Meaning of organization

 “An organization comes into existence

when there are a number of persons in
communication and relationship to each
other and are willing to contribute
towards a common endeavor.”
What is organizing

 Organizing is the process of identifying

and grouping the work to be performed,
defining and delegating
responsibility and authority, and
establishing relationships for the
purpose of enabling people to work
most effectively together in
accomplishing objectives - L. A. Allen
Definition
 Stephen P. Robbins and Mary Coulter -
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,
and where decisions are to be made.
 Koontz and O’Donnell - Organisation is
the establishment of authority and
relationships with provision for
coordination between them, both vertically
and horizontally in the enterprise structure.
Organizing as process

 “Organizing involves the grouping of

activities necessary to accomplish goals
and plans, the assignment of these
activities to appropriate departments
and the provision for authority
delegation and coordination” - Koontz
and O’Donnell
Process/steps of organizing
 Determination of objectives

 Division of activities

 Fitting individuals into jobs

 Developing relationships

 Coordination of activities
Nature/Characteristics
 Division of work or specialization

 Orientation toward goals

 Composition of individual and groups

 Differentiated functions

 Continues process
Purpose of organizing
 Help to achieve organization goals

 Optimum use of resources

 To perform managerial functions

 Facilitates growth and diversification

 Human treatment of employees

Principles of organization
 Principle of objectives.
 Principle of division of work.
 Principle of unity of command.
 Principle of span of control.
 Principle of scalar chain.
 Principle of delegation.
 Principle of absoluteness of
responsibility.
 Principle of parity of authority and
responsibility.
 Principle of co-ordination.
 Principle of flexibility .
 Principle of efficiency.
 Principle of continuity.
 Principle of exception
Types of organization

 Formal organization

 Informal organization
Formal Organization

 Formal organization is a fixed set of rules

of intra-organization procedures and
structures.
 It is usually set out in writing, with a
language of rules that ostensibly leave little
discretion for interpretation.
 It is a group of people working together
cooperatively, under authority, towards
goals that mutually benefit the participants
and the organization.
Characteristics
 Well defined rules and regulation
 Arbitrary structure
 Determined objectives and policies
 Status symbol
 Limitation on the activities of the
individual
 Strict observance of the principle of co-
ordination
 Messages are communicated through
scalar chain
Formal Vs Informal Organization

Basis of Comparison Formal Organization Informal Organization

General Nature Official Unofficial

Major Concepts Authority and Power and Politics

Responsibility
Primary Focus Position Person

Guidelines for Rules Norms

Behavior
Source of Leader Delegation by Delegation by
Powers Management Management
Informal Organization
 A network of interpersonal relationships
that arise when people associate with each
other.

 Groups of people who decide to interact

among themselves

 Informal organization refers to the

relationship between people in an
organization based on personal attitudes,
emotion, prejudices, likes and dislikes, etc.
 It describes the pattern of behavior and
interaction, that stems from personal,
rather than official relationships.

 In other words, informal organizations are

created by the group members themselves.
(for accomplishment of purpose may or
may not be relevant to the organization)
Characteristics
 Evolving constantly
 Dynamic and responsive
 Excellent at motivation
 Requires insider knowledge to be seen
 Treats people as individuals
 Flat and fluid
 Cohered by trust and reciprocity
 Difficult to pin down
 Essential for situations that change quickly
or are not yet fully understood
Within Organization
between two or more
Benefits of Informal Organization

 To Employees

 To Management
 Employees:
 Sense of belonging
 Aid on the job
 Check on authority

 Management:
 Less supervision
 An aid to management
 Disadvantage of Informal
Organization
 Resistance to change

 Role conflicts

 Rumors

 Conformity

 Group think philosophy

Span of control
 It is also known as span of management

 “The span of management or span of

control is the number of subordinates who
report directly to a specific manager.” -
Kathryn M. Bartol and David C. Martin

 It suggests how the relations are designed

between a superior and a subordinate in an
organization
 Previously used in military for control
and supervision.

 The concept of span of control was

developed in the united kingdom in
1992, by sir Hamilton.

 Based on assumption that individual

(manager) have finite amount of time,
energy, and attention to devote their
jobs.
Factors Determining effective Span
 Subordinate Training

 Clarity of Delegation of Authority

 Clarity of Plans

 Geographic Location

 Use of Objective Standards/ Type of work

Continue…..
 Communication Techniques

 Amount of Personal Contact

 Organization Level

 Economic Consideration

 Other Personal factors ( Capability,

Personality)
Types of Span of Control

 Wide span of control

 Narrow span of control

Wide span of control

 Wide span of control is also known as Flat

Organization (Structure)

 when there is relatively few hierarchical

levels, where more subordinates report
directly to a given manager.

