ORGANIZING FUNCTION

 The concept of organization

 The element of organizing function
 The organizing process
 Organizational structure
 departmentalization
Centralization & decentralization
 delegation of authority
 authority relations in organizations –line, staff
& functional
 span of management
 Formal and informal organizations
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 ORGANIZING FUNCTION

After discussing the chapter, you will be able to:

Explain the concepts and process of organizing;
 Identify the different bases of departmentalization;
List and explain the types of organization structure;
Mention the basic principles of organizing.

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 ORGANIZING FUNCTION
The Concept of Organization
 In planning, managers set objectives and determine
what to do to attain these objectives
 Hence, to achieve the objectives set through planning
organizing the efforts of many people is required
 In this regard, some of the basic questions are:
What specific tasks are required to implement the plans?
 how many organizational positions are needed to perform the
tasks?
 how should these positions be grouped?
 how many organizational levels are needed to coordinate the
tasks?
 how many people should a manager supervise directly?
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 ORGANIZING FUNCTION
The Concept of Organization
 Exercise: what could be the product of answering these
questions?
 Answering these questions results in an organizational
arrangement (a structure ) for putting plans into actions
 Note: before dealing with many aspects of organizing. It
will be better to raise some points which are relevant in
the study of organization
 In an organization, the ability to work with whom we
dislike is the necessary condition
 exercise: why we should tolerate & work with whom
we dislike?
 In an organization, certainly, there are different: ideas,4
beliefs, prejudices, etc.
 ORGANIZING FUNCTION
The Concept of Organization
 therefore, in order to exist, perform & be successful, we must
tolerate others in an organization setting
 organizational setting includes three common factors:
 people (the relationship and behavior)
 objectives (what should be achieved)
 structure (pattern, the results of design)
 it is the qualities of these factors that determine the
effectiveness of the organization (i.e., better decisions can be
dependent on them)
 thus, the application of organization theory & the process of
management take place within the context of an organization
setting
 organization exist in order to achieve objective and provide
satisfaction to their stakeholders through cooperative action 5
 ORGANIZING FUNCTION
The Concept of Organization
 To achieve those objectives, organizations take inputs from the
environment & transform them into output
 Thus, organization’s survival is dependent upon a series of
exchanges b/n the organizations and its environment
What is organizing?
 organizing is an extension of planning
 Planning is a management tool that guides the organization to
achieve its objectives
 hence, to fulfill organizational plans, mangers must organize &
create a r/ships b/n people, resources & work
Definition of organizing
 a management function that involves arranging human & non-
human resources to help attain organizational objectives 6
 the end result of an organizing is an organization
 ORGANIZING FUNCTION
The Concept of Organization
What is organizations?
 It is the total system of social & cultural r/ships among people who are
joined together to achieve some specific common objectives
 It is a whole consisting of unified parts (a system) acting in harmony to
execute task to achieve goals, both effectively and efficiently .
 Thus, an Organization is :
 A complex social system
 The sum of may interrelated variables
 Influenced by external environment
 Part of the external environment
 Therefore, managers need to understand:
 The nature of organizations & their environments
 The main features which affect the functioning of work organization:
 The structure
 Behavior
 Management 7
 ORGANIZING FUNCTION
The Concept of Organization
Exercise; into what types of categories it is
possible classify organizations? Could you
mention them?
 organizations can be classified into:
 Formal or informal
 private or public; GOs & NGOs
 religious or secular
 complex or simple
 large or small, etc.
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 ORGANIZING FUNCTION
The Concept of Organization
The importance of organizing
 the main responsibility of mangers is to make sure that;
 The objectives of the organization are realized
 objectives can be realized if a every employee understands what to do,
why & how
 thus, effective organizing provides the following benefits:
 Clarify of the individual performance expectation & specialized tasks
 division of work that avoids duplication, conflicts & misuse of resources
 a logical flow of work activities that can be comfortably performed by
individuals & groups
 established channels of communication that enhance decision- making &
control
 coordinating mechanism that ensure harmony among organization members
engaged in a diversified activities
 focused efforts that relate to objectives logically & efficient
 appropriate authority structures with responsibility to enhance planning 9&
controlling throughout the organization
 ORGANIZING FUNCTION
The Concept of Organization
 Exercise; what is the r/ships b/n organizing responsibility of
managers & their management levels?
 the extent & scope of responsibility varies
 Identify those internal constraints that affect organization’s
ability to function effectively?
 budgets, procedures, management philosophy, priorities and capabilities,
motivation, experience & skills, etc.
 All are related to strength & weaknesses
 what are the outcomes of organizing?
 Creation of positions or jobs
 formal organizational structure with administrative levels, divisions,
