LESSON 3

ORGANIZING

Report by: CADENAS, Krishia Clarisse

ORGANIZING

- It is the function of management which follows planning. It is a function in

which the synchronization and combination of human, physical and financial
resources take place.
- It is the process of defining and grouping the activities of the enterprise and
establishing the authority relationships among them. In performing the
organizing functions, the manager defines, departmentalizes and assigns the
activities so that they can be effectively executed.

6 NATURES OF ORGANIZING

1. PROCESS
- It is defining, arranging and grouping the activities of an enterprise and
establishing the authority relationships among persons performing
these activities. It is the framework within which people associate for
the attainment of an objective.
2. STRUCTURE
- It is the creation of a structural framework of duties and responsibilities
to be performed by a group of people for the attainment of the
objectives of the concern. The organization structure consists of
relationships at all levels of authority.
- Organization structure may also contain an “IDENTIFIABLE GROUP
OF PEOPLE CONTRIBUTING THEIR EFFORTS TOWARDS THE
ATTAINMENT OF GOALS.” It is an important function of management
to organize the enterprise by grouping the activities necessary to carry
out the plans into administrative units and defining the relationships
among executives and workers in such units.
3. DIVIDING AND GROUPING THE ACTIVITIES
- Organizing means the way in which parts of an enterprise are put into
working order. In doing such, it called for the determination of parts and
integration of one complete whole on the other. In fact, organization is
a process of dividing and combining the activities of an enterprise.
- Activities of an enterprise are required to be distributed between the
departments, units or sections as well as between the persons for
securing the benefits of division of labor and specialization and are to
be integrated or combined for giving them commonness of purpose.
 4. ACCOMPLISHMENT OF GOALS OR OBJECTIVES
- No purpose unless it is built around certain clear-cut goals or
objectives. In fact, an organizational structure is built-up precisely
because it is the ideal way of making a rational pursuit of objectives.
- A harmonious adjustment of specialized parts for the accomplishment
of some common purpose or purposes.
5. AUTHORITY RESPONSIBILITY RELATIONSHIP
- Consists of various positions arranged in a hierarchy with a clear
definition of the authority and responsibility associated with each of
these. An enterprise cannot serve the specific purposes or goals
unless some positions are placed above others and given authority to
bind them by their decisions. In fact, organization is quite often defined
as a structure of authority-responsibility relationships.
6. HUMAN AND MATERIAL ASPECTS
- Organization deals with the human and material factors in business.
Human elements are the most important element in the organization.
To accomplish the task of building up a sound organization, it is
essential to prepare an outline of organization which is logical and
simple. The manager should try to fit in suitable men.

“See that human and material organizations are suitable” and “Ensure material and
human order”. As per HENRY FAYOL.

6 STEPS IN PROCESS ORGANIZING

1. DETERMINATION OF ACTIVITIES
- First step in organizing is to divide the total job of an enterprise into
several essential activities such as- production, financing, purchasing,
sales, personnel and so on. Identification of work enables the
managers to concentrate attention on important activities, to avoid
duplication of work, and eliminate overlapping or wastage of effort.
2. DIVISION OF ACTIVITIES
- The whole task cannot be managed by a single person; hence, division
of labor comes in this next step of processing. The work is divided and
assigned in a particular way. Division of work leads to specialization
and benefits of dividing are:
○ GREATER OUTPUT
○ EFFICIENCY
○ TRAINS THE LESS-SKILLED WORKERS
3. ASSIGNMENT OF DUTIES TO INDIVIDUALS
- After the creation of departments or divisions, the next step will be to fix
suitable and qualified persons into the activities of each department.
 Each person in the department will be given a specific part of the job to
do and will be made responsible for it.
- So, the task of management in this step is to appoint workers, foremen,
supervisors, etc. and to define the responsibility of each one of them.
While assigning duties, the requirements of the job and the
competence of the individual should be properly matched together.
Assignment duties create responsibility and ensure certainty of work
performance.
4. ESTABLISHMENT OF RELATIONSHIPS
- Through the assignment of tasks to individuals superior-subordinate
relationships between various positions are established in the
enterprise. The superior manager commands his subordinates, and the
subordinate manager gives him the reports of his performances. Such
relationships and channels of communication should be clearly defined.
Each individual should know clearly from whom he is to take orders
and to whom he is accountable for his performance.
5. DELEGATION OF AUTHORITY
- Appropriate amount of authority is delegated to people to enable them
to perform the assigned duties with confidence. No one can discharge
his responsibilities regarding a particular work in the absence of
requisite authority to do the same. So, the manager will have to pass
on authority for completing the assigned work to the sectional
managers and the sectional managers to others below them.
- Delegation of authority can also be defined as subdivision and sub-
allocation of power to subordinates in order to achieve effective results.

