Organizing

Hazel A. Misola

Teacher
Learning Objectives

1. Discuss the nature of organizations

2. Distinguish the various types of
organization structures
3. Apply organization theories in solving
cases
4. Identify different elements of delegation
5. Differentiate from informal organizations
 Definition of Terms

➢Organization – the collection of people or groups of people

working to achieve a common goal
➢Organizing – a management function which involves assigning
tasks, allocating resources, and coordinating work activities in order
to achieve a common purpose
➢Organization Chart – visual representation of organization’s
structure
➢Organization Structure is a system made up of tasks to be
accomplished, work movements from one work level to other work
levels in the system, reporting relationships, and communication
passageways that unite the work of different individual persons and
groups.
 Types of
Organization Structure

❖Vertical Structure
Clears out issues related to authority rights,
responsibilities and reporting relationships
❖Horizontal Structure
Refers to the departmentalization of an organization
into smaller work units as tasks becomes increasingly
varied and numerous
❖Network structure
Collection of independent, usually single function
organizations that work together in order to produce a
product or a service
Vertical Structure
Clears out issues related to authority rights,
responsibilities and reporting relationships
Horizontal Structure
Refers to the departmentalization of an
organization into smaller work units as tasks
becomes increasingly varied and numerous
2 TYPES OF
DEPARTMENTS

Line Departments
deal directly with the firms primary goods and
services; responsible for manufacturing, selling and
providing services to clients
Line Departments
deal directly with the firms primary goods and
services; responsible for manufacturing, selling and
providing services to clients
Staff Departments
support the activities of the line departments by
doing research, attending to legal matter,
performing public relations
 APPROACHES TO
DEPARTMENTALIZATION

1. Functional
Where the subdivisions are formed based on specialized activities
such as marketing, production, financial management, and human
resources management

2. Divisional
Where departments are formed based on management of their
products, customers, or geographic areas covered

3. Matrix
Hybrid form of departmentalization where managers and staff
personnel report to the superiors, the functional manager and the
divisional manager
Divisional Approach
*management of products
 Divisional Approach
*management of customers

Globe Telecom

Personal Business

Small and
Postpaid Prepaid Enterprise Medium
Enterprise
 Divisional Approach
*management of geographic areas

UNILEVER
GLOBAL

Middle
Africa Americas Asia Pacific Europe
East
Network structure
Collection of independent, usually single
function organizations that work together in
order to produce a product or a service
Lesson 3: Organizational
Theories and Application

A. Traditional B. Modern
1. Simple 1. Team Design
2. Functional 2. Matrix Project Design
3. Divisional 3. Boundary-less Design
Simple Organizational
Design

Characteristics Strengths
➢ Few departments, wide span of 1. Flexible
control (big number of
2. Fast decision making and
subordinates directly reporting
results
to a manager)
3. Clear accountability
➢ Centralized authority
➢ Very little formalization of work
Weaknesses
➢ Usually used by companies that
start out as entrepreneurial 1. Risk of overdependence
ventures 2. Not appropriate as the
company grows
 Functional Organizational
Design
Characteristic Strengths
➢Group together similar 1. Cost-saving advantages
activities or related 2. Management is facilitated
specialties because workers with
similar tasks are grouped
together
Weakness
1. Managers may have little
knowledge of other unit’s
functions.
Divisional Organizational
Design

Characteristics Strengths
➢made up of separate business 1. Focused on results
divisions or units 2. Managers are responsible
➢the parent corporation acts
as overseer to coordinate and
control the different divisions Weaknesses
and provide financial and 1. Possible duplication of
legal support services activities and resources
2. Increased cost and reduced
efficiency
Team Design (Modern)

Characteristic Advantages
➢Made up of work groups or 1. Empowerment of team
teams members
2. Reduced barriers among
functional areas
Disadvantages
1. Clear chain of command
2. Great pressures on teams
to perform
Matrix Design

Characteristics Advantage
➢Specialists from different 1. Specialists are involved
departments work on in the project
projects that are
supervised by a project
manager Disadvantage
➢Results to double chain of 1. Tasks and personality
command (functional conflicts
manager and project
manager)
Project Design

Characteristics Advantage
➢Employees work 1. Flexible designs and fast
continuously on a project decision making

Disadvantage
1. Complexity of assigning
people to projects and
tasks and personality
conflicts
 Boundary-less Design

