Organizing : Designing the Structure
M.P.S.Ishari
M.Sc in Management (USJP), BBM (Hons) Spl. in Accountancy & Finance (UOJ),
MAATSL
Assistant Lecturer in Accountancy
Head/Department of Project Management
Advanced Technological Institute (SLIATE)
Kegalle, Sri Lanka
1
Contents
Defining organizing and its importance
Understanding the process of organizing
Understanding the organizational structure and organizational
chart
Analyzing the elements of organizational structure
Identifying the building blocks of organizational structure
Identifying contemporary organizational structures
Understanding Situational Contingencies on Organizational
Design
Identifying Emerging Issues in Organizational Design
2
What is Organizing?
3
The primary mechanism managers use
to activate plans
4
Definitions: Organizing
Organizing is the process of establishing orderly uses for
all resources within the management system.
(Certo and Certo,2010)
The deployment of organisational resources to achieve
strategic goals.
(Daft, 2012)
Organizing is the process of deciding how best to group
organisational elements.
(Griffin ,2012)
5
What is Organizing?
In general, organizing is the process of arranging
and allocating work authority and resources among
the members of the organization so that they can
achieve organization's goals and objectives
efficiently and effectively.
6
“Organizing”
It is the process of designing an appropriate
organizational structure, associated departments
or divisions and required jobs or teams to put the
plan into action with proper allocation of
resources, authority and responsibility.
7
What manager really
performs organizing function
?
The Process of Organizing
Identification of Work
Dividing the workload in to jobs
Grouping jobs in to departments
Deciding Spans of Management
Creation of Hierarchy
Delegating authority
Determining systems of working
Allocation of resources
Establishing coordinating mechanisms
Purpose of Organizing
However, the ultimate purpose of organizing is
to come out with an effective and efficient
organizational structure in order to
successfully implement the established plan of
the organization.
Organizational
Structure
The way in which an organization’s activities
are divided, organized and coordinated.
Organisational Structure
The formal framework by which job tasks are divided, grouped
and coordinated. (Robbins & Coulter,2010)
It reflects ;
• The set of formal tasks assigned to individuals and
department ;
• Formal reporting relationships, including lines of authority,
decision responsibility, number of hierarchical levels and span
of control ;
• The design of systems to ensure effective coordination of
employees across departments.
(Daft, 2012)
Organizational
Chart
?
Graphical/Visual Presentation of
the Organizational
Structure
Types of Organizational Charts
vertical
horizontal
circular
Benefits and Limitations of
Organizational Charts
Benefits of an Organisational Chart
Whole structure (hierarchy, departments, divisions,
number and types of positions & etc.) can be
viewed at a glance.
Outline managerial tasks and which manager is
responsible for overseeing each employee.
Help build and design the organization structure to
meet the business' objectives.
Shows the formal relationships and communication
channels between the organization's staff members.
(www.edrawsoft.com)
Limitations of an Organisational Chart
Only reflects the formal work relationships and communication
channels and does not illustrate the informal patterns of human
(social) relationships which develops overtime.
Does not explain the degree of delegation, formalization and the
managerial style adopted (e.g. autocratic or democratic).
It introduces rigidity into work relationships and create status
problems.
It can soon become out-of-dated, especially in large organizations
due to internal and external organisational changes.
(www.edrawsoft.com)
Understanding the elements of
Organizational Structure
Elements of Organising
Division of work/Designing Jobs
Grouping Jobs/Departmentalization
Establishing reporting relationships
Distributing authority
Coordinating activities
Differentiating between positions
(Griffin ,2012)
Element 01
Division of work/Designing Jobs
Breaking a complete and a complex work down in to
small and simple jobs in which each worker can
specialize by performing such simplified jobs
repetitively and continuously.
Concept of Job Specialization
Dividing Jobs
Job Specialization
Benefits of Specialization
Workers become very proficient at the task they perform
The transfer time between tasks decrease
Easy to develop specialized equipment to assist jobs
Easy replacement of employees
Limitations of Specialization
Monotony and boredom
Fatigue and job stress
Job dissatisfaction
Higher levels of absenteeism and turnover
Vocational diseases (Robbins & Coulter,2010 ; Griffin ,2012)
Element 02
Grouping Jobs : Departmentalization
The process of grouping jobs together so that common tasks can
easily be coordinated and controlled.
It is the process of grouping jobs according to some logical
arrangement.
The four most common bases for departmentalization are ;
Functional Base
Product Base
Customer Base
Geographical Base
Process base
Almost any organisation is likely to employ multiple bases of
departmentalization depending on the context of the organisation.
(Griffin ,2012) 26
Bases of
Departmentalization
Basis Example
1. Functional Production, Marketing, Finance etc.
2. Product Yarn, Textiles, Garments, Dye etc.
Southern, Western, Eastern etc.
