Organizing and Staffing

Organizing – An overview

Organizing is…  The identification and classification of required activities. division.. and department) in the organization structure. between corporate headquarters. .  The assignment of each group to a manager with the authority necessary to supervise it.  The grouping of similar activities necessary to attain objectives.  The provision for coordination horizontally (on the same or a similar organizational level) and vertically (e.g.

Delegating to the head of each group the authority necessary to perform the activities 6. . Tying the groups together horizontally and vertically. policies. Establishing enterprise objectives 2. Identifying. analyzing. though authority relationships and information flows. and classifying the activities necessary to accomplish these objectives 4. Grouping these activities in light of the human and material resources 5.The Logic of Organizing 1. Formulating supporting objectives. and plans 3.

Delegation of plans classification of of authority and resources and authority required activities information situations relationships 8.5. The Organizing Process Feasibility studies and feedback 1. Leading 9. 4. Grouping of policies. Staffing objectives. Enterprise Objectives 2. Supporting 6. Horizontal and 7. and 3.6 (Planning) (Organizing) (Other Functions) . Identification and vertical coordination activities in light of 5. Controlling Part 2 Part 3 Part 4.

 It includes all the behaviors of all participants.  It is the total system of social and cultural relationships.Organization  It is a formalized intentional structure of roles or positions. .

 A formal organization must be flexible. .  Individual effort in group situation must be channeled toward group and organizational goals.Formal Organization  Formal Organization means the intentional structure of roles in formally organized enterprise.

.  Thus. and the morning coffee “regulars”. the sixth floor crowd. the Friday evening bowling gang.Informal Organization  It is a network of interpersonal relationships that arise when people associate with each other.  It can also be described as any joint personal activity without conscious joint purpose. although contributing to joint results. informal organizations—relationships that do not appear on the organization chart—might include the machine shop group.

Department managers Informal organization: Informal organization: Informal organization: Morning coffee Bowling team Chess group “regulars” . Formal and Informal Organizations President Vice president etc. Division managers etc.

since the span is one of management and not merely of control. a narrow span. the reason for levels of organization is the limitation of the span of management. this is referred to as the span of control. with many levels. even thought this limit varies depending on situations. * In much of the literature on management. in this lecture span of management will be used.  A wide span of management is associated with a few organizational levels. organizational levels exist because the is a limit to the number of persons a manager can supervise effectively.Organizational Levels and the Span of Management*  While the purpose of organizing is to make human cooperation effective. which is only one function of managing. Despite the widespread use of this term.  In other words. .

Organization Structures with Narrow and Wide Spans Organization with narrow spans Advantages: Disadvantages: · Close supervision · Superiors tend to get too involved in · Close control subordinates’ work · Fast communication between subordinates and · Many levels of management superiors · High costs due to many levels · Excessive distance between lowest level and top level Organization with wide spans Advantages: Disadvantages: · Superiors are forced to delegate · Tendency of overloaded superiors to become · Clear policies must be made decision bottlenecks · Subordinates must be carefully selected · Danger of superior’s loss of control · Requires exceptional quality of managers .

. the most important determinant is a manager’s ability to reduce the time he or she spends with subordinates. getting along with people.Factors Determining an Effective Span  The number of subordinates a manager can effectively manage on the impact of underlying factors. and commanding loyalty and respect.  Aside from such personal capacities as comprehending quickly.

such as · Use of poor or inappropriate proper organization structure and written communication techniques. Factors Determining an Effective Span Table 1 Factors influencing the span of management Narrow spans (a great deal of Wide spans (very little time time spent with subordinates) spent with subordinates) · Little or no training of subordinates · Thorough training of subordinates · Inadequate or unclear authority · Clear delegation and well-defined tasks delegation · Well-defined plans for repetitive · Unclear plans for nonrepetitive operations operations · Verifiable objectives used as standards · Nonverifiable objectives and standards · Slow changes in external and internal · Fast changes in external and internal environments environments · Use of appropriate techniques. including and oral communication vague instructions · Effective interaction between superior · Ineffective interaction of superior and and subordinate subordinate · Effective meetings · Ineffective meetings · Greater number of specialties at upper · Greater number of specialties at lower levels (top managers concerned with and middle levels external environment) · Incompetent and untrained manager · Competent and trained manager · Complex task · Simple task · Subordinates’ unwillingness to assume · Subordinate’s willingness to assume responsibility and reasonable risks responsibility and reasonable risks · Immature subordnates · Mature subordinates Page 1 .

such as production.Organization Structure 1. selling. . and financing. Departmentation by Enterprise Function  It is the grouping of activities according to the functions of the enterprise.

