Chapter Four Organizing FunctionMTP (Chap 4) Ready.pptx
- 1. Course Title: Management Theory and Practice Instructor Samson T. (Assistant Professor)
- 3. Overview of Organizing Organizing - is the management function usually follows after planning. It involves – Assignment of tasks – The grouping of tasks into departments – The assignment of authority and responsibility – Allocation of resources across the organization. It is a function in which the synchronization and combination of human, physical and financial resources takes place. The task of organization is to unite or integrate these components effectively for the purpose of attaining the common goal.
- 4. Characteristics of organization It is a group of persons - an organization comes into existence when there are a number of persons in communication and relationship to each other and are willing to contribute towards a common goal. Organization as a structure of relationship - it sets up the scope of activities of the enterprise by laying down the structure of relationships. It is a basic function of management - it involves determination and provision of resources for the achievement of goals and performed by all managers. Organization as a continuous process - it is the process of establishing relationship among the members of the organization, and creating organization structure. It is a network of authority and responsibility relationships
- 5. Types of Organization Organizations can be classified into formal and informal types: Formal organization - is an organization that is deliberately and rationally designed and approved by management through organizing process to achieve certain goals/ objectives. – It is planned structure of an organization which is deliberately created to attain desired objectives. – It is a system with well-defined jobs, definite authority, responsibility, and accountability.
- 6. Cond… Characteristics of formal organization Consciously designed - are purposely designed and established to attain certain end results. Based on delegated authority - each employee has delimited authority; therefore there is superior-subordinate relationship. Has clear organizational chart - organizational chart shows jobs & departments, and it is the most tangible picture of an organizational structure. Deliberately impersonal - positions in an organization are not personal properties, but by merit.
- 7. Cond… Informal organization - refers to people in-group, but these groups are not specified in the structure of the formal organization. – They are natural grouping of people in the work situation based on their behavioral patterns; interests; beliefs; objectives; etc. – It can exist in the formal organization; nothing can destroy it or it cannot be avoided. – It may affect formal organizations positively or negatively.
- 8. Cond… Reasons for the formation of informal organization are: – Mutual benefit – Friendship – The need to fulfill social needs – Physical work condition – Administrative practice Some managers encourage while others suppress the formation of informal organization.
- 9. Cond… Characteristics of informal organization Group norms – have unwritten agreements/ rules/ regulations that govern members’ behavior Group cohesiveness - members have strong relationships. Group leadership - members select someone who is most active among the others as a leader Communication network - It is also called grapevine. It is the network outside the formal communication channel. Short Lifespan and purpose - have short life span in comparison with formal organization. – Therefore they end to exist when the members meet their interests and re-established when another need arises.
- 10. Cond… Large in number - the divergent nature of people’s interest, their feeling, tradition, attitude, etc., lead to the formation many informal organizations. Can gradually develop into formal organization - informal organizations gradually can be emerged as formal organization.
- 11. Cond… Advantages of informal Organizations – Useful channels of communication. – Provide satisfaction and stability in the organization. – Alert managers to plan and act accordingly – Inform managers sensitive issues Disadvantages of informal Organizations – Resistance to change – Role conflict – Rumor – Conformity (hidden agendas/destructive actions)
- 12. The Organizing Process The following are the steps of organizing: Step 1. Considering plans and goals Step 2. Determining activities necessary to accomplish objectives Step 3. Classifying and grouping activities – In order to provide a smooth flow of work, all closely related and similar activities must be grouped together. – This step requires managers to perform three activities. Examine each activity identified to determine its nature (marketing, finance, etc..) Group activities into related areas Establish department design for structure.
- 13. Step 4. Assigning work and delegating appropriate authority Step 5. Designing a hierarchy of relationships – This step requires the determination of the structure of an organization and its operating relationship.
- 14. Types of organizational structure In an organization vertical and horizontal operating relationship structure can be created. A. Vertical structuring creates the chain of command or hierarchy of decision making levels in the company. B. The horizontal structuring has two important effects. – It defines the working relationships between operating departments – It makes the final decision on the span of control.
- 15. Major concept of Organizing Departmentation Authority Unity of command Accountability and responsibility Span of Management Centralization and decentralization
- 16. Cond… Departmentation – is the horizontal differentiation of tasks or activities into discrete segments – It involves grouping of operating tasks into jobs, – combining of jobs into effective work group, and – combining of groups into divisions often termed as ‘departments’.
- 17. Authority - all managers in an organization have authority on the management position they occupy. – Authority is described as institutional power. – It is the right to act, or to give order/ command, or deploy resources in an organization. – It is the power derived from the position a manager holds. – it represents legitimate exercise of power in the organization structure.
- 18. Cond… 1. Line authority - is the relationship between superior and subordinates. – It is directed supervisory relationship. – It enables the manager to tell subordinates what to do. – It is represented by the chain of command. – It flows downward in an organization. 2. Staff authority - is the right to give advice. – It is advisory in nature. People in these positions have the authority to offer advice and recommendations. e.g. legal service; public Relation service. – The people in the staff position assist and advise the line manager.
- 19. Cond… 3. Functional authority - is an authority exercised or the right to control activities in other departments. It is an authority delegated to an individual or department over specific activities undertaken by personnel in other departments. It is usually limited in scope and duration. It is exercised one level below the person who has it.
- 20. Cond… Delegation - is authorizing subordinates to act in a certain manner independently. Delegation occurs for two purposes – When managers are absent from their jobs-Subordinates act on behalf and exercise authority. – To develop subordinates and facilitate decision making process.
- 21. Unity of command - each person within an organization should take orders from and reports to only one person. Accountability and Responsibility Accountability - is answer for the actions taken with regard to the tasks assigned/responsibility and authority delegated. Responsibility is the obligation to do a job whereas accountability is the liability for the performance of the job in a successful way.
- 22. Cond... Span of control – also called span of management refers to the number of subordinates that single manager can effectively supervise or should have to direct. Centralization Vs. Decentralization Both centralization and decentralization refer to the nature of authority within an organization structure.
- 23. Cond... Centralization – Centralization is the concentration of authority for decision making within the hands of one or few. Decentralization - is a systematic effort to delegate all authority to the lowest levels except that which can be exercised at central point – It is pushing down of authority and power of decision making to the lower levels of organization
- 24. Thank you! End of Chapter Four