ORGANISING FUNCTION IN MODERN ORGANISATIONS

PROVIDES DEFINITION AND PRINCIPLES OF ORGANISING FUNCTION, IMPORTANCE AND ORGANISING PROCESS, ORGANISATIONAL STRUCTURES, AUTHORITY AND RESPONSIBILITY

1. MANAGEMENT FUNCTION OF
ORGANISING

2. LEARNING GOALS
DEFINITION
PRINCIPLES OF ORGANISING
IMPORTANCE
ORGANISING PROCESS
ORGANISATIONAL STRUCTURES
AUTHORITY AND RESPONSIBILITY

3. DEFINITION OF ORGANISING
The process of arranging people and other
resources to work together to accomplish a goal
A process of making the organization structure fit
with its objectives, its resources and its
environment.
The process of deploying resources to achieve
strategic goals
The process by which managers establish working
relationships among employees to achieve goals.

4. 4
The functions of Organizing
Developing Structure
Organizing Workplace
Delegating Work
Establishing Relationship

5. PRINCIPLES /CONCEPTS OF
ORGANISING
Work specialization/ Departmentalization - where
activities are divided into specialized groups referred to as
departments for the purpose of specializing activities to
simplify tasks of managers.
Chain of command - an unbroken line of authority that
links all persons in an organization and defines who reports
to whom. Has two underlying principles: unity of command
and scalar principle.
Unity of command - states that an employee should have
one and only one supervisor to whom he or she is directly
responsible.

6. PRINCIPLES /CONCEPTS OF
ORGANISING
 Scalar Principle - refers to a clearly defined line of
authority that includes all employees in the
organization i.e. a clear and unbroken chain of
command linking every person in the organization
Span of control - the number of workers who
report to one manager/supervisor.

The span of control is wide if a superior is in charge
of many employees and narrow if the superior is in
charge of a few employees.

7. PRINCIPLES /CONCEPTS OF
ORGANISING
 Reasons for Wide Span of Control
-The manager and the subordinates are very
competent
-The organization has a well-established set of
standard operating procedures
-Few new problems are anticipated
 Reasons for narrow span of control
-Workers are located far from one another physically
-The manager has a lot of work to do in addition to
supervising workers.
-A great deal of interaction is required between
supervisor and workers.
-New problems arise frequently

8. PRINCIPLES /CONCEPTS OF
ORGANISING
Management by exception - lower level
managers to give attention to critical areas
which are recurring in nature and non
recurring matters should be referred to
higher levels.
Direct management (MBWA)- Management
by walking around e.g. in operation centres.
 

9. IMPORTANCE OF ORGANISING
Rational use of resources
Harmonies processes in the
organization
For control purposes
Interaction among various managerial
positions - Build relation ships.
It helps to avoid conflicts -Principal of
division of work, unity of command
Easy flow of information

10. STEPS OF THE ORGANISING
PROCESS
Detailing of work - determination of what kind of
work is to done i.e. list and analyze all the tasks that
need to be accomplished in order to reach
organizational goals.
Division of work - break down of work tasks so
that each individual in the organization is
responsible for and performs limited form of activity.
Division of work may be bring in the issues of
speciation and delegation of authority

11. STEPS OF THE ORGANISING
PROCESS
Departmentalization - the grouping of similar activities
to create departments /sections / units.
Coordinating the work / Design a hierarchy of
relationships - determine the vertical (decision-making)
and horizontal (coordinating) relationships of the
organization as a whole
Monitoring effectiveness and re- organization -
ensure necessary resources are put together and are
used well i.e. supervising and evaluating work
performance to keep it according to the plan and where
faults are discovered, re-organising resources to
improve performance.

12. ORGANISATIONAL STRUCTURES
Organizing process leads to creation of an
Organizational Structure
Organization structure - The system of tasks,
workflows, reporting relationships, and
communication channels that link together diverse
individuals and groups.
General Types of Structures
 Tall Structures
 Flat structures

13. ORGANISATIONAL STRUCTURES
Tall Structures – has
many levels of
management and
supervision i.e. a “long
chain of command”
running from the top to
the bottom of the
organisation

Flat structures -
relatively few
layers or just one
layer of
management i.e.
the “Chain of
Command” from
top to bottom is
short and the “span
of control is wide

14. TYPES OF ORGANISATIONAL
STRUCTURES
Formal structures
The structure of the organization in its official
state.
An organization chart is a diagram describing
reporting relationships and the formal
arrangement of work positions within an
organization.
An organization chart identifies the following
aspects of formal structure:
The division of work.
Supervisory relationships.
Communication channels.
Major subunits.
Levels of management.

