CHAPTER 4: ORGANIZING

I. Structures and Design

A. Definition of Organizing

1. Subfunctions of Organizing

2. Organizing a structure as a Process

B. Nature and Development of an Organization

C. Formal and Informal Structures

1. Types of Formal Organization Structures

D. Organizational Charts

1. Types of Organizational Charts

E. Other Types of Structures

II. Innovation in Organizations

A. Creativity and Innovation

1. Types of Innovations in an organization

2. Steps in Gary Hamel’s “Wheel of Innovation”

B. Change

1. Forces of Change

2. Targets for Change

3. Why many people Resist Change

4. Reorganization

a. Departmentation

C. Delegation

1. Nature and Definition of Delegation

2. The Elements of Delegation

3. The Exception / Exemption Principle

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CHAPTER 4 ORGANIZING

I. Organizing: Structures and Design

Definition of Organizing

Organizing is the process of grouping together of positions and establishing relationships

among them, defining the authority and responsibility of personnel by using the company’s other
basic resources to attain predetermined goals or objectives.

Subfunctions of Organizing
1. Divide up the Work
2. Arrange Resources
3. Coordinate Activities

Organizing a Structure as a Process

Organizing a Structure as a process should consider several factors or fundamentals:

1. First, the structure must reflect objectives and plans because activities of the
organization are based on them.
2. Second, the structure must reflect authority given to the top and middle management.
3. Third, organization structure, like any other plan, should reflect their external
environment.

The Nature and Development of an Organization

An organization is defined as a group of people working together, assuming respective

duties and responsibilities, to achieve a common goal.

Another definition is that an organization is the framework or backbone by which the

work of a business, managerial or otherwise, is performed, that it provides the required channels,
points of origin and flow of management direction and control.

Formal and Informal Structures

a. Formal Structures

b. Informal Structures

Types of Organization Structures

1. Line Organization

MANAGER

SUPERVISOR SUPERVISOR

WORKER WORKER WORKER WORKER

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 2. Line and Staff Organization

OWNER / MANAGER
SECRETARY

ACCOUNTANT OPERATIONS SUPERVISOR RESEARCHERS

WORKER WORKER WORKER WORKER WORKER WORKER

3. Functional Organization

MATH TEACHER ENGLISH TEACHER FILIPINO TEACHER SCIENCE TEACHER

P.E. TEACHER

VALUES TEACHER
HISTORY TEACHER

STUDENT

4. Committee – a group pf people formed to perform a specific project.

a. Ad Hoc Committees - temporary or single use only

b. Standing Committees – permanent or long-term use

Organization Chart

- An organization chart is an illustration or graphical representation of the important aspects of

an organization including the major functions and their respective relationships, the channels of
supervision, and the relative authority of each employee who is in charge of each function.

- The purpose of an organization chart is, at a single glance, to show the organization’s structure
as a whole, easily understand the relationships between positions and illustrate the lines of
authority and responsibility.

Types of Organization Charts

1. Master Chart or Chart of Authority - shows the job titles and relationships between
positions.

2. Functional Chart - shows the job titles and relationships between positions and the
functions of each position..

3. Personnel Chart - shows the job titles and relationships between positions, including the
names and even pictures of the members of the organization.

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Other Types of Structures

Centralized and Decentralized Organizations

a. Centralized Structures
b. Decentralized Structures

Flat and Tall Structures

This classification is based on the physical appearance of the organization chart.
a. Flat Structures

b. Tall Structures

II. Organizational Innovation and Change

Innovation in Organizations

Creativity is the generation of a novel idea or unique approach that solves a problem or crafts an
opportunity

Innovation is the process of taking a new idea and putting it into practice

Types of Innovations in an organization

a. Process Innovations
b. Product Innovations
c. Business Model / Financial Innovations
d. Commercializing / marketing Innovations

Steps in Gary Hamel’s “Wheel of Innovation”

1. Imagining
2. Designing
3. Experimenting
4. Assessing
5. Scaling

Forces of Change
1. Internal Factors
2. External Factors

Targets for Change

1. Tasks
2. People
3. Culture
4. Technology
5. Structure

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 Why many people Resist Change
1. Fear of the unknown
2. Disrupted habits
3. Loss of confidence
4. Loss of control
5. Poor timing
6. Work overload
7. Loss of face
8. Lack of purpose

Reorganization – the process of creating changes to an already existing organization.

Departmentation – the process of grouping together of work and people to simplify operations.

There are several approaches to forming departments:

1. Departmentation by Function

MANAGING DIRECTOR

PRODUCTION MARKETING FINANCE PERSONNEL R&D

MANAGER MANAGER MANAGER MANAGER MANAGER

2. Departmentation by Product

STORE MANAGER

REFRIGERATORS FANS TELEVISION AUDIO

DEPARTMENT DEPARTMENT DEPARTMENT DEPARTMENT

3. Departmentation by Process

STORE MANAGER

RECEIVING WASHING DRYING IRONING RELEASING

DEPARTMENT DEPARTMENT DEPARTMENT DEPARTMENT DEPARTMENT

4. Departmentation by Geographical Location

PALAWAN MANAGER

PUERTO PRINCESA BROOKE’S POINT NARRA ABORLAN

DEPARTMENT DEPARTMENT DEPARTMENT DEPARTMENT
5. Departmentation by Target Market

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 MANAGER

YOUTH GROUP ADULT GROUP SENIOR CITIZENS

GROUP
Delegation

The Elements of Delegation

1. Responsibility

2. Authority

3. Accountability

The Exception Principle