THE ORGANIZING

FUNCTION

BY;
Zemichael Wg.

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OUTLINE
 Introduction
 Steps in Organizing

 Purposes of organizing

 Organizational structure

 Organizational design

 Departmentalization

 Organizational charts

 Terms in Organizing

 Integration, differentiation & coordination

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 INTRODUCTION
 Organizing is establishing the internal organizational
structure of the organization.
 The focus is on division, coordination, and control of tasks
and the flow of information within the organizn.
 It is in this function that managers distribute authority to job
holders.
 It is a function in which the synchronization and
combination of human, physical and financial resources
takes place.
 Organizing is assigning the tasks developed during
planning to various individuals or groups within the
organization thereby creating a mechanism to put plans into
action
 It involves two phases- differentiation and integration.
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 INTRODUCTION…
 The organizing function deals
 formal assignment of tasks
 authority
 a coordination of effort.

Organization
 A pattern of relationship through which people pursue to achieve
common goals.
 are groups of people, with ideas and resources, working toward
common goals.
Characteristics of organizations:
 Whatever their purpose, all organizations have four characteristics:
(1) common goal or purpose
(2) division of labor
(3) hierarchy of authority
(4) coordination of effort 4
 INTRODUCTION…
Organizing is not only
 deciding what work to be done, or
 dealing with formal assignment of tasks and authority and
coordination.

BUT also
 arranging them into a decision-making framework.

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 INTRODUCTION…
Four building blocks
 Managers take four fundamental steps to make decisions about
organizing
1.Divide the total work load into tasks that can logically and
comfortably be performed by individuals or groups division
of work

2.Combine tasks in a logical and efficient manner. The grouping of

employees and tasks in general Departmentalization

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INTRODUCTION…
3.Specify who reports to whom in the organization. The linking
of departmental result in an organizational hierarchy

4.Setup mechanisms for integrating departmental activities into

coherent whole and monitoring the effectiveness of that
integration coordination

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PURPOSES OF ORGANIZING
• Assuring more efficient use of the organization’s
resources

• Improving employee understanding of job duties and

responsibilities

• Improving employee morale

• Providing a sense of direction for each of the

organization’s functional areas.
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 PURPOSES OF ORGANIZING…
 Making the organization a stable place for employees
 Deciding what work needs to be done,
 Dealing with formal assignment of tasks, authority and
coordination.
 Arranging them into a decision-making framework.
 To staff the work unit, train employees, secure resources,

and empower the work group into a productive team.

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 ORGANIZATIONAL STRUCTURES
 Organizational structure is the formal decision-making
framework by which job tasks are divided, grouped, and
coordinated.

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A CLEAR ORGANIZATIONAL
STRUCTURE

 clarifies the work environment,

 creates a coordinated environment,
 achieves a unity of direction,
 establishes a chain of command

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TYPES OF ORGANIZATIONAL
STRUCTURE
1. MECHANISTIC STRUCTURE
 The traditional or classical design, common in
many medium- and large-size organizations.
 somewhat rigid in that they consist of:
 very clearly delineated jobs,
 have a well-defined hierarchical structure
 rely heavily on the formal chain of command for control.

 best suited to
 repetitiveoperations
 stable environments

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1. MECHANISTIC STRUCTURE…
 Bureaucratic organizations, with their
emphasis on formalization, are the primary
form of mechanistic structures.
 According to Max Weber, bureaucracy is a
form of organization characterized by
a rational, goal-directed hierarchy
impersonal decision making
formal controls
subdivision into managerial positions
specialization of labor
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 1. MECHANISTIC STRUCTURE…

 Bureaucratic organizational structures are tall consisting

of hierarchies with many levels of management.
 In a tall structure, people become relatively confined to
their own area of specialization.
 Bureaucracies are driven by a top-down or command
and control approach in which managers:
 provideconsiderable direction
 have considerable control over others.
 Other features of the bureaucratic organization include
functional division of labor and work specialization.

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 2. ORGANIC STRUCTURE
 It is more flexible, more adaptable to a participative form of
management, and less concerned with a clearly defined
structure.

