CHAPTER 4:

Organizing

FUNDAMENTALS OF
MANAGEMENT (MGT162)
 o Define organizing.
o Describe the process of organizing.
o Explain the types of organizational
structure/departmentalization.
LEARNING o Describe the span of management,
chain of command, authority,
OBJECTIVES centralization and decentralization.
o Discuss delegation and its
importance.
 Organizing is defined as the process
of:

◦ determining the tasks to be done,

DEFINITION ◦ who will do them, and
◦ how those tasks will be managed and
coordinated.
ORGANIZING PROCESS
TYPES OF ORGANIZATION STRUCTURE
(Departmentalization)
1. Functional Structure
2. Product Structure
3. Customer Structure
4. Geographic Structure
5. Matrix Structure
6. Network Structure
 TYPES OF ORGANIZATION STRUCTURE :
Functional Structure
◦Grouping based on functions performed.

Advantages Disadvantages
Experts in job function Slow in decision
Easy supervision Difficult to monitor performance
TYPES OF ORGANIZATION STRUCTURE :
Functional Structure
 TYPES OF ORGANIZATION STRUCTURE :
Product Structure
◦Grouping based on the basis of products manufactured.

Advantages Disadvantages
Easy focus Focus only on own products
Quick/speed in decision Increase costs
TYPES OF ORGANIZATION STRUCTURE :
Product Structure
 TYPES OF ORGANIZATION STRUCTURE :
Customer Structure
◦Grouping based on the types of customers served.

Advantages Concentration on customers’ needs

Good feeling from customers
Expert in the customer handling
Disadvantages Difficult to coordinate operations
Must be experts in customers’
problems
TYPES OF ORGANIZATION STRUCTURE :
Customer Structure
 TYPES OF ORGANIZATION STRUCTURE :
Geographic Structure
◦Grouping based on geographical areas.
Advantages Better serve local needs
positive competition
Better communication with
customers
Disadvantages Duplication of jobs
Less control
TYPES OF ORGANIZATION STRUCTURE :
Geographic Structure
 TYPES OF ORGANIZATION STRUCTURE :
Matrix Structure
◦Two different dimensions/departments grouped simultaneously.

Advantages Disadvantages
Good use of resources Frustration and confusion

Sharing of information High conflict

TYPES OF ORGANIZATION STRUCTURE :
Matrix Structure

Manager,
Product A

Manager,
Product B
 TYPES OF ORGANIZATION STRUCTURE :
Network Structure
◦Set of alliances with other organizations.

Advantages Do more with less resources

Effective
Reduce cost
Disadvantages Difficult to develop loyalty
Difficult to control
Conflict between management
TYPES OF ORGANIZATION STRUCTURE :
Network Structure
 TYPES OF
ORGANIZATIONAL RELATIONSHIPS

Chart &
Chain of
Command

Delegation

Span of
management
FLAT STRUCTURE TALL STRUCTURE
Organizational Chart
 Chain Of Command
◦Line of authority and responsibility.
◦Components:
1. Unity of Command
Suggests that each person within an organization must have a
clear reporting relationship to only one superior

2. Scalar Relationship
Suggests that there must be a clear and unbroken line of
authority that extends from the lowest to the highest
position in the organization
 Span of Management
 Definition: A number of subordinates who report directly to a given
manager of supervision.
 Also called ‘span of control’
 In theory, when tasks are very complex, span of control should
be relatively narrow.
 In contrast, where jobs are highly standardized and routine (low
complexity), a manager will not need to spend as much time
supporting individual subordinates, and the span of control may
be larger.
 TYPES OF
SPAN OF
MANAGEMENT
 DELEGATION
◦ The process of transferring the authority for a specific activity or task to
another member of the organization and empowering that individual to
accomplish the task effectively”
STEPS IN DELEGATION
 Benefits of Delegation
1. Empowerment
2. Better decision-making
3. Provide an opportunity for the development of analytical
and problem-solving skills
4. Managers magnify their accomplishments
 Barriers of Delegation
1. Manager may refrain to delegate because they are insecure about
their value to the organization
2. Managers simply lack confidence in the abilities of their
subordinates
3. Manager experience dual accountability
4. Subordinate are reluctant to accept delegation
 ~THE END~

Good order is the foundation of all things.

- Edmund Burke -