Organizing and Staffing

Nature and purpose of organization, principles of organization, types of organization, formal and informal organization, types of organization structure, departmentation, importance and bases of departmentaion, committees, meaning and types, centralization vs decentralization of authority and responsibility, span of control, MBO and MBE (meaning only), nature and importance of staffing, process of recruitment & selection (in brief)

1. 1Unit 3 -POM Mr.T.Somasundaram
UNIT IV
MR.T.SOMASUNDARAM
ASSISTANT PROFESSOR
DEPARTMENT OF MANAGEMENT
KRISTU JAYANTI COLLEGE,
BANGALORE.

2. UNIT IV
ORGANISING & STAFFING
Natureandpurposeoforganization,principlesof
organization,typesoforganization,formaland
informalorganization,typesoforganizationstructure,
departmentation,importanceandbasesof
departmentaion,committees,meaningandtypes,
centralizationvsdecentralizationofauthorityand
responsibility,spanofcontrol,MBOandMBE
(meaningonly),natureandimportanceofstaffing,
processofrecruitment&selection(inbrief)
2Mr.T.Somasundaram

3. ORGANIZING
Definition:
“Organizingistheprocessofdefining
andgroupingtheactivitiesoftheenterprise
andestablishingtheauthorityrelationshipsamongthem”.
-Haimann
“Organizingisthegroupingofactivitiesnecessaryto
attainobjectives,theassignmentofeachgroupingtoa
managerwithauthoritynecessarytosuperviseit,andthe
provisionforco-ordinationandverticallyintheenterprise
structure”.
-KoontzandO’Donnel
3Mr.T.Somasundaram

4. NatureorCharacteristicsofOrganizing:
i)CommonObjectives.
ii)SpecializationorDivisionofLabour.
iii)AuthorityofStructure.
iv)Groupofpersons.
v)Co-ordination.
vi)Communication.
vii)Environment.
viii)RulesandRegulations.
ix)Universalprocess.
4Mr.T.Somasundaram

5. PurposeorImportanceorAdvantagesofOrganizing:
1.Facilitateadministration.
2.Increasestheefficiencyofmanagement.
3.Facilitatesgrowthanddiversification.
4.Ensuresoptimumuseofmanandmaterialresources.
5.Facilitatesco-ordinationandcommunication.
6.Permitsoptimumuseoftechnologicalinnovations.
7.Simulatescreativityandinitiative.
8.IncreaseinSpecialization.
9.Facilitatesdevelopmentofmanagerialability.
5Mr.T.Somasundaram

6. StepsinOrganizing(Or)StructureandProcessof
Organizing:
6
Determination
of activities /
Objectives
Enumeration of
activities /
Objectives
Grouping /
Classification of
activities
Assignment of
duties
Delegation of
Authority
Establishment of
structural
relationship
Co-ordination
of activities
Mr.T.Somasundaram

7. 1.Determinationofactivities:
Toidentifytheworkthatmustbedonetoachievethegoal.
2.Enumerationofactivities:
Listdowntheactivitiesonebyone.
3.Groupingofactivities:
Groupingsimilaractivitiestoformdepartments,division&
sections.
Itisdonebasedonfunctions,processes,location&
products.
4.Assignmentofduties:
Groupsareassignedtoapersonmostsuitedforit.
7

8. 5.Delegationofauthority:
Allotmentofdutiestospecifiedpersonsisfollowed
bydelegationofauthority.
6.Establishmentofstructuralrelationship:
Relationshipshouldbeclearlydefinedwhenpersons
areworkingtogetherforacommongoals.
7.Co-ordinationofactivities:
Inordertogetoptimumperformance.
8

9. PRINCIPLES OF ORGANIZATION
Principles:
1.PrincipleofUnityofobjective.
2.Principleofdivisionofworkorspecialization.
3.Principleofefficiency.
4.Principleofspanofcontrol.
5.Principleofscalarchainorlineofauthority.
6.Principleofunityofcommand.
7.Principleofunityofdirectionorco-ordination.
8.Principleofauthorityandresponsibility.
9Mr.T.Somasundaram

10. 9.Principleofbalance.
10.Principleofflexibility.
11.Principleofcontinuity.
12.Principleofsimplicity.
13.Principleofleadershipfacilitation.
14.Principleofleadershipfacilitation.
15.Principleofstability.
10Mr.T.Somasundaram
PRINCIPLES OF ORGANIZATION

11. Types of Organization
FormalOrganization:
“Theformalorganizationisasystemofwell
definedjobs,eachbearingadefinitemeasureof
authority,responsibilityandaccountability”.
-Allen
“Aformalorganizationtypicallyconsistsofa
classicalhierarchicalstructureinwhichpositions,
responsibility,authority,accountabilityandtheline
ofcommandareclearlydefinedandestablished.
11Mr.T.Somasundaram

12. Characteristicsofformalorganization:
Formalorganizationstructureislaiddownbytop
managementtoachieveorganizationalgoals.
Formalorganizationisboundbyrules,regulations
andprocedures.
Formalorganizationisflexible&properlyplanned.
Basedonprincipleofdivisionoflabourand
efficiencyinoperations.
Concentratesmoreperformanceofjobsandnoton
individualsperforming.
Coordination&control,responsibilityand
accountabilityatalllevels.
Informalorganization,coordinationproceeds
accordingtotheprescribedpatter.
Unityofcommand.
12

13. Advantagesofformalorganization:
Conflictamongworkersareautomaticallyreducedsince
definiteboundariesareclearlydefined.
Overlappingofresponsibilityiseasilyavoided.
Ensurestableorganization,motivatestheemployees.
Enablesthepeopleoforganizationtoworktogether.
Disadvantagesorcriticismsofformalorganization:
Itdoesnotconsiderthesentimentsoforganizational
members.
Itdoesnotconsiderthegoalsofindividualsanditis
designedtoachievegoalsoftheorganizationonly.
Itisboundbyrigidrules,regulationsandproceduresand
thismaketheachievementofgoalsdifficult.
13