 In a flat structure, tasks are highly inter-

related
Advantages of wide span…..
 Clear goals, policies and effective
delegation.

 Fast reach of messages

 Less supervision and more responsibility

 High motivation

 Cost effective
Disadvantages

 Overloaded managers

 Lack of control over subordinates

 Decision making may affect

 Managerial skill
Narrow span of control
 Known as tall or vertical span of control
or organization.

 Narrow span is when there is relatively

large number of hierarchical levels
where each manager supervising a
small number of employees

 More supervision and control is

required to perform a job
Advantages
 Effective control and measurements

 Feedback

 Idea generation

 Fast communication within a level

 Less responsibility compared to wide

Operative 4096, Managers (Level Operative 4096, Managers
1-6) = 1365 (Level 1-4) = 585
Disadvantages
 Expensive

 Many level of management

 Low motivation

 Excessive gap between top and low

level management

 Belongingness
Authority

 Authority is seen as the legitimate right

of a person to exercise influence or the
legitimate right to make decisions, to
carry out actions, and to direct others.

 Authority is a power to make decision

which guide the action of others.
Power of Authority….
Characteristics of authority
 Basis of getting thing done
 Legitimacy
 Decision making
 Implementation
 Authority flow down the vertical
hierarchy
 Authority is vested on organization
position not people
 Authority is delegated downward
Authority
Top level

Middle level

Lower level

Workers
Sources of authority

 The formal authority theory

 The acceptance of authority theory

 The competent theory

Formal Authority
Acceptance Theory
 Authority flow from the superior to the
subordinates whenever there is an
acceptance on the part of the
subordinates.

 Acceptance depends upon various

factors like reward, subordinates
behavior, dismissal or non acceptance
results, special knowledge, confidence,
and relation
Competent Theory

 This type of authority is invested with the

person by virtue of the office held by them.

 Person or organization that has the legally

delegated or invested authority, capacity,
or power, to perform a designated function.
Responsibility

 “The obligation of a subordinate to

whom a duty has been assigned to
perform” – Koontz O’ Donnel

 Responsibility comes into existence

because a person with authority,
requires assistance from another and
delegates authority to him.
Elements of Responsibility
 It arises from superior – subordinates
relationship

 It ensures from contractual agreement

 The responsibility can not be transferred

to anybody.

 It is created by acceptance of authority

 There is essence of obligation

 The responsibility may be general or

specific

 Responsibility is a continuing process

by nature
 Responsibility moves upwards
Responsibility
Top level

Middle level

Lower level

Workers
Characteristics
 Responsibility is to assign duty to human
beings only.
 Responsibility always flows upward from
juniors to seniors.
 Responsibility is result of duty assigned.
 Responsibility is the obligation to complete
the job as per instruction.
 It is personal obligation ,and absolute also.
 The manager remains responsible to his
superiors for his job even after its
delegation.
Team Work……
Imbalance in authority and
responsibility

Authority Responsibility

If responsibility is greater than authority ,then this

could result in frustration.
Imbalance in authority and
responsibility
Responsibility

Authority

If authority is greater than responsibility ,then this

could result in autocratic behavior
Delegation of Authority
 It’s a process of transferring responsibility
for the performance of an activity from one
individual to another while retaining the
accountability for the outcome.

 Delegation is the entrusting of authority,

power and responsibility to another.

 Organizations encourage managers to

delegate authority to lowest possible level.
 Delegation - The manager extends his area
of operations, for without delegation, by
his actions are confined to what he himself
can perform.

 Delegation is the entrusting of authority,

power and responsibility to another.
Types of delegation
 General or Specific

 Written or Oral

 Formal or Informal

 Downward and Sideward

Features
 Delegation has dual characteristics.

 Authority once delegated can be enhanced,

reduced, and withdrawn.

 Delegation of authority is always to the position

created through organizing.

 Manager delegated authority out of his authority

 Delegation may be specific or general.

Effective Delegation
 Know yourself and team members.
 Assess strength, weakness, job specification,
situation and skills required.
 Keep clear, complete and continues
communication.
 Provide authority with limitations and
reporting requirements.
 Ensure that subordinates accept
 Evaluate review for effective results.
Key Elements
Principles of Delegation

 Delegation to conform to desired objectives

 Responsibility NEVER be delegated.
 Authority to match duties
 Unity of command
 Limits to authority to well-defined and level of
authority
 Parity of authority and responsibility
Process of Delegation

 Define assignment and what to delegate

 Select the right person in the light of job to
be done
 Maintain open lines of communication
 Establish proper control
 Reward effectively (superior and
subordinate)
Advantages of delegations
 It’s a art of getting work and done and best
results
 Lightens the burden of top executives
 Quick (quality) decisions and time saving.
 Motivation and enhancement of subordinates
with belongingness
 Each level development, aid to development
and diversification
 Development of second line leadership
Pitfalls/ Hindrances of Delegation

 Organizational

 Personal
 On the part of Superior

 On the part of Subordinates

Authority actually……
“Everything that increasing the role of
subordinates is decentralization and that
decreases the role is centralization”
Centralization & Decentralization
 Centralization is the tendency to restrict
delegation of decision making in an
organization, usually by holding it at the
nearest top of the organization structure.

