ORGANIZING-CM
Page 1: Organizing
Organizing is the second function of management.
Involves creating activities and assigning suitable workers to complete these efficiently and effectively.
Well-organized activities reduce resource wastage, leading to optimal usage of time, money, and effort.
Involves a well-structured chain of command.
Process of deploying resources to achieve strategic goals.
Leads to the creation of an organizational structure based on:
Division of labor into departments and jobs.
Establishment of formal lines of authority.
Mechanisms for coordinating diverse tasks.
Page 2: Nature & Purpose
Verifiable objectives as a major part of planning.
Clear understanding of major duties or activities involved.
Defined area of discretion or authority for individuals to accomplish goals.
Provision of information and tools necessary for effective role performance.
Identification and classification of required activities:
Grouping activities necessary to attain objectives.
Assignment of each grouping to a manager with necessary authority (delegation).
Provision for horizontal and vertical coordination within the organizational structure.
Page 3: Principles of Organizing Work
Key principles include:
Work Specialization
Span of Control
Authority
Chain of Command
Delegation
Page 4: Principles of Organizing
Unity of Objective
Specialization
Coordination
Authority & Responsibility
Unity of Command
Scalar Chain
Span of Control
Exception
Efficiency
Page 5: Principles of Organizing Continued
Balance
Continuity
Homogeneity
Simplicity
Page 6: Importance of Organisation
Process of selecting and structuring means to achieve objectives.
Establishing structured activities and lines of authority.
Coordination of efforts leading to synergy.
Emphasizes proper and effective communication.
Improves managerial effectiveness and organizational quality.
Page 7: Guidelines For Effective Organizations
Clear line of authority from top to bottom.
Each individual should report to a single boss.
Clear and written responsibility and authority.
Managers are accountable for their subordinates' actions.
Minimize levels of authority, ideally a maximum of six levels.
Implement work specialization.
Keep line and staff functions separate.
Establish a well-defined span of control.
Maintain a simple and flexible organization.
Page 8: Organizational Process
Steps involved in the organizational process:
Reviewing plans
Determining activities
Grouping activities
Assessing works and resources
Evaluating results
Providing feedback
Page 9: Organization Structure Design
Involves arrangement of activities and assignments of personnel to achieve organizational goals efficiently.
Steps:
Determination, identification, and enumeration of activities.
Grouping and assigning activities based on similar functions.
Delegation of authority tied to responsibility.
Page 10: Benefits of Good Organizational Structure
Helps attain objectives through proper coordination.
Eliminates redundant work.
Avoids runaround problems.
Assists in wage and salary administration.
Establishes proper communication systems.
Serves as a foundation for effective planning.
Increases member cooperation.
Page 11: Authority & Responsibility
Authority: Right to give orders and exact obedience (according to Henry Fayol).
Authority allows managers at higher levels to exercise control over assigned tasks.
Responsibility: Obligation to complete tasks, combining duties, tasks, and liabilities.
Responsibility exists for all individuals related to organizations.
Page 12: Delegation
Downward transfer of formal authority from one person to another.
Principles of delegation include:
Clarity of function
Matching authority with responsibility
Unity of command
Communication principles
Management by exception.
Page 13: Process of Delegation
Steps include:
Assignment of tasks.
Delegation of decision-making authority.
Creation of obligation regarding duty to achieve goals.
Creation of accountability.
Page 14: Principles of Delegation
Functional Definition.
Unity of Command.
Principle of Exception.
Clarity of Authority.
Parity of Responsibility.
Scalar Responsibility Principle.
Page 15: Advantages & Disadvantages Of Delegation
Advantages:
Results in quick decisions.
Frees up time for strategic planning.
Acts as a motivational factor.
Disadvantages:
Personal factors affecting delegation.
Reluctance from executives and subordinates.
Page 16: Problems in Delegating Authority
Desire to dominate.
Partial delegation issues.
Egoism.
Lack of direction in delegation.
Communication problems.
Page 17: Line Authority
Based on superior-subordinate relationships.
Managerial in nature, allowing orders to be directed to subordinates.
Governed by the principle of unity of command.
Page 18: Staff Authority
Based on expertise in specialized areas.
Provides counsel without direct managerial power.
Makes recommendations to line organizations.
Page 19: Difference Between Line & Staff Authority
Line Authority:
Flows vertically from top to bottom; establishes a chain of command.
Directly responsible for task accomplishment; connected to production.
Staff Authority:
Flows horizontally; connected to secondary command issues.
Provides support in a non-direct role; indirectly linked to production.
Page 20: Line & Staff Structure
Line people directly achieve organizational objectives; functions specialists added to line management.
General Staff:
General background, advisory role without authority.
Special Staff:
Provides company-wide expert advice and services.
Control Capacity:
Enforces quality standards.
Page 21: Reasons Of Conflict Between Line & Staff
Staff feels powerless due to advisory roles.
Resentment towards staff expertise.
Ego clashes and access issues with top management.
Shifting responsibilities during crises.
Page 22: Formal Organization
Formed when two or more people work towards a common objective.
Has defined rules and regulations.
Established systems of coordination and authority with clear relationships.
Examples include companies, schools, and banks.
Page 23: Informal Organization
Exists within formal organizations as a network of personal relationships.
