 WHAT IS ORGANIZING?
 TYPES OF ORGANIZATION
- Organizing is the second key
management function, after planning,
which coordinates human efforts,
arranges resources and incorporates
the two in such a way which helps in
the achievement of objectives. It
involves deciding the ways and means
with which the plans can be
implemented.
- It entails defining jobs and working
relationships, assigning different tasks
associated with the plans, arranging
and allocating resources, design a
structure which distinguishes duties,
responsibilities and authorities,
scheduling activities, in order to
maintain smoothness and
effectiveness in operations.
 NATURE OF ORGANIZATION
- Organization is a social system
composed of people, structure and
technology for achieving common
goals in a dynamic environment.
- Organization is a human association,
where two or more people come
together with a certain common aim
and equipment and desire to achieve
certain common goals through planned
joint effort and teamwork.
- According to S.A Sharlekar and V.S.
Sherlekar, “Organization is a sales, accounting, manufacturing, and
mechanism or a basic framework
enabling people to work together
effectively and achieve the set goals
through integrated group effort. It is a
medium for the management to
exercise managerial functions.”
- According to W.J Duncan, “An
organization is a collection of
interacting and interdependent
individuals who work toward common
goals and whose relationships are
determined according to a certain
structure.”
1. FUNCTIONAL STRUCTURE-
earliest and most used organizational
designs. This structure is organized by
departments and expertise areas, such
as R&D (research & development),
production, accounting, and human
resources. Functional organizations
are referred to as pyramid structures
since they are governed by a
hierarchical, topdown control system.
- Excels in providing for a high degree
of specialization and a simple and
straightforward reporting system within
departments, offers economies of
scale, and is not difficult to scale if and
when the organization grows.
- Disadvantages of this structure
include isolation of departments from
each other since they tend to form
“silos” which are characterized by
closed mindsets that are not open to
communicating across departments,
lack of quick decision-making and
coordination of tasks across
departments, and competition for
power and resources.
2. DIVISIONAL STRUCTURE- many
functional departments grouped under
a division head. Each functional group
in a division has its own marketing,
production team. This structure
resembles a product structure that also
has profit centers.
-helpful for large companies since
decentralized decision making means
that the headquarters does not have to
micromanage all the divisions.
- divisions can easily become isolated
and insular from one another and that
different systems, such as accounting,
finance, sales, and so on, may suffer
from poor and infrequent
communication and coordination of
enterprise mission, direction, and
values.
3. GEOGRAPHIC STRUCTURE- this
structure is organized by the locations
of customers that a company serves.
This structure evolved as companies
became more national, international,
and global. Organizing geographically
enables each geographic
organizational unit (like a division) the
ability to understand, research, and
design products and/or services with
the knowledge of customer needs,
tastes, and cultural differences.
- it can be easy for decision-making to
become decentralized, as geographic
divisions often have a great deal of
autonomy.
4. MATRIX STRUCTURE- move
closer to organic systems in an
attempt to respond to environmental
uncertainty, complexity, and instability.
- has lines of formal authority along
two dimensions: employees report to a
functional, departmental boss and
simultaneously to a product or project
team boss.
- originated at a time in the 1960s
when U.S. aerospace firms contracted
with the government. Aerospace firms
were required to “develop charts
showing the structure of the project
management team that would be
executing the contract and how this
team was related to the overall
management structure of the
organization.”
- employees would be required to have
dual reporting relationships—with the
government and the aerospace
company. Since then, this structure
has been imitated and used by other
industries and companies since it
provides flexibility and helps integrate
decision-making in functionally
organized companies.
- Weaknesses of matrix structures is
the confusion and conflicts employees
experience in reporting to two bosses.
To work effectively, employees
(including their bosses and project
leaders) who work in dual authority
matrix structures require good
interpersonal communication, conflict
management, and political skills to
manage up and down the organization.
ORGANIZATION THEORIES AND
APPPLICATION
- There are two (2) main classifications
of theories regarding organizational
design: the traditional and modern.
1. Traditional organizational design-
pertains to the usual or old-fashioned
ways.
 Simple organizational design-
has few departments, wide
spans of control over a big
number of subordinates directly
reporting to a manger; has a
centralized authority figure and
has very little formalization of
work; usually used by
companies that start out as
entrepreneurial ventures.
 Functional organizational
design-group together similar
or related specialties, It is,
generally, functional
departmentalization utilized and
put into practice in entire
organization. For example, a
marketing firm that markets cars
and related products like tires,
car batteries, and accessories.
