PoM- Module 2
Organising
Organizing
Important managerial function
1. Formalizing – making rules and regulation
2. Departmentalization- grouping of
activities
3. Staffing- recruitment and selection
4. Fixing responsibility and accountability
5. Providing authority- power to give orders
and get the work.
6. Delegating- empowering
7. Control- supervision
8. Direction- source of instruction
Characteristics of organizations
1. Organizations are social entities
2. Organizations are goals directed
3. Organizations are relatively
permanent
4. Organizations have structure-
horizontal & vertical
5. Organizations interact with
environment as open systems
6. Organizations are pyramidical in shape
Types of organizations
1. Mutual benefit organizations-
cooperative societies, social clubs
2. Business organization- profit making
3. Social service organizations –
charities, religious places
4. Public service organizations- police,
military, postal service
5. Formal organizations – defined
structure and authority
6. Informal organizations- without
defined structure or authority
Importance of organization
1. Helps people to work together
2. Facilitates performance
3. Helps growth and
diversification
4. Optimum use of resources
5. Stimulates creativity
6. Delegates-authority
7. Fixes accountability
8. Brings order/system
Why form organizations
•To eliminate the individual
limitations
•To compress the time needed for
performance
•To benefit by accumulated expertise
•To create economy of scale
•To help and to be helped by one
another
Scope of organization
Multiple levels-top, middle,
bottom
Multiple functions- finance,
HR, marketing
Multiple vocations-commerce,
politics, social service, religion
Wherever there is organized
activities by groups of people
Informal organization
1. Natural union of people
without any formal structure
It is based on
Common characteristics of
members as well as
Uniqueness of certain
members.
Informal organization
• Spontaneous and flexible structure
• It is not different from its members
• Fluid- may not last longer
• Unwritten rules- lot of flexibility
• Small and temporary
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Why people form informal
organizations
Propinquity- proximity
Similarity – of needs, attitudes,
priorities
Complementarities-
complementary needs
Interaction – communicating more
often
Frequent meetings- often coming
together
Why people form informal
organizations
Social overlays- similarities
Functional overlays- special
expertise
Decision overlays- Age, maturity,
judgement
Power overlays: More power than
(officially granted) authority
Communication overlays: more
options for communication
How do members benefit from
informal organization?
Sense of belongingness
Safety
Aid on the job
Recreation
Communication
Social control
Check on the authority
Drawback of informal organization
Resistance to change
Sub optimization –common
goals difficult to achieve
Rumour-grapevine
Group thinking
Organizational structure
Ways, in which tasks are formally
divided, grouped and coordinated
Types of structure
1. Simple structure
2. Bureaucracy
3. Matrix structure
4. Team structure
5. Virtual organisation
6. Boundary less orgainsation
Simple structure
Owner
textiles Steel Cement Tea
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Bureaucracy
Routine tasks
High specialization
Formal rules and regulations
Departmentalization
Centralised authority
Narrow span of control
Decisions are through chain of
command.
Bureaucracy
Chairman
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Matrix structure
Dual lines of authority
Combination of functional and
product departmentalization
Matrix structure
Project Engineering Sales
Manager Mfg Manager Manager Manager
Project A Anand Bharath Chethan
Manager
Project B Dinesh Eshwar Mahesh
Manager
Project C Girish Harish Rajesh
Manager
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Team structure
Use of
teams as
the central
device
to
coordinate
work
activities
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Virtual organizations
A small core organization that
out sources major business
functions
Boundary less organization
No chain of command
Larger span of control
No departmentalization
Work with empowered teams.
Boundary less structure
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What factors determine the
organizational structure?
Nature of work
Business strategy –innovation,
cost, speed, quality
Organizational size
Technology
Environmental factors
Maturity of people capability
Locational advantages
DEPARTMENT
• A DISTINCT AREA, DIVISION OR BRANCH OF
AN ORGANISATION OVER WHICH A MANAGER
HAS AUTHORITY FOR THE PERFORMANCE OF
SPECIFIED ACTIVITIES
• EG: FINANCE DEPARTMENT PRODUCTION
DEPARTMENT, HR DEPARTMENT, MARKETING
DEPARTMENT
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Types of departmentalization
1. Functional departmentalization
2. Product departmentalization
3. Customer departmentalization
4. Geographical departmentalization
5. Matrix departmentalization- functional
and product
6. Divisional departmentalization – profit
centres/ business divisions
1.Functional Department
CEO
HR Marketing Finance Production
Department Department Department Dperatment
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2.Product Departmentalization
Eg: LG Products
Consumer Electronics
Washing
TV Mobile
Machines
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3.Customer Departmentalization
Life style Products
High End Middle class Low end
Customers Customers Customers
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4.Geographical Departmentalization
Asian Sales Region
South east
West Asia Asia Pacific South Asia
Asia
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5.Matrix Departmentalization
Manageme B.Com BBM MBA
nt and
Commerce
HOD
Marketing A B C
HR D E F
Finance G H I
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6.Divisional Departmentalization
Banking Industry
Urban Semi urban
Rural Customers
Customers Customers
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Purpose of departmentalization
Streamlining processes
Utilization of specialization
Simplifying the work
Increasing focus
Improving efficiency
Ensuring success
Fixing accountability and
responsibility
Unity of command
• Unity of Command
• Each individual participating in the operation reports
to only one supervisor. This eliminates the potential
for individuals to receive conflicting orders from a
variety of supervisors, thus increasing accountability,
preventing freelancing, improving the flow of
information, helping with the coordination of
operational efforts, and enhancing operational
safety.
