CREATING AN ORGANOZATION

PREPARED FOR:
MOHAMMAD BADRUZZAMAN BHUIYAN. LECTURER DEPARTMENT OF ACCOUNTING COMILLA UNIVERSITY

PREPARED BY:

CONSIST OF: FARDUS MAHMUD-12 (GROUP LEADER) TAPSHI RABEYA-44 (ASST. GROUP LEADER) UMMAY TASLIMA-02 (MEMBER) SIRAJUM MONIRA-03 (MEMBER) SANOWAR HOSSAIN-29 (MEMBER)

DATE OF SUBMISSION:

30 SEPTEMBER 2007 1. What an organization is & why it necessary?

Some people wanted to organize a business. First, they make a plan to organize the business. They fixed their goal. To attain the goal they have to take time, energy & money to develop quality plan needs to organize its employees. Otherwise, they will not be able to reach their goal. Generally, origination means groups of people who are combining to achieve a specific goal. Weihrich & koontz defined organization as a 1. Identification & classification of required activities. 2. The groping activities necessary to attain objective. 3. the assignment of each grouping to a manager with the authority necessary to supervise it & 4. The provision for coordination horizontally & vertically in the organization structure. Therefore, we can say that, organization is harmonious adjustment of specialized parts for the accomplishment of some common purpose or purposes.

WHY IT IS NECESSARY
We know that organization is a group of people. Who are combined to achieve a specific goal. We know planning is important for an organization. Only planning cannot ensure the success of an organization. However, a grope of people may take time, energy & money but without organizing them, they cannot start their business. These elements should be organized. Staff & employees need to organize to attain the organizational goal. That means Organization provides a structure that makes clear who has responsibility for all task &who reports to whom. Beside these, there are some questions-

Who will do what types of work? - Who will give order? - Who will supervise them? - To whom they will report. By creating & organization above question, become clean. Organization is the management function of assigning activities & grouping people so that the firms objective can be accomplished. In case of large organization there need specialization. Some types of organization structure is needed for things to run smoothly. Manager must plan & implement the way a business will be organized. Each firm believes that a particular organizational structure works best.
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2.LIST & DESCRIBE THE STEPS IN THE ORGANIZING PROCESS

Managers build & modify organizations by using the organizing process. To create an organization we have to follow the stepsSTEP-1: Consider objective & plans Objectives & plans are the starting point. Objectives mean the purpose that organization have or will have. Managers begin the process by examining the objective of the organization. As a result - objectives are being developed - new departments may be created -old one may be given new responsibility STEP-2: Determining the necessary work activities After identifying the objectives manager, determine what work activities are necessary to accomplish the identified objectives creating a list of tasks to be accomplished. Thus, tasks may be on going that means daily works, as hiring, training & record keeping. Others task include assembling, machining, shipping, sorting, selling, advertising. Manager ready to classify these works into many work units. Manager fix what works must be done. STEP-3: Classify & group activities

In this step manger fix what tasks will performed by which department. Then he makes group & divide these tasks into related areas. Than he establish the basic department design for the organization structure. As example selling, advertising, shipping & storing can be considered as marketing related activities. Assembling, cutting, machining, welding, painting are manufacturing process. Hiring, training, developing, and recruiting are personnel relate activities. STEP-4: Assign work & delegate appropriate authority After classifying & group activities, a manager informs the worker & assigns their work. That means works are being divided among the workers. As they know what they have to do. They are given appropriate authority on there work to accomplish the task. As example accounts officer may check the accounts. He has to give the right to do so. STEP-5: Design a hierarchy of relationship This is the last step of the organizing process. In this step manager, complete the vertical & horizontal operating relationship of the organization as a whole. Vertical structure shows a decision-making hierarchy that shows who is in charge of each task of each specialty area. Horizontal structure shows working relationship between operating department & it makes the final decision on the span of control.

3.IDENTIFY THE FORMS OF DEPARTMENTALIZATION & THE SITUATIONS IN WHICH EACH WOULD BE APPROPRIATE

In the third process of building an organization, necessary activities are classified & grouped into related work unit such as production, marketing, finance, personnel etc. To do such departmentalization is created. In simple words, we can say that departmentalization is the process where it creates a departmental structure for the organization. This structure shows how to form groups, departments & divisions than according to the objectives of the organizations.

