ORGANIZING

GROUP MEMBERS
MIHIR BABARIA
DHARAM JOSHI PURAV NANAVATI

05
23 38

RICKEN RAMCHANDANI
JEET SHAH SWARALI THIPSAY

41
51 58

ORGANIZING
The process of deploying resources to achieve strategic goals

ORGANIZING CHART

ORGANIZING CHART
The division of work
Supervisory relationships Communication channels

Major subunits
Levels of management

ORGANIZATION ROLE - FORMAL

Source-Management A Global Perspective, Harold Koontz

ORGANIZATION ROLE - INFORMAL

Source-Management A Global Perspective, Harold Koontz

ORGANIZATION LEVELS & THE SPAN OF MANAGEMENT

Choosing the Span

FACTORS DETERMINING THE EFFECTIVE SPAN

Subordinate training
Clarity of delegation of authority Clarity of plans Use of objective standards Rate of change

Communication techniques
Amount of personal contact needed

Variation by organization level

The Need For Balance

ENTREPRENEUR & INTRAPRENEUR

Contrary to Conventional wisdom Personal risks Rewards

LOGICAL STEPS OF ORGANIZING

Establishing enterprise objectives Formulating supporting objectives, policies & plans Identifying & classifying the activities necessary to accomplish these

Grouping these activities

Delegating Tying the group together

DEPARTMENTATION
The process by which similar activities of the business are grouped into units for the purpose of facilitating smooth administration at all levels

Choosing basis for departmentation

Specialization Coordination Control Economy Recognition of local condition Adequate attention Human consideration

DEPARTMENTATION BY TYPE
Functional
Grouping jobs by functions performed

Process
Grouping jobs on the basis of product or customer flow

Product
Grouping jobs by product line

Customer
Grouping jobs by type of customer and needs

Geographical
Grouping jobs on the basis of territory or geography

1. PRODUCT DEPARTMENTATION

+ + +

Allows specialization in particular products and services Managers can become experts in their industry Closer to customers Duplication of functions Limited view of organizational goals

Source : Management Stephen Robbins

2.FUNCTIONAL DEPARTMENTATION
The grouping of common & homogeneous activities to form an organizational unit is known as functional departmentation

The functional departmentation will include both line function as well as staff function

Source : Management Stephen Robbins

3.TERRITORIAL/GEOGRAPHICAL DEPARTMENTATION
Territorial departmentation is attractive to large scale firms or enterprises whose activities are physically or geographically dispersed. All the activities of given area of operation are grouped into zones, divisions, branches, etc This structure is most often used in sales & production

ADVANTAGES More effective and efficient handling of specific regional issues that arise Serve needs of unique geographic markets better

DISADVANTAGES Duplication of functions Can feel isolated from other organizational areas

Source : Management Stephen Robbins

4. CUSTOMER DEPARTMENTATION
Customer based departmentation is basically market oriented in which department are created around the market served or around marketing channel Customers are the key to the way activities are grouped

Source : Management Stephen Robbins

5. PROCESS DEPARTMENTATION
When production activities involve the use of several distinctive processes, this can be used as the base for grouping of activities

ADVANTAGES Machine can be used effectively Economy in operation No duplication of activities Principle of specialization & division of labor is followed

DISADVANTAGES Heavy cost of operation More specialist are essential

Source : Management Stephen Robbins

MATRIX ORGANIZATION
Specialists from different functional departments are assigned to work on projects led by project managers. Matrix and project participants have two managers. In project structures, employees work continuously on projects; moving on to another project as each project is completed.

Source : Management Stephen Robbins

STRATEGIC BUSINESS UNITS (SBUs)

Distinct little businesses set up as units in a larger company to ensure that a certain product or product line is promoted and handled as though it were an independent business. Criteria to become an SBU 1. Have its own mission 2. Have definable group of competitors 3. Prepare its own integrative plans

4. Manage its resources in key areas

5. Have a proper size

STRATEGIC BUSINESS UNITS

Source-Management A Global Perspective, Harold Koontz

LINE/STAFF AUTHORITY

Power v/s Authority

Various Bases of Power: Legitimate

Knowledge Referent

Reward Coercive

LINE AND STAFF CONCEPT

Confusion between line and staff Solution : Scalar Principle

FUNCTIONAL AUTHORITY
Delegation of functional authority

Restricting the Area of Functional Authority

 Benefits of Staff

Limitations of Staff Underestimating Line Authority Blame Game No practise Only preach Managerial issues

CENTRALIZATION AND DECENTRALIZATION

THE DEGREE OF CENTRALIZATION

Lower Higher Employee Empowerment Lower

Decentralization

Centralization
Higher

FACTORS DETERMINING DEGREE OF DECENTRALIZATION

Costliness of the Decision
Desire for Uniformity of Policy Size and character of the organization History and culture of the Enterprise Management Philosophy

Desire for Independence Availability of managers Control Techniques Decentralized performance Business Dynamics The Pace of change Environmental Influences

DECENTRALIZATION
A DVA NTAGES
L I M I TATIONS

More freedom and independence to managers Facilitates product diversification Facilitates setting up of Profit centers

More difficult to have a uniform policy

Increases complexity of coordination of decentralized units

Involves considerable expense for training managers May not be favored by economies of scale of some operations

