CHAPTER # 14

BASIC ELEMENTS
OF
ORGANIZING
7–1
 What Is Organizing?

• Organizing
 Organizing is the process of arranging and allocating
works, authority and resources among an organization's
members so that they can achieve organizational goals. -
Stoner, Freeman and Gilbert.

 Organizing refers to arranging and structuring work to

accomplish an organization’s goals. - Stephen P. Robbins
& Mary Coulter.

 Organizing refers to arranging, allocating and coordinating

resources and activities of an organization.

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Organizational structure/ Organogram

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 Organizational Structure and
Organogram
Organizational structure refers to formal
arrangement of jobs within an organization.

Organogram refers to pictorial

presentation of an organizational
structure.

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 Basic Elements of Organizing
• There are six basic elements (building blocks)
that managers can use in constructing an
organization:
1. Designing Jobs
2. Grouping Jobs
3. Establishing Reporting Relationships between
Jobs
4. Distributing Authority among Jobs
5. Coordinating Activities among Jobs
6. Differentiating among Positions

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 Basic Elements of Organizing
1-Job Design 2- Departmentalization

3- Reporting Relationship 4- Distributing Authority

5- Coordination 6- Differentiation
 1. Designing Jobs

Job Design refers to the determination of a position’s

work-related responsibilities.

 For example, for a machine operator at Caterpillar, job

design might specify what machines are to be operated,
how they are to be operated, and what performance
standards are expected, the sequence of activities of the
job.

The starting point for designing jobs is determining the

level of desired job specialization.
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 1. Designing Jobs

Job Specialization:
Job specialization is the degree to which the overall
tasks of a particular work is broken down divided into
smaller parts.
Job specialization evolved from the concept of division
of labor.
Level of job specialization determines the area of
responsibilities of a job.
For example, the task of making shirts can be divided
into many smaller parts, such as taking measurement,
cutting the fabrics, sewing, button fixing, ironing,
packaging and delivery, etc.
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Division of Labor for Making Shirts

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 1. Designing Jobs

Benefit of Job Specialization:

Job specialization provides a number of benefits to
organizations:
a)Workers performing small & simple tasks will become
very proficient at each task.
b)Transfer time between the tasks decreases.
c)If job is narrowly defined, it becomes easier to develop
specialized equipment for each part of the job.
d)When an employee who performs a specialized job is
absent or resigns, the manager is able to train someone
new at relatively low cost.

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 1. Designing Jobs

Limitations of Job Specialization:

Job specialization also have some negative
consequences to organizations:

a)Workers who perform highly specialized jobs may

become bored or dissatisfied.

b)The job my not offer challenge or stimulation.

c)Boredom, monotony set in, absenteeism rises, and

quality of work may suffer.
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 1. Designing Jobs

Alternatives to Job Specialization:

To counter the drawbacks of Job specialization,
managers have alternative approaches to job design.
They are-
a)Job Rotation
b)Job Enlargement
c)Job Enrichment
d)Job Characteristics Model
e)Work Teams

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 1. Designing Jobs

a) Job Rotation:
Job rotation involves systematically moving
employees from one job to another.

b) Job Enlargement:
Job enlargement involves giving the employee more
tasks to perform.
This method increases the total number of tasks the
employees perform.
As a result, all employees perform a wide variety of
tasks, which tends to reduce the level of job
dissatisfaction.
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 1. Designing Jobs

c) Job Enrichment:
Job enrichment involves increasing both the number
of tasks the worker does and the control the worker
has over the job.

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 1. Designing Jobs
d) Job Characteristics Approach:
Job characteristics approach suggests that jobs
should be diagnosed and designed along five core
dimensions:
1. Skill Variety: the number of things a person does in a
job.
2. Task Identity: the extent to which the worker does a
complete or identifiable portion of the total job.
3. Task Significance: the perceived importance of the job.
4. Autonomy: the degree of control the worker has over
how the work is performed.
5. Feedback: the extent to which the worker knows how
well he is performing the job.

