Organizing

What is an organization?

 “An organization is a social unit or

human grouping, deliberately structured
for the purpose of attaining specific
goals.”

(by A. Etzion)

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 Types of Organizations
1. Production organizations 2. Services organizations
Characteristics Product Services

Output Tangible Intangible

Output consumption Overtime, can be stored Immediate, can’t be stored

Nature of work Producer intensive Labor intensive (consumers’)

Customer contact Minimal, indirect Direct

Customer participation Little or none Essential

 Organizing……..

 The term organizing is used in two

different senses.
1. Organizational design-process of
organizing
2. Organizational structure- the
result of that process

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 Organizational design
 Is the “process of defining and grouping
activities of the organization and
establishing the authority relationship
among them”.
 Is function of organizing, in which we
differentiate and integrate the activities of
the organization.

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Organization structure

It demonstrates how jobs /tasks are formally

divided, grouped and coordinated
Structure is a means for attaining the objectives
and goals of an organization

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The Organization Chart

Organization Chart
is a box-and-lines
illustration showing the
formal lines of authority
and the organization’s
official positions or
division of labor

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Organization Chart—Example
for a Hospital
Board of
Directors

Chief Executive
Officer

Executive Executive
Administrative Medical Director
Director

Director Director of Director of Director of Director Chief

of Nutrition & X-Ray & of Physician
Personne Admissions Food Laboratory Pharmac
l Services Services y

Director of Director of Director of Director of

Patient & Accounting Surgery Outpatient
Public Services8
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Relations
Information in Organization Charts

The Vertical Hierarchy of Authority: A glance up

and a glance down shows the chain of command

The Horizontal Specialization: A glance to the left

and right on the line of an organization chart shows
the different jobs or work specialization

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Key elements in org.structure

• Work specialization
• Departmentalization
• Chain of command
• Span of control
• Centralization and decentralization

• Formalization
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Work specialization (division of
labour)
 To what degree are tasks subdivided
into separate jobs?
 The degree to which tasks in
organization are subdivided into
separate jobs

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Departmentalization
 On what basis will jobs be grouped
together?
 By function
 By product
 By customer
 By territory

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Chain of command
 To whom individuals and groups
report?
 Who reports to whom?

 Chain of command is an unbroken

line of Authority than extends from
the top to the lowest level of
organization

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Span of Control

How many individuals can a manager

direct/control?

Divided into two:

-Narrower
-Wider

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Centralization

Where does decision-making

authority lie?

Refers to the location of decision-

making authority in the hierarchy of
the organization
Divided into
centralized & Decentralized
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 Centralized Vs.
Decentralized Organizations

Centralized Authority
important decisions are made by
higher-level managers

Decentralized Authority
important decisions are made by
middle-level and supervisory-level
managers

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Formalization

To what degree will there be rules to direct

employees and managers
Refers to the extent to which expectations
regarding the means and ends of work are
specified and written

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Contingency Design
Contingency
Design the
process of fitting the
organization to the
environment

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There are two types (model) of
organizational structure:
1. Organic structure
2. Mechanistic organization
Types of organizational structure:

1. Organic structure (flat),

 Is characterized by wide span of control,
 Decentralized hierarchy of authority
 Needs skilled labor,
 Many teams or task forces
 Free flow of information.
 Few rules and procedures
2. Mechanistic organization (tall) ,
 Characterized by narrow span of control
 Rigid departmentalization/Specialized tasks
 Centralized hierarchy of authority
 High formalization/formalized communication
 Many rules and procedures
 Little flow of information.
 Few teams or task forces
Types of organizational structure:
Key:
T = Top manager
CEO M = Middle manager
Mechanistic F = First-line manager

T T T

M M M M M M M M M

F F F F F F F F F F F F F F

F F F F F F F F F F F F F

Organic CEO

M M M M M M M M M

F F F F F F F F F F F F F F

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F F F F F F F F F F F F F
Distinct characteristics of health
service organizations

 Among the most frequently mentioned

differences are the following.
 Defining and measuring out put are more
difficult.
 The work involved is more highly variable and
complex
 More of the work is of an emergency and non-
deferrable nature.
 The work permits little tolerance for
ambiguity or error.
 The work activities are interdependent;
require coordination among divers’
professional groups.
 Organizational participants are highly
professionalized.
 Their primary loyalty belongs to the profession
rather than to the organization.
 Types of organizational designs

