GRADUATE SCHOOL

ORGANIZATION AND
MANAGEMENT

PA 212

ORGANIZING

Kate Katherine H. Leccio Prof. Merelina Dionisio

MPA 1 Student Course Facilitator

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Unit IV Organizing
Learning Objective:
1. To define and describe the management functions of Organizing
2. To delineate methods of introducing change in the organization.
3. To describe organization theories and their applications
4. 4. To enumerate characteristics of the formal and informal organizations, and the different
ways of organizing departments

Organizing Function of Management

Organizing is the function of management which follows planning. It is a function in which the
synchronization and combination of human, physical and financial resources take place. All the
three resources are important to get results. Therefore, organizational function helps in
achievement of results which in fact is important for the functioning of a concern.

According to Chester Barnard, “Organizing is a function by which the concern is able to define
the role positions, the jobs related and the co-ordination between authority and responsibility.
Hence, a manager always has to organize in order to get results.

According to Koontz and O'Donnell, "Organization involves the grouping of activities necessary
to accomplish goals and plans, the assignment of these activities to appropriate departments and
the provision of authority, delegation and co-ordination." Organization involves division of work
among people whose efforts must be coordinated to achieve specific objectives and to implement
pre-determined strategies.

Importance of Organizing Function

1. Specialization - Organizational structure is a network of relationships in which the work

is divided into units and departments. This division of work is helping in bringing
specialization in various activities of concern.

2. Well defined jobs - Organizational structure helps in putting right men on right job which
can be done by selecting people for various departments according to their qualifications,
skill and experience.

3. Clarifies authority - Organizational structure helps in clarifying the role positions to every
manager (status quo). This can be done by clarifying the powers to every manager and the
way he has to exercise those powers should be clarified so that misuse of powers do not
takes place.

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 4. Co-ordination - Organization is a means of creating co-ordination among different
departments of the enterprise. It creates clear cut relationships among positions and ensure
mutual co-operation among individuals.

For smooth running of an organization, the co-ordination between authority- responsibility

is very important. There should be co-ordination between different relationships. Clarity
should be made for having an ultimate responsibility attached to every authority. There is
a saying, “Authority without responsibility leads to ineffective behavior and responsibility
without authority makes person ineffective.” Therefore, co-ordination of authority-
responsibility is very important.

5. Effective administration - The organization structure is helpful in defining the jobs

positions. The roles to be performed by different managers are clarified.

6. Growth and diversification - A company’s growth is totally dependent on how efficiently

and smoothly a concern works. This is possible only when the organization structure is
well- defined. This is possible through a set of formal structure.

7. Sense of security - Organizational structure clarifies the job positions. The roles assigned
to every manager is clear. Co-ordination is possible.

8. Scope for new changes - Where the roles and activities to be performed are clear and every
person gets independence in his working, this provides enough space to a manager to
develop his talents and flourish his knowledge.

What is organizational change management?

Organizational change management refers to an event or program that a business or enterprise
wishes to initiate, which causes significant disruption to their daily operations. There can be a
variety of factors that lead to change within an organization.

A major challenge is reducing the potential for friction and resistance to change by ensuring all
employees understand why change is important to the company’s future. Yet, ignoring the need
for change can be far more threatening to your business than the change itself.

Why is change important for an organization?

In today’s dynamic world, change is not just a fact of life, but essential for survival. New
organizational developments and priorities happen so quickly that if you’re not up-to-date, you’re
slipping behind. Trends and technology evolve, which means that customers’ needs will constantly
be changing. Information is transmitted faster and companies that can’t deliver on speed will lose
out to those that can.

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Whether it is installing a new software platform, reorganizing your business to make it more
streamlined and efficient, or adapting to customer needs, it is essential as a business to ask yourself
why as a leader change is imperative to your organization.

Types of Organizational Change

With organizational change strategies, companies can avoid stagnation while minimizing
disruption. Preparation is integral for success, especially during a change effort. However, one
can’t prepare without knowing what type of change is occurring. The first step is to understand
what change management models exist and then figuring out what best suits your company or
team.

Here is a list of 5 types of organizational change companies undergo.

1. Organization-Wide Change

Organization-wide change is a large-scale transformation that affects the whole company. This
could include restructuring leadership, adding a new policy, or introducing a new enterprise
technology.