7–15
 Critical
Core job Personal and
psychological
dimensions work outcomes
states

• Skill variety Experienced • High internal

• Task identity meaningfulness work motivation
• Task significance of the work

• High-quality work
Experienced performance
• Autonomy responsibility
for outcomes
of the work • High satisfaction
with the work

Knowledge of the
• Feedback actual results of • Low absenteeism
work activities and turnover

Job Characteristics Employee

growth-need
Approach strength

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 1. Designing Jobs
d) Job Characteristics Approach:
The five job dimensions may lead to critical
psychological states which, in turn, may enhance
motivation, performance, and job satisfaction while
also reducing absenteeism and turnover.

e) Work Teams:
Under this arrangement, a team is given responsibility
for designing the work system to be used in
performing an interrelated set of tasks.
The work team assigns specific tasks to members,
monitors and controls its own performance and has
autonomy over work scheduling.
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2. Grouping Jobs: Departmentalization
Departmentalization:
How jobs are grouped together is called
departmentalization.
There are five common forms of departmentalization:
a)Functional Departmentalization
b)Product Departmentalization
c)Customer Departmentalization
d)Location Departmentalization
e)Process Departmentalization

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 Bases for Departmentalization: Apex Computers

President

Computers Software

Manufac- Finance Marketing Marketing Finance Design

turing

Saudi
UAE Oman Bahrain
Arabia

Industrial Consumer
sales sales

Saudi UAE Bahrain Oman Qatar

Arabia

11–19
2. Grouping Jobs: Departmentalization
a) Functional Departmentalization:
Grouping jobs involving same or similar activities.

The word ‘function’ is used here to mean organizational

functions such as human resource, finance,
production, marketing, etc.

b) Product Departmentalization:
Grouping jobs by product line.

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2. Grouping Jobs: Departmentalization
c) Customer Departmentalization:
Grouping jobs on the basis of the kinds of customers.

A company may have two distinct departments –

industrial sales and consumer sales.

d) Location Departmentalization:
Grouping jobs on the basis of defined geographic areas.

A company may have two manufacturing plants – one in

Chittagong and another one in Gazipur.

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2. Grouping Jobs: Departmentalization
f) Process Departmentalization:
Grouping jobs on the basis of the product or customer
flow.

For example, the task of making shirts can be

divided into many sequential parts, such as
taking measurement, cutting the fabrics, sewing,
button fixing, ironing, packaging and delivery,
etc.
Other Forms of Departmentalization:
Time/Shift based departmentalization.

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 Other Considerations

• Sometimes
departments are
called something
different, such as:
– Division.
– Units.
– Section.
– Bureaus.

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3. Establishing Reporting Relationships
Two basic issues must be clarified in establishing
reporting relationships:
A.The Chain of Command
B.The Span of Management

A.The Chain of Command

The chain of command is the line of authority extending
from upper levels to lower levels of the organization,
which clarifies who reports to whom. The chain of
command has two components:
a) Unity of Command
b) Scalar Principle
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 Chain of Command

Unity of Command – one and

only one boss

Scalar Principle – clear and unbroken line of

authority extending from the bottom to the top
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02-05-I200-SL
3. Establishing Reporting Relationships
A. The Chain of Command

a) Unity of Command:
Unity of command suggests that each person within
organization have a clear reporting relationship to
one and only one boss.

b) Scalar Principle:
Scalar principle suggests that there must be clear and
unbroken line of authority that extends from highest
to lowest position in the organization.

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3. Establishing Reporting Relationships
B. The Span of Management
Span of management refer to the number of people who
report to a particular manager.
This is also called span of supervision or span of control.

Narrow Versus Wide Spans:

Managers usually try to determine optimum span of
management.
For example, should it be relatively narrow (with few
subordinates per manager) or relatively wide (with
many subordinates)

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Span of Control

Narrow Span of control

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02-12-I200-SL
 Span of Control

Narrow - Effective Narrow - Effective

Narrow - Effective
Wide Span of Control
span of controlspan of controlspan of control
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02-12-I200-SL
3. Establishing Reporting Relationships
B. The Span of Management

 A. V. Graicunas tried so far to quantify span of

management issues.
 He noted that a manager must deal with three kinds of
interactions with and among subordinates: (i) Direct (ii)
Cross (iii) Group.

