by means of connecting lines, who is accountable to whom and who has authority for each area.

Organization ChartIn form ation S e rvices G roup

C a ta log er

C a ta log er

C u sto m e r L ia ison

T a xo n om y D es ign er

K n ow le dg e A rch ite ctu re Le ad

D ev e lo per

D ev e lo per

S yste m s A dm in

S e arch /S ys te m s Le ad

A ssis tan t D e s ign er

D e sign Le ad

K no w le dg e A rch ite ctu re M an ag er

Basic Concepts: Organization

Organizational Hierarchy (flat & Tall

Organizations)

Authority (Centralization &

Decentralization )

Responsibility

Span of Management

Principles of Organization Align department objectives to corporate goalsCost-effective operationsOptimum number of subordinatesSpecializationDefine authority & Flow of authorityEnsure one employee, one superiorOne head and one planDefine responsibilityCommensurate authority and responsibility &

Attain balanceEnsure flexibility & Manage via exceptional casesProvide for continuity

Determine what is to be done/ Division of Work:

Assign Tasks: Departmentalization:Link Departments: Hierarchy

Development:Decide how much Authority to Designate/

Authority, Responsibility and Delegation: Decide the Levels at which Decisions are

to be made / Centralization vs. Decentralization:

Decide how to Achieve Coordination:

Process of Organizing

LINE ORGANIZATIONLine Organization structure is also known as

scalar, military or vertical organization and perhaps is the oldest form.

This concept holds that in any organization or hierarchy derived from a scalar process, there must be a single head who commands it.

All persons of the same organization are independent of each other.

This structure specifies responsibility and authority for all positions limiting the area of action by a particular position holder.

Example for

LINE ORGANIZATION

Chief ExecutiveChief Executive

FOREMAN A FOREMAN B FOREMAN C

Workers Workers Workers

LINE AND STAFF ORGANIZATION

The problem can usually be solved by classifying activities within an organization in two ways:

1. That which is substantive (direct) in its contribution – Line activities

2. That which is objective (indirect) in its contribution – Staff activities

Example forLINE AND STAFF ORGANIZATION

GENRAL MANAGERPublic Relations

OfficerSecretary

Manager (Finance)

Manager (personnel)

Manager - Production

Manager - Marketing

Production Engineer

Production Engineer

Workers Workers

FUNCTIONAL ORGANIZATION

It is created by grouping the activities on the basis of functions required for the achievement of organizational objectives.

CHARACTERISTICS:1. Specialization by functions2. Emphasis on sub-goals3. Pyramidal growth of Organization4. Line and staff division5. Limited span of management6. Functional authority relationships among

departments

Example for FUNCTIONAL ORGANIZATION

Head Quarters

Production Marketing Finance Personnel

Plant 1 Plant 2 Plant 3

P M F P P PM MF FP P

COMMITTEE ORGANIZATIONIt can be defined as a body of persons

appointed to meet on an organized basis for the discussion and dealing of matters brought before it.

FEATURES:1. Group of persons2. Can deliberate only on matters that are

brought before it3. Members of the committee draw authority

through delegation.

Example forCOMMITTEE ORGANIZATION

MATRIX ORGANIZATION

Matrix Organization is the realization of two dimensional structure which emanates directly from two dimensions of authority.

1. Pure project structure2. Functional structure

Functional Geographic

Product Customer

Departmental Bases:Functional Departmentalization

Jobs are combined according to the functions of the organization

The principal advantage is efficiencyBy having departments of specialists,

management creates efficient unitsA major disadvantage is that

organizational goals may be sacrificed in favor of departmental goals

EngineeringEngineeringEngineeringEngineering ReliabilityReliabilityReliabilityReliability FinanceFinanceFinanceFinance

ManufacturingManufacturingManufacturingManufacturing DistributionDistributionDistributionDistributionHumanHuman

ResourcesResourcesHumanHuman

ResourcesResources

PublicPublicRelationsRelations

PublicPublicRelationsRelations

PurchasingPurchasingPurchasingPurchasing

OBM CompanyOBM CompanyOBM CompanyOBM Company

Departmental Bases:Geographic Departmentalization

Establish groups according to geographic area

The logic is that all activities in a given region should be assigned to a manager