2. Transformational Change

Transformational change specifically targets a company’s organizational strategy. Companies that

are best suited to withstand rapid change in their industry are nimble, adaptable, and prepared to
transform their game plans when the need arises.

3. Personnel Change

Personnel change happens when a company experiences hyper-growth or layoffs. Each of these
types of organizational change can cause a significant shift in employee engagement and retention.

4. Unplanned Change

Unplanned change is typically defined as necessary action following unexpected events. While
unplanned change cannot be predicted — it can be dealt with in an organized manner.

5. Remedial Change

Leaders implement remedial changes when they identify a need to address deficiencies or poor
company performance.

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5 ways to ensure successful organizational change
Organizational change has many clear benefits but can lead to misalignment and company-wide
confusion without proper implementation. In order to execute organizational change with glowing
results, take note of these five ways to ensure its success.

1. Set clear goals and develop a strategy

Organizational change often transcends multiple departments and job functions. A variety of
stakeholders are involved to guarantee their interests are heard and met.

According to the Katzenbach Center, only 54% of change initiatives succeed. To achieve
successful organizational change, clearly defined goals need to be set along with a digital
strategy for how they’ll be reached. After all, how can you measure success if you don’t know
what you’re aiming for?

2. Overcoming resistance and staff engagement

Organizational change can often be difficult, especially if your employees don’t see anything
wrong with the status quo. To them, the change may appear disruptive at best. There will be new
technologies to learn and platforms to navigate. Worse still, if the initiated change automates many
of their existing tasks, some employees may feel threatened.

3. Offering management support

For organizational change to be successful, it needs to be adopted across the business, from C-
level down to managers. The CEO may have a vision for the change, but it will be up to the rest
of the business to execute it. That’s why it’s important to share that vision so that others know
what their role will be in bringing it to fruition, and what will be required of them after the changes
have taken place.

4. Contextual learning for new technologies

It is inevitable that with any organizational change, there will be new tools to learn and understand.
Learning is an ongoing journey and requires employers to provide contextual learning techniques.
Using outdated training methods such as classroom lectures is a single-use solution that doesn’t
scale. Employees may watch or attend a lecture one time, and if the information isn’t clear or
continuously refreshed, it won’t be retained. Contextual learning like a digital adoption
platform helps employees by personalizing their training experience.

5. Invest in agility training

Organizational agility refers to being able to react quickly to changes in business operations,
strategy, and even culture. However, agility is not innate within an organization; it must be
learned.

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Agility can take different forms, but there are three main steps to focus on when developing agility
training. The first is to foster change management skills. These can be individual skills such as
personal resilience and organization to more company-wide skills, like forcing clarity, networking,
and coaching.

The second step is to train your team in productive time management. Knowing how to evaluate
what is important versus urgent and how to prioritize tasks is crucial. Employees will be readily
equipped to tackle changes within the organization or their daily jobs.

Finally, as mentioned above, offer continual learning and development. When organizational
changes take place, there is a lot of information that needs to be acclimated. However, if learning
is already habitual and employees are used to training within their workflow, these changes will
seem far less daunting and more manageable.

Organization Theories and their Applications

Definition of organization theory

Organization is a group of people who jointly work to achieve at least one common goal. It is to
achieve certain value and objectives. For public administration, it requires organization to provide
goods and services to the society.

Theory is a proposition or a set of propositions that seek to explain or predict something. (systematic
view of phenomena) In the case of organization theory, it tries to explain how group and individual
behave in different organizational arrangement.
Organization Theory is a set of theories that explain and help us understand how organizations
function. Organizations and people within organizations are the focus of organization theory.
Organization theories could focus on the total organization, groups of employees such as
departments or divisions, or on individual employees.

These theories offer ideas, models, and tools to design and manage effective organizations. These
theories can help us understand the interconnections between different parts of an organization and
manage the complexity of organizations.

Depending on how scientists and practitioners define and study organizations, theories produce
different insights. In this way, organization theory provides a systematic pathway to understand
and talk about organizations.

Types of Organizational Theories

1. Classical or Traditional Theory

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 ▪ Taylor‘s scientific management approach
▪ Weber‘s bureaucratic approach
▪ Administrative theory
2. Neoclassical theory
3. Modern theories
▪ The systems approach
▪ Socio-Technical Approach
▪ The contingency or situational approach

Classical Theory

The classical writers viewed organization as a machine and human beings as components of that
machine. They were of the view that efficiency of the organization can be increased by making
human beings efficient. Their emphasis was on specialization and co-ordination of activities.

