Chapter 4: Organizing
A function of Management …..
Concept of organizing
The word ‘organise’ means placement of ideas,
objects or people in a correct order so that they are
easily available whenever required.
In management, it represents all those activities that
result in the formal assignment of tasks, authority &
responsibility to groups and individuals.
Organizing
It involves:
Classification of work
Designing of different work units
Assigning different tasks.
Establishing co-ordination and relationship amongst
the different units and positions.
Organizing Process
Step I: Review of Strategic and Operational Plans
Step II: Determination of the activities to be
performed to implement the Plans
Step III: Creation of a job
Step IV: Departmentation
Step V: Organization Structure
Step VI: Determination of Authority
Organization
Organization involves two or more people with
ideas and resources, working together in a
structured, formal environment to achieve
common goals.
It is a social and managerial system with a
clearly defined boundary, which pursues
collective goals through planning, hiring the
human resources, directing their effort and
controlling the performance.
Basic Organizational Designs:
Functional Organization
Divisional Organization
Matrix Organization
Strategic business Unit. (SBU)
Virtual Organization
Functional Organization
This structure is based on
occupational specialisation.
Finance, manufacturing,
marketing, accounts,
research etc.
It leads to efficiency and
economy.
Divisional Organization
In this design, the corporate
house or group is divided
into different divisions.
These divisions are
relatively autonomous.
Divisional Organization
These operate as self contained business units.
Various divisions can be totally unrelated but
work under the single corporate umbrella.
The central headquarter focuses on all the
divisions.
Matrix Organization
This structure
utilises both
the functional
and divisional
chains of
command
simultaneously
in the same
part of the
organisation.
Matrix Organisation
This structure assigns specialists from different functional units
to work together on a project as a cross functional team.
The team is led by a project manager.
Project managers have the authority over activities geared
towards achieving organisational goals while functional managers
have authority over tasks related to their department.
Strategic business Unit. (SBU)
SBUs are distinct business units within a large company.
They are treated as separate business as they have
adequate size and mission.
A manager is appointed to head an SBU and made fully
accountable for its profitability and operations.
The main advantage here is that SBUs can be provided
with specific focus and their heads can manage them
with entrepreneurial zeal.
Virtual Organization
This comprises of a
group of independent
people or
organisations that
come together to
execute a project and
then disperse.
This is made possible
by telecommuting and
customer organisation
linkages.
Virtual Organisation
Virtual organisations appear for the execution of
tasks and disband after the successful execution of
the task.
The only disadvantage is that the focus is specific
on the task and there is little sense of
belongingness and ownership.
Line Authority
Line authority represents superior-subordinate
relationships for functions, which are directly
responsible for accomplishing the key
objectives of the enterprise.
The line identifies those positions that possess
command and authority to make decisions.
Staff Relationship
Staff identifies those positions in an organisation that
do not command a decision making authority.
These are support positions providing services, advice,
assistance and support to the line authority to enable
them to perform their duties.
It is for the line managers to decide whether to take
some decision with respect to the given advice.
Line & Staff Relationship
Departmentation
A department is a distinct area or a branch of
the organisation which handles tasks of similar
nature.
The process of grouping of activities into units
for the purpose of administration is called
departmentation.
Types/Basis of Departmentation
Departmentation by Function
Departmentation by Product
Departmentation by Geographical
Regions
Departmentation by Process
Departmentation by Customer Group
1. Departmentation by Function
In this type, similar occupational specialties are
grouped together under functional system units
of finance, manufacturing, marketing,
accounts, research etc.
2. Departmentation by Product
This form assembles different activities of an
organisation in accordance with different
product types that it manufactures.
This form of departmentation enables
organisations to focus on different products
simultaneously which sell a large number of
products simultaneously.
Eg: Cosmetics, Clothing etc
3. Departmentation by
Geographical Regions
In this form, different jobs are grouped on the
basis of territory.
South Asia, Europe, North America etc.
4. Deparmentation by Process
Activities are grouped on the basis of different
steps involved in the process of manufacturing.
Eg. Bottling, capping, labeling, filling etc.
5. Departmentation by
Customer Group
Some organisations serve different market
segments by offering different types of
products.
These markets or customers can be served
effectively with different channels.
This forms of departmentation groups jobs on
the basis of a common set of needs or
problems of specific customers
All
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