 Common designs in health service

organizations are
 Functional,
 Divisional, and

 Matrix designs.
 1. Functional design:

 Grouping similar or related occupational

specialists together.
 In other words, it exists when labor is
divided in to departments specialized by
functional area.
 The functional design is most useful when
the organization has only a few products or
goals.
Functional Structure
Structure for
a business President

Vice
Vice Vice Vice
President,
President, President, President,
Human
Marketing Finance Production
Resources

Chief
Structure for
Administrator
a hospital

Chief of Director of Director of Director of

Medical Administrative Outpatient Nutrition &
Services Services Services Food Services
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 Functional design enables decisions to be
made on the centralized, hierarchical basis.
 Interdepartmental coordination is poor and
decisions pile up at the top.
 If the environment becomes unsuitable, the
functional design cannot cope.
 The response time is generally too slow
because decision is made at the top.
The functional design is most appropriate
 When an organization is relatively simple,
 Only in stable environment/where few
changes taking place
Functional design is unsuitable when
 An organization grows and begins to
diversify its services
 2. Divisional design

 An organization structure made up of

 separate, semi autonomous units or different
units.
 It is often found in large organization.
 It operates under conditions of high
environmental uncertainty, high
technological complexity.
 It is also found in organizations where a
large variety of products and markets.
 Divisional design/structure

1. Function Product Divisions

group activities are arranged around
similar products or services
2. Customer Divisions group
activities around common customers
or clients
3. Geographic Divisions group
activities around defined regional
locations
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 Divisional Structure
Product Divisional President
Structure

Motion Magazine & Internet

Music
Pictures & TV Book Products
Division
Division Division Division

Customer Divisional President

Structure

Consumer Mortgage Business Agriculture

Loans Loans Loans Loans

Geographic Divisional President

Structure

Western Northern Southern Eastern

Region
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 3. Matrix design

 Matrix designs have evolved to improve

 mechanisms of lateral coordination and
 information flow across the organizations.
 A matrix organization is particularly useful
in highly specialized technological areas
that focus on innovation.
 Matrix Structure President
Functional
Structure
Project
structure
Vice Vice Vice Vice
President, President, President, President.
Engineering Finance Production Marketing
Project
Manager,
Taurus

Project
Manager,
Mustang
Subordinate
Project reports to
Manager, both Vice
Explorer President of
marketing &
Project
Manager, to project
Expedition Manager for
Mustang
Example
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Company 34
Advantages of Matrix
Organization
 Efficient use or resources
 Flexibility in conditions of change and
uncertainty
 Technical excellence
 Freeing top management for long-run
planning

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Disadvantages

 Individual workers having two bosses may

creates conflicting expectations and
ambiguity.
 Is expensive.
Levels of organization design
1. Individual positions
 Manager
 Staff positions
 Health professionals
 Other workers
2. Work group
 Task force /committees
 Teams
 Units and departments
3. Clusters of work group
 Divisions of two or more
units
 Medical staff organization
4. Total organization
 Hospitals
 Primary care center
5. Net work of
organizations
 organizations providing
service for similar
patients 
6. Systems
 A chain of hospitals
under a single ownership
 1. Designing a position

 Designing individual positions in the

organization.
 e.g. Staff positions, managers position
 It is necessary to identify the size and
scope of task that can be performed and
work standardized.
 2. Designing a work group

 Creating:
 Task force and committees
 Teams
 Units and departments
 It needs to clarify the specific purpose of
the work group, and boundaries of the
group’s authority.
 Types of skills and profession needed for
the position should be identified.
 3. Designing a cluster of
work groups
 It is necessary to redesign a cluster of
departments or units with in an
organization to form a division.
 Is a grouping of units to achieve
coordination with in the division.
 Units may be grouped by profession and/or
skill of the workers.
 E.g. Divisions of two or more units
 Medical staff organization
4. Design a total organization

 Is design for a total organization

 E.g. Hospitals,
Health center
5. Designing a net work
 Assessing of organizations those are
inline with our objectives.
 Aim is to achieve a common purpose or
serve common clients.
 E.g, social services that may exist in a
community to provide services to
geriatric patients.  
 The objective in the design of the network
is
 To ensure coordination of services
 To create smoothness of client flow between
organizations
 To maximize effectiveness.
 6. Designing a system

 At the system level,

 The design decisions depends on the
 Purpose of the system and
 Heterogeneity of the programs provided.
 E.g. A chain of hospitals under a single
ownership (by government) hospitals
referral system