We can divide into four categories of the departmentalization. Now in the following we will discuss about the forms of departmentalization with a figure, which shows the methods of departmentalization. Functional departmentalization: Functional departmentalization means a structure in which each unit or department has a different set of activities & responsibilities. There are some common function of each organization. Such as production, finance, marketing, personnel etc. we can say them the major headings. Under the major headings there are also have some functions. For example in a manufacturing firm, can be considered engineering, manufacturing & marketing would be separate department. Selling, advertising, storing, shipping can be considered marketing activities & they are grouped under the marketing heading. Because of separate department functional experts becomes even more skilled in their areas. Functional departmentalization clearly draw the lines between the functional Areas. Geographic or territorial departmentalization: Territorial departmentalization groups activities & responsibilities according to geography. Specifically we can say that territorial departmentalization is such kind of departmentalization in which units are divided based on territory or geographical region. This departmentalization divisions when companies expand their business in various parts of the country because of favorable labors, materials costs, tax incentives, easy transportation system or the need to be near customers to serve them quickly & efficiently. If we look at the figure, we can see the divisions-the eastern region & western region- that illustrate this method. Each division operates like an independent business. Division managers have authority to take advantage of regional costs, resource & competitive conditions. Product departmentalization Product departmentalization assembles the activities of creating, producing & marketing

each product into one department. That is all the product related activities are included into the Product departmentalization. Product departmentalization is considered that is product requires a unique marketing strategy, production process, distribution system etc. In the figure we can see that typewriters and calculator department assembles their activities in to one department that means product department. Customers departmentalization Customers departmentalization are formed from the customers point of view it main objective is to fulfill the customers demand. In this case, customers departmentalization considers the customer choice, inclination, situation, demand etc. When a company market there product different types of customer can consume them. Such as Government. Retail, hospital etc. Each of this customer groups has a different set of demands, bees and preferences. In turn, each requires a different set of approach, customs and operations.

4.DEFINE AUTHORITY & EXPLAIN THE DEFERENCES AMONG LINE, STAFF, & FUNCTIONAL AUTHOTITY.

AUTHORITY: In an organization manager, accomplish organizational activities by subordinates. So manager have to supervise them. As a result, they need authority. Authority means right to control subordinates. All managers have authority. Authority varies from level to level. Authority is a managerial tool; it can be described as the right to commit resources or legal right to give orders. Legal right to give orders means tell someone to do or not to do something. Authority is the glue that holds organization together. It comes from top level & goes to lower levels that mean chain of command. Authority is fixed in manager because of position & they occupy the organization. There are three types of authority: 1. line authority 2. staff authority

functional authority Line authority: Each position in managerial hierarchy has line authority or direct authority over lower level in hierarchy. A manager with line authority is the unquestioned superior for all activities of his or her employees. Line authority defines the relationship between superior & subordinate. It is direct supervisory. Staff authority: In staff authority, manager gets assistance from an advisor. Advisor only can provide advice or technical knowledge. They cannot dominate or obligate manager. Functional authority: Functional authority is the authority to make decisions on specific activities that are undertaken by personnel in other departments. A personnel manager must monitor & review compliance in operating departments for recruitment, selection, & performance appraisal systems.

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5.RELATE THE CONCPT OF DELEGTION TO AUTHORITY, RESPONSIBILITY & ACCOUNTABILITY.

Delegation takes place for two reasons- When company expands & more employees here or managers fell the need of skill ness of subordinates. Superior delegates authority to subordinates to perform duties successfully. It is always related to formal authority. From the definition, we can see some steps are maintained in delegation. Lets we describe the sequence of events, which are created in delegation: Step-1:Assignment of task: At first manager should identify the specific duties for specific employees or departments & allocate it. When it becomes possible than all employees are responsible for their tasks. Step-2:Delegation of authority: To complete their tasks or duties they need proper authority. However, it should be considered that authority & duties must be equal. If less authority is given to the subordinates, they cannot perform their duties for lack of right. On the other hand if more authority is given they may misuse of there right.

So superiors must be conscious when delegate the authority. Step-3: Acceptances of responsibility: To describe the point we must describe what responsibility is. Responsibility means the obligations or bindings to the superiors for ones specific duties. When any person accepts any duty, they are responsible to perform this by their best ability. In the delegation process, a manager to an employee does not delegate responsibility. An employee becomes responsible when the superiors accept the assignment. When employee receives, duties & delegate authority than responsibility emerge naturally. Step-4: Creation of accountability: Accountability means a practice to answer someone for actions. Either it means gets the result of doing works- credit or blame. When the manager identifies and allocates duties specifically than it is easy for accountability. When subordinate take duty & authority, they will be accountable, answerable for action taken. A manager is accountable for two times first time manager is accountable for there authority & performance. Second time for the performance of their subordinates.

6.EXPLAIN THE ORGATIONAL CONCEPTS OF SPAN OF CONTROL.