Most of the writers gave emphasis on efficiency at the top level and few at lower levels of
organization. That is why this theory has given streams; scientific management and administrative
management. The scientific management group was mainly concerned with the tasks to be
performed at operative levels.

Taylor‘s scientific management approach

Scientific management, also called Taylorism, is the application of Frederick Taylor’s theory to
the workplace to improve economic efficiency. Taylor published “The Principles of Scientific
Management” in 1911, which explains his process of using scientific studies to analyze, optimize
and standardize workflow.

Scientific management can be summarized in four main principles:

1. Using scientific methods to determine and standardize the one best way of doing a job

Rather than allowing each individual worker the freedom to use their own “rule of
thumb” method to complete a task, you should instead use the scientific method to
determine the “one best way” to do the job.

2. A clear division of tasks and responsibilities

Instead of randomly assigning workers to any open job, assess which ones are most
capable of each specific job and train them to work at peak efficiency.

3. High pay for high-performing employees

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 Assess your workers’ efficiency and provide additional instruction when necessary to
guarantee they are working productively.

4. A hierarchy of authority and strict surveillance of employees

Managers should plan and train, while workers should implement what they’ve been
trained to do.

Weber‘s bureaucratic approach

Bureaucracy definition: what is bureaucracy?

Bureaucracy definition: “Bureaucracy is an organizational structure that is characterized by many

rules, standardized processes, procedures and requirements, number of desks, meticulous division
of labor and responsibility, clear hierarchies and professional, almost impersonal interactions
between employees”.

At the end of the 19th century, it was German sociologist and author of The Protestant Ethic and
the Spirit of Capitalism (1905), Max Weber who was the first to use and describe the term
bureaucracy. This is also known as the bureaucratic theory of management, bureaucratic
management theory or the Max Weber theory.

He believed bureaucracy was the most efficient way to set up an organization, administration and
organizations. Max Weber believed that Bureaucracy was a better than traditional structures. In a
bureaucratic organization, everyone is treated equal and the division of labor is clearly described
for each employee.

The 6 bureaucracy characteristics are:

1. Division of labor
2. Hierarchical layers of authority
3. Formal selection
4. Rules and requirements
5. Impersonality
6. Career orientation

Administrative theory

The Administrative Theory of Management was first generalized by Henri Fayol (1841-1925) with
his work and publications, Fayol's 14 Principles of Management (1888) and Administration
Industrielle et Generale (1916).

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Fayol is considered the father of Administrative Management Theory, often called Process Theory
or Structural Theory.

Administrative management theory attempts to find a rational way to design an organization as

a whole. The theory generally calls for a formalized administrative structure, a clear division of
labor, and delegation of power and authority to administrators relevant to their areas of
responsibilities.

Neo-Classical Theory

The classical theory of organization focused main attention on physiological and mechanical
variables of organizational functioning. The testing of these variables did not show positive results.
The Hawthorne Studies conducted by George Elton Mayo and associates discovered that real cause
of human behavior was somewhat more than mere physiological variables. These studies focused
attention on human beings in the organization.

New-classical approach is contained in two points:

(i) Organizational situation should be viewed in social, economic and technical terms, and
(ii) the social process of group behavior can be understood in terms of clinical method analogous
to the doctor’s diagnosis of human organism.

Modern Theory

Modern organization theory is of recent origin, having developed in early 1960’s. This theory has
tried to overcome the drawbacks of earlier theories.

In the words of W.G. Scott, ‘The distinctive qualities of modern organization theory are its
conceptual analytical base, its reliance on empirical research data and, above all, its integrating
nature. These qualities are framed in a philosophy which accepts the premise that the only
meaningful way to study organization is to study it as a system.”

This theory may be understood in three approaches: systems approach, socio technical approach
and contingency approach.

Systems Approach:

This approach studies the organization in its totality. The mutually dependent variables are
properly analyzed. Both internal and external variables are studied in analyzing the nature of
organization. Though this theory passes a much higher conceptual level as compared to earlier
theories but different writers have given varied views of the system.

Organization as a system can well be understood by identifying various sub-systems within it.
Each sub-system may be identified by certain processes, roles, structures and norms of conduct.