3 ELEMENTS OF DELEGATION

1. AUTHORITY
- In a context of a business organization, authority can be defined as the
power and right of a person to use and allocate the resources
efficiently, to take decisions and to give order to achieve the
organizational objectives. All people who have the authority should
know what the scope of their authority is, and they shouldn’t misuse it.
Authority is the right to give commands, orders and get the things
done. The top-level management has the greatest authority. Authority
always flows from the top to bottom. It explains how a superior gets
work done from his subordinate by clearly explaining what is expected
of him and how he should go about it. Authority should be
accompanied with an equal amount of responsibility. Delegating the
authority to someone else doesn’t imply escaping from accountability.
Accountability still rests with the person having the utmost authority.
2. RESPONSIBILITY
 -
It is the duty of the person to complete the task assigned to him. A
person who is given the responsibility should ensure that he
accomplishes the tasks assigned to him. If the tasks for which he was
held responsible are not completed, then he should not give
explanations or excuses. Responsibility without adequate authority
leads to disconnect and dissatisfaction among the people.
Responsibility flows from the bottom to top. The middle level and lower-
level management holds more responsibility. The person held
responsible for a job is answerable for it. If he performs the task
assigned as expected, he is bound for praise. While if he doesn’t
accomplish the task assigned as expected, then also he is answerable
for that.
3. ACCOUNTABILITY
- It means giving explanations for any variance in the actual performance
from the expectation set accountability cannot be delegated. For
example, if ‘A’ is given a task with sufficient authority, and ‘A’ delegates
this task to B and asks him to ensure the task is done well,
responsibility rests with ‘B’ but accountability still rests with ‘A’. The top-
level management is most accountable. Being accountable means
being innovative as the person will think beyond his scope of job.
Accountability, in short, means being answerable for the result.
Accountability can’t be escaped. It arises from responsibility.

5 ELEMENTS OF ORGANIZING

1. DESIGNING JOBS
- Job design is the first building block of organizational structure. It
means defining an individual’s responsibilities at work. Job design
involves defining areas of decision-making, responsibility, identifying
goals and expectations, and establishing appropriate indicators of
success.

TOOLS OF DESIGNING JOBS:

● JOB SPECIALIZATION
- Is the first and most important tool of all. Job
specialization is similar to the concept of division of labor.
Job specialization means, breaking down the entire job or
task into smaller parts and dividing them accordingly.
● JOB CHARACTERISTIC MODEL (JCM)
- Is also an effective tool for designing jobs, where jobs
design is conducted considering both employees’
preferences and the required work system.
 - The approach suggests that job design should be done
by considering five core dimensions:
○ SKILL
○ VARIETY
○ TASK IDENTITY
○ TASK SIGNIFICANCE
○ AUTONOMY
○ FEEDBACK
● WORK TEAMS
- Work teams are very useful for doing comprehensive and
difficult jobs which require expertise from various
departments or faculty or organization.
● JOB ROTATION
- Is systematically moving employees from one task to
another. However, in practice, job rotation creates more
problems than solving them, like employees’ satisfaction
and motivation diminishes. It is now used as a training
system.
● JOB ENLARGEMENT
- It involves increasing the total number of tasks workers
are assigned and perform. It also gives employees
motivation as it gives them a bigger chance to participate
in the organization’s operations.
● JOB ENRICHMENT
- It is similar to job enlargement but with a more
comprehensive approach. Job enrichment includes
increasing the number of tasks and the portion of control
over these tasks. Here managers must give authority
along with responsibility for the jobs.