 The number of possible interactions of all types between a

manager and subordinates by the following formula:
I = N (2^N/2 + N -1)
Where ‘I’ is the number of interactions and ‘N’ is the number
of subordinates. 7–30
 What is the optimum SOC?
A. V. Graicunas • Ralph C. Davis
– Operative span for
• Subordinate lower-level managers
up to 30 workers,
interactions whereas executive
spans should be
limited to 3 to 9.
• I = N(2N/2 + N - 1)

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3. Establishing Reporting Relationships
B. The Span of Management

Tall Versus Flat Organizations:

 Narrower span of management leads to tall organizations.
 Wider span of management leads to flat organizations.

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 Tall Versus Flat Organizations
Tall Organization
President

Flat Organization
President

11–33
3. Establishing Reporting Relationships
Determining Appropriate Span of Management:

Although no perfect formula exists, researchers have

identified a set of factors that influence the span for a
particular circumstance.
1.Competence of Supervisor and Subordinates (the greater the
competence, the wider the potential span).

2. Physical dispersion of Subordinates (the greater the

dispersion, the narrower the potential span).

3. Extent of nonsupervisory work in manager’s job (the more

nonsupervisory work, the narrower the potential span). 7–34
Determining Appropriate Span of Management:

4. Degree of required interaction (the more required

interaction, the narrower the potential span).

5. Extent of standardized procedures (the more standardized

procedures, the wider the potential span).

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3. Establishing Reporting Relationships
Determining Appropriate Span of Management:

6. Similarity of tasks being supervised (the similar the tasks,

the wider the potential span)

7. Frequency of new problems (the higher the frequency of

new problems, the narrower the potential span)

8. Preferences of the supervisors, etc.

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 4. Distributing Authority
Authority is the power that has been legitimized by the
organization.
This is the official power/right to make decisions.

Two specific issues that managers must address when

distributing authority are:
a) Delegation
b) Centralization and Decentralization

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 4. Distributing Authority
a) Delegation/ Delegation of Authority
Delegation is the process by which a manager assigns a
portion of his or her total workload to others.

Delegation Process:
Delegation process involves three steps:
i. Assigning Responsibility
ii. Granting Authority
iii. Creating Accountability

7–38
Steps in the Delegation Process
Step 1 Step 2 Step 3
Assigning Granting Creating
responsibility authority accountability

Manager Manager
Manager Manager
Manager

Subordinate Subordinate Subordinate

Figure 11.4
11–39
 4. Distributing Authority
b) Centralization and Decentralization
Organizations also develop patterns of authority across a wide
variety of positions and departments. The patterns are:

Centralization is the process of systematically retaining

power and authority in the hands of higher-level managers.

Decentralization is the process of systematically delegating

power and authority throughout the organization to middle
and lower-level managers.
Keep in mind that Centralization or decentralization is
relative, not absolute –that is, an organization is never
completely centralized or decentralized. 7–40
 5. Coordinating Activities

Coordination is the process of linking the activities of the

various departments of the organization.

Coordination means the integration and synchronization of

the activities, resources and efforts of the people working in
the organization.

The greater the interdependence among the various

departments and units, the more attention the organization
must devote to coordination.

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Types of Interdependence

• (1) Pooled interdependence

• When units operate with little interaction; their output is
simply pooled. This represents the lowest level of
interdependence.
• (2) Sequential interdependence
• When output of one unit becomes the input for another in
sequential fashion.
• (3) Reciprocal interdependence
• This interdependence exists when activities flow both
ways between units.
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6. Differences Between Line and Staff
The last basic element of organizing is differentiating between
line and staff positions in the organization.

Line positions:
The positions in the direct chain of command who are directly
responsible for the achievement of the main objectives of the
organization.

Staff positions:
The positions responsible for advising, supporting, assisting
the line positions.

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6. Differences Between Line and Staff
Organizations sometimes attempt to balance their emphasis on
line versus staff positions in terms of administrative
intensity.

Administrative Intensity:
The degree to which managerial positions are concentrated in
staff positions.

An organization with high administrative intensity is one with

many staff positions relative to the number of line positions.
Low administrative intensity reflects relatively more line
positions
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6. Differences Between Line and Staff

There should be low administrative intensity in an

organization.

Organizations should devote most of their human resource

investment to line managers because, by definition, they
directly contribute to the organization’s basic goals.

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THE END OF THE
CHAPTER

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