Organizing

Organizing

• Analysis of activities to be performed for achieving organizational objectives.

• Grouping of them into various departments and sections.

• Assignment of each group to a Manager with the authority to supervise it.

• Provision for co-ordination.

Staffing

Leading

Controlling

Enterprise Objectives

Supporting objectives, policies, and plans

Identification and classification of required activities

Grouping of activities

Delegation of authority

Horizontal and vertical coordination

• Organization: A formalized intentional structure of roles or positions.

• Formal Organization: the intentional structure of roles in a formally organized enterprise.

• Informal Organization: a network of interpersonal relationships that arise when people associate with one another.

Organization Theory • Study of structure and design of Organization.

• It explains how organizations’ are actually designed and offers suggestions on how they can be constructed to improve organizational effectiveness.

• Study of human behavior as individual, group and sub-group.

• Prescribes relationships among variables in the organization.

Classical Organization Theory

• The Classical Theory is the beginning of the systematic study of organization.

• Viewed an organization as a machine and human beings as different components of that machine.

• Based on the contributions of Scientific Management by Taylor.

• Focuses on input-output mediators.• Also termed as “Machine Theory”,

“Structural Theory”, or “Physiological Theory”

Major contributors to the Classical Organizational Theory

Scientific Management:»Frederick Taylor

Administrative Management:»Henri Fayol »Luther Halsey Gulick»Max Weber

Chief Characteristics

• It is built on accounting model.• Maximizes neatness and control.• Puts special emphasis on the detection of

errors and their corrections.• Extra pair of hands concepts.• Assumes man to be relatively homogeneous

and relatively un-modifiable.• Stability of the employees.• Centralization.

• Accounting Model: Set of basic assumptions, concepts, principles and procedures

Pillars of Classical Theory

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Scala

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Pro

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Classical Theory

Division of Labor

Scalar and Functional process

Structure Span of control

1. Division of labor

• Work must be divided among individuals depending upon specialization.

• Each differential task can be handled separately either by different individuals at the same time or by the same individual at different times.

2. Scalar and Functional process

• Scalar process refers to the growth of –

Chain of commandDelegation of authority Unity of command, and the obligation to report

• Functional process refers to the division of organization into specialized parts. (like Marketing, HR, Finance, Production)

• Scalar process deals with vertical growth of the organization, functional process deals with horizontal growth.

Departmentation Headquarters

Production Marketing Finance HRM

Process of dividing the work of the organization into various units or department

Coordination of hierarchy

• With jobs specialized and divided among units, co-ordination becomes necessary.

• Coordination can be achieved mainly through hierarchy or chain of command.

• The chain of command principle implies that every one from bottom to the top should have a superior to whom he is accountable.

A

B

C

D

Unity of command

An individual in the organization should receive orders from only one superior

Delegation of authority

• Authorization for an individual for making decisions.

• Delegation to carry out the work.

Line and staff relations Line relationship exists between superior and his subordinate in which a superior can direct the activities of his subordinate.

Staff relationship involves tendering the advice by staff personnel to the line managers.

3. Structure

• Frame work of the formal relationships among various tasks, activities, and people in the organization.

• The basic structural element in the classical theory is the position.

• Various positions in the organization are grouped in various ways – horizontally, vertically or both

• Each position is then sanctioned a certain amount of authority.

• Depending upon the distribution of authority, the organization structure may be centralized or decentralized.

Centralization – authority is concentrated in the higher positions

• Decentralization – relevant authority is delegated to the lowest positions in the organization.

4. Span of control

• Refers to the number of subordinates which can be effectively supervised by a superior.

• Span of control for a superior should be limited because every Manager has a limited amount of knowledge and capacity.

Criticism against classical theory

• Closed system assumptions – no environmental interactions

• Static view of an organization – once structure is created, it will work for ever

• Too much reliance on classical pillars

• Lack of universality