Principles of Management

Organizing
Unit 3
SYLLABUS OF UNIT 3

01 02 03
Organizational structure Types of organizational Authority, delegation,
and design; structures; decentralization and
reengineering
1. Organisation structure
and Design
 Video
Amazon Organisation
Structure
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 Definition
“ The grouping of activities
necessary to attain
objectives, the assignment
of each grouping to a
manager with authority
necessary to supervise it,
and the provision for
coordination horizontally
and vertically in the
enterprise structure”
 Verifiable objectives

A clear ideas of the major

Organisation role duties/ activities involved

should incorporate
An understood area of
discretion or authority so that
the person filling the role
knows what he or she can do to
accomplish goals
Provision should be made for
supplying needed information
and other tools necessary for
performance
Formal and
informal
organisation
FORMAL STRUCTURE
structure

VENUS
We think of organising as……

It could be the part of the presentation

where you can introduce yourself, write
your email…
Organisation with wide spans
What are the factors influencing span of
Management?
Principle of the span of management
一Refer Table 7.1_Koontz pdf
The Organising process

Fig: 7.1, Koontz

2. Types of organisational
structures
a. Functional Organisation
b. Geographical Organisation
c. Departmentation by Customers
d. Product organisation
e. Matrix organisation
 Functional
Organisation

Advantages Dis advantages

Territorial or
Geographical
Organisation
 Departmentation
by Customers
Product
Organisation
Matrix
Organisation
 3. Authority,
delegation,
decentralization and
reengineering
leaders
understandin
g that, they
still want to
control,” she
said.
She said she
has always
followed the
‘mantra’ of
being
problem
solvers, and
not
task-doers.
Authority

re n
fe
Dif
ce ween
bet horit
u t
A nd
y a er
w
Po
https://www.norhart.com/blog/2018/08/08/great-leaders
hip-is-about-influence-not-authority/
 Ability of people to grant
Power of Knowledge rewards

Expert Reward
Power Power

Different
bases of
power
Legitimate Referent Coercive
Power Power Power

Derived from obligation

Influence of people Power to punish
and rights
Empowerme
nt
Are women employees already
empowered or they need to be
empowered???
https://thethrivingsmallbusiness.com/employee-empowerm
ent/
Line / Staff
concepts &
Functional
authority
Line/Staff Authority Functional Authority
• Scalar Principle: The line of
authority from the ultimate The right delegated to a department
management position to every to control specified processes.
subordinate position.
• Line Authority: Relation in which a
superior excercises adirect
supervision over a subordinate.
• Staff relationship: Investigate,
research and give advice to give
advice to line managers. It is
advisory.
a. Types of Centralisation
(performance, departmental, management)

b. Decentralisation
 Delegation
Authority is delegated when a superior gives the
subordinate discretion to make decisions.
Receptiveness

Willingness to let go
Willingness to allow mistakes by
subordinates
Personal Attitudes
Willingness to establish and use
towards Delegation
broad controls
Holiday Inn Vs Hilton
Crunching the numbers
● Acquiring a new customer is five times as expensive as retaining an existing customer.
● 44% of companies admit they, "have a greater focus" on acquisition, while 18% focus on retention (the rest
claim to have an equal focus).
● 89% of businesses, "see customer experience as a key factor in driving customer loyalty and retention."
● 76% of companies see Customer Lifetime Value as "an important concept for their organization."
● The success rate of selling to a customer you already have is 60-70%, while the success rate of selling to a new
customer is 5-20%.
● "Increasing customer retention rates by 5% increases profits by 25-95%."
Reengineering