 The organic organization is open to the environment in order

to capitalize upon new opportunities.

 Organic organizations have a flat structure with only one or

two levels of management.

 Flat organizations emphasize a decentralized approach to

management that encourages high employee involvement
in decisions.
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 2. ORGANIC STRUCTURE…
 The supervisor tends to have more personal
relationship with his or her employees.
 characterized by informality, working in groups
and open communication
 The purpose of this structure is to create
independent small businesses or enterprises that
can rapidly respond to customers' needs or
changes in the business environment.
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2. ORGANIC STRUCTURE…
a non-bureaucratic organization
 referred participative-democratic
 Management and employees interact in a friendly
environment
 characterized by mutual confidence and trust.
 Organic organizations are best suited to an
uncertaintask
a changing environment

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3. CONTINGENCY ORGANIZATION
 suggests that the most appropriate
organizational structure for each situation
depends upon
technology
organizational size
goals and strategy
environmental stability
characteristics of the employees

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 3. CONTINGENCY
ORGANIZATION…
 Incontrast, a less bureaucratic or more organic form of
organization is likely to be more effective when the
environment is complex and dynamic, tasks and
technologies are non routine, and a relatively high
percentage of professionals are involved.

 Contingency theorists do not advocate an either/or

approach but rather view the process as a continuum from
more or less bureaucratic (mechanistic) to more or less
organic.

 Contingency has wide application to health services

(Mohr,1982)
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 FUTURE TRENDS OF
ORGANIZATION
 Futuretrends are for more organizational
structures designed
To maximize responsiveness to customer needs
A flattening of hierarchies within organizations
Downsizing and re-engineering of companies
Decentralization of decision-making and authority
Increased accountability

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 ORGANIZATION DESIGN
 Is the determination of the organizational structure that
is most appropriate for the strategy, people, technology
and tasks of the organization

 Designing an organization involves choosing an

organizational structure that will enable the company to
most effectively achieve its goals.

 The way in which the building blocks of organization-

authority, responsibility, accountability, information, and
rewards are arranged or rearranged to improve
effectiveness and adaptive capacity

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ORGANIZATION DESIGN…
Organization design is the creation of
an organization's structure,
traditionally
functional,
divisional,
matrix.

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 ORGANIZATION DESIGN
1. FUNCTIONAL ORGANIZATION
 Authority is determined by the relationships between
group functions and activities.
 Functional structures group similar or related occupational
specialties or processes together under the familiar
headings of finance, manufacturing, marketing, research,
surgery, etc.

 Economy of scale is achieved through specialization.

 However, the organization risks losing sight of its overall

interests as different departments pursue their own goals.
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 ORGANIZATION DESIGN…
2. DIVISIONAL ORGANIZATION
 Corporate divisions operate as relatively autonomous
businesses under the larger corporate umbrella.
 In a conglomerate organization, divisions may be
unrelated.

 Divisional structures are made up of self-contained

strategic business units that each produces a single
product.

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DIVISIONAL ORGANIZATION…
 A centralheadquarters, focusing on results,
coordinates and controls the activities, and provides
support services between divisions.

 Departments accomplish division goals.

 A weakness however, is the tendency to duplicate

activities among divisions.

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ORGANIZATION DESIGN…
3. MATRIX STRUCTURES
 Ina matrix organization, teams are formed and team
members report to two or more managers.

 Utilizefunctional and divisional chains of command

simultaneously in the same part of the organization,
commonly for one-of-a-kind projects.

 It is used to develop a new product, to ensure the

continuing success of a product to which several
departments directly contribute, and to solve a
difficult problem.
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ORGANIZATION DESIGN…
3. MATRIX STRUCTURES…
 By superimposing a project structure upon the functional structure,
a matrix organization is formed that allows the organization to
take advantage of new opportunities.
 The matrix concept facilitates working on concurrent projects by
creating a dual chain of command,
 the project (program, systems, or product) manager
 the functional manager.