r/ships, & authority –responsibility system
 is organizing a one time process?
 It is not a one time process – an ongoing process
 b/c structures are tools with which to implement plans to achieve particular
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objectives
 ORGANIZING FUNCTION
The organizing Process
Organizing process has the following steps:
 Step 1. Consider plans and goals/ identification of objectives
 Understand clearly the objectives of the organization specially, specific
objectives to be pursued
 Step2.Determine the work activities necessary to accomplish objectives
 after knowing the objectives clearly, the identification of activities is needed
 work activities are necessary to accomplish the identified organizational
objectives
 the identification of specific activities needed is called division of labor
 Step 3. Classify and group activities.
 the number of activities identified must be grouped together
 this involves grouping together of activities in accordance with:
o Similarities (homogeneity) of activities of the activities
o interdependence of the activities
o job characteristics
 the process is called departmentetion that results into departments
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 grouping of similar activities is based on the concept of division of labor and specialization
 ORGANIZING FUNCTION
The organizing Process
Organizing process has the following steps:
 Step 4. Assign work and delegate appropriate authority.
 Management has identified activities necessary to achieve objectives, and
has classified and grouped these activities in to major operational areas, and
has selected departmental structure.
 These activities now must be assigned to individuals who are simultaneously
given the appropriate authority to accomplish the task.
 Step 5. provision for coordination/Designs a hierarchy of
relationships
 It is the determination of both vertical and horizontal operating relationship
of the organization as the whole.
 The vertical structure of the organization results in a decision making
hierarchy showing who is in a charge of each task, of each specialty area,
and of organization as a whole.
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 ORGANIZING FUNCTION
The organizing Process
 Levels of management are established from bottom to
top in the organization. These levels create the chain of
command, or hierarchy of decision making levels in the
company.
 These levels create the chain of command, or hierarchy
of decision- making levels, in the company
 the horizontal structure has two important hierarchy
 It defines the working r/ships b/n operating departments
 it makes the final decision on span of control
 the result of this step is a complete organization
structure
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 ORGANIZING FUNCTION
Element of organizing function
 the element of organizing function & the organizing process are
highly interrelated
 There are several element of the organizing function
 however, here, the major emphasis is on division of labor
Division of labor
 is the degree to which the grand task of the organization is
broken down & divided in to smaller component parts
 is performed in light of organizational objectives
 It begins by determining the sub-tasks will be defined by
enumerating the activities performed- this is called job description
 job description is an account of activities associated with
authority & responsibility r/ships among jobs
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 ORGANIZING FUNCTION
Element of organizing function
Division of labor
 Thus, individuals specialize in doing part of the task rather than the
entire task
 (i.e., division of labor in effect is the assignment of various portion of a
particular task into among organizational members)
 In short, division of labor involves:
 breaking down a task into its most basic elements
 sequencing activities so that one person’s efforts build on another’s
 training workers in performing specific duties
 advantages & disadvantages of division of labor
 advantage
 it enables a person performing a task to become highly proficient in a relatively short
time
 as a result, efficiency & productivity increase
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 ORGANIZING FUNCTION
Element of organizing function
Division of labor
 Decreased transfer time- save the time that is always lost in changing from
one job to another
 less wastage of materials in the learning process including time (i.e.,
training is easier, takes shorter period & less costly)
 ease of supervision- the supervisor easily when employees are performing
similar simplified tasks
 Disadvantages
 monotonous, repetitive & less challenging work leads to boredom &
fatigue
 specialization would result in limited knowledge of workers:
 creates communication barriers- specialists develop their own language
which can hamper communications across department
 causes workers to think more in terms of their department or function
instead of the company – they lose sight of the company’s mission
 different specialties often formulate rules, policies & procedures that 16
conflict with those of other operational units
 ORGANIZING FUNCTION
Element of organizing function
Organizational structure
Meaning
 organizational structure is the structural framework for carrying
out the functions of planning, controlling, communication,
motivation, etc.
 organization structure is the defined set of r/ships among
divisions, departments & managers, including the responsibilities
of each unit
 Organization structure is the formal pattern of interactions &
coordination designed by managers to link the tasks of individuals
& groups in achieving organizational goals
 organization structure is the arrangement & interrelationship of
the component parts & positions of an organization
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 ORGANIZING FUNCTION