14. InformalOrganization:
“Informalorganizationreferstotherelationship
betweenpeopleintheorganizationbasedonpersonal
attitudes,emotions,prejudices,likes,dislikesetc.an
informalorganizationisanorganizationwhichisnot
establishedbyanyformalauthority,butarisesfromthe
personalandsocialrelationsofthepeople”.
TheInformalorganizationrelationshipexistsunderthe
formalorganizationalso.Theinformalorganizationgivea
greaterjobsatisfactiontotheindividualsandresultin
maximumproduction.
14

15. Characteristicsofinformalorganization:
Itariseswithoutanyexternalcause(i.e.)Voluntarily.
Itiscreatedbasedonsimilarity.(age,gender,place,caste,
etc.)
Thereisnoplaceinorganizationchart,oneofpartsof
totalorganization.
Thereisnostructureanddefinitenesstoinformal
organization.
Personbecomemembersofseveralinformalorganization.
Thereisnorulesandtraditionsofinformalorganization
butfollowed.
15

16. Advantagesofinformalorganization:
Itmotivatesworkersandalsomaintainsstabilityofwork.
Itfillsupgapsanddeficiencyofformalorganization.
Itfillsupgapamongabilitiesofmanagers.
Itencouragetheexecutivestoplanworkcorrectlyandact
accordingly.
Itisoneoftheusefulchannelofcommunication.
Disadvantagesofinformalorganization:
Itfunctioninwaysthatarecounterproductiveandstandinway
ofachievingorganizationobjectives.
Indirectlyreduceseffortofmanagementtopromotegreater
productivity.
Spreadsrumouramongworkersregardingfunctioningof
organizationunnecessarily.
16

17. DifferencebetweenFormalandInformalOrganization:
17
S.NoPoint of viewFormal Organization Informal
Organization
1Origin Created deliberately and
consciously by frames of
organization
Created
spontaneouslyand
naturally
2Purpose Created for achieving
legitimate objectives of
organizations
Created by members
of organization for
social and
psychological
satisfaction
3Nature Planned and OfficialUnplanned and
Unofficial
4Size It may quite largeIt may be smallin
size
5Nature of groupsStable and continue for
very long period of time
Quite unstable in
nature

18. 18
S.NoPoint of viewFormal Organization Informal
Organization
6Number of
groups
More Less
7Structure Definite structure,
mechanical & rational
Structureless,
impersonal &
emotional
8Authority Authority flows from
top to bottom
Flows upward to
downwards from
horizontally
9CommunicationFlows through
prescribed chain of
command
Pass through
informal channels
which don’t have
one single form
10Control processRigid rules and
regulations
Group norms and
values

19. Organization structure
Meaning:
Itisasystemthatoutlineshowcertainactivitiesare
directedinordertoachievethegoalsofanorganization.
Itincluderules,rolesandresponsibilities.
Itdetermineshowinformationflowsbetweenlevelwithin
thecompany.
Itlookslikeapyramidwithanarrowtopandbroadbottom.
Itshowstheauthorityandresponsibilityrelationships
betweenthevariouspositionsintheorganizationby
showingwhoreportstowhom.
19

20. Organization structure
Definition:
OrganizationalStructurereferstothehierarchical
arrangementofvariouspositionsinanenterprise.Itdefinesthe
relationshipbetweenvariouspositions,departmentsandpersons.It
definestheformalrelationshipintomanagerialhierarchy.
ImportanceofOrganizationStructure:
Itimproveteamworkandproductivitybyworkingtogether.
Itdeterminesthelocationofdecisionmaking.
Itstimulatescreativethinkingandinitiativeamongorganizational
members.
Itfacilitatesgrowthofenterprisebyincreasingitscapacity.
Itprovidespatternofcommunicationandcoordination.
Ithelpsmemberstoknowabouthisroles.
20

21. Elements of Organization structure
Thesevenelementstobeconsideredwhiledesigningthe
organizationalstructureare–
1.WorkSpecialization:
Eachworkerisassignedaspecific,repetitivetask.
Jobwillbebreakingintosmallstandardizedtasks,whichmakes
peoplemorefocusedandactive.
Individualemployeewillspecializeindoingpartofsmalltask.
2.Departmentation:
Itmeansdivisionoftotalworkintoindividualfunctionsandsub
functions.
Thesegroupsarecalledworkunits,otherwiseitiscalled
departments.
21

22. 3.ChainofCommand:
Itislineofauthoritythatextendsfromtopof
organizationtolowestlevels.
Itdecidesamountofauthority,responsibilityand
accountabilityateachlevelofchain.
4.UnityofCommand:
Itisaprocessofanemployeecanreceivingthe
commandfromonlyonesuperior.
Itundermineauthority,endangerdisciplineanddisturb
orderandstabilityincaseoftwoormoresuperiors.
22

23. 5.SpanofManagement:
Itreferstotheno.ofsubordinateswhocanmanaged
effectivelybysuperior.
Itisalsocalledspanoforganizationorspanofsupervision.
6.CentralizationandDecentralization:
Centralizationreferstoconcentrationofauthority.
Decentralizationreferstodispersionofauthority.
7.Formalization:
Organizationalstructureisformalizedorstandardizedfor
simplicityandefficiency.
Employeesarefreetoproceedaccordingtotheirliking,if
formalizationislow&theyhavetobehaveaccordingtoset
rulesandregulations.
23

24. Types of Organization structure
Organizationstructureisprimarilyconcernedwiththeallocationof
tasksanddelegationofauthority.Thefivemajortypesof
organizationstructureare-
24
1. Line Organization
2. Functional Structure
3. Line and Staff
Organization
4. Project Organization
5. Matrix Organization