Promotes development of general managers

Aids in adaptation to fastchanging environment

DELEGATION OF AUTHORITY
Delegation of decision making power to subordinates by their seniors

Process of Delegation
Determining the results expected from a position Assigning tasks to the position Delegating authority for accomplishing these tasks Holding the person responsible for the accomplishment of the task

SPLINTERED AUTHORITY
Shared control of the same decisions between two or more individuals or organizations It exists when a decision cannot be made without pooling the authority of two or more managers Splintered Authority cannot be wholly avoided in decision making

However recurring decisions may be an evidence that authority is not delegated properly and some reorganization is required

PERSONAL ATTITUDES TOWARDS DELEGATION

Receptiveness Willingness to go Willingness to let others make mistakes Willingness to trust subordinates

Willingness to establish and use broad controls

HOW TO OVERCOME WEAK DELEGATION?

Define assignments and delegate authority in light of results expected Select the person in light of the job to be done Maintain open lines of communication Establish proper controls Reward effective delegation and successful assumption of authority

AVOIDING MISTAKES IN ORGANIZING BY PLANNING

Establishment of objectives and orderly planning are necessary for good organization as with the other functions of managing Lack of design in organization is :
1) Illogical

2) Wasteful
3) Inefficient

Organizing mistakes can be avoided through two steps

1) Planning for the Ideal
2) Modification for the Human Factor

AVOIDING ORGANIZATIONAL INFLEXIBILITY

Organizational inflexibility is the inability to adapt to a changing environment
Signs of inflexibility: 1. Old organizational pattern 2. Regional organizations could be changed 3. Inadequate decentralization

Inflexibility in work culture is highly undesirable among employees

AVOIDING INFLEXIBILITY THROUGH REORGANIZATION

Inflexibilities can be avoided through reorganization, readjustments and changes.
Reorganization:
1) Business Environment changes
2) Change in Personnel 3) Change in Work Culture

Excessive reorganization may result into low morale.

ERNST & YOUNG

Ernst & Young estimates saving $17 million in turnover-related costs during 1997 and 1998, with flexible work arrangements. 65% of the people who used the flexible work arrangements had earlier considered leaving The organization avoided $40mn of rent by using a policy of encouraging virtual work (work at home and elsewhere) It eliminated one million of the seven million square feet it rents nationwide.

MAKING STAFF WORK EFFECTIVE

What is the line staff problem?

Solving this problem requires great managerial skill, careful attention to principles and patient teaching of personnel.
HOW? Understanding Authority Relationships Making line listen to staff

Keeping staff informed

Requiring completed staff work

CHARACTERISTICS OF AN EFFECTIVE STAFF

Atmosphere
Group objectives Communications

Decision making
Task achievement Leadership Review of team processes

POSITION DESCRIPTIONS
Positions description furnishes a standard against which it can be judged if a position is necessary, its organizational level and exact location in the structure Benefits: 1. Duties are brought into focus

2.
3. 4.

Areas of overlapping are recognized

Helps recruit required personnel and training Setting salary levels

STRUCTURE AND NATURE OF ORGANIZING

For the various organization structures to work, members of the enterprise must understand the general working of informal as well as formal organization

Organizations should maintain well-written organization manuals that contain:

Statement of the organizations philosophy

Programs and charts

Structure of the organization Outline of job descriptions etc.

THE GRAPEVINE
It is a form of informal and unstructured communication
It is usually based on rumours

It is prevalent at the lower levels of the establishment

It is inevitable and valuable

ADVANTAGES OF GRAPEVINE COMMUNICATION

Spreads fast and wide

Is spontaneous

Aides formal communication

ADVANTAGES
Gives quick feedback Provides an emotional supportive value Enhances group cohesiveness

DISADVANTAGES OF GRAPEVINE COMMUNICATION

Employees become unproductive

Gives only partial information

Information distortion

No formal control

DISADVANTAGES Information
need not be true Can harm the organizations goodwill

No evidence

DEALING WITH GRAPEVINE COMMUNICATION

Managers should tactfully deal with grapevine:

They should not try to eliminate the grapevine

They should find out what information is being circulated in the grapevine
They should feed the accurate information and correct any false information that is being circulated

ORGANIZATION CULTURE
The values and behaviours that contribute to the unique social and psychological environment of an organization

LEADERSHIP STYLE
Forms organizational environments

Forms ideologies

Gives best values

Increases integration

Increases commitment

Improves co-ordination

MANAGEMENT SYSTEMS
It is a framework of processes and procedures used to ensure that an organization can fulfill all tasks required to achieve its objectives Burns and Stalker proposed two contrasting forms of management systems to suit different conditions:

MECHANISTIC SYSTEM AND ORGANIC SYSTEM

The two forms of systems represent two ends of a continuum

An organization may oscillate from one end to the other end as transitions occurs in its conditions

MECHANISTIC vs. ORGANIC SYSTEMS

POINT OF DIFFERENCE
Suitable conditions Specialization Integrating Mechanisms Centralization Standardization Communication Communication Direction Employee Commitment Control and Authority structures

MECHANISTIC
Stable Individual Simple Centralized High Written Vertical Low Hierarchic

ORGANIC
Changing Joint Complex Decentralized Low( Mutual Agreement) Verbal Lateral High Network