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ORGANIZING
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Importance of Organizations
Importance of Organizations (contd)
Adapt to and influence a changing environment
Create value for owners, customers and employees
Accommodate ongoing challenges of diversity, ethics,
and the motivation and coordination of employees
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Steps in organizing are :
The identification and classification of required activities
The grouping of activities necessary to attain the
objectives.
The assignment of each grouping to a manager with the
authority necessary to supervise it.
The provision for co-ordination horizontally and vertically
in the organizational structure.
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Formal & Informal Organization structures
Formal organization means the intentional structure of
roles in a formally organized enterprise.
Informal organization is a network of personal and
social relations not established/required by the formal
organization but arising spontaneously as people
associate with one another.
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Tall and Flat Organizations
Tall structures have many levels of authority and narrow
spans of control
Flat structures have fewer levels and wide spans ofcontrol
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Span of Control
Refers to the number of subordinates who report
directly to an executive or supervisor
The differences in the span of control have direct
implications on the shape of the organization
Organizations must find the optimal span of control to
be effective
Narrow enough to permit managers to maintain control oversubordinates
Wide enough so that the possibility of micromanaging isminimized
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The optimal span of control is dependent on the following
factors
Is the work clearly defined
Are subordinates highly trained and do they have access to
information
Is the manager highly capable and supportive
Are jobs similar and performance measures comparable
Do subordinates prefer autonomy to close supervisory control
Clarity of delegation of authority.`
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Clarity of plans
Use of objective standards
Rate of change of organization
Communication Techniques
Amount of personal contact needed
Variation by organization level
A manager who is competent and well trained can
effectively supervise more people.
Positive attitude of subordinates towards assumption of
responsibility as well as their willingness to take reasonable
risk.
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Problems with organizational levels :
Expensive
Complicates communication
Complicates planning and control
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Factors Affecting Organizational Structure
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Five Basic Parts of an
Organization
TopManagement
Technical
Support
Technical Core
Administrative
Support
Middle
Management
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Goals and
StrategyEnvironment Size
Culture Technology
Structure1. Formalization
2. Specialization
3. Hierarchy of Authority
4. Centralization
5. Professionalism
6. Personnel Ratios
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Differences Between Large and Small
Organizations
LARGE
Economies of scale
Global reach
Vertical hierarchy Mechanistic
Complex
Stable market
Career longevity and stability
SMALL
Responsive
Flexible
Regional reach
Flat structure
Organic
Simple
Niche finding
Entrepreneurs
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Departmentalization
Process of establishing department in organization
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Basic patterns of Departmentation
1. Departmentation by Simple numbers
2. Departmentation by Time
3. Departmentation by Enterprise functions
4. Departmentation by Territory/Geography
5. Departmentation by Product
6. Process/Equipment Departmentation
7. Customer Departmentation
8. Matrix Departmentation
D t t ti b Si l N b
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Departmentation by Simple Numbers
This is structural departmentation include tolling off
persons who are to perform the same duties and functions and
putting them together under the supervision of a manager.
Age old method and rapidly falling into disuse
Reason for this are
1.The technology is advancing very fast, demanding more
specialized and different skills.
2.Groups composed of specialized personnel are more frequently
more efficient than merely based on numbers.
It is useful only at the lowest level of the organization structure.
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Departmentation by time
Suitable for lower level of the organization
Oldest form structuring organization
Grouping of activities according to basis of time
The use of shifts is common in many enterprise because
normal workloads become insufficient and ineffective
E.g.: Hospital, Steel mill
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Advantages
1. Services offered 24X7 instead of 8 hrs shift
2. Process need not be interrupted which needs a
continuous cycle of operation
3. Expensive capital equipments can be used more than
8hrs/day
4. Students attending classes during the days time canwork in night shift to sustain their living.
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Dis-advantages1. Supervising during night shift becomes difficult
2. There is fatigue factor, since it is difficult for most
employees to change their biological clock
3. Having several shifts may cause problems with
coordination and communication
4. Payment of overtime can increase the cost of
production or services rendered.