THE ORGANIZING PROCESS

Chapter 11-12

Rowshonara Akter Akhi

Lecturer
Jahangirnagar University
Organizing: The process by which managers
establish working relationships and allocate
resources among employees to achieve goals.
 Clarifies
 Divides
 Provides
 Establishes
 Develops
 Relates
 Establishes authority

11 - 3
Elements of Organizing
 Design the Jobs
 Group the Jobs
 Establish Reporting Relationship
 Distribute Authority
 Coordinating Activities
 Differentiating between Positions
Managing Organizational Design
 Basic Organizational Design
 Contemporary Organizational Design
Six Building Blocks/Elements required to construct an Organization:
1.Design the Jobs: Job specialization, Job rotation, Job Enlargement,
Job Enrichment

2.Group the Jobs(Departmentalization):Functional, Product,

Geographical, Process, Customer
3.Establish Reporting Relationship: Chain of Command, Span of
Control
4.Distribute Authority: Delegation of Authority, Centralization,
Decentralization
5.Coordinating Activities
6.Differentiating between Positions: Line Position, Staff Position
 The determination of individual’s work
related responsibilities.
 Job specialization: the degree to which the overall
task is broken down and divided into smaller
component parts.
 Job rotation: An alternative to Job Specialization
that involves systematically moving employees
from one job to another.
 Job Enlargement: involves increasing the total
number of tasks workers perform.
 Job Enrichment: involves increasing both number
of tasks and the control the worker has over the
job.
The process of grouping jobs according to
some logical arrangement.
 functional - groups jobs by functions
performed
 product - groups jobs by product line
 geographical - groups jobs on the basis of
territory or geography
 customer - groups jobs on the basis of
common customers

10-7
 Plant Manager

Manager, Manager, Manager, Manager, Manager,

Engineering Accounting Manufacturing Human Resources Purchasing

10-8
 Bombardier, Ltd.

Manager, Recreational and Utility Rail Products

Retail Accounts Vehicles Sector Sector

Mass Transit Recreational Products

Division Division

Bombardier-Rotax Logistic Equipment

(Vienna) Division

Industrial Equipment
Division

Bombadier-Rotax
(Gunskirchen)
10-9
 Vice President
for Sales

Sales Director, Sales Director, Sales Director, Sales Director,

Western Region Southern Region Midwestern Region Eastern Region

10-10
 Plant Superintendent

Sawing Planning and Assembling Lacquering and

Department Milling Department Sanding
Manager Department Manager Department
Manager Manager

Finishing
Department
Manager

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 Director
of Sales

Manager, Manager, Manager,

Retail Accounts Wholesale Accounts Government Accounts

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 1. Chain of Command
◦ continuous line of authority that extends from upper
organizational levels to the lowest levels and clarifies
who reports to whom
 Unity of command - a person should report to only one
manager.
 Scalar Principle-Clear and unbroken line of authority

10-13
2. Span of Control
 number of employees that a manager can efficiently
and effectively manage
 the wider the span, the more efficient the
organization
 appropriate span influenced by:
 the skills and abilities of employees
 the complexity of tasks performed
 availability of standardized procedures

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 Competence of supervisor and
subordinates.
 Dispersion of subordinates.
 Extent of non-supervisory
work.
 Degree of required supervision.
 Extent of standard procedures.
 Similarity of tasks.
 Frequency of new problems.
 Preferences of supervision.

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10-16
◦ Tall structures have many levels of authority relative
to the organization’s size.
 As levels in the hierarchy increase, communication gets
difficult.
 The extra levels result in more time being taken to
implement decisions.

◦ Flat structures have few levels but wide spans of

control.
 Results in quick communications but can lead to
overworked managers.
11 - 18
 Flat structure: Small number of levels and broad span of
management at each level
◦ Manager must be able to delegate well
◦ Advantages:
 Great Job Satisfaction
 More Delegation
 Increased communication between levels of management

 Tall Structure: Has many levels with small spans of

management
◦ Power is centralized on the top levels and there is more
employee control
◦ Advantages:
 Greater control
 Better Performance
 Authority - the rights inherent in a managerial
position to tell people what to do and to expect
them to do it
 Responsibility - the obligation to perform any
assigned duties.

