Chapter 4

ORGANIZING
 ORGANIZING

• Process of grouping together of men and establishing

relationships among them.

• Defining the authority and responsibility of personnel

 NATURE OF ORGANIZING

• Weakness in the organization is a positive sign because it

induces people to attain teamwork.

• Design and structure and improvement of systems of

roles are basically the managerial function of organizing.
ORGANIZING AS A PROCESS
SHOULD CONSIDER SEVERAL FACTORS:

1. Structure must reflect objectives and plans because activities of

the organization are based on them.

2. Structure must reflect authority given to top and middle

management.

3. Organization structure should reflect their external environment.

4. Organization must be manned.

THE NATURE AND DEVELOPMENT OF
ORGANIZATION

PROPER ORGANIZATION is the backbone of the

successful enterprise
WHAT IS AN ORGANIZATION?

• Executive structure of a business

• Connotes a creative process

• Total business organization, including facilities, materials,

money, and manpower (refers to the term “CONCEPT”)
 Process of organizing

Organizing, like planning, is a process that needs to be

carefully worked out and implemented. This process
involves determining what work is needed, assigning those
tasks and organizing them in a decision-making framework
(organizational structure). If this process is not well
conducted, the results may include confusion, frustration,
loss of efficiency and limited effectiveness.. The process of
organising consists of the following five steps.
 TYPES OF ORGANIZATION
STRUCTURE
1. LINEAR ORGANIZATION
- simplest form of structure and refers to a direct straight-
line responsibility and control from the top management to
the middle management and to the lower level.

2. LINE AND STAFF ORGANIZATION

- utilizes the assistance of experts or specialists
 TYPES OF ORGANIZATION
STRUCTURE
3. FUNCTIONAL ORGANIZATION
- utilizes the pure services of experts or specialists

4. COMMITTEES
- used in situations where group participation and
decision are required
 COMMITTEES
May be classified as:

1. AD HOC COMMITTEE
-undertakes temporary activities

2. STANDING COMMITTEE
-called permanent committee which undertakes
permanent activities
 COMMITTEES
FOUR BASIC PRINCIPLES TO BE CONSIDERED:

1. Organization of a committee should grow out of need

that is recognized by the representatives of the
departments and the personnel affected.

2. Members of a committee should be representatives of

the function and the personnel concerned who have
variations in opinion among them.
 COMMITTEES
FOUR BASIC PRINCIPLES TO BE CONSIDERED:

3. Duties, authority and responsibility must be clearly

defined.

4. Organization and operation of a committee should be a

cooperative development.
 ORGANIZATION CHART

• Diagram or drawing showing the important aspects of an

organizational structure

• GEORGE TERRY: Diagrammatical form which shows

important aspects of an organization including the major
functions and their respective relationships, the channels
of supervision, and the relative authority of each
employee
TYPES OF ORGANIZATION CHART
1. MASTER CHART OR CHART OF AUTHORITY
- entire organizational structure

2. FUNCTIONAL CHART
- functions and activities of departments or positions

3. PERSONNEL CHART
- departments in the same relative manner as the
functional chart
HOW TO DRAW AN ORGANIZATION
CHART
BEFORE DRAWING:

1. Gather the necessary information

2. Draw a temporary chart

3. Chart as drawn must be submitted and recommended to

top management for approval and implementation
HOW TO DRAW AN ORGANIZATION
CHART
The following rules should be observed in drawing an
organization chart:

1. Boxes or rectangles representing various positions/jobs

in the organization should be grouped and placed
according to their level

2. Boxes indicating the organizational functions on the

same level should be of the same sizes
HOW TO DRAW AN ORGANIZATION
CHART
3. Solid/block lines should connect boxes or rectangles to
designate managerial control or line of authority

4. Box should be drawn to the side of the line organization.

Either left or right.

5. Staff and service functions are placed under the office or

units served, usually to the right using the dotted lines.
 REORGANIZATION

• Process by which an existing organization undergoes

changes in the size and shape of the organization
structure.

