PART- II

Organizing
 Organizational Design
• Organizing
“Arranging and structuring work to accomplish the
goals”
• Process design
– Customer focused
– Employee best experience
– Increase revenue and decrease cost
Purpose of Organizing
 SIX KEY ELEMENTS
1. Work specialization
2. Departmentalization
3. Chain of command
4. Span of control
5. Centralization and decentralization
6. Formalization
 1 - Work specialization

 Dividing work activities into separate job tasks

• Efficient use of diversity of skills

• Productivity
– Tailor
– McDonald
Economies and diseconomies
of work specialization
 2- Departmentalization

 Basis by which jobs are grouped together

 5 common types
1) Functional
2) Geographical
3) Product
4) Process
5) Customer
 Cross functional teams
3. Chain of command
– Line of authority extending from upper organizational levels to lower
levels
• Authority----rights inherent in a managerial position
• Responsibility ---- Obligations to perform work
• Unity of command
– Barnard contention
1. They understand the order.
2. They feel the order is consistent with the organization’s purpose.
3. The order does not conflict with their personal beliefs.
4. They are able to perform the task as directed.
Chain of Command and Line authority
Line Vs. Staff Authority
 4- Span of control

The number of
employees a manager
can manage efficiently
and effectively
 5- Centralization Vs. Decentralization

THE DEGREE TO WHICH DECISION MAKING TAKE

PLACE AT UPPER LEVEL OF ORGANIZATION
6. Formalization
– How standardized an organization’s jobs are
– The extent to which employee behavior is guided by rules and
procedures
• Though, necessary for consistency and control
BUT
Offering some latitude and autonomy can increase
performance
Mechanistic Vs. Organic Organization
 Organizational Structure
• Depends on 4 contingency
1. Strategy and structure
2. Size and structure
3. Technology and structure
a. Unit Production
b. Mass Production
c. Process
4. Environmental Uncertainty and structure
Traditional Organizational Design