25. 1.LineOrganization:
Itistheoldesttypeoforganizationstructure.
Ithasunbrokenverticallinethroughauthorityflowsfromtopto
thebottomoforganization.
Everymanagerexercisesdirectauthoritytohissubordinates.
Thisishierarchicalarrangementofauthorityandnoseparate
supportiveorserviceunits.
(E.g.)Manufacturingmanagerhimselfhastoarrangefor
recruitment,selectionandtrainingofworkersforproduction
department.
LineOrganizationisoftwotypes–
a)PureLineOrganization
b)DepartmentalLineOrganization
25

26. a.PureLineOrganization:
Inpurelineorganization,allpersonsatagivenlevelperform
sametypeofwork.
Thedivisionsaresolelyforpurposeofcontrolanddirection.
Departmentaldivisionsaremadeonlyforsakeofconvenience
andcontrol.
Allworkersperformthesametypeofwork.
26

27. b.DepartmentalLineOrganization:
Itdividestheenterpriseintodifferentdepartmentswhichare
convenientforcontrolpurposes.
Unityofcontrolandlineofauthorityflowsfromtoptobottom.
Differentdepartmentsareputundercontrolofdepartmental
managers,wheretheygetordersdirectlyfromGeneralManager.
Everydepartmenthasitsownlineoforganization.
27

28. Lineorganizationissuitableinfollowingcases-
i)Wherebusinessiscarriedonasmallscaleandfew
subordinatesareemployed.
ii)Wheretheworkislargelyofroutinenatureand
methodsofoperationaresimple.
iii)Wherecontinuousprocessesareemployed.
(E.g.)Sugarindustry.
28

29. Advantages:
Simplicity
IdentificationofAuthority&
Responsibility
Cordination
OrderlyCommunication
Economical
QuickDecisions
UnityofCommand
ExecutiveDevelopment
Disadvantages:
Lackofspecialisation
Overloading
Lackofinitiative
Instability
Autocraticapproach

30. 2.FunctionalOrganizationStructure:
Functionalorganizationisbasedonconceptof‘Functional
Foremanship’suggestedbyF.W.Taylor.
Asorganizationgrowsinsize,lineorganizationprovides
inadequateanditbecomesnecessarytointroduce
specialization.
Itisdividedintono.offunctionalareasandeachfunction
managedbyexpertinthatarea.
Everyoperatingexecutivereceivesordersfromseveral
functionalspecialistswithinafunctionaldepartment.
(E.g.)Purchasedepartmenthandlespurchasesforall
departments.Personnelmanagerwilldecidequeriesrelated
tosalary,promotions,etc.
30

31. Functional Organization Structure
31

32. Advantages:
Specialization
Reductionorworkload
Easierstaffing
Higherefficiency
Scopeforexpansion
Disadvantages:
Doublecommand
Complexity
Delayindecision-
making
Lackofco-ordination
Expensive

33. 3.LineandStaffOrganization:
LineandStafforganizationisacombinationoflineand
functionalstructure.
Lineauthorityflowsinaverticallineasinlineorganization
andstaffspecialistsdon’thavepowerofcommandover
subordinatesinotherdepartments.
Staffpositionsarecreatedtosupportthelinemanagers.
Staffspecialist,haslineauthorityoversubordinatesinhis
owndepartment.
(E.g.)ChiefAccountanthascommandauthorityover
accountantsandclerksinaccountsdepartment,buthehas
onlyadvisoryrelationshipwithotherdepartments.
33

34. Line and Staff Organization
34

35. Advantages:
ExpertAdvice
Relieftotopexecutives
Qualitydecisions
Flexibility
Disadvantages:
Linestaffconflicts
Confusion
Ineffectivestaff
Expensive

36. 4.ProjectOrganizationStructure:
Aprojectorganizationisoneinwhichaproject
structureiscreatedasaseparateunitordivision
withapermanentfunctionalstructure.
Ithasworkersfromvariousfunctionaldepartments
whoworkunderoverallleadership,controlandco-
ordinationofaprojectmanager.
Teamofspecialistsandworkersfromdifferent
functionalareastoworkonproject.
Projectteamfunctionsunderoverallcontroland
leadershipofprojectmanager.
36

37. Project Organization Structure
37

38. Advantages:
Concentratedattentiononprojectwork
Advantagesofteamspecialization
Timelycompletionoftheproject.
Disadvantages:
Problempfco-ordination
Unclearlydefinedrelationships
Feelingofinsecurityamongpersonnel

39. 5.MatrixOrganizationStructure:
Matrixstructureisahybridorganizationalformconsistsboth
projectandfunctionalstructures.
Ithasdimensionalpatterntomeetproblemsofgrowingsizeand
complexityofundertakings.
Inprojectstructure,separategroupsarecreatedformanaging
andcompletingresponsibilityassignedtooneprojectmanager.
(suitableforsmallno.ofprojects).
Inmatrixstructure,responsibilityaresharedwithothersin
organization.(suitableforlargeno.ofprojects).
“Matrixorganizationisanyorganizationthat
employsmultiplecommandstructurebutalsorelatedsupport
mechanismandanassociatedorganizationalcultureand
behaviourpattern”.
39

40. 40Unit 3 -POM Mr.T.Somasundaram
Matrix Organization Structure

41. Advantages:
Bestutilizationoforganizationalresources.
FlexibleStructure.
DevelopmentofPersonnel.
Highmotivationandmoraleofemployees.
Disadvantages:
Confusioncausedbydoublelineofcommand.
Phenomenonoffrictionandpassingthebuck.
Conflictsoverdivisionofauthorityandsharingof
resources.