Element of organizing function

Organizational structure
 Exercise;
 differentiate b/n structure & management
 what are the bases to from the pyramidal structure?
 what is an organizational chart?
Structure and management
 Structure is the skeleton part of an organization – deals with the
static part
 management is the software of an organization – deals with the
dynamic part

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 ORGANIZING FUNCTION
Element of organizing function
Organizational structure
Pyramidal structure
 the pyramidal structure of an organization in derived from the
division of labor & hierarchy of authority
 Division of labor-breadth – horizontal dimension
 hierarchy of authority – depth- vertical dimension
 when the breadth & depth completed it turns to have a triangular
shape
 the triangular shape is called a pyramid- appropriate for small
organizations
organizational chart:
 Organizational chart is a line diagram that depicts the broad
outlines of an organization’s structure 19
 ORGANIZING FUNCTION
Element of organizing function
organizational chart:
 It is a pictorial representation of the structural framework of the
organization
 It shows the flow of authority, responsibility & communication among the
various departments which are located at different of the hierarchy
 At a snapshot, it shows three things;
 division of work
 levels of authority
 formal organizational r/ship
 The organizational chart can tell us:
 Who reports to whom (chain of command)
 The number of managerial levels
 How many subordinates work for each manager
 Channel of official communication through the solid lines that connect each job
 How the organization is structured-by function, territory, customer, etc.
 the type of authority r/ships-line authority, staff authority, & functional authority
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 ORGANIZING FUNCTION

Element of organizing function

organizational chart:
 limitations;
 depicts the static view of the organization at a given point in time
 doesn’t show how the organization actually works & behave
 doesn’t show the authority and responsibility of positions on the same
level
 doesn’t show lateral contact (i.e., informal r/ships are not seen)
 doesn’t show the extent of delegation
Departmentation –meaning and basis
 All organization regarding of their size or mission, divide the
overall operations into sub-activities & then combine these sub-
activities into working groups
 This process of grouping specialized activities in a logical manner
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is called departmentation
 ORGANIZING FUNCTION
Departmentation
Department
 Is a distinct area, division, or branch of an organization over
which a manager has authority for the performance of specialized
activities
 Is a unit formulated as a result of the departmentation process
Bases for departmentation
 Since organizations are different in their activities, objectives and
areas in which they operate, there are different base for
departmentation
 The most common bases are function, territory, product, customer
or process

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 ORGANIZING FUNCTION

Departmentation by function
 Grouping together activities in accordance with
the function of an enterprise, on the basis of
similarity of expertise, skills, work or activities
 jobs that call for certain skills or the use of
similar working methods will be put together
 It presents in almost every enterprise at some
level in the organizational structure
 The kinds of activities are; human resources,
production, marketing, finance, etc .
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 ORGANIZING FUNCTION

Departmentation by function
Advantage:
 simplifies training: train functional specialist by indicating special
abilities required
 provides unity of command for closely related activities
 managers can easily plan & coordinate – all the jobs that report to them
are similar in content
 promotes specialization & operational efficiency –related activities are
grouped together & this permits effective economies of sca le
Disadvantages
 de-emphasis of overall company objectives – identification with the
departmental objectives
 Reduces coordination & communications b/n functions
 Decisions are concentrated at the top management, creating delay
 Limits the development of general managers –over specialization 24&
narrow viewpoints of key personnel
 ORGANIZING FUNCTION
Departmentation by territory/ geography
 Grouping activities on the basis of geographic
region or territory
 common in enterprise that operate over wide
geographical area
 all activities in a particular area or region should
be assigned to a manager- the manager would be
in charge of all operations in that geographic area
 it works best when different laws, currencies,
languages, & traditions exist & have a direct
impact on the ways in which business activities
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must be conducted
 ORGANIZING FUNCTION