No rules or defined relationships; communication through informal channels.
Page 24: Matrix Organization
Complex structure combining multiple organizational types.
Originated in aerospace for management problem-solving.
Employees report to two authorities: Functional and Project Managers.
Page 25: Matrix Organization Structure
Illustrated through multiple project groups led by specialists with shared functions.
Page 26: Advantages of Matrix Organization
Decisions are made by experts.
Skills development across functions.
Top management can focus on strategic planning.
Quick response to changes in the environment.
Page 27: Additional Advantages of Matrix Organization
Specialization enhances efficiency.
Optimum resource utilization avoids wastage.
Team collaboration boosts motivation.
Leads to higher efficiency and returns.
Page 28: Limitations of Matrix Organization
High workload due to added responsibilities.
Increased operational costs due to administrative demands.
Lack of unity of command due to dual-reporting structures.
Complexity in balancing administrative and technical matters.
Page 29: Further Limitations of Matrix Organization
Potential for power struggles between managers.
Low morale among employees handling diverse roles.
Complexity hampers clear governance.
Responsibility shifting during project failures.
Page 30: Departmentalization
Grouping related work activities for effective resource use.
Improves control and communication, primarily using a functional structure.
Page 31: Types of Departmentalization
Functional: Grouping by functional areas.
Product: Grouping by product lines.
Geographical: Grouping based on territories.
Process: Grouping based on processing flows.
Customer: Grouping based on common customer needs.
Page 32: Work Specialization
Involves dividing labor to enhance task efficiency.
Employees are trained for specific skills leading to increased productivity.
Page 33: Centralization
Decision-making occurs at the top of the organization.
Tends towards decentralization for enhanced decision-making closer to operations.
Page 34: Advantages of Centralization
Enforces uniform policies.
Facilitates quality decisions.
Eases control of departmental functions.
Optimizes human resources.
Page 35: Decentralization
Authority for decisions is dispersed throughout various levels of management.
Page 36: Advantages of Decentralization
Develops future executives.
Motivates subordinates with decision-making authority.
Facilitates prompt actions and decisions.
Page 37: Factors Influencing Decentralization
Environmental change and uncertainty levels.
Corporate strategy and culture.
Organizational size and dispersion.
Risk tolerance affecting decision-making levels.
Page 38: Difference Between Centralization & Decentralization
Centralization:
Single individual decision-maker.
Efficient for smaller businesses; can lead to sluggish operations.
Decentralization:
Multiple individuals making decisions.
Encourages knowledge diversity but may face alignment challenges.
Page 39: Coordination
Coordination ensures unity and synchronization among departments.
Promotes harmony in task execution towards common goals.
Prevents chaotic operations through orderly arrangements.
Page 40: Features of Coordination
Relevant for group efforts; continuous and dynamic processes.
Emphasizes the need for unity of efforts among tasks.
Integral responsibility of all managers.
Page 41: More Features of Coordination
Involves fixing timing and manner of various functions' execution.
Increased integration enhances coordination effectiveness.
Page 42: Communication
Process of exchanging information; foundational for all management roles.
Essential for effective planning, organizing, leading, and controlling.
Page 43: Communication Process
Components include:
Sender
Encoding
Message
Decoding
Receiver
Noise
Page 44: Detailed Communication Process
Sender: Originator of the message.
Message: Information intended for the receiver.
Encoding: Converting message into communicable symbols.
Channel: Medium of transmission (e.g., email, phone).
Receiver: Intended recipient of the message.
Decoding: Receiver interprets the message.
Feedback: Confirmation that the message was understood correctly.
Noise: Any interference affecting communication accuracy.
Page 45: Functions of Communication
Sharing information on policies and procedures.
Providing instructions and commands.
Influencing and persuading others.
Integrating subsystems within the organization.
Page 46: Types of Communication Networks
Circle
Chain
Y Network
Wheel Network
Page 47: Communication Networks Explained
Wheel Network: Highly centralized, with one leader; poor coordination.
Y-Pattern: Centralization with two close contacts to the network center.
Page 48: More Communication Networks
Chain Network: Vertical communication between superior and subordinate; efficient but slow.
Circular Network: Decentralized, where each person communicates with adjacent members.
Page 49: Additional Communication Network Types
Free Flow/All Channel/Star Network: Fast communication among all, but coordination challenges exist.
Grapevine Network: Informal communication with different patterns:
Single Strand
Gossip
Probability
Cluster
Page 50: Grapevine Networks Patterns
Single Strand: Sequential communication among individuals.
Gossip: Non-selective sharing of information.
Probability: Random communications.
Cluster: Sharing information with trusted individuals.
Page 51: Grapevine Network Diagrams
Different patterns including single strand, gossip, probability, and cluster.
Page 52: Controlling
A monitoring process to ensure desired results are met.
Ensures activities align with short- and long-range plans.
Maintains compliance with essential organizational policies.
Page 53: Controlling Process Steps
Establish standards.
Measure performance using specific methods.
Take corrective actions as necessary.
Page 54: Types of Control
Budgetary Control: Using numerical data to set performance expectations.
Standard Costing: Comparing recorded costs against standard costs for real-time activity profit analysis.
Financial Ratio Analysis: Metric comparison of financial statements for consistency and stability.