Advantageous in large organizations because physical separation of activities makes centralized coordination difficult

Provides a training ground for managerial personnel

Northeast Midwest Southeast Pacific

OBMCompany

Southwest

Geographic Departmentalization Structure

Departmental Bases:Product Departmentalization

All jobs associated with producing and selling a product or product line will be placed under the direction of one manager

Product becomes the preferred basis as a firm grows by increasing the number of products it markets

Concentrating authority, responsibility, and accountability in a specific product department allows top management to coordinate actions

OBM CompanyOBM CompanyOBM CompanyOBM Company

SmallSmallHouseholdHouseholdAppliancesAppliances

SmallSmallHouseholdHouseholdAppliancesAppliances

LargeLargeHouseholdHouseholdAppliancesAppliances

LargeLargeHouseholdHouseholdAppliancesAppliances

CommercialCommercialAppliancesAppliancesCommercialCommercialAppliancesAppliances

BuildingBuildingMaterials andMaterials and

ProductsProducts

BuildingBuildingMaterials andMaterials and

ProductsProducts

Lawn andLawn andGardenGarden

ProductsProducts

Lawn andLawn andGardenGarden

ProductsProducts

AutomotiveAutomotiveProductsProducts

AutomotiveAutomotiveProductsProducts

Departmental Bases:Customer Departmentalization

The importance of customer satisfaction has stimulated firms to search for creative ways to serve people better

Organizations with customer-based departments are better able to satisfy customer-identified needs than organizations that base departments on non-customer factors

RetailStores

Mail OrderOn-Line

SalesGovernment

Contracts

OBMCompany

InstitutionalSales

Customer Departmentalization Structure

MODERN ORGANISATION STRUCTURES

Virtual Organizations

Virtual organization – a collection of geographically distributed, functionally and/or culturally diverse aggregations of individuals that is linked by electronic forms of communication

Assembled and disassembled according to needs

CoreCoreFirmFirm

(Canada)(Canada)

ProductProductDevelopmentDevelopment

FirmFirm(France)(France)

MarketingMarketingFirmFirm

(U.K.)(U.K.)

CustomerCustomerServiceService

FirmFirm(U.S.A.)(U.S.A.)

ProductionProductionFirmFirm

(China)(China)

AccountingAccountingFirmFirm

(Canada)(Canada)

Organizations in which:the hierarchy and chain of command are

minimizedrigidly structured departments are eliminated

Implemented to reduce barriers between people and constituencies

VIRTUAL ORGANIZATION

Virtual Organization is a temporary network of independent companies – suppliers, customers, even erstwhile rivals – linked by information technology to share skills, costs and access to one another’s markets.

It will have neither central office nor organization chart. It will have no hierarchy, no vertical integration.

CELLULAR ORGANIZATION

It is a form of organization consisting of a collection of self-managing firms or cells held together by mutual interest. A cellular organization is built on the principles of self-organization, member ownership, and entrepreneurship.

Each cell within the organization shares common features and purposes with its sister cells but is also able to function independently.

TEAM STRUCTURE

A Team is a group of people in the organization constituted for completing certain assignments.

TYPES:1. Lead Team2. Cross-functional Team3. Problem-solving Team4. Self-managing Team

Features of Team-Based Structures

Structure is built around Self-directed work teams rather than individuals

Teams organized around work processesVery flat span of controlVery little formalizationMost supervisory activities are delegated to the

teamUsually found within divisionalized structureVery responsive and flexible; empowerment is

high; reduced need for managers; time consuming; ambiquity

BOUNDARYLESS ORGANIZATION

It is a model that views organizations as having permeable boundaries. An organization has external boundaries that separate it from its suppliers and customers, and internal boundaries that provide demarcation to departments.

This rigidity is removed in boundaryless organizations, where the goal is to develop greater flexibility and responsiveness to change and to facilitate the free exchange of information and ideas.

Empowered Empowered front-line front-line workersworkersSupport Support

PersonnelPersonnel

Top Top Mgmt.Mgmt.

• Alternative to traditional chain of command

• It includes a few levels of management

• Sales people and sales support staff sit on the top as the key decision makers for all the issues related to sales and dealing with the customers