 Divisional organizational
design-made up of separate
business divisions or units,
where the patent corporation
acts as oversee to coordinate
 and control the different
divisions and provide financial
and legal support services.
2. Modern organizational
designs- refer to contemporary or
new design theories
 Team organizational
design- made up of work
groups or teams.
 Matrix or project
organizational design- an
organization where
specialists from different
departments work on
projects that are supervised
by a project manager. This
design results in a double
chain of command wherein
workers have two (2)
managers: the functional
area manager and the
project manager – who
share authority over them.
 Boundaryless
organizational design- the
design is not defined or
limited.
DELEGATIONS- vital for the
accomplishment of many
organizational tasks. It occurs when
someone with authority confers upon
another person the power to do a
particular task. Delegation is usually a
one-way street – superiors delegate
authority to subordinates. However,
ultimate responsibility for task
completion usually remains the
responsibility of the person who
delegated the authority to complete it.
For example, if your boss delegates a
task to you, she/he is likely still
ultimately responsible for making sure
that task is accomplished.
STEPS IN DELEGATION INCLUDES:
1. IDENTIFY THE KEY TASK-
recognize and track all the main
tasks that the members of your
group must accomplish.
Develop a task list for your
group. Define the task and
establish your goals for a
project. Have a vision to carry
through a project.
2. Delegate Each Task
Appropriately- Review the list
in order to identify the tasks that
you should do and those that
can be delegated to the
members of your group.
Choose members whose skills
and personality styles match the
assignment. Empower the
members so as to provide them
an opportunity to grow and be
challenged.
3. Explain Each Task to Your
New Members- Define and
clarify the nature of task that is
delegated to your members. To
ensure a collaborative
approach, properly
communicate to all the
members of your group as to
what tasks and to whom it has
been delegated. Be sure to give
specific directions and to make
your expectations clear, for both
quality and time frame. Explain
to the members clearly as to
why the task is important and
how it contributes to the
organization as a whole
4. Delegate Each Task
Appropriately- A sound plan is
essential for the projects to
succeed. Good planning is a
critical part of the delegation
process. The plan should define
how the task will be
accomplished; list the subtasks,
 and their completion dates.  Share a purpose
Make sure your members have In this way, all business organizations
all the necessary resources to are formal organizations; they have a
complete the assigned task. system of well-defined jobs bearing a
Encourage your members to definite measure of authority,
take a lead in developing a responsibility and accountability. All
plan. this is designed to enable the people
5. Explain Each Task to Your working within the enterprise to work
New Members- Review the more effectively for achieving
progress of each task on a objectives.
regular basis. Set checkpoints
CHARACTERISTICS OF FORMAL
for both short-range and long-
ORGANIZATION
range projects. Give members
1. Organization structure stands
the freedom to perform and
on division of labor which brings
avoid close supervision.
efficiency in organizations’
Measure success by
operations.
quantifiable criteria. Give praise
2. Policies and Objectives of
and constructive criticism where
organizations are determined
it is due. Look at a failed act of
3. Individual activities are limited
delegation as a learning
4. Organizations communicate
opportunity. Help your members
messages through straight
to learn to grow through both
chain of command
their successes and their
5. Arbitrary structure of
failures.
organization
Example of Formal Organization
FORMAL ORGANIZATIONS- an
officially defined set of relationships,  A main feature of such
responsibilities, and connections that interrelationships is that they
exist across an organization. The can be shown in
formal organization is basically a goal- organization charts or
oriented entity that exists to accurately manuals as one shown
assess the efforts of individuals and it below. Example of formal
refers to the structure of jobs and organization with the help of
positions with clearly defined functions, an organizational chart of an
responsibilities and authorities. electrical Co.
According to CHESTER BERNARD-  When Justin sets up his
“an organization is formal when the formal organization, he will
activities are coordinated towards a need to design the
common objective”. administrative
-He found that the essence of formal responsibilities and
organization is conscious common communication structures
purpose and that formal organization that should function within
comes into being when persons: an organizational system.
 Are able to communicate with The formal systems describe
each other how the flow of information
 Are willing to act, and and resources should occur
within an organization. To
 establish the formal
organization, he will identify
the essential functions that
need to be part of the
system, and he will hire
people to fill these functions.
He will then need to help
employees learn their
functions and how these
functions should relate to
one another.