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Seiler has classified four components in an organization, human inputs, technological inputs,
organizational inputs, and social structure and norms.

For example, the managerial functions of planning, organizing, staffing, directing, leading and
controlling are all interlocked, or contained within each other. All these functions can be conceived
as sub-functions of each other.

Socio-technical approach:

Sociotechnical theory (STS) theory is all about how the social and technical aspects of a
workplace fit together. The goal is to optimize both of these so that an organization can run as
smoothly as possible. Basically, STS theory is an approach to the way that work organizations are
designed.
STS theory emphasizes the strategic consideration of both the social and the technical aspects of
an organization, thinking of these two features as intertwined. Ideally, organizations want to
achieve what is known as joint optimization. This means that rather than simply inputting people
into existing technical systems, work places should be designed in such a way that both people and
technology coexist in harmony.

Inside a sociotechnical system (STS), you’ll find people, software, hardware, the organization, and
any number of other systems functioning together as a whole. Understanding how a sociotechnical
system works takes a lot more than just looking at the information systems, human resources, or
organizational theory by itself.

Let’s use email providers as examples of STSs. Consider how Gmail, Hotmail, Outlook, and other
email systems could be described and analyzed. Each of these systems is distinct, but they also
interact with other systems in an STS to form a functional email program:

• Development team and the organization: Developers, in creating and

maintaining email software, must interact with technology systems as well as other
human systems.
• Hardware: Used along with software by developers and ultimately by end-users.
• Software: Uses hardware and is created by and maintained by developers and other
teams within the company. End-users of the software also interact with it.
• Users: Interacting with and influencing the other systems through their behaviors
as customers and consumers, users are another critical part of an email STS.

When you elevate the entire sociotechnical system over managing your business in disparate parts,
it’s easier to grow and respond to change. Sociotechnical systems are an effective way to bring
technology and people together while managing risks and improving the human experience of
today’s technologies.

Contingency Approach:
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Even though systems approach presents a better understanding of organizational and managerial
functioning but it does not provide solution for all types of organizational structures. Systems
approach offers models which may not suit every type of organization. A structure suitable for one
unit may not be suitable for another. Contingency approach suggests an organizational design
which suits a particular unit. A structure will be suitable only if it is tailor made for an enterprise.
The influence of both internal and external factors should be considered while framing a suitable
organizational structure. This approach suggests that needs, requirements, situations of a particular
concern should be considered while designing an organizational structure.

The factors which influence an organization may be described as:

(i) Environment
(ii) Technology
(iii) Size of operations
(iv) People.
These factors greatly influence a decision for the selection of an appropriate organization for an
enterprise.

Formal and Informal Organization

Formal Organization
Chester I Bernard defines formal organization as -"a system of consciously coordinated
activities or forces of two or more persons. It refers to the structure of well-defined jobs, each
bearing a definite measure of authority, responsibility and accountability."
Characteristics of Formal Organization:
The characteristics of the formal organization are listed below:

1. Created by the management.

2. Specialization or the division of labor is the basis of the formal organization.
3. The authority and responsibility of people in a formal organization is very clearly defined.
4. There are formal rules and procedures.
5. There is a clear system of authority attached with each member.
6. There are clearly specified lines of communication.

Advantages of Formal Organization:

The advantages of a formal organization are listed below:

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1. Clear definition of roles and responsibilities of all members, helps in avoiding duplication of
efforts.
2. Accountability is easy to fix.
3. Provides stability to the organization.
4. Unity of command is maintained.
5. Tasks can be mastered with maximum skills in minimum time and with minimum efforts.

Disadvantages of Formal Organization:

Listed below are the disadvantages of formal organization:

1. Decision making can be a time-consuming exercise as formal communication follows

established chain of command.
2. Established rules and policies can create organizational rigidity. Thus, creativity may suffer.
3. Formal organization can create too narrow jobs that may cost dear as far as very close managerial
supervision is concerned.
4. Formal organization focuses on formal structure and work. Thus, it can contribute to creation of
human problems.

Informal Organization
Informal organization refers to the relationship between people in the organization based on
personal attitudes, emotions, prejudices, likes, dislikes etc. an informal organization is an
organization which is not established by any formal authority, but arises from the personal and
social relations of the people. These relations are not developed according to procedures and
regulations laid down in the formal organization structure; generally large formal groups give rise
to small informal or social groups.

