Professional Documents
Culture Documents
Chapter 4
The manager needs to acquire various skills in management, including those for organizing
technical activities. In this highly competitive environment, the unskilled manager will not be able
to bring his unit, or his company, as the case may be, to success.
The value of a superior organizational set-up has been proven dramatically during the Second
World War when a smaller American Naval force confronted the formidable Japanese navy at
Midway. Military historians indicated that the Americans emerged victorious because of the
superior organizational skills of their leaders.
Even today, skills in organizing contribute largely to the accomplishment of the objectives of
many organizations, whether they are private businesses or otherwise. The positive effects of
business success become more pronounced when they come as a result of international
operations. International businesses, however, cannot hope to make huge profit unless they are
properly organized to implement their plans.
ORGANIZING DEFINED
Organizing is a management function which refers to the “the structuring of resources and
activities to accomplish objectives in an efficient and effective manner.”
The arrangement or relationship of positions within an organization is called the structure. The
result of the organizing process is the structure.
1. It defines the relationships between tasks and authority for individuals and departments.
2. It defines formal reporting relationships, the number of levels 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 manager must be concerned with the following:
1. Division of labor – determining the scope of work and how it is combined in a job.
2. Delegation of authority – the process of assigning various degrees of decision-making
authority to subordinates.
3. Departmentation – the grouping of related jobs, activities, or processes into major
organizational subunits.
4. Span of Control – the number of people who report directly to a given manager.
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After a plan is adapted, management will proceed to form an organization to carry out the
activities indicated in the plan.
The formal organization is “the 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 establish patterned relationships among
the components that will meet the objectives effectively”.
1. organization chart
2. organizational manual and
3. policy manuals.
The organizational chart is a diagram of the organization’s official positions and formal lines of
authority.
The organizational manual provides written descriptions of authority relationships, details the
functions of major organizational units, and describes job procedures.
INFORMAL GROUPS
Formal organizations require the formation of formal groups which will be assigned to perform
specific tasks aimed at achieving organizational objectives. The formal group is a part of the
organization structure.
There are instances when members of an organization spontaneously form a group with
friendship as a principal reason for belonging. This group is called an informal group. It is not
part of the formal organization and it does not have a formal performance purpose.
Informal groups are oftentimes very useful; in the accomplishment of major tasks, especially if
these tasks conform with the expectations of the members of the informal group.
The manager is, therefore warned that he must be on the lookout for the possible difficulties that
the informal groups may do the organization. It will be to his best interest if he could make the
informal groups work for the organization.
Organizations may be classified into three types. They are the following:
FRIENDSHIP
COMMON INTEREST
COLLECTIVE POWER
GROUP GOALS
Functional Organization
Functional organization structures are very effective in smaller firms, especially “single-business
firms where key activities revolve around well-defined skills and areas of specialization.”
Advantages:
1. The groupings 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.
6. Employees are provided with career progress within functional departments.
Disadvantages:
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 view of organizational goals by employees.
6. There is limited general management training for employees.
PRESIDENT/
GENERAL MANAGER
The product or market organization, with its feature of operating by divisions, is “appropriate for
a large corporation with many product lines in several related companies.”
Advantages:
1. The organization is flexible and is 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.
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Disadvantages:
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.
5. There is competition for corporate resources.
PRESIDENT
Matrix Organization
A matrix, organization, 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 length of time they were
needed.”
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.
5. There are enlarged tasks for employees which motivate them better.
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Disadvantages:
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.
5. There is a tendency for power dominance by one side of the matrix.
PRESIDENT/
GENERAL MANAGER
TYPES OF AUTHORITY
The delegation of authority is a requisite for effective organizing. It consists of three types.
1. Line authority – a manager’s right to tell subordinates what to do and then see they do
it.
2. Staff authority – a staff specialist’s right to give advice to superior.
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3. Functional authority – a specialist’s right to oversee lower level personnel involved in that
specialty, regardless of where the personnel are in the organization.
Line departments perform tasks that reflect the organization’s primary goal and mission. In a
construction firm, the department that negotiates and secures contracts for the firm is a line
department. The construction division is also a line of function.
Staff departments include all those that provided specialized skills in support of line departments.
Examples of staff departments include those which perform strategic planning, labor relations,
research, accounting, and personnel.
1. Personal Staff – those individuals assigned to a specific manager to provide needed staff
services.
2. Specialized staff – those individuals providing needed staff services for the whole
organization.
Functional authority is one given to a person or a work group to make decisions related to their
expertise even if these decisions concern other departments. This authority is given to most
budget officers of organizations, as well as other officers.
PRESIDENT/
GENERAL MANAGER
Corporate Legal
Planning Counsel
When certain formal groups are deemed inappropriate to meet expectation, committees are
oftentimes harnessed to achieve organizational goals. Many organizations, large or small, make
use of committees.
A committee is a 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.’’
Committees are very useful most especially to engineering and manufacturing firms. When a
certain concern, like product development, is under consideration, a committee is usually formed
to provide the necessary line-up of expertise needed to achieve certain objectives.
1. Ad hoc committee – one created for a short-term purpose and have a limited life. An
example is the committee created to manage the anniversary festivities of a certain firm.
2. Standing committee – it 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.
Committees may not work properly, however, if they are not correctly managed. Delaney
suggests that ‘’it might be useful to set up some procedure to make the committee a more
effective tool to accomplish our goals.’’
1. Prepare an organization chart of a large engineering firm showing line and staff
relationship
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