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Chain of command
• It is the continuous line of authority that extends
from the higher organizational levels to the lowest
levels and clarifies who reports to whom. The
concepts related to chain of command are:
authority, responsibility and unity of command.
• Authority refers to the right entrusted to managers
to enable them to tell their subordinates what to
do and expect them to do it.
• Responsibility is the obligation to perform any
assigned duties.
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The Chain of Command
Chief Executive
Officer
Executive Executive
President
Vice President Vice President
Vice Vice Vice Vice Vice
President President President President President
Region Region Region Region Region
1 2 3 4 5
District District District District District District District
A B C D E F G
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Span of control
The number of subordinates any
manager can control
Narrow span of control- lesser
number of subordinates to control
Wider span of control- larger
number of subordinates to control
Span of control-determining
factors
Similarity of functions
Complexity of functions
Geographical distance
Nature and Extent of coordination
Capability of subordinates
Risk level –high or low
ORGANISATION WITH NARROW SPAN OF
CONTROL
General Manager
Sr. Manager Sr. Manager
Sr. Manager
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ORGANISATION WITH NARROW SPAN OF
CONTROL
DISADVANTAGES
ADVANTAGES • TOO MUCH OF
• CLOSE SUPERVISION
SUPERVISION • MANY LEVELS OF
• CLOSE CONTROL MANAGEMENT
• FAST • HIGH COSTS DUE TO
COMMUNICATION MANY LEVELS
BETWEEN • EXCESSIVE
SUBORDINATES DISTANCE BETWEEN
AND SUPERIORS LOWEST AND
HIGHEST LEVEL
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ORGANISATION WITH WIDE SPAN OF
CONTROL
Manager
Asst Asst Asst Asst
Asst
Manager Manager Manager Manager
Manager
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ORGANISATION WITH WIDE SPAN OF
CONTROL
ADVANTAGES DISADVANTAGES
• SUPERIORS ARE • OVERLOADED
FORCED TO SUPERIORS
DELEGATE • DECISION
• CLEAR POLICIES BOTTLENECK
MUST BE MADE • LOSS OF
• SUBORDINATES CONTROL
MUST BE • REQUIRES VERY
CAREFULLY GOOD QUALITY
SELECTED OF MANAGERS
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Centralization and Decentralization
• Centralization-authority rests
with top management
• Decentralization- authority is
delegated to lower rung
employees
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Factors determining decentralization
• Mission and vision
• Size and complexity of business
• Location of production and market
• Capability of people
• Need for involvement and creativity
• Time demands
• Communication channels
• Nature of work
• Standardization of process
• Environmental factors
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DELEGATION
DELEGATION
Fundamental aspect of manager’s job;
Transferring a task or procedure to someone else!
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Delegation:
“Transferring responsibility for the
performance of an activity from
one individual to another while
retaining the accountability for the
outcome”
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What to delegate?
• Things subordinate can do better
• Things subordinate needs to do for
growth
• Operational work
• Things for which you don’t have time
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Supervision:
“Providing guidance for the
accomplishment of a taskor activity
withdirection, periodic inspectionof
accomplishment”…“functionof
qualification”
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WHATDELEGATIONISNOT
• “dumping” work indiscriminately
• giving orders
• abdicating control or responsibility
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Delegation implies that the
subordinate is given the
authority to do the job, can
make independent decisions,
and has the responsibility for
seeing that the job is done well.
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Why delegate? (Benefits)
• Saves time
• Develop people’s skills and abilities
• Motivates people involved
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Delegation involves:
• Determination of the task to be
accomplished
• Assessment of each person’s competency
• Amount of decision making needed
• Level of supervision available
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SIX PRINCIPLES OF
DELEGATION
1. Know yourself and team members
2. Assess strengths, weaknesses, job, situation and
skills
3. Understand the state practice act, limitations, and
job descriptions
4. Know the job requirements
5. Keep communication clear, complete and constant
6. Evaluate-review what happened/measure results
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FOUR BASIC STEPS:
1. Select a capable person
2. Explain the task and outcomes to occur
3. Give the necessary authority and means for
doing the job
4. Arrange to keep in contact and give
feedback.
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VERBALANDWRITTEN
INSTRUCTIONSAND/OR
DETAILS
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PITFALLSOFDELEGATION
• Manager’s reluctance to “give away”
• Feeling that need todoit yourself
• Lack of confidence in subordinate
• Fear of losing authority
• Name others!
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ACCOUNTABILITY
“Being obligated to answer for one’s
acts, including the act of
supervision.”
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LEADERS/MANAGERS
SHOULDNEVER ATTEMPTTO
DELEGATE:
• Personal accountability
• Discipline of employees
• Recognition and praise/actions associated
with morale and related motivation
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Organizational design and configuration
• Developments in or changes to the structure
of an organization
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Organisational design can be part of the
requirement or just a consequence
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