42. Departmentation
Definition:
“Adepartmentationisaprocessofdividingthelarge
monolithicfunctionalorganizationintosmallandflexible
administrativeunits”. -Knootz&O’Donnell
“Departmentationmeanstheprocessofgroupingof
similaractivitiesofthebusinessintodepartment,division
orotherhomogeneousunits.Itisusedforthepurposeof
facilitatingsmoothadministrationatalllevels”.
“Adepartmentisadistinctarea,divisionorbranchof
anenterpriseoverwhichamanagerhasauthorityforthe
performanceofspecificactivities”.
42

43. ImportanceofDepartmentation:
1.Specification–ithelpstogrowspecificationinvarious
activitieswhichleadstoimprovingtheefficiency.
2.Feelingofautonomy–givesindependentchargesto
managersandincreasestheirresponsibilitiesand
efficiency.
3.Fixationofresponsibility–responsibilitiesofwork
definedpreciselyandaccuratelyfixed.
4.DevelopmentofManagement–itperformspecialized
functionsanddevelopforhigherpositionsandfacilities
developmentofmanagerialpersonnelbyproviding
opportunities.
43

44. 5.FacilityinAppraisal–managersperformspecified
jobsandfacilitatesadministrativecontrolasstandards
ofperformanceforeachdepartment.
6.BudgetPreparation–itmakesthepreparationof
budgetfordepartmentseasieraswellasfor
organization.
7.ProperSupervision–authorityformakingdecisions
isdiffusedtomanagersofdepartmentsandworksare
assignedtoeachindividualdepartmentwise,
supervisionandcontrolbecomeeasier.
44

45. Bases or Types of Departmentation
TypesofDepartmentation:
1.Departmentationbynumbers.
2.Departmentationbytime.
3.DepartmentationbyEnterprisefunction.
4.DepartmentationbyterritoryorGeography.
5.Departmentationbycustomers.
6.Departmentationbyequipmentorprocess.
7.Departmentationbyproductorservice.
45

46. 1.Departmentationbynumbers:
Itiscreatedonbasisofnumberofpersonsformingthe
department.
Eachgroupiscontrolledbysupervisororanexecutive.
(E.g.)Armysoldiersaregroupedintosquads,companies,brigades
andregimentsonbasisofnumberprescribedforeachunit.
Inmanufacturingunit,thisbasisisfollowedatlowerlevelof
hierarchy.
Disadvantages:
Itrequiresmorespecializedanddifferentskillspersonin
advancedtechnologyworld.
Specializedpersoningroupsarefrequentlymoreefficientthan
thosebasedonnumbers.
Itisusefulatlowerleveloforganizationstructure.
46

47. 2.DepartmentationbyTime:
Businessactivitiesaregroupedtogetheronthebasisoftimeof
performance.
(E.g.)Manufacturingunitworkinginthreeshiftsofeighthourseachperday
maygrouptheactivitiesshiftwiseandhavingseparatedepartmentforeach
shift.
Advantages:
Servicerenderedaroundtheclockbasis.
Itispossibletouseprocessesthatcan’tbeinterrupted.
Expensivecapitalequipmentcanbeused(i.e.)24hrs/day.
Parttimeworkforthestudentsthosestudyingduringtheday.
Disadvantages:
Supervisingmaybelackingduringnightshift.
Difficulttoswitchfromadayshifttonightshift.
Createproblemsincoordinationandcommunication.
Overtimeratescanincreasethecostofproduct.
47

48. 3.DepartmentationbyEnterprisefunction:
Itisbasedonactivitiesgroupedonbasisoffunctions
whichtobeperformed.
48
President
Vice -President
Managing director
Marketing dept Finance deptPersonal deptProduction dept
•Market
research
•Market
planning
•Sales
administration
•Advertising
•Production
planning
•Production
engineering
•Purchasing
•Tooling
•Repairs
•Recruitment
& selection
•Training
•Labour
•Financial
planning
•Budgets
•General
accounting
•Cost
accounting

49. Advantages:
Itislogical,scientific&timeproven,naturalmethod.
Itprovidesspecializationofworkwhichmakesmaximumutilization
ofresources.
Thereisproperperformancecontrol&facilitatesdelegationof
authority.
Itfacilitatescoordinationactivitywithdepartment.
Iteliminatesduplicationofcosts&effectivecontroloverafunction.
Disadvantages:
Duetooverspecialization,itisdifficulttohandleproblems.
Itdiscouragecommunicationacrossfunctions.
Itincreasesworkload&responsibilityofdepartmentalheads.
Itdoesn’tofferanyscopefortrainingforoveralldevelopment.
Itgrowsinsizetojustifytheircosts.
Itisdifficultiesincoordinatingtheactivitiesofdifferentdepartment.
49

50. 4.DepartmentationbyTerritoryorGeography:
Itoperatesindifferentgeographicalareas,eachwithdistinctneedsto
createdepartmentsalonegeographicallines.
Itisgroupedinarea–wiseandinchargeofonepersonandithelpsto
increasesales.
Itisusedforlargescaleenterprisewhicharegeographicallyspread
outlikeBanking,Insurance,transport,etc.
50
President
Managing director
Northern
region
Eastern
region
Central
region
Western
region
Southern
region

51. Advantages:
Itplacesresponsibilityatalowerlevel&improvescoordination.
Thesalesincreasedwithhelpofintimateknowledge.
Itreducescostofoperationandgainssavingintime.
Theareamanagercanspecializeinpeculiarproblems.
Itgivesbettercoordinationofactivitiesinregionaloffices.
Itprovideopportunitiestomanagerstoimprovetheirskill.
Itfacilitatesexpansionofbusiness.
Disadvantages:
Thereislackofcommunicationduetogeographicaldistance.
Itincreaseno.ofpersonnel&leadstohighoperationalcost.
Ithasfrictionbetweenregionalmanagers.
Coordination&controlofheadofficeislesseffective.
Duplicationofphysicalfacilitiesduetohighoperationcost.
Smallbusinessunitcan’tmanagehighoperationcost.
51