 Project managers have authority over activities geared toward

achieving organizational goals.
 Functional managers have authority over promotion decisions and
performance reviews.
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ORGANIZATION DESIGN…
3. MATRIX STRUCTURES…
 Matrixorganizations are particularly appealing to firms
that want to speed up the decision-making process.

 However,
the matrix organization may not allow long-
term working relationships to develop.

 Usingmultiple managers for one employee may result

in confusion as to manager’s evaluation and
accountability.

 Thus,the matrix system may elevate the conflict

between product and functional interests.
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3. MATRIX STRUCTURES…

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 DEPARTMENTALIZATION
 Afterreviewing the plans, usually the first step in the
organizing process is departmentalization.

 Once jobs have been classified through work

specialization, they are grouped so that common tasks
can be coordinated.

 Departmentalization is the basis on which work or

individuals are grouped into manageable units.
 There are five types of departmentalization

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31
 WHAT CAN BE READ FROM
ORGANIZATIONAL CHART?
• organizational structure
• shows job titles
• relationships between departments.
 Responsibilities of individuals
 Formal reporting relationships, level of hierarchy, or
chain of command/communication
 How individuals are grouped into sections/ departments
 Span of control
 Decentralization and centralization

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 The
The Organization
Organization Chart
Chart
Identifies lines of authority.

Gives employees a better understanding of the

formal structure of the organization.
Helps identify areas of overlapping
responsibility that should be eliminated.
Identifies promotional opportunities for job
applicants and new employees.
Identifies areas suitable for training and 33
orientation.
HOW TO DESIGN ORGANIZATIONAL
CHART?
 Define organizational objective
 Determine specific activities to achieve objectives
 Group similar activities
 Identify the proper personnel for each activity
 Create a network of relationships among each activity
 Create a chain of command among each level

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CHANGES IN THE ORGANIZATIONAL
STRUCTURE MAY OCCUR AS A RESULT
OF:
 Changes in government policy/ regulations/ system
 Changes in the organizational objectives
 Expansion and contraction of the organization
 Change of the management body
 Inefficient outcome which may be due to:
o Improper decision
o Conflicts
o Poor relationship

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SIGNS OF POOR ORGANIZATION
STRUCTURE
1. Poor forecasting
2. Not meeting customer needs
3. Slow response to changes in the environment
4. Conflict between individuals and/or groups
5. Poor communication/coordination
6. Poor decision making—Decisions being made by
the wrong people or at the wrong level in the
hierarchy.
 Inadequate information to make good decisions

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IMPORTANT TERMS IN
ORGANIZING
Work Specialization
 The degree to which organizational tasks are sub-
divided into individual jobs

 Also called division of labor

 Withtoo much specialization, employees are isolated

and do only a single, tiny, boring job

 Many organizations enlarge jobs to provide greater

challenges or assigning to tasks that are rotated.
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CHAIN OF COMMAND

 An unbroken line of authority that links all individuals in the

organization and specifies who reports to whom.

o Unity of Command - one employee is held accountable to only one

supervisor

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AUTHORITY, RESPONSIBILITY, AND
ACCOUNTABILITY
 Authority - formal and legitimate right of a manager to
make decisions, issue orders, and allocate resources to
achieve organizationally desired outcomes.

 Responsibility - duty to perform, task or activity an

employee is assigned

 Accountability - the fact that the people with authority

and responsibility are subject to reporting and
justifying task outcomes to those above them in the
chain of command
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DELEGATION
 The process managers use to transfer authority and
responsibility to positions below them in the hierarchy

 Organizations today tend to encourage delegation from

highest to lowest possible levels

 Can improve flexibility to meet customers needs and

adaptation to competitive environments

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CENTRALIZATION,
DECENTRALIZATION, AND
FORMALIZATION
 Centralization - The location of decision making
authority near top organizational levels.

 Decentralization - The location of decision making

authority near lower organizational levels.

 Formalization - The written documentation used to

direct and control employees.

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TALL VS. FLAT STRUCTURE
 Tall –
 narrow span of management
 a relatively large number of hierarchical levels
 Tight control

 Flat –
a wide span of control
 relatively few hierarchical levels
 Loose control
 Facilitates delegation

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 DIFFERENTIATION AND
INTEGRATION
 Two fundamental concepts around which organizations
are structured.

