Module 4 - Organizing

Organizing is undertaken:

• to facilitate the implementation of plans.

• to breakdown the total job into more manageable man size jobs.

• to facilitate the assignment of authority, responsibility and accountability for certain functions and tasks.

Organizing

management function which refers to “the structuring of resources and activities to accomplish objectives in an efficient and effective manner.”

Structure

The arrangement or relationship of positions within an organization is called the ____. The result of the organizing process is the ____.

The structure serves some very useful purposes. They are the following:

1.     It defines the relationships between tasks and authority for individuals and departments.

2.     It defines formal reporting relationships, the number of level in the hierarchy of the organization, and the span of control.

3.     It defines the groupings of individuals into departments and departments into organization.

4.     It defines the system to effect coordination of effort in both vertical (authority) and horizontal (tasks) directions.

When structuring an organization, the engineer manager must be concerned with the following:

1.     Division of labor - determining the scope of work and how it is combined in job

2.     Delegation of authority - the process of assigning various degrees of decision making authority subordinates.

3.     Departmentation - the grouping related jobs, activities, or processes into major organizational subunits.

4.     Span of control - the number of people who report directly to given manager.

5.     Coordination - the linking of activities in the organization that serves to achieve a common goal or objective.

Formal Organization

“structure that details lines of responsibilities, authority, and position”. What is depicted in the organization chart is the formal organization. It is “the planned structure” and it “represents the deliberate attempt to established patterned relationships among components that will meet the objectives effectively”.

Organization Chart

diagram of the organization’s official positions and formal lines of authority.

Organizational Manual

provides written descriptions of authority relationships, details the functions of major organizational units and describes job procedures

Policy Manuals

describes personnel activities and company policies

Following are the advantages of formal organization:

1.    Easy to Fix Accountability

Since the authority and responsibility of all the employees have been already fixed, inefficient employees can easily be apprehended and in this way their accountability can be fixed.

2.  No Overlapping of Work

Everything moves in an orderly manner. Therefore, there is no possibility of any work being left out or unnecessarily duplicated.

3.  Unity of Command Possible

It is possible to observe the principle of unity of command in view of the presence of scalar chain of authority.

4.  Easy to Get Goals

It is easy to achieve the goals of the organization because there is an optimum use of all the material and human resources.

5.  Stability in Organization

All the people work by observing rules and remain confined within the domain of their authority. This leads to the establishment of good relationship which, in turn, leads to stability to the organization

Informal Groups

There are instances when members of an organization spontaneously form a group with friendship as a principal reason for belonging. It is not a part of the formal organization and it does not have a formal performance purpose.

are oftentimes very useful in the accomplishment of major tasks, especially if these tasks conform to the expectations of the members of the informal group

Line Authority

manager’s right to tell subordinates what to do and then see that they do it

Staff Authority

staff specialist’s right to give advice to a superior

Functional Authority

specialist’s right to oversee lower level personnel involved in that specialty, regardless of where the personnel are in the organization.

Personnel Staff

those individuals assigned to a specific manager to provide needed staff services.

Specialized Staff

those individuals providing needed staff services for the whole organization.

Committee

formal group of persons formed for a specific purpose. For instance, the product planning committee, as described by Millevo, is “often staffed by top executives from marketing, production, research, engineering, and finance, who work part-time to evaluate and approve product ideas.”

Ad Hoc Committee

one created for short-term purpose and has a limited life. An example is the committee created to manage the anniversary festivities of a certain firm

Standing Committee

is a relatively permanent committee that deals with issues on an ongoing basis. An example is the grievance committee set up to handle initially complaints from employees of the organization.

Functional Organization

this is a form of departmentalization in which everyone engaged in one functional activity, such as engineering or marketing, is grouped into one unit.

are very effective in smaller firms, especially “single-business firms where key activities revolve around well-defined skills ad areas of specialization.”

Product or Market Organization

refers to the organization of a company by divisions that brings together all those involved with a certain type of product or costumer.

with its feature of operation by divisions, is “appropriate for a large corporation with many product lines in several related industries.”

Matrix Organization

an organizational structure in which each employee reports to both a functional or division

according to Thompson and Strickland, “is a structure with two (or more) channels of command, two lines of budget authority, and two sources of performance and reward.” Higgins declared that “the matrix structure was designed to keep employees in a central pool and to allocate them to various projects in the firm according to the length of time they were needed.”

Functional organizations have certain advantages. They are the following:

1.  The grouping of employees who perform a common task permit economies of scale and efficient resource use.

2.  Since the chain of command converges at the top of the organization, decision-making is centralized, providing a unified direction from the top.

3.  Communication and coordination among employees within each department are excellent.

4.  The structure promotes high quality technical problem-solving.

5.  The organization is provided with in depth skill specialization and development.

Employees are provided with career progress within functional departments

 The disadvantages of the functional organizational are the following:

1.  Communication and coordination between the departments are often poor.

2.  Decisions involving more than one department pile up at the top management level and are often delayed.

3.    Work specialization and division of labor, which are stressed in a functional organization, produce routine, no motivating employee tasks.

4.  It is difficult to identify which section or group is responsible for certain problems.

5.  There is limited organizational goals by view of employees.

There is limited general management training for employees

The advantages of a product or market organization are as follows:

1.  The organization is flexible and responsive to change.

2.  The organization provides a high concern for customer’s needs.

3.  The organization provides excellent coordination across functional departments.

4.  There is easy pinpointing of responsibility for product problems.

5.  There is emphasis on overall product and division goals.

The opportunity for the development of general management skills is provided.

The disadvantages of the product or market organization are as follows:

1.  There is a high possibility of duplication of resources across divisions.

2.  There is less technical depth and specialization in divisions.

3.  There is poor coordination across divisions.

4.  There is less top management control.

There is competition for corporate resources

The matrix organization is afforded with the following advantages:

1.  There is more efficient use of resources than the divisional structure.

2. There is flexibility and adaptability to changing environment.

3.  The development of both general and functional management skills are present.

4.  There is interdisciplinary cooperation and any expertise is available to all divisions.

There are enlarged tasks for employees which motivate them better

The matrix organization has some disadvantages, however. They are the following:

1.  There is frustration and confusion from dual chain of command.

2.  There is high conflict between divisional and functional interests.

3.  There are many meetings and more discussion than action.

4.  There is a need for human relations training for key employees and managers.

There is a tendency for power dominance by one side of the matrix