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Reason for Organizing

In effective organizing, steps are
undertaken to breakdown the total job
into more manageable man-size jobs.
Doing these will make it possible to
assign the particular tasks to particular

Organizing Defined
Organizing is a management function
which refers to the the structuring of
resources and activities to accomplish
objectives in an efficient and effective

Purpose of the Structure

1. It defines the relationships betweentasks and authority for individuals

2. It defines formal reporting relationships, the number of levels in the

hierarchy of the organization, and the span of control.

3. It defines the groupings of individuals into departments and departments

into organization.
4. It defines the system to effect coordination of effort in both vertical
(authority) and horizontal (tasks) directions.

Concerns to be Addressed in
Structuring Organization

Division of labor
Delegation of authority
Span of Control


The formal organization is the structure that
details lines of responsibilities, authority, and
position. What is depicted in the organization
chart is the formal organization. It is the
planned structure and it represents the
deliberate attempt to establish patterned
relationships among the components that will
meetthe objectives effectively.

The formal structure is described

bymanagement through:
Organization chart - is a diagram of the organizations official positions
and formal lines ofauthority.
Organizational manual - provides written descriptions of authority
relationships, details the functions of major organizational units, and
describes job procedures.
Policy manuals - describes personnelactivities and company policies.

There are instances when members of an organization spontaneously
form a group with friendship as a principal reason for belonging. This
group is called an informal group. It is not part of the formal
organization and it does not have a formal performance purpose.
Informal groups are oftentimes very useful; in the accomplishment of
major tasks, especially ifthese tasks conform to the expectations of
the members of the informal group.
The informal organization, useful as it is, is vulnerable to expediency,
manipulation, and opportunism, according to Valentine. Its low
visibility, Valentine added, makes it difficult for management to
detect these perversions and considerable harm can be done to the

Functional Organization this is a form of departmentalization in which
everyone engaged in one functional activity, such as engineering or
marketing, is grouped into one unit.

Product or Market Organization this refers to the organization of a

company by divisions that bring together all those involved with a
certain type of product or customer.

Matrix organization an organizational structure in which each

employee reports both a functional or division manager and to a
project or group manager.

Functional Organization
Functional organization structures are very
effective in smaller firms, especially
single-business firms where key activities revolve
around well-definedskills and areas of

The groupings of employees who perform a common task permit economies of scale and
efficient resource use.
Since the chain of command converges at the top of the organization, decision-making is
centralized, providing a unified direction from the top.

Communication and coordination among employees within each department are excellent.
The structure promotes high-quality technical problem-solving.

The organization is provided with indepth skill specialization and development.

Employees are provided with career progress within functional departments.

Communication and coordination between the departments are often poor.

Decisions involving more than one department pile up at the top

management level and are often delayed.
Work specialization and division of labor, which are stressed in a functional
organization, produce routine, no motivating employee tasks.
It is difficult to identify which section or group is responsible for certain
There is limited view of organizational goals by employees.
There is limited general management training foremployees.

Product or Market Organization

The product or market organization, with its feature of
operating by divisions, is appropriate fora large
corporation with many product lines in several related

The organization is flexible and is responsive to change.
The organization provides a high concern for customers needs.
The organization provides excellent coordination across
There is easy pinpointing of responsibility for product problems.
There is emphasis on overall product and division goals.

There is a high possibility of duplication of resources across divisions
There is less technical depth and specialization in divisions.
There is poor coordination across divisions.
There is less top management control.
There is competition forcorporate resources.

Matrix Organization
A matrix, organization, according to Thompson and Strickland, is a
structure with two (or more) channels of command, two lines of
budget authority, and two sources of performance and reward.
Higgins declared that the matrix structure was designed to
keepemployees in a central pool and to allocate them to various
projects in the firm according to length of time they were needed.

There is more efficient use of resources than the divisional structure.
There is flexibility and adaptability tochanging environment.
The development of both general and functional management skills
are present.
There is interdisciplinary cooperation and any expertise isavailable to
all divisions.
There are enlarged tasks for employees which motivate them better.

There is frustration and confusion from dual chain ofcommand.
There is high conflict between divisional and functional interests.
There are many meetings and more discussion than action.
There is a need for human relations training for key employees and
There is a tendency for power dominance by one side of the matrix.

Line authority a managers right to tell subordinates what to do and
then see they do
Staff authority a staff specialists right to give advice to superior.
Functional authority a specialists right tooversee lower level
personnel involved
inthat specialty, regardless of where the
personnel arein the organization.

Purpose of Committees
A committee is a formal group of persons formed for a specific purpose. For
instance, the product planning committee, as described by Millevo, is often
staffed by top executives from marketing, production, research, engineering,
and finance, who work part-time to evaluate and approve product ideas.
Committees are very useful most especially to engineering and
manufacturing firms. When a certain concern, like product development, is
under consideration, a committee is usually formed to provide the necessary
line-up ofexpertise needed to achieve certain objectives.

Committees may be classified as

Ad hoc committee - one created for a short-term purpose and have a
life. An example is the committee created tomanage the
anniversary festivities of acertain firm.

Standing committee it is a relatively permanent committee that

deals with issues on an ongoing basis. An example is the grievance
committee set up to handle initially complaints from employees of the

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