SPAN OF CONTROL: Span of control means diversity of the number of subordinates a manager supervises. Span of control is the one kind of principal, which is necessary for the betterment of organization to achieve the goal. It limits the number of subordinates reporting to a supervisor. For solving any types of problem, controlling power is diversified among various people. It is called span of control. The exact number for each manager is determined by The complexity & variety of the subordinates work. The capacity of manager The ability & training of the subordinates

 The supervisors willingness to delegate authority Therefore, we can say that the principal of organization that limits the number of subordinates reporting to a supervisor.

7.DIFFERENTIATE AMONG LINE, LINE & STAFF, FUNCTIONAL & MATRIX ORGANIZATION STRUCTURE.

Formal organization is an organization where those who have authority, responsibility & accountability create the management. The formal organization structure is displayed in the organization chart. Formal organization structure is developed by companies to help achieve their specific objectives. The organization structure selected by an organization will depend on its objectives, resources, stage of development, & philosophies of management. There are four types of formal organization structures developed by managers. Four types of formal organization & there difference are fully explained with diagram is given below-

Line organization

The line organization structure is the simplest & the oldest form of organization. In the line organization, structure relationship is created between superior & subordinate. The line organization is based on direct authority. Line organization is an organization where direction is provided from top-level management to lower level management. Each manager is responsible for making his or her own decisions. In making these decisions, the manager is responsible for collecting & processing his or her information without any help of specialists or staff advisors. The line organization is most applicable to small organization but it is not applicable for big organization because of complexity, lot of employees, scope of operations. This organization also called military organization. Line & staff organization This organization consists of line organization & staff personal & the staff personal provide advise to the line management to do their work effectively. Staff departments & their employees advice the line personal than the line manager s

make decisions &then take actions directly affect the firms performance. So we can see that in this organization staff personal has no power to make a decision, they only have the power to advise. In the line & staff organization structure, there are three types of authority. Such as Line authority: Line managers passes or control line authority- direct supervisory authority over their departments & operations. They have the authority to make decisions & to compel action. Staff authority: Staff managers control the staff authority. Their objective as to advise line managers. They do not have the authority to give order or make decision. Functional authority: Some staff managers are given functional authority. They have the authority to make decisions on specific activities. Functional organization Functional organization structure is a structure is on organization structure where management provide expert to give technical advice to each workers. One person is not able to do work effectively like one expert separate supervisor. Different types of technically skilled supervisors in this structure supervise different types of element of an organization. Matrix organization Matrix organization has received increasing attention in resent years. Matrix organizational structure means a group of many specialists from different departments or divisions to work on special project. When the project is completed, the specialists either return to their control area or engaged to another project. In this structure to fore a group members are selected from the different departments & are supervised for the duration of the project by the project manager. For its characteristics. It is also called project organization structure. Difference among four types of organizational structure Authority: In the line, organization subordinate has no power & superior has the total authority to control the organization line & staff organization specialized or expert have no authority to

control, line management has this authority. In the functional organization because of separate supervisors has the authority & in the matrix organization specialists has the authority to perform every activity. Decision-making: In the line organization, decision can be made faster. In the staff & line, organization decisions can be delayed for research. In the functional organization, decision can be made faster for separate expert. In the matrix, organization decisions can be delayed because of specialists research. Skilled specialists: In the line organization, do not have special skills to perform as effectively. In the line & staff organization management, provide expert thus the organization have skilled specialists. However, separate tasks are given to separate specialists so they become skilled person. In matrix organization, specialists of different department form a group. In matrix organization, a project team composed of skilled member from major departments. Uses: Line organization is applicable for small & easy types of organization. Line & staff organization is applicable for large & complex organization. Functional organization is used for the betterment of six element of production. To solve a project matrix organization structure is used. Flexibility: Line organization structure, there is no scope of flexibility. In line & staff organization, subordinate can helps to open different department & can change if it is necessary. In the functional organization each & very tasks are being done by specialist, as a result they can change in their own field if they want.

Man is social being. Naturally, they talk to each other. When they live or work together in an area they communicate & share their views, it is the grapevine of

EXPLAIN THE NATURE OF THE INFORMAL ORGANIZATION

informal communication. From informal communication, informal organization arises. Informal organization is the network of personal & social relationship that emerges naturally in the group employees of an organization. It organizes or crate by launch bunch bowling team, meeting & conversation after official work. Informal organization is not mandatory from managerial structure. It is voluntary. It totally depends on members wish. Manager cannot control the informal relationship of the employees. Employees naturally create an informal organization to interact & develop relationship. In informal organization, different department & levels employees come together & share their views & information. Their main purpose find commonalities support & assist each other satisfy needs. It helps to maintain equality of the employees, do all work successfully, and provide stability, support managers. When they discuss among themselves many information come & their hesitation remove about many task & rumor.

Informati on collected from

Business for the 21 century * (Skinner & Ivancehvich) Introduction to business * (Straub & Attner) Principle of management * (Stephen P. Robins)

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