Deprtementation by territory/ geography

Advantages
 Places emphasis on local markets and problems- allows the
company to address needs that are particular to that area
 Encourages local participation in decision making
 Improve coordination of activities in a region
 Takes advantages of economies of local operations
 Encourages decentralized decision-making
Disadvantages
 requires more operations with general manager abilities
 duplicates staffs, services, or efforts- e.g., services such as
personnel or purshasing
 increase the problem of top management control
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 ORGANIZING FUNCTION

Departmentation by product /line

 Grouping & arrangement activities around products or
product groups
 attentions, energy & efforts need to be focused on an
organization’s particular products
 it works when an enterprise engaged in very different
type of products
 example:
 -textile product; nylon, wool, silk, cotton, etc.
 -petroleum refining- benzene, kerosene, diesel, etc.
 -electronics- radio, television, computer, etc.
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 ORGANIZING FUNCTION
Departmentation by product /line
Advantages
 places attention & effort on product line
 Facilitates use of specialized skill, capital facilities &
knowledge
 Permits growth & diversity of products & services]
 Places responsibility for profits at the division level
 Furnishes measurable training ground for general
managers
Disadvantage
 Requires more persons with general manager abilities
 Duplication of business functions within each product line
 Presents increased problems of top management control28
 ORGANIZING FUNCTION
Departmentation by customer
 Grouping of activities around customers
 Appropriate when the customers are distinct enough in their
demands, preferences & needs
 Example:
 Hospital – emergency service, out patient service, inpatient service, x-ray, etc.
 Retail stores- men’s clothing, women’s clothing, children's clothing, etc.
Advantages
 Encourages concentration on customers needs
 Gives customers the feeling that they have an understanding supplier
 Develops expertness in customer area
Disadvantages
 Difficult to coordinate operations b/n competing customer demands
 Requires managers & experts in customers’ problems
 Customer groups may not always be clearly defined
 The possibility of underemployment of facilities & specialized workers in
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customers groups
 ORGANIZING FUNCTION
Departmentation by process
 Manufacturing firms often group activities around a process or type
of equipment
 This is when special skill is needed to operate different machines
 Example: making plywood involves several sequential processes
 poling (removing bark from logs, Sawing logs in to 8” lengths
 Heating, Veneer stripping & stamping veneer sheets in to 4” segments
 Drying & grading according to quality
 Gluing plies together; finishing & bundling
-Advantage
-Achieves economic advantage
-Uses specialized technology
-Simplifies training
-Disadvantages
-Coordination of departments
-Responsibility for profit is at the top 30
-Unsuitable for developing general managers
 ORGANIZING FUNCTION
Delegation of authority-
 Is the right to commit resources & a legitimate right to give
orders to do or not to do something
 Is the right to make decision, carry out actions & direct others
in matters related to duties & goals of a position
 Levels of authority varies with levels of management, higher-
level of management have greater authority
 Authority is vested in a manager b/c of the position she/he
occupies in the organization, that is why we say, “authority
comes with the territory”
 Authority is derived from the person’s official position in the
organization

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 ORGANIZING FUNCTION
Delegation of authority
 Even though a manager has formal or legitimate authority, it
is wise to remember that the willingness of employees to accept
the legitimate authority is a key to effective management
“acceptance theory of authority”
 Is the downward pushing of authority from superiors to
subordinates to make decision within their area of
responsibilities
 Is the process of allocating tasks to subordinates, giving them
adequate authority to carry out those assignments
 In delegating authority a manager doesn’t surrender his
power- delegated authority can always be regained called
recovery of delegated authority

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 ORGANIZING FUNCTION
The process of delegation
 delegation of authority has the following steps:
Assignment of tasks
 -specific tasks or duties will be identified by the manager for assignment to
subordinates
Delegation of authority
 In order for the subordinate to complete the duties or tasks, the authority
necessary to do them should be delegated by the manager to the subordinate
 A guideline for authority is that it be adequate to complete the task –no more
& no less
Acceptance of responsibility
 Responsibility is the obligation to carryout one’s assigned duties to the best
of one’s ability
 It is the obligation created when someone accepts task assignments together
with the appropriate authority
 The subordinate is the receiver of the assigned duties and the delegated
authority; these confer responsibility as well 33
 ORGANIZING FUNCTION