TYPES OF FORMAL
ORGANIZATION
 Bureaucracy- most common
frameworks for thinking about
these issues is called the
bureaucratic model. It was
developed by Max Weber, a
19th-century sociologist.
Weber’s central assumption
was that organizations will find
efficiencies when they divide
the duties of labor, allow people
to specialize, and create a
structure for coordinating their
differentiated efforts, usually
within a hierarchy of
responsibility. He proposed five
elements of bureaucracy that
serve as a foundation for
determining an appropriate
structure: specialization,
command-and-control, a span
of control, centralization, and
formalization.
 Specialization- The degree to
which people are organized into
subunits according to their
expertise is referred to as
specialization—for example,
human resources, finance,
marketing, or manufacturing. It
may also include specialization
within those functions. For
instance, people who work in a
manufacturing facility may be
well-versed in every part of a
manufacturing process, or they
may be organized into specialty
units that focus on different
parts of the manufacturing
process, such as procurement,
material preparation, assembly,
quality control, and the like
 Command-and-Control- The
next element to consider is the
reporting and oversight
structure of the organization. It
refers to the way in which
people report to one another or
connect to coordinate their
efforts in accomplishing the
work of the organization
 Span of Control- Another
question addresses the scope
of the work that any one person
in the organization will be
accountable for, referred to as
the span of control. For
instance, top-level leaders are
usually responsible for all of the
work of their subordinates, mid-
level leaders are responsible for
a narrower set of
responsibilities, and ground-
level employees usually perform
very specific tasks. Each
manager in a hierarchy works
within the span of control of
another manager at a level of
the organization.
 Centralization- to manage the
flow of resources and
information in an organization or
its centralization. A highly
centralized organization
concentrates resources in only
one or very few locations, or
only a few individuals are
authorized to make decisions
about the use of resources. In
 contrast, a diffuse organization responsibilities in teams and
distributes resources more interact with colleagues and
broadly throughout an managers in different departments
organizational system along to ensure operational success.
with the authority to make - Mechanistic organizations are
decisions about how to use on the other side of the continuum
those resources. from an organic organization. In
 Formalization- refers to the this system, top-level managers
degree of definition in the roles make all key decisions. This
that exist throughout an organizational structure is typically
organization. A highly used in big companies that operate
formalized system (e.g., the like bureaucracies. The
military) has a very defined administrative system visually
organization, a tightly structured appears like a pyramid structure,
system, in which all of the jobs, where the higher positions indicate
responsibilities, and more authority. Entry-level staff
accountability structures are positions occupy the lower ranks of
very clearly understood. In the pyramid, with supervisors
contrast, a loosely structured occupying the middle levels.
system (e.g., a small, volunteer Executives occupy the top
nonprofit) relies heavily on the positions of the pyramid.
emergent relationships of
informal organizations. INFORMAL ORGANIZATIONS- a
group of people who share a common
Mechanistic and Organic identity and are committed to
Structures achieving a common purpose. Informal
- Using the principles of organizations are created by the will
bureaucracy outlined above, and shared identity of their members.
managers like Justin have The operation of an organization, in
experimented with many different reality, is known as an informal
structures as a way to shape the organization as opposed to a formal
formal organization and potentially organization, which is based on roles
to capture some of the advantages and responsibilities.
of the informal organization. -emerge from the interaction or
Generally, the application of these communication between employees
principles leads to some irrespective of their designations and
combination of the two kinds of hierarchies. It runs parallel to a formal
structures that can be seen as organization.
anchors on a continuum - According to Schein, an informal
- Companies that adopt an organic organization exists in the sense that it
organizational structure are has no legal existence, no legal
characterized by flexible working boundaries, no membership roster, no
environments and a horizontal tangible assets, no formal structure,
approach to communication. In this and no official leadership. The
horizontal method of distinguishing feature of an informal
communication, employees share organization is the social fabric that
binds its members together with a
common identity.
- According to Chester Barnard, an
informal organization is an aggregate
of interpersonal relationships without
any conscious purpose but which may
contribute to joint results.

Concept and Types of Informal

Organization
 Horizontal Group- People who
work at the same level in an
organization belong to a
horizontal group. Such groups
promote mutual support and
information sharing among the
members. It is often found that
people share the same
problems, concerns, and
interests.
 Vertical Group- People
working at different levels in an
organization belong to the
vertical group. Such groups are
formed through skip level
relationships.
 Mixed Group- People from
different levels and different
departments create a Mixed
Group. The groups are created
based on common interests like
club memberships, common
interests or their backgrounds.