Characteristics of Informal Organization:

Given below are the features of the informal organization:

1. It is the result of relationships developing on the basis of common characteristics, like race,
religion, language, culture, etc.
2. It is marked by the absence of any written or formal rules and regulations.
3. It has no structure, nor is it shown on an organizational chart.
4. It fulfils the social and psychological needs of its members.

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5. It is not bound by any departmental or functional barrier.

Advantages of Informal Organization:

The benefits of the informal organization have been recognized as under:

1. Informal groupings can at times surpass the formal organization in terms of effectiveness
and the tendency to close ranks in the event of a perceived threat to the organization.

2. The social relationships formed in informal groupings can strongly motivate the workers
towards the organizational goals.

3. At times it can lead to better coordination as a result of friendly relations among the
members.

4. The flexibility in an informal organization helps in bridging the gaps in the shortcomings
of the management.

5. Innovation and creativity is promoted by the informal grouping, which in turn, helps in
personality development and leadership skills.

6. Work problems are solved through informal groupings and assistance of the group.

Disadvantages of Informal Organization:

The limitations of an informal organization are defined below:

1. There may be constant conflicts between the formal and the informal role of the member
which may impact the organization adversely. At times the interest of the formal group
may go against the interest of the organization, i.e. the formal group.

2. The informal organization sees changes as a threat to its interests. Thus, it may put up
resistance to changes within the formal organization, thereby, acting against the overall
interest of the organization.

Departmentation by Different Strategies

Departmentation is the process of grouping of work activities into departments, divisions,
and other homogenous units. Key Factors in Departmentation
It should facilitate control.

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 ▪ It should ensure proper coordination.
▪ It should take into consideration the benefits of specialization.
▪ It should not result in excess cost.
▪ It should give due consideration to Human Aspects.
Departmentation takes place in various patterns like departmentation by functions, products,
customers, geographic location, process, and its combinations.
1. Functional Departmentation
Functional departmentation is the process of grouping activities by functions
performed.
2. Product Departmentation
Product departmentation is the process of grouping activities by product line. Tasks can
also be grouped according to a specific product or service, thus placing all activities related
to the product or the service under one manager.
3. Customer Departmentation
Customer departmentation is the process of grouping activities on the basis of
common customers or types of customers. Jobs may be grouped according to the type of
customer served by the organization.
4. Geographic Departmentation
Geographic departmentation is the process of grouping activities on the basis of
territory. If an organization's customers are geographically dispersed, it can group jobs
based on geography.
5. Process Departmentation
Geographic departmentation is the process of grouping activities on the basis of
product or service or customer flow. Because each process requires different skills, process
departmentation allows homogenous activities to be categorized.
6. Matrix Departmentation
One of the mixed forms of organization is referred to as matrix or grid organization’s
According to the situations, the patterns of Organizing varies from case to case. The form
of structure must reflect the tasks, goals and technology if the originations the type of
people employed and the environmental conditions that it faces. It is not unusual to see
firms that utilize the function and project organization combination. The same is true for
process and project as well as other combinations.

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REFERENCES

Principle of Management-Organizing.
https://www.brainkart.com/article/Departmentation-by-Different-Strategies_7582/

What is Organizational Theory?

https://conceptshacked.com/organization-theory/

Three Organization Theories: Classical, Neo-Classical and Modern.

https://www.yourarticlelibrary.com/organization/three-organisation-theories-classical-neo-
classical-and-modern/53221

Understanding Taylorism: The History of Scienti fic Managem ent Theory

https://www.masterclass.com/articles/understanding-taylorism-the-history-of-scientific-
management-theory#time-studies-vs-motion-studies-how-are-they-different

Gordon, Jason. Sept. 23, 2021. What is Administrative Management Theory?

https://thebusinessprofessor.com/en_US/management-leadership-organizational-
behavior/administrative-theory-of-management

What Is Administrative Management Theory? - Definition & Functions

https://study.com/academy/lesson/what-is-administrative-management-theory-definition-
functions-quiz.htmlhttps://thebusinessprofessor.com/en_US/management-leadership-
organizational-behavior/administrative-theory-of-management

Sociotechnical Systems (STS) Theory

https://study.com/academy/lesson/sociotechnical-systems-sts-theory.html

For further reading:

Organizational Theories
http://www.fao.org/3/w7503e/w7503e03.htm

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