The process of delegation

Creation of accountability
 Accountability refers to answering to someone for your results or
actions-taking the consequences (either credit or blame)
 It is the requirement to provide satisfactory reasons for
significant deviations from duties or expected results
 A manager is accountable for the;
 Use of his /her authority and performance
 Performance and actions of subordinates
Importance of delegation
 It relieves the manager from his/her heavy workload – lets the
manager devote more time to problems (strategic issue) requiring
his/her full attention
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 ORGANIZING FUNCTION
Importance of delegation
 It speeds up decision – making – decision made by lower level managers
usually are timelier than those that go through several layers of
management
 It leads to better decisions- subordinates are closer to real activities &
problems than superior
 They have more realistic information & better understandings
 The realistic information that subordinates have may lead them to make
better decisions
 It helps subordinates to rain & build moral: subordinate managers can
reach their full potential only if given the chance to make decisions & to
assume responsibility for them
 It encourages the development of professional managers-had there not
been any delegation, professional managers wouldn’t have been produced
 It helps to create the organization- if there were no delegation of authority
in an organization, there would exist only the president/CEO/ top-level
manager- an individual cannot create an organization 35
 ORGANIZING FUNCTION
Centralization & decentralization
 While centralization refers to the concentration of authority,
decentralization refers to the dispersal of authority within an
organization structure
 Centralization and decentralization are relative concepts when
applied to organizations- they are tendencies of delegation of
authority
Centralization
 is the extent to which power and authority are systematically
retained by top managers
 in a centralized organization,
 decision making power remains at the top
 the participation of lower level managers in decision making is very low

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 ORGANIZING FUNCTION
Advantages of centralization
 It provides uniformity of policy and actions
 It reduces risk of error by subordinates
 It utilize the skills of centralized and specialized personnel
 Close control of operations can be maintained
Decentralization
 is the extent to which power and authority are systematically
dispersed/delegated throughout the organization
Advantages of decentralization
 It is more compatible with the behavioral aspects of management
 It increases motivation
 In decentralized organization;
 Decision- making power is pushed downwards
 Lower –level managers actively participate in decision making
process
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 ORGANIZING FUNCTION
 when decentralization is greater;
 The number of decisions made at lower level of the organization increasers
 More functions are affected by decisions made at lower levels
 Subordinates refer less to a top manager prior to a decision
 More effective decisions can be made b/c of speed & first hand knowledge
 It allows more time for top management to concentrate on important issues
Factors determining delegation
 Some factors that affect the degree of centralization or
decentralization –delegation of authority are;
 The history and culture of the organization
 where authority is centralized depends upon the way the business
(organization) has built
 The nature of the decision
 the costlier and riskier the decision is, the more centralized the authority will be
 cost may be in terms of the company’s reputation, its competitive position

38
 ORGANIZING FUNCTION
Factors determining delegation
 Availability and ability of lower level manages
 refers to the availability of plenty of lower level managers and their
qualities
 Management philosophy
 the willingness of managers to delegate authority and limit the degree of
decentralization or the desire to do the job by themselves
 Size and character of the organization
 the larger the organization, the more decisions to be made
 geographical dispersion of the organization
 geographic dispersion of operations make decentralization more
necessary
 Environmental uncertainty
 environmental uncertainty tends to produce a need for more
decentralization
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 ORGANIZING FUNCTION
Problems in effective delegation
 Reluctance to delegate
 Fear of loss of power
 some managers fear when they delegate authority b/c they will be replaced
by their subordinates if subordinates have got the experience and skill of
decision making
 I can do it better myself
 some managers an inflated worth of themselves & think that they do
everything better than their subordinates which is a fallacy
 Lack of confidence in subordinates
 the perceptions of managers that my subordinates just are not capable
enough
 Fear of being exposed
 some managers fear that their subordinates do better jobs as compared with
themselves (i.e., possibly makes the manager look poor by comparison)
 Difficulty in briefing
 many times managers are reluctant to delegate authority if they conclude
that the time for briefing is more than the time for decision-making or if40they
believe they lack the time to train subordinates
 ORGANIZING FUNCTION
Reluctance to accept delegation
 Fear of failure & criticism
 subordinates who fear criticism for mistakes are frequently reactant to
accept delegation
 Delegation may increase the load & the risk of making
mistakes
 accepting delegation means work harder under greater pressure
 However, without appropriate compensation or adequate rewards
subordinate may be unwilling to do
 Lack of adequate information and resources
 if subordinates think that they don’t have enough factual information on
which to base a decision or other resources necessary to carryout the
assigned duties. They tend to decline the delegated authority
 Lack of self-confidence & thinking that decision making is the
boss’s job
 on the part of employee or subordinates 41
 ORGANIZING FUNCTION
 Authority relationship in organization-line, staff &
functional
 In organizations, different type of authorities are created by the
r/ships b/n individuals as well as departments
A. Line authority
 define the r/n ships b/n superior and subordinates
 It is a direct supervisory r/n ships
 In line authority a superior exercise direct command over
subordinates
 Line authority is represented by the standard chain of
command that starts with the most superiors & extends
down through the various levels in the hierarchy to the point
where the basic activities of the organizations are carried out
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 ORGANIZING FUNCTION
B. Staff-authority
 is advisory in nature & normally authority flows upward
 The function of people in a pure staff capacity is to give advice,
expertise, technical assistance, and support to help line managers
to work more effectively in accomplishing the objective
 Advisory authority doesn’t provide any basis for direct control
over the subordinates or activities of other departments with
whom they consult
 However, line authority exists within the staff manager’s own
department
 Example, research & development, legal, public relations, etc.
C. Line & staff department have different roles or positions
within the organizations structure
 Line departments, headed by line managers, are the departments
established to meet the major objectives of the organization
 Designed as line departments include production, marketing,43
finance, etc.
 ORGANIZING FUNCTION

