CHAPTER 4:

ORGANISING
Muhamad Fhadli Syakirin bin Mohd Jamalludin
FBM, UiTM Tapah
MGT162
 LEARNING OUTCOMES
• At the end of the lesson, students should be able to:

1) Define organizing
2) Understand the organizing process
3) Types of Organizational Structure & Chart
4) Understand division of work/labour
5) Describe span of management
6) Describe authority, delegation and coordination
 OVERVIEW

The form of organisational structure should be design so that it can help an organisation
achieve its function. Its important factors that will determine their success or failure.
 4.1 DEFINITION

Organising refers to the process of determining the task to be done, who will do them
and how those tasks will be managed and coordinated (lewis, 2007).

Organising synchronises and combines organisation resource-human, physical and financial- which are
important in obtaining result.
 4.2 ORGANIZING PROCESS

Reflecting on Establish Major Divide Major Task

Mission & vission Tasks into Subtasks

Allocate Resources
Evaluate the Result and Directives for
Subtasks
 4.3 TYPES OF ORGANIZATIONAL
STRUCTURE
• Organizational structure (OS) is the plan that represents the relationship between jobs and
departments.
• OS is a systems of task, reporting relationship and communication linkages (Schermerhorn,
2005).
• OS as the arrangement and interrelationship of the components parts and positions of the
company (Stoner, 1986).

‘OS used to define a hierarchy (responsibility, authority and accountability)

within an organization’

• Organisational chart: Pictured as the arrangement of parts.

• Departmentalization : Grouping people into separate units.
 4.3.1 TYPES OF ORGANIZATIONAL
STRUCTURE (CONT.)
• The structure is illustrated using an organizational chart.

• Common forms of Organizational Structure:

1. Functional Structure – Based on the function (E.g : Marketing, production, Financial,
Operations)
2. Divisional Structure
1. Product (for diverse product lines)
2. Geographic (Limited product lines but wide coverage)
3. Customer (Separate customers with very specific and distinct needs. E.g : Banking)
3. Matrix Structure (Dual chain of command)
4. Network Structure – An organization with a set of alliances with different set of expertise
(E.g : Ikea, Scandinavian company – outsource)
 Functional Structure

CEO
Functional Structure

Human
Marketing Production Sales Finance
Resources
 Divisional Structure – Product Division

CEO

Product Product Product Product

A B C D

Marketing Marketing Marketing Marketing

Production Production Production Production

Sales Sales Sales Sales

Human Resources Human Resources Human Resources Human Resources

Finance Finance Finance Finance

 Divisional Structure – Geographic Division

CEO

Northern East Coast Central Southern

region Region region Region

Marketing Marketing Marketing Marketing

Production Production Production Production

Sales Sales Sales Sales

Human Resources Human Resources Human Resources Human Resources

Finance Finance Finance Finance

 Divisional Structure – Customer Division

CEO

Real Estate
Counter Credit Card Loan
Mortgage
 Matric Structure

CEO

Human Resources
Production Manager Marketing Manager Finance Manager
Manager

Production Manager
Marketing Manager
Project
Finance A
Manager
HumanManager
Resources Manager

Project B
Manager

Project C
Manager
 Network Structure

Company A Company B

Production Manager
Marketing Manager
Finance Manager General
Human Resources Manager Contractor Company C
Company E

Company D
 4.4 DIVISION OF WORK/LABOUR
• Means all duties are divided into simpler, more specialized tasks for a better efficiency

Advantages Disadvantages
Increases productivity -
Creates job specialization Boredom
Enhances the skills -
Increase job satisfaction -
 4.5 SPAN OF MANAGEMENT
• Also known as span of control which means the number of employees who report to a
single manager
• 2 types:
• Tall structure (Narrow span of control)
• Long chain of command
• Bureaucratic control

• Flat structure (Wide span of control)

• Direct supervision
• Managers are over-utilized
 4.5 SPAN OF MANAGEMENT
(CONT.) – CLASS ACTIVITY
TALL
STRUCTURE
Advantages Drawbacks

FLAT
STRUCTURE
Advantages Drawbacks
 4.6 AUTHORITY
• Is the formal right delegated by the top management to make decisions
• The right to take action, make decisions, and give directions to do work to others
 4.6 AUTHORITY (CONT.)

Formal – from position

Types

Informal – personal characteristics and skills

Responsibility – obligation to perform the assigned task

Accountability – supervisor’s/manager’s responsibility the result of the decisions made

 6) AUTHORITY - TYPES (CONT.)

Line – Standard chain of command

Staff – Based on expert/experience

 4.7 DELEGATION
• Delegation refers to the process of transferring the authority for a task to another person and
empowers them to complete it responsibly
 4.7.1 DELEGATION PROCESS

Assigning Granting Establishing

responsibility authority accountability
 4.7.2 BENEFITS OF DELEGATION
AND EMPOWERMENT

Better decision Facilitates employee

Shorter response time
making development

Managers can have

time to focus on more Sense of appreciation
important matters
 4.7.3 REASONS FOR FAILING TO
DELEGATE (BARRIERS)

Lack of
‘Time crunch’ confidence Insecure
 Match the skills

4.7.4
LEARNING
TO Choose level of Be organized &
delegation communicate
DELEGATE carefully enough

EFFECTIVEL
Y
Give full authority
 4.8 CENTRALIZATION AND
DECENTRALIZATION

Centralization • Decision made by the upstairs

Decentralization • Decision made by lower level
 4.9 COORDINATION
• Coordination means keeping an organization units interact with one another to share
information to complete the common shared goal
• It varies, depending to the interdependence level of each groups
• 3 primary levels of work group
• Pooled interdependence
• Sequential interdependence
• Reciprocal interdependence
 Branch
A

Branch Branch
4.9 COORDINATION D HQ B
– POOLED
INTERDEPENDENC
E Branch
C

Common resources but no/least interrelation with one another

E.g: Banking sector
 4.9 COORDINATION – SEQUENTIAL
INTERDEPENDENCE
• Must coordinate the flow of information, resources from one unit to another
• Output of a unit becomes the input to another
• E.g : Food processing factory

A B C
 4.9 COORDINATION – RECIPROCAL
INTERDEPENDENCE
• Occurs when an information is passed back and forth between work groups
• E.g : University

A B

C D

E F
END OF CHAPTER 4