52. 5.DepartmentationbyCustomers:
Itispreferredwhentheneedsofcustomersaredifferentinnature.
Thisismarketorientedwheredepartmentsarecreatedtoservemarket
ormarketingchannels.
(E.g.)bankdividedintoloansection,corporatebanking,agricultural
banking,mortgageloans,etc.
52
Branch Manager
Manager
corporative
loans
Manager
personal
loans
Manager
business
loans
Manager
agricultural
loans
Manager
housing
loans

53. Advantages:
Itfacilitatesconcentrationoncustomerneedsandsatisfaction.
Typesofcustomerssatisfiedthroughspecializedstaff.
Itdevelopspecializationamongstaffmembers.
Ithelpstogetfeelofmarketdynamicsbasedonpreferencesof
customers,competitors,etc.
Disadvantages:
Itrequiresmanagers&staffexpertincustomersproblems.
Duplicationofactivities.
Underutilizationoffacilitiesandmanpowerduringlowdemand.
Groupingofcustomers&theirdefinitionbecomedifficult.
Productionactivitiescan’tbeorganizedundermethodsof
departmentation.
Somegroupofcustomersmayexpandandflourishordisappear.
53

54. 6.DepartmentationbyProcessorEquipment:
Activitiesaregroupedonbasisofproductionprocessesorequipment
involved.
Themainobjectiveofthistypeistoachieveefficiency&economy.
(E.g.)Textilemillhavedepartmentslikespinning,ginning,wearing,
dyeing&printing,packing,sales,etc.
54
President
General Manager
Ginning
Dying and
printing
WeavingSpinning
Packing
and Sales

55. Advantages:
Itusesspecializedtechnology.
Itprovidesutilizationofspecializedequipment&specialskill.
Thereisnoduplicationofactivities.
Economyinoperationduetolocationofsimilartypeofmachines.
Nointerruptionofdepartmentsorprocess.
Specialization&divisionoflabourisfollowed.
Disadvantages:
Coordinationisdifficult.
Departmentdoesn’tfocustheireffortsoncostsanditsreduction.
Specialistsareessentialtoeachprocess.
Notrainingtostaffmembers&lackofoveralldevelopment.
Separateroomsforoperations&otherfacilitiestoallprocess.
Conflictariseamongmanagersofdifferentprocesses.
55

56. 7.DepartmentationbyProductorService:
Itisformedaccordingtotypeofproduct&usedinmulti-line
corporations(productexpansion,diversification,manufacturing,etc).
(E.g.)HindustanLeverlimitedhaveseparatedivisionbasedonproduct
lines(variousproducts).
56
General Manager
Heavy
Engineering
division
Power products
division
AutomobileEarth moving
equipment
division
Finance Sales
ProductionPersonal
Finance Sales
ProductionPersonal
Finance Sales
ProductionPersonal
Sales
Production
Personal

57. Advantages:
Attentiononproductlinewhichfacilitatesproductexpansion&
diversification.
Maximumutilizationofpersonalefficiencyofworkers.
Improvescoordinationoffunctionalactivities.
Quickresponsetochangesinenvironment.
Itprovidesexcellenttraininggroundtomanagers.
Betterservicesprovidedtocustomers,performanceofproductis
evaluated.
Easyforexpansion&diversificationofactivities.
Possibilityforgainingeconomyinmanufacturing.
Disadvantages:
Possibilityofduplicationofwork,requiresmoreperson.
Createsproblemofeffectivecontroloverproductdivisions.
Machines&equipmentmaynotfullyutilized.
Requiresadditionalcostformaintainingasalespersonnel.
57

58. Committees
Meaning:
Committeesareformalbodieswithadefinitestructurein
theorganization.
Itmayreviewbudgets,formulateplansfornewproductsor
makepolicydecisions.
Committeehavepowertomakerecommendationsand
suggestions.
Definition:
“ACommitteeisabodyofpersonsappointedorelectedto
meetonanorganizedbasisforconsiderationofmatters
broughtbeforeit.”
58

59. ObjectivesofCommittee:
Tohaveconsultationwithvariouspersonstosecure
theirview-pointsondifferentaspectsofbusiness.
Togiveparticipationtovariousgroupsofpeople.
Tosecurecooperationofdifferentdepartments.
Tocoordinatethefunctioningofdifferent
departmentsandindividualsbybringingaboutunity
ofdirection.
Toavoidtheconcentrationoftoomuchauthorityin
asingleindividual.
59

60. FeaturesofCommittee:
Itisagroupofpersonperformingagrouptaskwiththe
objectofsolvingcertainproblems.
Committeemayformulateplans,makepolicydecisionsor
reviewtheperformanceofcertainunits.
Thereisnolimitationonmaximumno.ofpersons.
Itcandeliberateonlyonmattersthatbroughtbeforeit.
Itmaybeconstitutedatanyleveloforganizationandits
memberscandrawnfromanylevelorfunction.
Apersoncanbememberofmorethanonecommitteeatthe
sametime.
60

61. TypesofCommittee:
1.LineandStaffCommittees:
Ifcommitteeisvestedwithauthorityandresponsibilityto
decideandwhosedecisionisimplementedinvariably,is
knownasalinecommittee.
(E.g.)BoardofDirectorsisalinecommitteeofthe
representativesofitsmembers,whichisauthorizedtotakeand
implementpolicydecisions.
Ifcommitteeisappointedmerelytocounselandadvise,is
knownasstaffcommittee.
(E.g.)committeecomposedofheadsofvariousdepartments
maymeetatperiodicalintervalstocounselthechiefexecutive.
61

62. 2.FormalandInformalCommittees:
Whenacommitteeisconstitutedasapartoforganization
structureandhasclear-cutjurisdictionisknownasformal
committee.
Informalcommitteeisformedtoadviseoncertaincomplicated
matters,managementdoesn’twanttosetupformalcommittee
anddon’tformpartoforganizationstructure.
3.StandingandAdhocCommittees:
Formalcommittees,whichareofpermanentcharacterare
knownasstandingcommittees.
Adhoccommitteesaretemporarybodies,whichmaybeforma
orinformal.
Thiscommitteeisappointedtodealsomespecialproblemand
stopsfunctioningafteritsjobover.
62

