y In the words of Stephen P. Robbins:

´Organizing is determining what tasks are to be done, who is to do them, how the tasks are to be grouped, who reports to whom & where decisions are to be made.µ

Deter ining activities to be perfor ed to achieve organisation objectives Identifying ajor functions related to these activities Grouping within each function on basis of si ilarity/relatedness Establishing relationship individuals and groups. a ong


Determining the activities to be performed to achieve the Objectives of the organisation
y Organisations undertake economic activities with

view to earn profit.
y May perform manufacturing, trading or service

In a manufacturing organisation, production & sales are two

major activities.  In a trading organisation, purchases & sales are two main activities.  Service organisations provide services such as transportation to their customers.


Identification of major functions to which these activities relate finance & personnel are major functions

y In a manufacturing organisation, production, selling, y At this stage, a list of activities relating to each function

must be prepared

Grouping and sub-dividing the work within each function y The activities of a production department. y Besides. y This division and subdivision of activities goes on till individual positions have been created for performing all types of work in an organisation. can be divided into a number of workshops where production will actually take place. separate sections may be created for such production related activities as quality control and repairs. . for example.3.

Establishing Relationships Between Individuals & Groups y It deals with creation of authority relationships among job holders/ job positions.4. y Various managerial jobs are grouped into different levels of authority which is called a hierarchy y Top managerial positions have more authority than middle & lower levels of management y Authority flows from top level to lower levels of management .

. y It includes the interaction patterns that link people to people and people to work.Organizational Structure y Organizational structure identifies and distinguishes the individual parts of an organization and ties them together to define an integrated whole. and these patterns are continually evolving.

Clear cut authority-responsibility relationships 2. Defines the number of employees over whom a manager exercise authority. . Defines how specific tasks and activities are assigned to their functional departments 5. Provides the patterns of communication and coordination 3. To identify who's involved in the decision-making process 4.Significance of Organizational Structure 1.

Highly structured and formally designed. Capable of adaption to both internal and external environment .Classification of Organizations Design Mechanistic Model This type of model has bureaucratic organization Organic Model Organic organization is fluid and dynamic.

Basis of Selection of Design Environment Strategy Technology Size of Organization .

the greater the need for an organic structure o organizations are being designed to be more organic nowadays . Environment Environmental Uncertainty and Structure y one way to reduce environmental uncertainty is to adjust the organization·s structure y with greater stability.1. mechanistic structures are more effective o mechanistic structures are not equipped to respond to rapid environmental change y the greater the uncertainty.

and tight controls of mechanistic structure o imitation ² seeks to move into new products or new markets only after their viability has already been proven--organic & mechanistic . stability.2. Strategy Strategy focuses on o innovation .seek efficiency.flexibility and free flow of information of the organic structure o cost minimization .

y mechanistic structure o supports routine technology y organic structure o supports non-routine technology . Technology y How an organization transfer its inputs into outputs y degree of routine: automated & standardized operations y routine tasks--more departmentalized formalized documentation structure.3.

y Size affects structure at a decreasing rate. Size of Organization y Large organizations tend to have more  Specialization  more departmentalization  more vertical levels  more rules & regulations than do small org. .4.

Ca ses ‡ ‡ ‡ ‡ Strategy Size Technology Environment Str ct res ‡ Mechanistic ‡ Organic Performance and Satisfaction Moderated by individual differences and cultural norms .

to form a specialized functional area that is distinct from other functional areas in an organization. y Division of labor creates specialists who need coordination. . This coordination is facilitated by grouping specialists together in departments.Departmentalization y Manner or practice in which related individual tasks and their allocation to work groups is combined.

Basis of Departmentalization Functional Departmentalization Customer Departmentalization Process Departmentalization .

selling.Functional Departmentalization y Based on the functions or the operations carried within the organization y For e. production.g. distributing and financing y Type of organization or an enterprise affects the formation of different departments . marketing.

President Marketing Engineering Financial Operating Engineer Purchasing Operating Plan Equipment Admin Packaging .

credit card services.Customer Departmentalization y Usually found in sales or marketing departments y Involves division of customer base in terms of types of customers like individual buyers. auto companies . banking services.g. industrial buyers or wholesalers y For e.

President Investment Bank Community Bank Commercial Bank Agriculture Bank .

: Jewellery makers.g. shoe makers and oil companies .Process Departmentalization y Aims at achieving economies or effective utilization of the company·s resources by grouping activities around a process y Similar types of labor and equipments are brought together y For e.