2. DEPARTMENTALIZATION
- It is a grouping of jobs according to some logical arrangement, the
second building block of organization structure.
- It refers to the formal structure of the organization, composed of
various departments and managerial positions and their relationship
with each other. As an organization grows, its department grows and
more sub-units are created, which in turn add more levels of
management. This often creates less flexibility, adaptability, and units
of action within the firm. Departmentalization is the efficient and
 effective grouping of jobs into meaningful work units to coordinate
numerous jobs-all for the expeditious accomplishment of the
organization’s objective.

TYPES OF DEPARTMENTALIZATION

I. FUNCTIONAL DEPARTMENTALIZATION
- Groups together those jobs involving the same or similar activities. The
word “FUNCTION” indicates organizational functions such as finance
and production, rather than the basic managerial functions, such as
planning, controlling, manufacturing, finance, and marketing
departments, each an organizational function.
II. PRODUCT DEPARTMENTALIZATION
- It involves grouping and arranging activities around product or product
groups. This method places all the resources and authority under one
manager to get a product manufactured and marketed.
III. CUSTOMER DEPARTMENTALIZATION
- It is used when a great emphasis is placed on effectively serving
different customer types.
IV. DEPARTMENTALIZATION BY PROCESS
- It is preferable when the machinery or equipment used to require
special skills for operation, is of a large capacity that eliminates
organizational dividing, or has technical facilities which strongly
suggest concentrated location.
V. DEPARTMENTALIZATION BY TASK FORCE
- It involves assigning a team or task force to a definite project or block
of work, which extends from the beginning to the completion of a
wanted and definite type and quality of work.

VI. LOCATION OR TERRITORY DEPARTMENTALIZATION

- Logically group jobs based on defined geographic sites or areas. The
defined sites or areas may range in size from a hemisphere to only a
few blocks of a large city.
VII. MATRIX DEPARTMENTALIZATION
- It was introduced in the early 1960 in response to the growing
complexity and size of technically oriented enterprises, which needed
more flexibility.
- Attempts to combine functional and task force (project)
departmentalization designs to improve the synchronization of multiple
components activity to improve economies of scale, and to be better
serve the customer and company.

3. ESTABLISHING REPORTING RELATIONSHIPS BETWEEN JOBS

 - The establishment of reporting relationships among positions is the third basic
element of organizing. The establishment of reporting relationships indicates,
clarifying the chain of command and the span of management. The chain of
command shows a clear distinct line of author among the positions and span
of management indicates the number of people who report to a particular
manager. Here, the organizations’ hierarchy, its positions, and lines are
defined.

4. DISTRIBUTING AUTHORITY

- It is another building block in structuring organizations. Authority in the

organization is the right in a position and, through it, the right of the person
occupying the position to exercise discretion in making decisions affecting
others.
- Authority is the power that has been legitimized by the organization. Here, the
determination of how authority is to be distributed among positions. Disturbing
authority in the organization means, giving decision power to employees.

5. DIFFERENTIATING BETWEEN POSITIONS

- Differentiating between line and staff positions in the organization is the last
building block of organizational structure.

A LINE POSITION is in the direct chain of command also responsible for the
achievement of an organization’s group.

On the contrary a STAFF POSITION is there only to provide expert advice, and
support for line positions.

However, in modern organizations, these differences are very less; in some cases,
the difference is eliminated.

6 OBJECTIVES OF ORGANIZING

1. INCREASED EFFICIENCY
● understand your operation.
● set the right objectives.
2. IMPROVED PRODUCTIVITY
● encourage people to focus.
● eliminate distractions whenever possible.
● enable effective communications.
3. REDUCED STRESS
● ask for help / talk to someone.
● get enough rest.
● eat well.
● take a break.
 4. ENHANCED FUNCTIONALITY
● Upgraded PC and other Tool in the company.
● Enhanced good communications.
● Focus to achieve goals.