63. 4.ExecutiveCommittees:
Itisacommittee,whichhaspowertoadministerthe
affairsofthebusiness.
5.CoordinatingCommittees:
Committeeisgenerallyconstitutedtocoordinatethe
functioningofdifferentdepartments.
Itisrepresentativesofdifferentdepartmentwho
meetperiodicallytodiscusstheircommonproblems.
63

64. Advantages Disadvantages
The knowledge and experience of
the individuals can be pooled
together.
Constitution of a committee may
be costly both in terms of time
and money.
It is useful for coordinating the
activities among various
organizational units.
The decision making process in a
committee is slow.
Committees are often used to give
representation to various interest
groups.
Many times committee meeting
result into indecision.
Committees are useful for
transmission and sharing of
information.
Many managers try to impose
their own personal decisions
through committees.
It can be used to consolidate broken
authority.
It can be used as a tool of
management development.

65. Centralization and Decentralization
Definition-Centralization:
“Itistheprocessoftransferringandassigningdecision-making
authoritytohigherlevelsofanorganizationalhierarchy.Thespanof
controloftopmanagersisrelativelybroad,andtherearerelatively
manytiersintheorganization.
Characteristics:
•Philosophy/emphasison:top-downcontrol,leadership,vision,
strategy.
•Decision-making:strong,authoritarian,visionary,charismatic.
•Organizationalchange:shapedbytop,visionofleader.
•Execution:decisive,fast,coordinated.Abletorespondquicklyto
majorissuesandchanges.
•Uniformity:Lowriskofdissentorconflictsbetweenpartsofthe
organization.
65

66. Advantages:
•ProvidePowerandprestigeformanager
•Promoteuniformityofpolicies,practicesanddecisions
•Minimalextensivecontrollingproceduresandpractices
•Minimizeduplicationoffunction
Disadvantages:
•Neglectedfunctionsformid.Level,andlessmotivated
besidepersonnel.
•Nursingsupervisorfunctionsasalinkofficerbetween
nursingdirectorandfirst-linemanagement.
66Unit 3 -POM Mr.T.Somasundaram

67. Definition-Decentralization:
“Itistheprocessoftransferringandassigningdecision-making
authoritytolowerlevelsofanorganizationalhierarchy.Thespanof
controloftopmanagersisrelativelysmall,andtherearerelatively
fewtearsintheorganization,becausethereismoreautonomyinthe
lowerranks.
Characteristics:
•Philosophy/emphasison:bottom-up,political,culturalandlearning
dynamics.
•Decision-making:democratic,participative,detailed.
•Organizationalchange:emergingfrominteractions,organizational
dynamics.
•Execution:evolutionary,emergent.Flexibletoadapttominorissues
andchanges.
•Participation,accountability:Lowriskofnot-invented-herebehavior.
67

68. Advantages:
•Raisemoraleandpromoteinterpersonalrelationships
•Relievefromthedailyadministration
•Bringdecision-makingclosetoaction
•DevelopSecond-linemanagers
•Promoteemployee’senthusiasmandcoordination
•Facilitateactionsbylower-levelmanagers
Disadvantages:
•Top-leveladministrationmayfeelitwoulddecreasetheirstatus
•Managersmaynotpermitfullandmaximumutilizationofhighly
qualifiedpersonnel
•Increasedcosts.Itrequiresmoremanagersandlargestaff
•Itmayleadtooverlappingandduplicationofeffort
68Unit 3 -POM Mr.T.Somasundaram

69. Centralization Decentralization
Unification of powers and authorities, in
the hands of high-level management
Dispersal of powersand authorities by
the top level to the functional level
management.
It is thesystematic and consistent
concentration of authority at central
points.
It is the systematic delegation of
authority in an organization
Centralization is best for a small sized
organization
Large sized organization should
practice decentralization.
Formal communication exists in the
centralized organization
Communication stretches in all
directions.
In centralization due to the concentration
of powers in the hands of a single person,
the decision takes time.
On the contrary, decentralization proves
better regarding decision making as the
decisions are taken much closer to the
actions
There are full leadership and
coordination in Centralization
Decentralization shares the burden of
the top level managers.
Lies with the top management.
Multiple persons have the power of
decision making.

70. Span of Control
Definition:
“Spanofmanagementmeansthenumberofpeople
managedeffectivelybyasinglesuperiorinanorganization.Itis
alsoknownas“SpanofControl”,“SpanofSupervision”,“Span
ofAuthority”,“Spanofresponsibility”.
“Itisbettertermbecausecontrolandsupervisionare
elementsofmanagement”.
Idealno.ofsubordinatesisfourincaseofhigherlevel&8–12
incaseofbottomlevel(L.Urwick).
20to30subordinatescanmanageeffectivelybymanager
(J.C.Worthy).
Spanofcontrolisrelatedtodegreeofresponsibility(Hamilton).
6subordinatesinbottomlevel&3intoplevelisappropriate.
70

71. Factorsdetermininganeffectivespan:
i)Capacityofsuperior:
Capacityfactorslikecommunication,leadership,decision
making,control,etcaffectmanagingsubordinates.
ii)Capacityofsubordinates:
Subordinateswhoaretrained,developed&experienced
needsupervisiontodotheirduties.
iii)Natureofwork:
Ifactivitiesissimple&repetitive,itispossibleformanager
tosupervisemoresubordinates.
Rateofchangeofworkaffectsthespan.
71