Sewing Department Milling Department Assembly Department Plant Superintendent Lacquering Department Finishing Department Inspection and Shipping Department .

Matrix Structure y Characteristics:  Dual lines of authority (chain of command)  Combines functional & product departmentalization y Strength  facilitate coordination. power struggle. facilitate the efficient deployment of specialists y Weakness  confusion & ambiguity foster the seeds of conflict. stress on individuals .

CEO Vice President Engineering Vice President Sales & Marketing Vice President Finance Vice President Research & Development Vice President Purchasing Product A Manager Product B Manager Product Team Product C Manager Product D Manager Two-boss employee .

y There is an inverse relation between the span of management and the number of hierarchical levels in an organization. skills and capabilities of manager.Span Of Control y It is the number of subordinates a manager can direct efficiently & effectively. the employees skills and abilities. the nature of job. y Ideal span of control depends upon the nature of an organization. . the degree of interaction required between superior and subordinates.

Graicunas' formula: Three basic kinds of relationships are: 1.Cross relationships between individual subordinates 3.Direct single relationships between superior and individual subordinates 2.Direct group relationships between superior & combinations of subordinates Relevant notations and elements: n = number of persons supervised a = number of direct single relationships (superior to subordinate) b = number of cross relationships (subordinate to subordinate) c = number of direct group relationships (superior to combinations of subordinates) d = total group relationships (a + b) e = total of direct relationships (a + c) f = total of direct and group relationships (a + b + c) .

Maximum Case Kind of Relationship Direct single relationships Cross relationships Direct group relationships Total direct single & cross relationships (a + b) Total direct single & group (a + c) Total direct & cross relationships (a + b + c) Variable a b c d e f Formula n n(n ² 1) n(2n/2 ² 1) n2 n(2n/2) n (2n/2 + n ² 1) .

Minimum Case Kind of Relationship Direct single relationships Cross relationships Direct group relationships Total direct single & cross relationships (a + b) Total direct single & group (a + c) Total direct & cross relationships (a + b + c) Variable a b c d e f Formula n n/2(n²1) 2n ²n ²1 n/2(n+1) 2n ²1 2n+n/2(n²1)²1 .

. motivated and confident the employees are. the better it is to have a narrow span of management so that the managers can spend time with them & supervise them well. Manager 1 Employee Employee Employee Employee Employee Each employee holding a position of authority is responsible for at least two others.e. i.  The less capable..Narrow Span Of Control It means single manager or supervisor oversees few subordinates. the span of control is at least 2.

which can reduce innovation and morale among employees. . y It is expensive .Narrow Span Of Control The advantages of a narrow span of control are: y Quick and easy communication y Better feedback from subordinates y Less management skill required y More growth opportunities The disadvantages of narrow span of control y It create a situation where managers are too involved in their subordinates· work.

the span of control is at least 5. the better it is to have wide span of management for such organization Manager 1 Employee Employee Employee Employee Employee Employee Employee Employee Employee Each employee holding a position of authority is responsible for at least others. .. i.e.Wide Span Of Control It means a single manager or supervisor oversees a large number of subordinates.  The more efficient and organized the managers are in performing their tasks.

Wide Span Of Control Advantages: y There is more flexibility y Cost efficient y Effective communication Disadvantages: y y y y Time consuming Lack of personal contact Danger of superior·s loss of control Requires exceptional quality of managers .

Responsibility 3.Delegation Of Authority Delegation of authority means division of authority and powers downwards to the subordinate. Accountability . Authority 2. y Elements of Delegation: 1.

a manager has to work in a system and has to perform following steps: Assignment of tasks and duties Granting of authority Creating accountability and responsibility .y For achieving delegation.

4. . 2. Responsibility It is the right of a person or a superior It is the obligation of subordinate to to command his subordinates. Authority can be delegated by a Responsibility cannot be shifted and is superior to a subordinate. 3. It flows from top to bottom. to him. Responsibility arises out of superior² Authority is attached to the position subordinate relationship in which subordinate agrees to carry out duty given of a superior in concern. It flows from bottom to top. perform the work assigned to him.Authority Vs Responsibility Authority 1. absolute.

Reservation of operating authority with the middle level managers. The implication of centralization can be :y y y Reservation of decision making power at top level.Centralization Centralization is concentration of management and decision making power at the top of an organization·s hierarchy. Reservation of operation at lower level at the directions of the top level .