C. Line & staff department have different roles or positions

within the organizations structure
 Staff department provide assistance to line departments & to
each other
 They can contribute indirectly to the company through
advices, services & assistance
 Staff departments are created on the basis of the special
needs of the organization
 Staff departments could be legal, personnel computer
services etc.
D. Functional authority
 It is the right which is delegated to an individual or
department to control specified process, practices, or other
matters relating to activities undertaken by persons in other
44
department
 ORGANIZING FUNCTION
D. Functional authority
 If the principle of unity of command were followed without
exception –authority over these activities would be exercised
only by their line superiors
 However, numerous reasons, including lack of specialized
knowledge, lack of ability to supervise processes, and danger of
diverse interpretations of policies do not allow exercising this
authority
 Thus, it is delegated by their common superior to a staff specialist
or to a manager in another departments
 Example
 The finance manager can give a direct command to the marketing
manager of the same levels about financial affairs
 The legal advisor can give a direct command to others concerning the
legal affairs of the organization
 45
The personnel manager can give direct command to others regarding
 ORGANIZING FUNCTION
 Conflict b/n staff & line managers
 b/c of several reasons there are conflict b/n line & staff managers
Demographic factors
 there is a general premise that staff managers are younger, well educated,
firmly attached to their profession than their organizations & wants more
money, power & prestige's
 the older line officers dislike of receiving what they regard as instruction from
someone so much younger than themselves
Threats to authority
 line managers consider staff managers as potential threats to their authority,
particularly if staff managers exercise functional authority
Dependence on knowledge
 line managers feel discomfort & get frustrated when they progressively
depends on the advice of staff managers, i.e., they fell that they are less
important to the organization
Give command
 staff managers may exceed their authority & attempt to give direct command
46
to the line manager
 ORGANIZING FUNCTION
Credit for idea
 staff managers may attempt to take credit for ideas implemented
by line managers: conversely, line managers may not
acknowledge the role of staff managers
High position
 staff departments are organizationally placed in a relatively high
position to top management
 Resolving conflicts
 the line-staff problems is not only one of the most difficult that
organizations face but also the source of an extra ordinarily large
amount of inefficiency
 Solving this problem requires great managerial skills, careful
attention to principles & patient teaching of personals

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 ORGANIZING FUNCTION
Resolving conflicts
 some ways of resolving the conflict include:
Understanding authority relationships
 manager must understand the nature of
authority r/ships if they want to solve the
problems of line & staff
 Line means making decisions & acting on them
staff implies the right to assist & counsel
Making line listen to staff
 line managers should be encouraged or required
to consult with staff