15. TYPES OF ORGANISATIONAL
STRUCTURES
Informal structures
A “shadow” organization made up of the
unofficial, but often critical, working relationships
between organization members.
Potential advantages of informal structures:
Helping people accomplish their work.
Overcoming limits of formal structure.
Gaining access to interpersonal networks.
Informal learning.

16. FORMS OF FORMAL ORGANIZATIONAL
STRUCTURES
Functional structures
People with similar skills and performing similar
tasks are grouped together into formal work units
normally departments
Members work in their functional areas of
expertise.
Production
Manager
Marketing
Manager
Accounts
Manager
Personnel
Manager
IT
Manager
Chief Executive
Board of Directors

17. FUNCTIONAL STRUCTURES
ADVANTAGES
Avoids duplication of
resources e.g many
personnel departments
Task assignments
consistent with expertise
and training.
High-quality technical
problem solving,
In-depth training and
skill development.
Clear career paths within
functions
DISADVANTAGES
Difficulties in pinpointing
responsibilities.
Difficult for departments to
communicate with others
sometimes
Preoccupation with own
department and losing sight of
organizational goals.
Excessive upward referral of
decisions i.e. difficult to make
decisions as the organization
expands
Hinders diversification of skills

18. 18
Functional structures
Advantages
•Facilitates
specialization
•Simplifies
coordination
•Permits use of
current technologies
and equipment
Disadvantages
•Encourages excessive
centralization
•Restricts development
of managerial skills
•Limits personal growth

19. FORMS OF FORMAL
ORGANISATIONAL STRUCTURES
Divisional structures
Group together people who work on
the same product or process, serve
similar customers, and/or are
located in the same area or
geographical region.
Common in complex organizations.
Avoid problems associated with
functional structures.

20. 10-20
EXAMPLE
ONE
Product,
customer/
Market and
Geographic
Structures

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Divisional structures based on product,
geography, customer, and process.

22. 22
Product /Geographical Organization
Advantages
•Facilitates coordination
•Encourages
management
development
•Provides for
decentralization
•Promotes growth
Disadvantages
•Requires management
talents
•Technical obsolescence
of specialists
•Changes take time to
effect

23. DIVISONAL STRUCTURES
ADVANTAGES
More flexibility in
responding to
environmental changes
Improved coordination.
Clear points of
responsibility
Expertise focused on
specific customers,
products, and regions.
Greater ease in
restructuring.
DISADVANTAGES
Duplication of resources
and efforts across divisions.
Competition and poor
coordination across
divisions.
Emphasis on divisional
goals at expense of
organizational goals.
Inconsistency in standards
may develop in different
locations

24. Advantages of Divisional Structures
- continued
Accountability becomes easy- very simple to
identify managers responsible for success and
failure particular products, locations, customers
and different processes.
Division managers become experts in their area
Removes need for direct supervision of division
by corporate managers
Divisional management improves the use of
resources
Its cheaper to establish local factories /offices
than to service markets in one location

25. Forms of Formal Organizational Structures
Matrix structure
Combines functional and divisional structures to gain
advantages and minimize disadvantages of each.
Common in organizations that use team and project work
(have teams and projects)
Creates dual authority – where an employee reports to two
immediate bosses
Used in:
Manufacturing
Service industries
Professional fields
Non-profit sector
Multi-national corporations

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Matrix structure Organizational Chart

27. MATRIX ORGANISATIONAL
STRUCTURES
ADVANTAGES
Better cooperation across
functions
Improved decision making
Increased flexibility in
restructuring
Better customer service
Better performance
accountability
Improved strategic
management
DISADVANTAGES
Two-boss system is
susceptible to power
struggles
Two-boss system can
create task confusion and
conflict in work priorities.
Team meetings are time
consuming
Team may develop
“groupitis.”

28. Factors To Consider when
Developing Organizational Structures
Environment
Strategy
Human
Resources
Technology
Determine design
or organizational
structure

29. Determinants of Structure
The environment : Fast-changing
environments require flat structures; slowly
changing environments favor tallstructures.
Structure must be more flexible when
environmental change is rapid.
–Usually need to decentralize authority.
Strategy: Different strategies require the use
of different structures.
A differentiation strategy needs a flexible
structure, low cost may need a more
formal structure.
Increased vertical integration or
diversification also requires a more flexible
structure.

30. Technology
Small Batch Technology: produces small
quantities of one-of-a-kind products.
Based on the skills of the workers who need a
flexible (flat) structure.
Mass Production Technology: automated
machines make high volumes of standard
products.
Workers perform repetitive tasks so a formal
(strict) - tall structure works well.
Continuous Process Technology: totally
mechanized systems of automatic machines.
Workers must watch for unexpected problems and
react quickly. A flexible structure is needed here.