 It is a situation where the top management is

the people who take all the organization
decision.
Reason/Factors conducive
Centralization
 Personal Factors:
 Lack of confidence on subordinates
 Lack of skills of subordinates
 Insecure personality of superior person

 Political Factors:
 Legacy
 Development
 Defense activity
 Economic Factors:

 Big budget
 Foreign aid
 Control over spending
 Resources
Advantages of Centralization
 Top down control

 Decision making

 Organizational change

 Fast execution

 Uniformity
Decentralization
 Definition: the process of transferring
and assigning decision making
authority to lower levels of an
organizational hierarchy.

 Decision making move to lower level i.e.

divisions, branches, department, and
subsidiaries.
Factors affecting decentralization
 Specialization

 Diversity of market

 Technology

 Geographical dispersion of the organization

 The quality of middle and junior level manager

in subordinates.
Kind of Decentralization
 Political

 Administrative

 Deconcentration

 Delegation

 Devolution
Advantage of decentralization
 Learning dynamics

 Democratic and participative decision making

 Organizational change (dynamics)

 Flexible for change adoption

 Participative approach
Line and staff conflicts
 Line organization: oldest and simplest form.

 Line of authority flow top to bottom.

 Authority is maximum at top level and

minimum at lower level.

 Based on the supervisor-subordinate

relationship as per organization structure.
Line – Staff Organization
 Authority is created by the functional
differentiation of the primary function such
as production and marketing.

 All are in direct chain of command of these

functions.

 Personal function is not independently

organized.
Characteristics
 Unity of command

 Relationship is clear (authority)

 Strict discipline

 Rigid n traditional structure

 Staff authority – Staff refers to those elements
of the Organisation which help the line to
work most effectively in accomplishing the
primary objectives of the enterprises.

 They help the line person work most

effectively in accomplishing the objectives.

 No command over the function as known for

support
Characteristics
 Staff share credit with line officials

 Loose discipline

 Number of Experts are more to assist line

staff

 Based on planned specialization

Conflicts…..
Line Dept complains:  Staff Dept Complains

1. Staff people encroach 1. Line people are bull-

on their authority headed, resist new ideas
2. Advice is academic in 2. Distrust, are non-
nature cooperative and
3. Credit of project- staff sabotage line plans
4. failure of project- line 3. Lack of authority
5. Fail to see entire 4. Line departments
picture and operate in receive preferential
limited objectives treatment (payments)
Criteria/Reasons for Conflicts

Basis of Distinctions Authority Power

Source Legitimate (From May or may not be
Position in an orgnizt.) Legitimate
Definition Well Define Not so well Define
Connection Power and Authority Not arise from Authority
same
Purpose Productive Destructive
Nature Right to Command Capacity to Command
Management Formal Not Formal
Relationship Via Authority Can be connected to
(subordinates/Superior) anyone.
Plural Executive
 A position not held by a single person but is
held by more than one - Koontz and O
'Donnel.
 It is an executive branch with power
divided among several independent
officers.
 A plural executive could be built under the
provisions of laws, or may also on
a decision from a superior.
 Authority

 Roles in policy making

 Roles on policy execution

Plural Vs Individual Executive
 As per survey done by AMA (American
Management Association)
 Individual manager perform better
managerial function.
 Individual is less good at formulating
functions and strategies
 For innovation both are good.
 For better outcome individual should be
assisted by committee.
Committee
 Definition: Group of persons to whom, as a
group, some matter is committed.

 Individual or a group, appointed by

an agency, authority, or larger assembly, to
whom a matter is referred, or is committed
for attention, investigation, analysis,
or resolution. A committee has no power,
except the power(s) assigned to it by its
appointer.
Nature of committee
 Some may undertake managerial functions.

 A committee may be either line or staff

depending upon authority.

 Committee can be formal or informal.

 Committee may be permanent of

temporary in nature.
Reasons for using committee
 Group deliberation and judgment.

 Fear of too much authority in a single

person.

 Sharing of information.

 Consolidation of authority
 Motivation through participation.

 Avoidance of action.

 Representation of interested groups and

people.

 Coordination of departments, plans, and

policies.
Disadvantages of committees
 High cost in time and money

 Compromise at the least common

denominator

 Indecision

 Tendency to be self destructive

 Splitting of responsibility