HC1031 Managing People and Organization

Lecture 6: Part A

Fundamentals of organizing
 Unit Objectives & Learning Outcomes

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Applied Business Statistics for Managers
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 Unit Objectives & Learning Outcomes

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Applied Business Statistics for Managers
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 What you will learn in Part A

1. Discuss the fundamental characteristics of organizing, including

such concepts as work specialization, chain of command, line and
staff authority and task forces
2. Explain when specific structural characteristics such as centralization
versus decentralization, and span of control should be used within
organizations
3. Define the expressions, span of control, delegation, line & support,
chain of commend
4. Observe what an organizational chart looks like and note the peculiar
aspect of organizational titles

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 Organizing

Refers to the deployment of organisational

resources to achieve strategic goals

Reflected in:
1. The organisation’s division of labour
into specific jobs and departments
2. Formal lines of authority
3. Mechanism for coordinating various
tasks

Most companies have made structural

changes to accommodate use of the
Internet

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 The organization structure

Refers to the framework in which the organization defines how tasks are
divided, and departments coordinated

Defined as:

1. The set of formal tasks assigned to individuals and

departments
2. Formal reporting relationships
3. The design of systems to ensure effective coordination of
employees across departments

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 Food company organizational structure

This is the visual

representation of an
organization's structure

Characteristics include:
1. Work specialization
2. Chain of command

Authority, responsibility and

delegation
Line and staff authority
Span of management
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 Work specialization

Refers to the degree to which

organisational tasks are subdivided
into individual jobs, or division of
labour

Involves:

1. Specialisation, which results in

‘efficiency’

2. But too much specialization

reduces 'motivation' & creates
'silo effects'

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 “Chain of command”

The chain of command is an unbroken line of authority that links all persons
in an organization and indicates who reports to whom.

Two underlying principles of the chain of command are:

1. ‘unity of command’. Each employee is held accountable to only one

supervisor.

2. ‘scalar principle’. There is a clearly defined line of authority in the

organization that includes all employees.

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 Authority, responsibility and delegation

Authority:

Refers to:

“… the formal and

legitimate right of a
manager to make
decisions, issue orders and
allocate resources to
achieve organisationally
desired outcomes“.

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 Authority, responsibility and delegation

Authority is distinguished by three

characteristics. Authority is:

1. vested in organizational positions, not

people. Managers have authority because
of the positions they hold.

2. accepted by employees. Employees

comply because they believe
managers have a legitimate right to
issue instructions.

3. flows down the vertical hierarchy.

Positions at the top are vested with more
formal authority than those at the
bottom.

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 Authority, responsibility and delegation

1. ‘Responsibility’ is the duty to perform the task or activity an employee

has been assigned. Typically, managers are assigned authority
commensurate with responsibility.

2. ‘Accountability’ aligns authority and responsibility – those with authority

and responsibility are subject to reporting and justifying task outcomes to
those above them in the chain of command.

3. ‘Delegation’ is the process managers use to transfer authority and

responsibility to positions below them in the hierarchy.

(Many of today’s organizations encourage managers to delegate authority to the

lowest possible level to gain flexibility to meet customer needs and adapt to the
environment)

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 Line and Staff Authority

1. ‘Line’ authority means that managers have formal authority to direct and
control immediate subordinates.

2. ‘Staff’ departments include all those who provide specialized skills in

support of line departments, e.g. human resources (HR)

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 ‘Span’ of management

“Span of management”

The span of management, or span of control, is the number of employees

reporting to a supervisor

This determines how closely a supervisor can monitor subordinates

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 Factors, less supervisor involvement

1. Employees are highly trained and need little

direction in performing tasks.

1. Rules and procedures defining task activities

are available and work is common/similar
with centralized processes in a similar
location.
2. Support systems and personnel are available for
the manager.
3. Little time is required in non-supervisory activities.
4. Managers’ personal preferences and styles
favour a large span.
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 Summary: What have you learned?

1. Defined the many managerial terms that are used such as span of
control, delegation, line & support, chain of command. Explained the
ideological differences between line & support roles.
2. Discussed the fundamental characteristics of organizing, including
such concepts as work specialization, chain of command, line and
staff authority and task forces
3. Explained when specific structural characteristics such as
centralization versus decentralization, and span of control should be
used within organizations
4. Observed what an organizational chart looks like and note the peculiar
aspect of organizational titles.

Holmes Institute
Applied Business Statistics for Managers
Pathways