• Change may range from simple to complex

 DEPARTMENTATION

Process of grouping the functions and activities in an

organization
 DEPARTMENTATION
Gullick sets up four bases for departmentalizing an organization:

1. FUNCTION
- involves identifying major functions to be performed in achieving
the goals of an organization and grouping the other related functions
and activities accordingly

2. PRODUCT
- grouping the activities and functions on the basis of products
manufactured by the company
 DEPARTMENTATION

3. PROCESS
- done on the basis of the nature of work being done

4. GEOGRAPHICAL LOCATION
- entire service area of the organization is divided into
geographical locations or territories
RESULTS OF GOOD ORGANIZATION

1. Responsibility and preventing “buck passing”

2. Easier communication
3. Eliminating jurisdictional disputes
4. Develop executive ability

5. Aiding in measuring a person’s performance

6. Aiding in equitable distribution of work, functions, and/or
personal supervision

7. Permitting expansion and contraction

RESULTS OF GOOD ORGANIZATION

8. Pointing out “dead-end” jobs

9. Affording movement in the direction of the “ideal” organization
10. Establishing closer cooperation and higher morale

11. Delineating avenues of promotion

12. Preventing duplication of work
13. Making growth possible with adequate control

14. Aiding in wage and salary administration

 DELEGATION

Process of entrusting and transferring responsibility and

authority by the top management to the lowest level
ELEMENTS OF DELEGATION
1. RESPONSIBILITY
- work or duty assigned to a particular position

2. AUTHORITY
- power or right to be obeyed
THREE CURRENT CONCEPTS OF AUTHORITY:
1. Traditional
- Henri Fayol’s statement: “Authority is the right to
command and the power to make oneself obeyed.”
ELEMENTS OF DELEGATION
2. Behaviorist/Social Scientist
-explain authority to be a relationship between the
supervisor and the worker
3. Functional

3. ACCOUNTABILITY
- answerability of the obligation to perform the delegated
responsibility and to exercise the authority for the proper
performance of the work
 ART OF DELEGATION

Delegation is considered as an art and a science. It is an

art because it is a skill that the manager performs effectively
if he practices it.
 EXCEPTION PRINCIPLE
• Also known as management by exception

• Closely related to parity principle

• Managers should concentrate their efforts on matters that deviate

significantly from the normal and let subordinates handle routine
matters
FORMAL AND INFORMAL ORGANIZATIONS

• FORMAL
- composed if the recognized and formalized lines of
communication, authority and control

• INFORMAL
- much more subtle and invisible in the organization chart
FORMAL AND INFORMAL ORGANIZATIONS

FORMAL INFORMAL
• Have planned structure • Not formally planned

• Deliberate attempts to create • Arise spontaneously as a result

patterned relationships of interactions

• Usually shown by a chart • Not depicted in a chart

• Traditional theory advocates • Human relations theory

formal organization stresses informal organization
CENTRALIZED AND DECENTRALIZED

• CENTRALIZED MANAGEMENT ORGANIZATION

- major decisions are made by a few top executives,
subordinates exercise little (if any) initiate in decision making.

• DECENTRALIZED MANAGEMENT ORGANIZATION

- represents a systematic effort to delegate to lower levels all
authority, except that which can only be exercised at the highest
level
CENTRALIZED AND DECENTRALIZED

CENTRALIZED DECENTRALIZED
• Control by few • Control by many

• Decisions are made by the top • Decisions are made throughout

management the organization
• Drawback is potential paralysis • Drawback may be controlled by
of decision making and poor many
moral
 NATURE OF LINE AND STAFF
RELATIONSHIP
• LINE PERSONNEL
- contribute directly to the accomplishment of organizational
objectives
- objectives are directly in line with the company’s objectives

• STAFF PERSONNEL
- advise and assist the line personnel
- objectives are indirectly in line with the company’s objectives
 “FLAT” and “TALL” STRUCTURES

FLAT TALL

• Span of supervision increases • Narrow span of supervision

• Has two levels with a span of • Has four levels with a span of
ten two

• Permits general supervision • Leads to close or tight

supervision