MODULE 4

Setting Up the Organization

The Nature of Organizing
Organizing is the process by which a manager
establishes the structure of working relationships
among employees for the efficient and effective
achievement of organizational goals. Based on
organizational goals, major tasks are identified,
classified, and grouped by the manager. Plans
are activated by the organizing process.
Influence is exerted through a line of authority
and responsibility which enable each employee
that has an appointed task to carry out his task.
 ORGANIZING AS A PROCESS

Formulating objectives, policies,

and plans
Identifying and classifying tasks
Grouping Tasks
Delegating Authority
Coordinating Authority
ORGANIZATIONS
The process of organizing takes place
in and for an organization. An
organization is an open and social
system that transforms inputs from the
environment to product outputs. It is
also known as enterprise. It is a
workplace for people working together
to achieve a common purpose.
Organizational Structure

The result of the organizing process

is an organizational structure. An
organizational structure is a system
of tasks and reporting relationships
that ensure effective coordination of
tasks among individuals and
departments in an organization.
Departmentalization
 Functional Departmentalization = is the establishment of a
department based on tasks. Members of a functional
department are grouped because they possess similar skills or
use the same kind of knowledge and techniques to carry out
their tasks.
 Product Departmentalization = results when people are
grouped according to product line.
 Geographical Departmentalization = is made based on
territory.
 Customer Departmentalization = depends on the type of
customers catered to, who can be grouped according to their
specialized needs.
 Process Departmentalization = on the other hand, is
anchored on customer or product flow.
Types of Organizational Structures
 Functional Structure = in this structure, an organization is set up by
function. People are grouped according to skills, knowledge, and know –
how. Typical functions are marketing, finance, human resources, and
operations.
Functional Structure
This setup is good for the
manager to the extent that he is
able to efficiently use resources
based on specialized functions.
Types of Organizational Structures
 Divisional Structure = This is characterized by an
organization set up by product, territory, customer, or process.

Types / Focus Examples

Product Store Manager
 Good or service produces
Fashion Furniture
Geographical Sales Manager
 Location of activity
Asian Division European Division
Customer Travel Agency Manager
 Customer or client services
Individuals Schools
Process Production Manager
 Component activities
Design Assembly &Testing Packaging
&

Dispatching
Divisional Structure
The divisional structure simplifies the
work of the manager in terms of
coordination among function. It is
strongly oriented and responsive to
customers. Managers are also given a
broad training in general
management.
 Organizational Structure and
Coordination Mechanisms
 Division of labor refers to the extent by which tasks are classified into
different jobs according to specialization. Through it, the skill of the
worker is increased, time is maximized, and tasks are performed more
easily and efficiently.
 Span of management refers to the number of employees that are
under
the jurisdiction of the manager. This number should be limited to the
extent that a manager can exercise effective supervision. Too few
people can waste a manager's time while too many can result to
ineffectiveness.
 Chain of command or scalar relationships refers to the positioning
of individuals within the organizational structure. It identifies the job
position, the reporting lines of authority, and the one responsible for the
various tasks
 The chain of command defines the lines of authority within
the organization, linking individuals to one another and
specifying who reports to whom. Authority, which is the
right to perform or command, is exercised by a manager
over those who report to him in order to get things done.
 We distinguish between line and staff authority. Line
authority is the formal authority exercised by a manager
over subordinates while staff authority consists of the right
to advise those in line authority according to one's area of
expertise.
 Authority is exercised in relation to one's responsibility.
Responsibility is the obligation to perform assigned tasks.
Authority should be proportional to responsibility.
Accountability consists of the need to report and justify
results or task outcomes to those higher than them in the
chain of command.
Disorganization Chart
 This is an organization chart. Identify the errors in it and redrew the
correct one. Explain the changes you made.

Unit Chief

Program Executive
Manager Assistant

Program Program
Assistant Analyst
Errors
 The executive assistant is a staff position
 The program analyst should be under the program
manager
 The program assistant should be under the
program analyst.

Note: The changes are keeping with the nature of

duties and responsibilities of the position