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 ORGANIZING FUNCTION
Resolving conflicts
Keeping staff informed
 staff assistants should be informed on matters in their field (if
not, even the best assistant cannot advice properly in such
case)
 Common criticisms of staff are that;
 Specialists operate in a vacuum
 Fail to appreciate the complexity of the line manager’s job
 Overlook important facts in making recommendations
 in fact, specialists should take that their recommendation deal
only with part of a problem
 In contrast, if line managers fail to inform their staff of
decisions affecting their work or if they don’t request for
cooperation –for staff to obtain the requisite information will
be difficult on specific problem & the staff cannot function49 as
intended
 ORGANIZING FUNCTION
Span of management
 The term span of management is also referred to as a span of
control, span of supervision, span of authority or span of
responsibility
Span of management
 –refers to the number of subordinates who report directly to a
manager, or the number of subordinates who will be directly
supervised by a manager
 This varies from one situation to another
 There is no magical number for the span of control
 There are various factors affecting the span of management
 Based on the number of subordinates who should report to a
manager or the number of subordinate that a superior should
supervise,
 we can have wide span & narrow span of management 50
 ORGANIZING FUNCTION
Span of management
Narrow span of management
 This means superior controls few numbers of subordinates or
few subordinates report to a superior
 When there is narrow span of management in an organization,
we get;
 Tall organization structure with many levels of supervision
b/n top management & the lowest organizational level
 More communication between superiors & subordinates
 Mangers are underutilized & their subordinates are over
controlled
 More trained managerial personnel & centralized authority

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 ORGANIZING FUNCTION
Span of management
Narrow span of management
Advantages
 Close supervision & control
 Fast communication b/n subordinates & superiors
 Easy to coordinate & control activities
Disadvantages
 Superiors tend to get too involved in the subordinates
work
 The problem of getting more trained managerial personnel
 Excessive distance b/n lowest level & top level
management
 High costs due to many levels 52
 ORGANIZING FUNCTION
Wide span of management
 This means many subordinates report to a superior or a superior
supervises many subordinates
 if the span of management is wide, we get;
 a flat organizational structure with fewer management levels b/n top &
lower level
 Many number of subordinates & decentralized authority
 Managers are overstrained & their subordinates receive too little guidance
& control
 Fewer hierarchal level
Advantages
 Superior are forced to delegate
 It initiates the development of clear polices
Disadvantages
 Tendency of overloaded & superior became decision bottle necks
 Danger of superior’s loss of control
 Required exceptional quality of managers 53
 ORGANIZING FUNCTION
Informal organization
 Is a network of personnel & social r/ships that arises
spontaneously as people associated with one another in a
work environment
 Is an unofficial network of personal & social relations
developed as a result of association or working together
 Example; the chess group, the morning coffee group, the
bowling team, etc.
 Operates outside formal authority r/ships
 Doesn’t have legal personality
 Develops within the formal organization
 Is composed of all the informal groupings of people with in a
formal organization
 It is not only the domain of workers; but managers form
informal groups that cut across departmental lines 54
 ORGANIZING FUNCTION
Informal organization
 Has a structure which is loosely designed, highly flexible &
spontaneous
 In such an organization, the pattern of information flow, the
exact nature of r/ships among the members & the goal of the
organization are unspecified
 However, to identify the existence of informal organizations
and their compositions there are two tools: a socio-gram & an
interaction chart
A socio-gram is a diagram of group attraction
 The socio-gram is developed through a process asking
members whom they like or dislike & with whom they wish to
work or not to work
 It is based on the belief that group interactions are the result of
people’s feelings of like & dislike for another 55
 ORGANIZING FUNCTION
Informal organization
An interaction chart is a diagram that shows the informal interactions
people have with one another
 For any specific person, the chart can show with whom the person
spends the most time & with whom the person communicates
informally
 Members tend to leave the original group & join the new one when
people vary in:
 Income levels
 Educational background
 Status or positions etc.
 Members are bonded together when they feel mutual benefits exists
 The informal organization presents a challenge for managers –
consists of actual operating r/ships not prescribed by the formal
organization
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 ORGANIZING FUNCTION
Informal organization
 Types of groups in the informal organization
 Informal groups may be described as horizontal, vertical, or mixed
 This refers to from where group members come from –from the same or
different levels of formal organization
Horizontal groups
 Are the common kinds of informal groups by virtue of the ease of
accessibility
 Include persons whose positions are on the same levels of the
organization (i.e., they are formed by peers)
 The groups can consist of all the members in the same work areas or
membership developed across departmental lines
 Members may be all management or non management personnel
 Membership in a horizontal group is usually mutually beneficial to
individuals-you help me and I will help you
 People in the same or related work areas often share the same problems,
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interest & concerns
 ORGANIZING FUNCTION
2. Vertical groups
 Can be the result of outside interests or various
employment r/ships –including people on different
levels of the formal organization’s hierarchy
 These people always come together within the same
department (work areas)
 A vertical group can consist of a supervisor & one or
more of his/her employees
 It may also be formed through skip – a top –level
manager may associate with a first level manager