 Differentiationis created by job specialization and the

division of labor.

 Differentpeople in different units do different tasks that

require different skills.
 Division of labor means that the work of the organization is subdivided
into smaller tasks.
 Specialization refers to the fact that different people or groups often
perform specific parts of the entire task.
 The degree of differentiation increases with increasing complexity in the
environment.
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DIFFERENTIATION AND
INTEGRATION…
 Integrationis the degree to which differentiated units work
together and coordinate their efforts.
 Itis achieved through structural mechanisms that enhance coordination and
collaboration.
 Coordination is the procedures that link the various parts
of the organization to achieve the organization's overall
mission.
 Isbringing activities into proper relation with each other.
 Makes rule that everything that needs to be done is done and no two
individuals are trying to do the same work (i.e., avoiding gaps and
overlaps).
 A process by which team leaders achieve integrated pattern of group and
individual efforts.

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 COORDINATION
 Co-ordination is the unification, integration,
synchronization of the efforts of group members so as to
provide unity of action in the pursuit of common goals.

 It
is a hidden force which binds all the other functions of
management.

 According to Mooney and Reelay, “Co-ordination is

orderly arrangement of group efforts to provide unity of
action in the pursuit of common goals”.

 According to Charles Worth, “Co-ordination is the

integration of several parts into an orderly whole to
achieve the purpose of understanding”. 45
 COORDINATION…
 Management seeks to achieve co-ordination through its
basic functions of planning, organizing, staffing,
directing and controlling.

 Thatis why; co-ordination is not a separate function of

management because achieving of harmony between
individuals efforts towards achievement of group goals is
a key to success of management.

 Co-ordination is the essence of management and is

implicit and inherent in all functions of management.
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 COORDINATION…
 A manager can be compared to an orchestra conductor since both of
them have to create rhythm and unity in the activities of group
members.
 Co-ordination is an integral element or ingredient of all the managerial
functions.
 Co-ordination through Planning – Planning facilitates co-ordination
by integrating the various plans through mutual discussion, exchange
of ideas. e.g. - co-ordination between finance budget and purchases
budget.
 Co-ordination through Organizing – Mooney considers co-
ordination as the very essence of organizing. In fact when a manager
groups and assigns various activities to subordinates, and when he
creates departments, coordination uppermost in his mind.
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 COORDINATION…
 Co-ordination through Staffing – A manager should
bear in mind that the right number of personnel in various
positions with right type of education and skills are taken
which will ensure right men on the right job.
 Co-ordination through Directing – The purpose of
giving orders, instructions & guidance to the subordinates
is served only when there is a harmony between superiors
& subordinates.
 Co-ordination through Controlling – Manager ensures
that there should be co-ordination between actual
performance & standard performance to achieve
organizational goals.
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COORDINATION…

 From above discussion, we can very much affirm that

co-ordination is the very much essence of management.

 It is required in each & every function and at each &

every stage & therefore it cannot be separated.

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 COORDINATION AND
COOPERATION
 Co-ordination is an orderly arrangement of efforts to
provide unity of action in the fulfillment of common
objective whereas co-operation denotes collective efforts
of persons working in an enterprise voluntarily for the
achievement of a particular purpose. It is the willingness
of individuals to help each other.

 Co-ordination is an effort to integrate effectively energies

of different groups whereas co-operation is sort to
achieve general objectives of business.

 Though these two are synonymous but they are different

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COORDINATION AND
COOPERATION…
 Therefore, existence of co-operation may prove to be
effective condition or requisite for co-ordination.

 But it does not mean that co-ordination originates

automatically from the voluntary efforts of the group of
members.

 Ithas to be achieved through conscious & deliberate

efforts of managers, therefore to conclude we can say that
co-operation without co-ordination has no fruit and co-
ordination without co-operation has no root.
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 GROUP WORK
 Describe organizational structure of the following
institutions

1. Criticize the organizing function of your

institution

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THANK YOU!!!

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