Characteristics Advantage
➢Not limited or defined by 1. Highly flexible and
vertical, horizontal, and responsive
external boundaries
➢No hierarchical levels that Disadvantage
separate employees, no
departmentalization, and no 1. Lack of control problem
boundaries that separate the in communication
organization from customers,
suppliers and stakeholders.
➢Virtually designed
Lesson 4: DELEGATION
assigning a new or additional task to a subordinate

getting work done through others by giving them the

right to make decision and make actions

Steps in Decision Making

1. Define the goal clearly
2. Select the person who will be given the task
3. Assigning of responsibility
4. Asking the person assigned about his or her planned approaches
to accomplish the task objectives
5. Grant the person the authority to act
6. Give the person enough time and resources to do the task, while
at the same time emphasizing his or her accountability
7. Check the accomplishment progress
8. Make sure the task objective has been accomplished
 Advantages and Disadvantages of
Delegation

Advantages Disadvantages
It prevents work overload among It may cause laziness among organizational
organizational managers managers
It provides opportunities for employee or It may encourage too much independence
subordinates assigned to do the task to fully on others
utilize their talents on the job
It leads to empowerment of employees or It may cause lack of control over priority
subordinate assigned to do the tasks, as it management problems
allows them freedom to contribute ideas
and to perform their job in the best possible
way
It increases job satisfaction among the It may cause low self-confidence among
assigned employees or subordinates that managers
may lead to better job performance
Lesson 5: FORMAL AND
INFORMAL ORGANIZATIONS

➢Formal organizations
Formed by the company owner or manager to help the
firm accomplish its goals
Made up of formal groups similarly formed by the
company authorities to support their activities and
achieve their objectives

➢Informal organizations
Organizations that exist because of friendship or common
interest made up of informal groups which exist for the
members needs for social affiliation
 Categorization of
Organizations

Formal Organizations Informal Organizations

Command groups Friendship groups
Task groups Interest groups
Affinity groups
 FORMAL AND INFORMAL
GROUPS IN ORGANIZATIONS
FORMAL INFORMAL
1. Command groups are relatively 1. Friendship groups, the
permanent work groups established affiliation among members arises
by the organization and are usually from close social relationships and
specified on an organization chart. the enjoyment that comes from
2. Task groups, also established by being together.
the organization, are relatively 2. The common bond in interest
temporary and exist only until the groups is the activity in which the
specific task is accomplished. members engage.
3. Affinity groups are formed by the
organization, consist of employees at
the same level and doing similar
jobs, and come together regularly to
share information and discuss
organizational issues.
 Classification Scheme for Types of Organizations
RELATIVELY RELATIVELY
PERMANENT TEMPORARY
Formal Command Groups Task Groups Affinity Groups
Quality-assurance Search committee for New-product
department a new school development group
Cost-accounting group superintendent
Task force on new-
product quality
Informal Friendship Groups Interest Groups
Friends who do many Bowling group
activities together Women’s network
(attend the theater,
play games, travel)
 Formal
Organizations
1. Working systematically
Advantag 2. Established on and for the
es organization’s objectives
3. No duplication or overlapping of 2. Gives importance to the psychological
work
4. Efficient coordination among
departments
5. Implementation of chain of
command and professional
relationship
1. Delay in feedback and action due
Disadvant to established chain of command
ages 2. Ignores the psychological and
social needs of employees
3. Emphasis on work only and
overlooks the human relations,
talents, and creativity of
employees
Informal
Organizations
1. Fast Communication due to the
absence of standard operating
procedures and protocols
and social needs of employees
3. Top Managers can solicit feedback
directly from the employees on new
policies and plans
1. More susceptible to rumor
mongering
2. There is no systematic workflow in
place
3. Difficulty in implementing new rules
and policies
4. More emphasis on the individual
interest of each employee rather
than the overall goal of the company
 Organization and Management in Action

After the chapter discussion: (ALTO)

1. Briefly explain which of the groups to which students commonly belong
could be defined as command groups?
2. What conflicts could occur when informal and formal groups overlap in
an organization? Enumerate 5 concrete examples. You may also use
any of the following as bases for answering
• business that you are developing in Entrepreneurship subject
• organizations or groups that are forming for Organization and
Management event
• observation of a business company
3. Students frequently are required to participate as members in their
respective Stands or in a learning subject set up.
a. What are the advantages of formal organizations in ABM Strand or in a
learning subject set up? Enumerate and briefly explain at least 4.
b. What are the disadvantages of informal organizations in ABM Strand or
in a learning subject set up? Enumerate and briefly explain at least 4.