Three process to distribute authority-

 Delegation of Authority
 Centralization
 Decentralization
 1.Delegation of Authority
Delegating to a Subordinate means to assign
responsibility and authority for a task to another
person

Why to Delegate:
1. Task is too time-consuming to handle alone
2. Task is too routine to warrant a manager’s attention
3. Task requires special skills that a manager may not possess

Benefits of Delegating
◦ Employees feel that management has confidence in
their abilities.
◦ Become more committed and increase job skills and
knowledge.
Exhibit 6–10
6–22
 2. Centralization
the degree to which decision making is concentrated at a
single point in the organization
3. Decentralization
the degree to which decisions are made by lower-level
employees
Complete centralization Complete decentralization
(no organization structure) (no organization structure)

Authority delegated

Authority not delegated

Centralization & decentralization as tendencies

Advantages of decentralization
 Relieves top management of some burden
 Promotes establishment & use of broad controls
which may increase motivation.
 Aids in adaptation to fast changing environment.

Disadvantages of decentralization
 May result in loss of some control by upper level
managers.
 Can be limited by the availability of qualified
managers.
 Involves considerable expenses for training
managers.
© Prentice Hall, 2002 10-25
Process of linking the activities of various departments
of the organization.
Coordinating Techniques
 Managerial Hierarchy
 Rules and procedures

 Task force
 Integrating Departments
 Line position-a position in the direct chain of
command.
 Staff Position-a position intended to provide
expertise, advice and support for line positions.
◦ A graphic illustration of the organization’s management
hierarchy and departments and their working relationships.
 Management level, chain of command, division and type of
work, and departmentalization.

6–28
Overall set of structural elements and the
relationship among those elements used to
manage the organization.
 Environment

Determine design
Strategy or organizational Technology
structure

Human
Resources
 The environment: The quicker the environment
changes, the more problems face managers.
 Structure must be more flexible when environmental
change is rapid.

 Strategy:Different strategies require the use of

different structures.
 A differentiation strategy needs a flexible structure,
low cost may need a more formal structure.
◦ Technology: The combination of skills, knowledge, tools,
equipment, computers and machines used in the
organization.

 Human Resources: the final factor affecting

organizational structure.
 Higher skilled workers who need to work in teams usually
need a more flexible structure.
Basic/Common Organizational Design
(Simple, Functional, Conglomerate, Divisional, &
Matrix Organization)

Contemporary Organizational Design

(Team, Virtual & Learning Organization)
Universal perspectives on Organizational Design
 Bureaucratic model.
 Behavioral model.

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Bureaucratic Model
 The organization should adopt a distinct division of labor.
 Develop a consistent set of rules.
 Establish a hierarchy of positions.
 Managers should conduct business impersonally to maintain
social distance.
 Employment and promotion should be based on technical
expertise, and employees should be protected from arbitrary
dismissal.

Behavioral Model
 A model of organization design consistent with the human
relations movement and stressing attention to developing work
groups and concern about interpersonal process.

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12 - 36
◦ Simple Design - low departmentalization, wide spans
of control, authority centralized in a single person,
and little formalization
 commonly used by small businesses
◦ Functional Design - groups similar or related
occupational specialties together.

◦ Conglomerate Design : An arrangement used by an

organization made up of a set of unrelated business

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◦ Divisional Design - composed of separate divisions
 each division has relatively limited autonomy
 parent corporation acts as an external overseer to
coordinate and control the divisions
 Matrix Design - assigns specialists from different
functional departments to work on projects led
by project managers
 creates a dual chain of command
 violates unity of command
 project managers have authority in areas relative to the
project’s goals
 functional managers retain authority over human resource
decisions (e.g., promotions)

10-38
12 - 39
© Prentice Hall, 2002 10-40
Contemporary Organizational Designs
◦ Team Organization – An approach to
organization design that relies exclusively on
project type teams with little or no functional
hierarchy.

 teams responsible for all work activity and

performance
 complements functional or divisional structures
in large organizations

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Concepts:
Little or no formal
Structure
Provides maximum
flexibility while
concentrating on what the
organization does best.
Learning Organization –
Organization that facilitates the lifelong learning and
personal development of all employees to respond to
changing environment.
an organizational mind-set rather than a specific organizational
design

has developed the capacity to continuously adapt

all members take an active role in identifying and
resolving work-related issues
practice knowledge management by continually
acquiring and sharing new knowledge
environment is conducive to open communication
leadership creates a shared vision for the future
organizational culture provides sense of community

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 Organizational Design
• Boundaryless
• Teams
• Empowerment

Organizational Culture
• Strong Mutual The Information Sharing
Relationships Learning • Open
• Sense of Community • Timely
• Caring
Organization
• Accurate
• Trust

Leadership
• Shared Vision
• Collaboration

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 Responsive to the market
 Customer centered
 Committed to maintaining networks and
alliances
 Focused on creating top-quality products and
services
 Dedicated to positive learning and change
 Attentive to meeting responsibilities to
customers, employees, suppliers, and society
 Able to respond to changing market conditions
quickly