3.Geographical
Drying, Cutting, Milling, Filtering, Packing
4. Process
5. Customer ENT, Cardiology, Maternity, etc.
6. Mixed
A B C
Produc
ts
Functio P M F
ns
Regio 1 2 3
ns
Element 03
Establishing Reporting Relationships
This involves clarifying the chain of command and the span of
management / span of control in the organization.
Chain of Command
A clear and distinct line of authority among the positions in an
organization which shows who reports to whom.
Consist of two (02) components ;
1) Unity of Command – Each person within an organization must
have a clear reporting relationship to one and only one boss.
2) Scalar Principle – There must be a clear and unbroken line
of authority that extends from the highest to the lowest
position in the organization.
(Griffin ,2012)
Establishing Reporting Relationships (Cont…)
Span of Management / Span of Control
Definition : Number of subordinates reporting directly to a
given manager
The average span of control used in an organization determines
whether the organisational structure is tall or flat.
A tall structure has an overall narrow span and more hierarchical
levels.
A flat structure has a wide span is horizontally dispersed and has
few hierarchical levels.
(Griffin ,2012)
Establishing Reporting Relationships (Cont…)
Span of Management / Span of Control (Cont…)
(Schermerhorn, 2010)
Factors Influencing the Span of Management / Span of Control
Competence of supervisor and subordinates
Extent of nonsupervisory work in manager’s job
Degree of required interaction
Extent of standardized procedures
Similarity of task being supervised
Frequency of new problems
Preference of supervisor and subordinates
(Griffin ,2012)
37
Element 04
Distributing Authority
Authority is the power that has been legitimized by the
organization.
It includes the formal and legitimate right of a manager to make
decisions, issue orders, and allocate resources to achieve
organizational desired outcomes.
Authority is distinguished by three(03) characteristics;
1) Authority is vested in organizational positions, not people.
2) Authority is accepted by subordinates.
3) Authority flows down the vertical hierarchy.
(Certo & Certo , 2010 ; Daft ,2012 ; Griffin , 2012)
Power Vs
Authority
Power
Authorit
y
Power: Ability to exert influence
Authority: Legal right inherent in a
position to make job related
decisions.
Delegation of Authority
Definition: The act of assigning
formal authority and responsibility
for completion of specific activities
to a subordinate
Passing authority to a
lower level
The Process of
Delegation
1. Assign the work
2. Delegate Authority
3. Create a Responsibility
Authority
Work = = Responsibility
Delegating Authority (Cont…)
Centralization and Decentralization
Centralization and decentralization pertain to the hierarchical level
at which decisions are made.
Centralization
The process of systematically retaining decision authority in the
hand of the higher level managers.
Decentralization
The process of systematically pushing down and delegating the
decision authority throughout the organization to middle and
lower levels.
(Daft ,2012 ; Griffin , 2012)
Centralization and Decentralization (Cont…)
Factors that typically influence the extent of centralization and
decentralization are ;
1) Greater change and uncertainty in the environment
2) The history of the organization
3) The organization's strategy
4) The nature of the decision
5) Abilities of lower level managers
(Daft ,2012 ; Griffin , 2012)
Element 05
Coordinating Activities
The process of linking the activities of the various departments of the
organization.
The primary reason for coordination is that departments and work
groups should be interdependent to achieve the common objectives
of the organization.
Commonly used coordination devices are;
The Managerial Hierarchy
Policies, Procedures, Rules and Regulations
Liaison Roles
Task Forces
(Griffin , 2012)
Element 06
Differentiating Between Positions
Involves distinguishing between line positions and staff positions in the
organization.
Line Position
A position in the direct chain of command that is responsible for the
direct achievement of an organization's goals.
Consists of line authority which is generally considered as the
formal/legitimate authority created by the organizational hierarchy.
Staff Position
A position intended to provide expertise, advice and support for line
positions.
Consists of staff authority which is less concrete (in comparison to line
authority) and take a variety of forms.
(Griffin , 2012)
The Basic Building Blocks of
the Structure
Groups
Teams
Committees
50
Groups, Teams & Committees:
The Basic Building Blocks of the
Structure
Groups, Teams & Committees:
The Basic Building Blocks of the
Structure
Groups
Formal Informal
Groups Groups
Command Task Interest Friendship
Groups Groups Groups Groups
Standing Task
Committees Forces
Vertical Horizontal Mixed
Cliques Cliques Cliques
Functional Cross-Functional
Committees Committees
Groups And
Characteristic Teams
Work Group Work Team
Leadership A strong, clearly focused leader Shared leadership roles
Accountability Individual accountability Individual and mutual
accountability
Purpose Same as the broader organizational Very specific purpose
mission
Work Product Individual work products Collective work products
Encourages open-ended active
Meetings Runs efficient meetings problem solving meetings
Measuring Measures effectiveness indirectly Measures performance directly
Performance by its influence on others by assessing collective work
products
Way of Working Discuss, decides and delegates Discuss, decides and does real
work together
Objective Sharing information Collective performance
Skills Random, varied Positive
Thank You
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