Decentralization Decentralization is a systematic delegation of authority at all levels of management and in all of the organization. In a decentralization concern. Diversification Coordination of operations at divisional level Greater motivation and morale of the employees . Implications of Decentralization : y y y y y Less burden on top management Development skills and capabilities of subordinates. Rest of the authority may be delegated to the middle level and lower level of management. authority in retained by the top management for taking major decisions and framing policies concerning the whole concern.

Lower-level managers do not want to have a say Lower-level managers want a voice in decisions in decisions Decisions are more significant Decisions are relatively minor Organization is facing a crisis or the risk of Corporate culture is more open to allowing company failure managers to have a say in what happens Company is large Company is geographically dispersed 7. 4. Effective implementation of company strategies Effective implementation of company strategies depends on managers retaining more say over depends on managers having more involvement what happens and flexibility to make decisions. Environment is complex. . 6. 5. uncertain Decentralization Environment is more stable capable or Lower-level managers are NOT capable or Lower-level managers are experienced at making decisions experienced at making decisions 3.Centralization 1. 2.

Scope Responsibility Freedom of Work . bases. Responsibility remains of the Responsibility is also delegated to managers and cannot be delegated subordinates.Basis Delegation Decentralization Meaning Managers delegate some of their Right to take decisions is shared function and authority to their by top management and other subordinates. Freedom to work can be maintained by subordinates as they are free to take decision and to implement it. Scope of delegation is limited as Scope is wide as the decision superior delegates the powers to making is shared by the the subordinates on individual subordinates also. Freedom is not given to the subordinates as they have to work as per the instructions of their superiors. level of management.

y Line departments are involved in making decisions regarding the operations. . y Example: y A line department might be the production department. has employees who advise and assist³making sure the product gets advertised . y A staff department. and support them. advice. on the other hand. while staff areas provide specialized support.Line and Staff Structure y This type of structure combines the flow of information from the line structure with the staff departments that service.

y Merits of Line and Staff Relationship: 1. Benefit of Specialization 4. presence of staff specialists and their expert advice serves as ground for training to line officials 7. Relief to line of executives 2. Expert advice 3. Better co-ordination 5. Benefits of Research and Development 6. Unity of action .

Staff steals the show 6. Lack of sound advice 3.y Demerits of Line and Staff Relationship: 1. Lack of understanding 2. proves to be costly for a concern with limited finance 5. Assumption of authority . Line and staff conflicts 4.

Conflicts of Line and Staff y Viewpoints of Line Managers: 1. Encroachment of line authority 3. Theoretical Bias 4. Lack of proper use of Staff 2. Lack of responsibility 2. Dilution of Authority y Viewpoints of Staff Managers: 1. Lack of proper Authority . Resistance to new idea 3.

they allow the owning conglomerate to respond quickly to changing economic or market situations. y Because SBUs are more agile. .Strategic Business Unit (SBU) y Autonomous division or organizational unit. small enough to be flexible and large enough to exercise control over most of the factors affecting its long-term performance.

the degree to which an SBU shares functional programs and facilities with other SBUs. the manner in which the corporation is because of new changes in market.Success factors: y There are three factors that determining the success of an SBU: 1. and 3. 2. . the degree of autonomy given to each SBU manager.

Modern Organizational Structure Boundary Less Organizational Structure Virtual Organizational Structure Feminine Organizational Structure .

. y The rigidity of internal and external boundary is removed in boundary less organizations. y Goal y develop greater flexibility and y responsiveness to change y to facilitate the free exchange of information and ideas.Boundary Less Structure y A model that views organizations as having permeable boundaries.

.y The boundary less organization behaves more like an organization encouraging better integration between departments and closer partnerships with suppliers and customers.

brand name. . with little or no departmentalization y core competency: design.Virtual Organizational Structure y A small core organization that outsources major business functions y small executive group oversee activities done in house. coordinate the network of relationships with outsource firm. marketing. etc. y highly centralized.

y Advantage: y allow someone with an innovative idea y little money to compete against large company y Drawback: y reduce management·s control 6 .52 .

y criticize sex segregation in both horizontal and vertical dimensions. y barriers to higher status jobs .Feminine Organizational Structure y the feminist theories agree on male dominance and inequality in the work-place. y leads to wage inequalities. y They argue that women have different and even better skills than men for managing the demands of the global workplace.

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