Organization Structure A functional organization grouping (in a manufacturing company) President Assistant to Personnel president Marketing Engineering Production Finance Market Engineering Production Financial Research Administration planning planning Marketing Preliminary Industrial Budgets Planning Design engineering Advertising Electrical Production General and Promotion Engineering engineering accounting Sales Mechanical Purchasing Cost administration Engineering accounting Sales Hydraulic Tooling Statistics and Engineering data processing Packaging General production Quality Control Advantages: Disadvantages: · Logical reflection of functions · De-emphasizes overall company objectives · Maintains power and prestige of major · Overspecializes and narrows viewpoints of functions key personnel · Follows principle of occupational · Reduces coordination between functions specialization · Responsibility for profits is at the top only · Simplifies training · Slow adaptation to changes in the · Furnishes means of tight control at the top environment · Limits development of general managers .

Departmentation by Territory or Geography  It is the grouping of activities by area or territory that is common in enterprises operating over wide geographic areas. . Organization Structure 2.

organization grouping (in a manufacturing company) President Marketing Personnel Purchasing Finance Western Southwest Central Southeast Eastern region region region region region Personnel Engineering Production Accounting Sales Advantages: Disadvantages: · Places responsibility at a lower level · Requires more persons with general manager · Places emphasis on local markets and problems abilities · Improves coordination in a region · Tends to make maintenance of economical central · Takes advantage of economies of local operation services difficult and may require services such as · Better face-to-face communication with local personnel or purchasing at the regional level interests · Makes control more difficult for top management · Furnishes measurable training ground for general managers . Organization Structure A territorial. or geographic.

Departmentation by Customer Group  It is the grouping of activities that reflects a primary interest in customers. . Organization Structure 3.

. Organization Structure Customer departmentation (in a large bank) President Community- Corporate Institutional city banking banking banking Real estate and Agricultural mortgage loans banking Advantages: Disadvantages: · Encourages focus on customer needs · May be difficult to coordinate operations · Gives customers the feeling that they have an between competing customer demands understanding supplier (banker) · Requires managers and staff expert in · Develops expertness in customer area customers’ problems · Customer groups may not always be clearly defined (e. large corporate firms vs. other corporate business) .g.

Organization Structure 4. . Departmentation by Product  It is the grouping of activities according to products or product line. especially in multiline. large enterprises.

Organization Structure A product organization grouping (in a manufacturing company) President Marketing Personnel Purchasing Finance Indicator Industrial Instrument Name Lights Tools Title division Division Division Engineering Accounting Engineering Accounting Production Sales Production Sales Advantages: Disadvantages: · Places attention and effort on product line · Requires more persons with general manager · Facilitates use of specialized capital. abilities and knowledge · Tends to make maintenance of economical central · Permits growth and diversity of products and services services difficult · Improves coordination of functional activities · Presents increased problem on top of management · Places responsibility for profits at the division level control · Furnishes measurable training ground for general managers * Product departmentation is also used in in nonmanufacturing companies. . facilities. skills.

Matrix Organization  It is the combining of functional and project or product patterns of departmentation in the same organization structure. . Organization Structure 5.

Organization Structure Matrix Organization (in engineering) Director Of Engineering Chief of Chief Chief Chief Chief Preliminary Mechanical Electrical Hydraulic Metallurgical Design Engineering Engineer Engineer Engineer Project A manager Project B manager Project C manager Project D manager Advantages: Disadvantages: · Oriented toward end results · Conflict in organizational authority exists · Professional identification is maintained · Possibility of disunity of command · Pinpoints product-profit responsibility · Requires a manager effective in human relations .