31. Determinants of Structure
Human Resources: the final factor affecting
organizational structure.
Higher skilled workers who need to work in teams
usually need a more flexible structure.
Higher skilled workers often have professional
norms (CPA’s, physicians).
Managers must take into account all
four factors (environment, strategy,
technology and human resources) when
designing the structure of the
organization.

32. AUTHORITY AND RESPONSIBILITY
Authority may be defined as the right to give orders
and the power to exert influence or the power to make
decisions which affect or guide the actions of others
Authority may never be effective unless accepted.
Influence; Actions that cause changes in behaviour or
attitude of others directly or indirectly
Power is the ability to exert influence

33. Sources /Types of Power
RewardReward
PowerPower
LegitimateLegitimate
PowerPower
CoerciveCoercive
PowerPower
ExpertExpert
PowerPower
ReferentReferent
PowerPower
Enable managers to beEnable managers to be
leaders & influenceleaders & influence
subordinates to subordinates to
achieve goalsachieve goals

34. Sources of Power
Used to affect other’s behavior and get
them to act in given ways.
Legitimate Power: manager’s authority
resulting by their management position in
the firm.
Can be power to hire/fire workers, assign work.
Reward Power: based on the manager’s
ability to give or withhold rewards.
Pay raises, bonuses, verbal praise.
Effective managers use reward power to signal
employees they are doing a good job.

35. Sources of Power
Coercive Power: based in ability to punish
others.
Ranges from verbal reprimand to pay cuts to firing.
Can have serious negative side effects.
Expert Power: based on special skills of leader.
First & middle managers have most expert power.
Often found in technical ability.
Referent Power: results from personal
characteristics of the leader which earn worker’s
respect, loyalty and admiration.
Usually held by likable managers who are concerned
about their workers.

36. RESPONSIBILTY AND
ACCOUNTABILITY
Authority goes with responsibility
Responsibility is the obligation to use authority
to get things done.
Responsibility requires those with authority to account
for it. Authority must be used as expected.
Accountability is the evaluation of how
authority has been used.
To have authority means accepting responsibility and
being accounted for.

37. DELEGATION OF AUTHORITY
Delegation of Authority is a process by which
managers assign some of their tasks to their
subordinate and permit them to exercise
authority of their behalf. The manager also
holds them accountable for their performance.
Delegation of authority is the mean by which
total authority vested in top management is
passed to the next chain in a graded manner.

38. FACTORS INFLUENCING
DELEGATION
The culture of the organization - , there may be a
culture of waiting for the boss to decide
The specific situation involved - Urgency or routine
The relationship between personalities - delegator and
delegatee
Capabilities of the people in the situation – delegator
and delegator

39. NEED AND IMPORTANCE OF
DELEGATION
Saves you time i.e. many tasks are performed at the
same time and can save you hundreds of hours of
unnecessary work
Quick decision making
Improving the job satisfaction, motivation and morale
of subordinate
Develops you people i.e. grooms a successor
Promotes healthy superior and subordinate relationship
 Subordinates acquire valuable experience in decision
making - Provides invaluable training
Increases productivity - staff feels motivated and more
confident

40. BARRIERS TO EFFECTIVE
DELEGATION OF AUTHORITY
Organizational structures where subordinates
have to wait for the boss to decide
Personality issues – managers may be afraid that
subordinate may dominate and replace them.
Fear or managerial insecurity - Authorities may
reduce their power and status is the organization.
Lack of time on the part of the delegator or the
delegatee
Poor organizational structures -Due to the lack
of clarity and formalness in the procedure of the
organization.

41. BARRIERS TO EFFECTIVE
DELEGATION OF AUTHORITY
Urgency of the matter i.e. delegation becomes
impossible if the matter / issues is urgent.
Delicate issues e.g. a doctor can not tell the
subordinate to operate a patient
Lack of suitable person to delegate to
Accountability problems

42. GUDELINES TO EFFECTIVE
DELEGATION OF AUTHORITY
Scalar Principle
Unity of command
Training of people
Open Communication
Analysis of goals -Task requirements capability,
determine what you will delegate
Understand the nature of task
Analyze the skill and capabilities of the
subordinates

43. GUDELINES TO EFFECTIVE
DELEGATION OF AUTHORITY
Delegate to the right person -Cross check the
subordinates skill to follow the instruction
Concurrent job monitoring and evaluation of
subordinates
 Obtain feedback from employees
Establish a follow-up schedule