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3. Mixed group
 Often formed b/c of common bonds outside work
 Is a combination of two or more persons whose
positions are on different levels of the formal
organization & in different work areas
 A vice- president may develop a close relationship
with the director of computer services in order to
get preferential treatment
 A production manager may cultivate an informal,
social r/ships with the director of maintenance for
the same reason
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 ORGANIZING FUNCTION
Why people form informal groups?
Informal groups are formed for different reasons
Need for satisfaction
 People have needs that in some cases are not met through the formal
organization
 The opportunity to fulfill security, affiliation, esteem, & sometimes self
actualization needs
Proximity & interaction
 A common reason people join groups is that they work near one another-
i.e., in close proximity physically or b/c of frequently interaction
 Horizontal informal groups are prime example of this
Similarity
 People may join informal groups b/c they are attracted to other people who
are similarity themselves-i.e., with the same attitudes or beliefs
 Other factors of similarity can be personality, race, sex, economic position,
age , educational background, etc.
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 ORGANIZING FUNCTION
Why informal groups exist
1. Maintain the social & cultural values of the group members
 Individuals in the group are likely to share the same beliefs & values as a
result of background, education, or cultural heritage
 Example; a common beliefs regarding work ethics
2. Provide group members the opportunity for status fulfillment
 Individuals can receive what the formal organization cannot provide-avoiding
identity crisis
 Example an individual whose post is a technician may assume a position of head for
a volleyball team
3. Provide information for their members
 The informal group develops its own system & channels of communication
parallel to management’s formal channel
 The ability to acquire access to information for members is a major function
of informal groups
 Crucial information can be obtained through informal communications
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 ORGANIZING FUNCTION
Why informal groups exist
4. They influence the work environment
 Regulate or influence the behavior, dress, or
work standards of their members through:
 Positive means –acceptance, support, and
affiliation
 Negative methods –threats of ostracizing non-
complying members
 The informal group can also regulate or
influence the actions of management

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 ORGANIZING FUNCTION
The impact of informal organization on the formal organization
A. The negative impacts
Resistance to change
 Place roadblock in the path to any alteration in the work environment
 This is in an effort to protect its values & beliefs
Conflict
 The company may allows 10 minutes for coffee break; however, the
informal group may extend it to 30 minutes
 Hence, the employee’s social satisfaction is in conflict with the employer’s
need for productivity –conflicting objectives
Rumor
 The informal communication system –the grapevine can create & process
false information or rumor
 The creation of rumors can upset the balance of the work environment
Pressure to conform
 The norms that the formal group develops act as a strong inducement towards
conformity
 The more cohesive the group, the more accepted are the behavioral standards
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 Non-conformity can result in execution
 ORGANIZING FUNCTION
B. The positive impacts
1. Makes the total system effective
 If the informal organization blends well with the formal system, the
organization can function more effectively
 The ability of the informal group to polish the plans & procedures
developed through the formal organization
2. Provides support to management
 The informal organization can provide support to the individual
manager
 By performing effectively & positively it can build a cooperative
environment
 This can means more delegation to the employee & less time spent by
the manager controlling employee behavior
4. Provides a useful communication channel
 Provides employees with the opportunity for social information, for
discussing their work & for understanding what happening in the work
environment
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 ORGANIZING FUNCTION
B. The positive impacts
5. Encourages better management
 Managers should be aware of the power of informal
organization in what is actually a check & balance system
 Planned changes should be made with an awareness of the
ability of the informal group to make the pan successful or
unsuccessful
6. Provides stability in the environment
 The informal organization can provide acceptance &
belonging
 This feeling of being wanted by the group can encourage
employees to remain the environment, thus reducing turnover
 Additionally, the informal organization provides a place for a
person to vent/voice frustrations
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