72. iv)Typeoftechnology:
Therewillbewidespanifthefirmusingmassproduction&
assemblylinetechnology.Woodwardsuggestedaverage
span:
1.Massproductionandassemblyline–49persons.
2.Unitorsmallbatchproduction–23persons.
v)Delegationofauthority:
Inadequateorunclearauthoritydelegation.
Iftaskisclearlydelegatedtosubordinates,thenthetaskwill
beperformedwell.
vi)Clarityofplans:
Ifplanishigher(rules,procedures,methods,etc),then
degreeofspanwillbehigher.
72

73. vii)Communicationtechnique:
Oral,face–to–facecommunicationrequiresmoretime&
energyonbothsides.
Electronic&otherdeviceswillsavelotoftimeandspan.
viii)Usingofobjectivestandards:
Usestandardstofindouterrorsandfaultsinperformance
ofwork,thennoneedtospendmoretimeinwatching
performanceofsubordinates.
ix) Geographical closeness of employees:
Closer the subordinates in physical location, it is easier for
supervisor to manage more employees.
x) Direction and Co-ordination:
It needs degree of co-ordination both within the unit and
other units.
73

74. Types of Span of Control:
1. Narrow Span (Tall structure):
Few no. of subordinates managed by a superior.
Higher level management adopt narrow span (planning, policy
making).
It implies 3 to 7 subordinates.
Advantages:
•Close supervision
•Close controlof subordinates
•Fast communication
Disadvantages:
•Too much control
•Many levels of management
•High costs
•Excessive distance between lowest level and highest level
74

75. 2. Wide Span (Flat structure):
Large no. of subordinates managed by a superior.
Middle level management adopt wide span.
It implies decentralizedor loosely controlled.
Advantages:
•More Delegation of Authority
•Development of Managers
•Clear policies
Disadvantages:
•Overloadedsupervisors
•Danger of superiors loss of control
•Requirement of highly trained managerial personnel
•Block in decision making
75

76. Management By Objective (MBO)
Definition:
“MBOcanbedefinedasamanagementmodelthatattempts
todeviseacommonobjectivethatisacceptableforboththe
managementandemployees,whichwillimprovetheoverall
performanceoftheorganization”.
Benefits:
Motivation–itraisesjobsatisfaction&commitment.
Clarityofobjectives–goalsarebetterunderstoodacrossthe
organization.
BetterCommunication–itaidsinbetterrelationshipbetween
themandhelpscoordination.
Drivetoachieve–moreurgetoachievetheobjectives.
Objectivescansetatalllevelsandforallfunctions.
76

77. Management By Exception (MBE)
Definition:
“MBEcanbedefinedasamanagementmodelthatprovides
theobjectivesforemployeesandonlyconcentrateonsignificant
deviationsfromthesetobjectivesortaskwhichwillreducethe
energyandtimelostonunnecessarymonitoringandevaluation
procedures”.
Benefits:
Managersdon’thavetooverlookallmonitoringproceduresand
theycanconcentrateontheircoreresponsibilities.
Itsavesprecioustimeandenergyofmanagement.
Problematicissuescanbeidentifiedmorerapidly.
Employeesaregivenataskandlesssupervisedandindirectly
motivatedbyself-drivenapproachtoattaingoals.
77

78. Staffing
Meaning:
Staffingfollowstheplanningandorganizingfunction.
Staffingisacontinuousprocessandperformfunctionatall
times.
Itincludesrecruitment,selection,training,development,
transfer,promotionandcompensationofpersonnel.
Definition:
“Staffingisdefinedastheprocessinvolvedin
identifying,assessing,placing,evaluatinganddirecting
individualsatwork”. -S.Benjamin
78

79. NatureofStaffing:
1.CriticalManagerialFunction:
Itismostcriticalmanagerialfunctionalongwithplanning,
organizing,directingandcontrolling.
Itdependsonworkforce.
2.RecurringandContinuousactivity:
Itisresponsibilityofallmanagersworkinginallcapacitiesandinall
departmentsofbusiness.
Itcontinuesthroughoutthelifecycle.
3.BasedonEfficientManagementofPersonnel:
HRaremanagedthroughsystemofstaffingfunctions,whichshould
befair,dynamicandefficient.
4.HiringtheRightpeople:
Thisisdonethrougharigorousrecruitmentprocessandselecting
mostappropriatecandidateforsuitablejob.
79

80. RoleofStaffing:
Massiveincreaseinno.ofemployees.
Technicalinnovationsrequiremoreskilledandexperienced
staff.
Changingemployeesroleandvalues.
Increasingthepercentageofwomenemployees.
Wideningthefunctionofmanagement.
Effectiveattainmentoforganizationgoals.
Effectiveutilizationofskillsandpotentialofworkforce.
Provisionofjobsatisfactiontoemployees.
Developmentandmaintenanceofqualityorworklife.
80

81. ImportanceofStaffing:
Maintenanceofasatisfactoryandsatisfiedwork–
force.
Preparationsforhumanresourceinadvance.
Bestrealizationofenterpriseobjectives.
Bestutilizationofthehumanfactors.
Jobsatisfaction.
Developmentofpersonnel.
Healthypersonnelrelations.
81

82. Recruitment and selection
Definition-Recruitment:
“Recruitmentisdefinedasaprocesstodiscoverthesourcesof
manpowertomeettherequirementsofthestaffingscheduleandto
employeffectivemeasuresforattractingthatmanpowerinadequate
numberstofacilitateeffectiveselectionofanefficientworkforce”.
“Theprocessofsearchingforprospectiveemployeesand
stimulatingthemtoapplyforjobsintheorganization”.-B.Flippo
SourcesofRecruitment:
1.Internalsources:
*presentpermanentemployees.
*presenttemporary/Casualemployees
*retiredemployees
*dependentsofdeceased,disabled,retiredandpresent
employees.
82