5. GREATER ACCOUNTABILITY
● Be a good model of the organization.
● Be proactive instead of waiting for a solution do something to
overcome the problem.
● Punctuality be always on time.
6. BETTER DECISION- MAKING
● Plan effectively
● Practice to handle conflict, emotion, and stress
● Learn from your mistakes.
● Communication efficiency

11 PRINCIPLES OF ORGANIZING

1. PRINCIPLE OF OBJECTIVES
- This principle is related to understanding the objectives of the
enterprise. Objectives are determined by top management. So, it is
necessary to review objectives and policies. By knowing the exact
objectives, it is possible to establish the exact structure. The objectives
are explained to the people involved in the business. According to this
principle the business and every part of it should be directed toward the
achievement of predetermined objectives.
2. DIVISION OF LABOR
- According to this principle the total work in the company should be
divided into small tasks and jobs and each job should be assigned to
an individual so that over a period of time he will specialize in the job.
Thus, it encourages specialization of work, it should be applied to the
work performed by employees as well as by managers. However, over-
specialization should be avoided. Make sure that jobs will not become
monotonous and boring.
3. FUNCTIONAL DEFINITION
- This principle should be well defined and performed by an individual.
The duties and authority relationship of various individuals in the
company should also be clearly defined to avoid overlapping and
duplication of work.
4. SPAN CONTROL
 - No executives should be required to supervise more subordinates than
warranted by their capacity. May refers to the number of subordinates
working under each superior.
5. SCALAR CHAIN
- There should be an unbroken line of authority or scalar chain from the
top to the lowest level. As far as possible this chain should be short. A
clearly defined scalar chain leads to more effective decision making
and improved organizational communication.
6. UNITY OF COMMAND
- Everyone should receive orders from only one superior and be
accountable to him for the work.
- Implies the single source of authority over subordinates. It reduces
conflict, helps to maintain discipline, creates a feeling of personal
responsibility, removes uncertainty, and prevents divided loyalty among
employees.
7. PRINCIPLE OF BALANCE
- There should be a balance between the various parts of a company
and no function should be given under emphasis at the cost of other
functions. For creating this balance, it is necessary to maintain a
balance between line and staff authority between the centralization and
decentralization and between the span of control and lines of
communications.
8. PRINCIPLE OF FLEXIBILITY
- The company structure should be flexible in nature. It should be
designed to permit the growth and diversification of activities. It should
permit quick and easy adaptation of the organization to the changing
environment.

9. PRINCIPLE OF RESPONSIBILITY
- Clears the corresponding responsibilities are clearly determined for
each job. Determinations of responsibility help an employee to use his
authority more cautiously and carefully.

10. PRINCIPLE OF EXCEPTION

- Each should take all decisions within the scope of their authority and
should be referred to a higher-level manager. The matters of the
routine decision should not be referred to the top management. The top
management should look into only exceptional matters.
11. PRINCIPLE OF SIMPLICITY
- It explains that the company should be simple. The organization should
be so structured that everyone can understand it easily. There may be
minimum levels in the organization.
IMPORTANCE OF ORGANIZING

- A comprehensive approach to organizing helps the management in many

ways. Organizing aligns the various resources towards a common mission.

1. EFFICIENT ADMINISTRATION
- It brings together various departments by grouping similar and related
jobs under a single specialization that establishes coordination
between different departments, which leads to unification of effort and
harmony in work.
2. RESOURCE OPTIMIZATION
- Organizing ensures role-job- fit for every employee in the company it
helps in avoiding confusion and delays, as well as duplication of work
and overlapping of efforts.
3. BENEFITS SPECIALIZATION
- Organizing groups and sub-divide the various activities and jobs based
on the concept of division labor this helps in completion of maximum
work in minimum time ensuring the benefits of specialization.
4. PROMOTE EFFECTIVE COMMUNICATION
- Organizing is an important means of creating coordination and
communication among the various departments of the organization.
Different jobs and positions are interrelated by structural relationships,
it specifies the channel and mode of communication among different
members.

5. CREATES TRANSPARENCY
- The job and activities performed by the employees are clearly defined
on the written details called the job description which details out what
exactly must be done in every job. Organizing fixed the authority-
responsibility among employees. This brings in clarity and
transparency in the company.

6. EXPANSION AND GROWTH

- When resources are optimally utilized and there exists a proper division
of work among departments and employees, management can multiply
its strength and undertake more activities. Organizations can easily
meet the challenges and can expand their activities in a planned
manner.