83. MeritsofInternalsources:
Itisusedasatechniqueofmotivation.
Themoraleofemployeescanbeimproved.
Theeconomicneedsforpromotion,higherincome.
Tradeunionscanbesatisfied.
Employeesbecomeloyaltoenterprise.
Industrialpeaceisensured.
2.Externalsources:
a)EducationalandTrainingInstitutes:
Universities&institutionsprovidefacilitiesforcampusrecruitment
andselection.
Organizationsrecruitthecandidatesdirectlyfromthissourcetoapply
forjobs.
Organizationsusethissourceforfunctionofselectionand
recruitment.
83

84. b)PrivateEmploymentAgencies:
Agenciesareexpertsinprovidingemployerclients.
Chargealittlefeefromtheirclients&serveasbrokersbetween
employerandemployees.
c)PublicEmploymentexchange:
Itissetbygovernment&provideinformationaboutvacanciesto
candidates.
d)Databanks:
Collectbiodataofcandidatesfromdifferentsourcesandfeedinto
computer.
e)Casualapplicants:
Applyingcasuallyforjobsthroughmailofhandovertheapplication
topersonneldepartment.
f)TradeUnions:
Approachingtradeunionleadersforgettingsuitableemploymentdue
tolatter’sintimacywithmanagement.
84

85. MeritsofExternalsources:
Suitablecandidateswithknowledge,talent,skills,etc.
Costofemployeescamminimizedduetoselectingfromthis
source.
Latestknowledge,skillsandcreativetalent.
RecruitmentProcess:
a)Identificationofvacancy(poststobefilled,no.ofpersons,
duties).
b)Preparationofjobdescriptionandjobspecification(tasks,
responsibilities,etc).
c)Selectionofsources(internal&externalsources).
d)Advertisingthevacancy(television,radio,newspaper,internet,
etc).
e)Managingtheresponse(receivingresponsefromjobseekers,
sievingprocessofresumes&callforinterview).
85

86. Definition–Selection:
Selectionistheprocessthatenablestheenterprisetopickupthe
candidateswiththerequiredqualifications,trainingandskillforthe
jobaftercarefulscreeningandrejectingtheundesirablesateach
successivestep”.
StepsinSelectionProcess:
a)ScreeningofApplications:
Screeningthepersonalbiodata,experience,etctofoundtobe
qualifiedforconsiderationofemployment.
b)Selectiontests:
Tomeasuretheintelligence,ability,aptitude,physicalandmental
abilitiesofapplicant(personalitytest,aptitudetest,etc).
c)Preliminaryinterview:
Itisashortinterviewtosizeupthecandidate&usefulforeliminating
undesirableandunsuitablecandidates.
86

87. d)Referencecheck:
Personsnamedinapplicationformarecontactedtocrosscheckthe
candidate’scharacter,performanceandbehaviour.
e)Medicalexamination:
Physicalqualitieslikeclearvision,perfecthearing,cleartone,
toleranceofhardworkingconditionsetc.
f)FinalInterview:
Itisessentialstepinprocessofselection&tocrosscheckthe
informationalreadyobtained&tocollectadditionalinformation
aboutcandidate.
i)Informalinterview ii)Formalinterview
iii)Plannedinterview iv)Depthinterview
v)Patternedinterview vi)Stressinterview
vii)Groupinterview viii)Panelinterview
87

88. g)Approvedbyappropriateauthority:
Suitablecandidatesarerecommendedforselectionbyselection
committeeandaskedtoreportdutytospecifiedperson.
h)PlacementorJoboffer:
Afterallformalities,thecandidatesareplacedontheirjobson
probationbasis.
Interview:
Itiswidelyusedtechniqueforselectionofemployee.
TypesofInterview:
1.PreliminaryInterview:
Exchangeofinformationbetweencandidateandmanagerabouttheir
jobnature,salary,workingconditions,etc.
a)Informalinterview:
Itisconductedatanyplacebyanypersontogetbasic&jobrelated
information.(E.g.)unemployedcandidatemeetthemanagerto
enquireaboutvacanciesinorganization.
88

89. b)Unstructuredinterview:
Candidateisgivenfreedomtotellbouthimself&hisfamily,
etc.
(E.g.)Tellmeaboutyourlastjob.
2.CoreInterview:
a)BackgroundInformationInterview:
Tocollecttheinformationwhichisnotavailableinapplication.
(E.g.)family,like,dislikes,etc.
b)FormalandStructuredinterview:
Alltheformalitiesproceduresliketime,opening&closing,
intimatingthecandidatesofficially.(E.g.)Whatisyourstrength
&weakness?Whydoyouwanttochangeyourjob?
c)StressInterview:
Tocreatesituationsofstresstofindoutwhetherapplicantcan
performwellincriticalsituation.(i.e.)emotionalstrain.
89

90. d)GroupInterview:
Candidatebroughttogetherintheroom&interviewedbymany
experts.
e)PanelInterview:
Thereareseveralinterviewers&panelofexpertsinterviews
candidateandjudgehisperformancebasedondifferentfactor.
f)DepthInterview:
Candidate’sknowledgeandskillsexaminedinthisinterview
andputminimumconstraintsonapplicant.
3.Decision–makingInterview:
Interviewerexaminestheinterestofcandidateinjob,career
planning,promotionalopportunities,salary,allowances,
promotions,etc.
Finallytopmanagementmakedecisionofcandidate
performance.
90

91. Tests:
Itisainstrumenttomeasureselectedpsychologicalfactors.
1.Aptitudetest:
Itisusedformeasuringhumanperformancecharacteristics
relatedtopossibledevelopmentofproficiencyonspecificjobs.
2.Intelligencetest:
Itmeasurethecapacityofcomprehension,reasoning,verbal
comprehension,numbers,memory,etc.
3.Psychomotortest:
Tofindoutphysicalstrength,properco-ordinationbetween
fingerandeyeforsomeoperations.
4.Personalitytest:
Tofindoutpersonaltraitsandinterestsofindividuals.
(personalskill,leadershipquality,self–confidence,patience&
ambition,etc.)
91

92. 92

93. 93