Organization

Organization consists of two or more persons who work together to achieve a common purpose.

It is a deliberate arrangement of people to accomplish some specific purpose. Each organization has a distinct purpose. This purpose is expressed in terms of a goal or set of goals that the organization hopes to accomplish.
Each organization is composed of people. One person working alone is not an organization. An organization can be defined as the means by which management coordinate the efforts of employees and other resources to achieve objectives. It is the formalized and intentional structure of positions.

Organization needs people and people also need organization. All organizations develop some deliberate structure so that their members can do their work. Organization may be formal and informal. The informal organization is a network of personal and social relationships. It is not planned or official. It may be flat and tall.

Each organization has a distinct purpose. Organization is composed of people. One person working alone is not an organization. All organizations develop some deliberate structure so that their members can do their work. The structure may be traditional or open and flexible. There us a division of labor. It is breaking down the jobs into narrow and repetitive tasks. There is a coordination among the tasks divided.

The concept of organization is changing. Why are organizations changing? Because the world around them has changed and continue to change. Societal, economic and political and technological change have created an environment in which successful organizations must embrace new ways of getting work done. Traditional organization is different from the contemporary organization.

Traditional VS new organization

Stable Inflexible Job-focused Work is defined by job positions Permanent jobs Command oriented Managers always make decisions Rule oriented Hierarchical relationships

Dynamic Flexible Skill focused Work is defined in terms of tasks to be done. Team oriented Temporary jobs Involvement oriented Employees participate in decision-making Customer oriented Lateral and net work relationships.

Principles of organization

The higher authorities are responsible for the acts of their subordinates. Authority can be delegated but not responsibility. The responsibility and authority of each supervisor should be established clearly and in writing. The principles of specialization should be applied wherever possible. Organization must be flexible so that it can be adjusted to any situation. Continuity must be maintained organization. It must be consistent. in the

Authority must be equal to responsibility. The line function and staff function should be kept separate The span of control should be reasonable and well established. Downward delegation of authority but not of responsibility. The organization should be simple and flat.

Benefits

According to Chandan (1996) a good organization produces a good number of benefits. A good organization facilitates attainment of objectives through proper coordination of all activities. Conflicts between individuals over jurisdiction are kept to minimum. Eliminates overlapping and duplication of work. Decreases likelihood of run- around. The run-around occur when we do not know who is responsible for what. Facilitates promotion. It aids wage and salary administrations. Communication is easier at all levels of the organizational hierarchy. Increased cooperation and a sense of pride. Encourages creativity.

What is Organizing?

Organizing is a process involving few steps:

Identifying and classifying activities of an organization. Grouping the activities. It is called departmentalization. Assigning authority and responsibility of each department to a manager who is accountable for its performance. Authority is the power that ahs been legitimized by the organization. Responsibility is the obligation to carry out certain tasks. Establishing reporting relationship between position. Two issues are involved: Chain of command and span of management. Chain of command is a clear and distinct line of authority among the positions in an organization. Coordinating the activities. It is the process of linking the activities of the various departments of the organization.

Steps in Organizing

Creation of departments. Allocation of duties. Establishment of reporting relationships Delegation of authority. Coordination of activities.

Departmentalization

Grouping jobs according to some logical arrangement is called departmentalization over which a manager has authority for the performance of specified activities. Grouping jobs together so that common task can be coordinated. The basis by which jobs are grouped together is called departmentalization. Common bases for departmentalization are function, product, customer location, time.

Functional departmentalization.

Grouping jobs involving same activities is called functional departmentalization. Examples are production, finance and manufacturing departments. Each department is staffed by experts in the functional area. That is, it follows principle of occupational specialization and economy of scale.
It provides means of tight control at the top. Coordination of activities inside each department is easier. Decision tends to become slower and more bureaucratic. Accountability and performance become difficult to monitor. It de-emphasizes overall enterprise objectives. This kind of departmentalization makes it difficult to adapt quickly to environmental changes.

Grouping and arranging activities around product is called product departmentalization. All activities associated with a product can be easily integrated and coordinated. The speed and effectiveness of decision-making are enhanced. Performance of the individual products can be easily assessed. But it requires more persons with general manager abilities. There is a danger of increased costs through duplication of central service and staff activities. It also presents increased problems of

product departmentalization.

control

top management

customer departmentalization
Grouping activities to respond to and interact with specific customers is called customer departmentalization. Apexs computer business has two distinct departmentsindustrial sales and consumer sales. Organizations are able to use skilled specialists to deal with unique customers.

Location departmentalization

Location departmentalization groups jobs on the basis of defined geographical sites or areas. It enables the organization to respond to easily to unique customer and environmental characteristics in the various regions. It places emphasis on local markets and problems. It improves coordination in a region. It takes advantages of economies of local operations. Drawback is the requirement of a large administrative staff to keep track of units in scattered locations.

Departmentalization by time

Departmentalization by time is grouping activities on the basis of time. The use of shifts is common in many enterprises where for economic and technological reasons the normal workday will not suffice. It is highly used in hospitals

Process Departmentalization

Manufacturing firms often group activities around a process. In this kind of departmentalization people and materials are brought together in order to carry out a particular operation. It achieves economic advantage, uses specialized technologies and utilizes special skills. But coordination of departments is difficult and is unsuitable for developing general managers.

span of management or control

Determining how many people will report to each manager is called span of management or control. It is the number of subordinates a manager can efficiently and effectively direct. Organization levels exist because there is a limit to the number of persons a manager can supervise effectively. With too many subordinates, managers become overloaded, find coordination difficult, and lose control of their work units activities.

Span of control

On the other hand, with too little subordinates, managers are underutilized

and tend to supervise excessively, giving little discretion. The span may be narrow (with few subordinates per manager) or wide (with many subordinates). The narrow span results in a tall organization with many layers or levels of management and wider span leads to flat organization

A. V. Graicunas quantified span of management. He noted that a manager has deal with three kinds of interactions with and among subordinates: direct (the managers one to one relationship with each subordinate), cross (among the subordinates themselves) and group (between groups of subordinates. The number of possible interactions of all types between a manager and subordinates can be determined by the following formula: I= N {2N/2+(N-1)} Where I is the total number of interactions with and among subordinates and N is the number of subordinates. If a manager has two subordinates, six potential interactions exist.

The narrow span results in a tall organization with many layers or levels of management and wider span leads to flat organization. A flat organization structure leads to higher employee morale and productivity. It improves organizational communicational network, which allows managers to stay in touch with a large number of subordinates. Business can function more effectively with fewer layers of management.

But the wide span requires exceptional quality of managers. The superior may lose control and there may occur delay in decision- making. A wide span of management in a flat organization may increase more administrative responsibilities because there are few managers but there are many subordinates reporting to each manager.

A tall structure is more expensive because of larger number of managers involved. High costs due to many levels. It also fosters more communication problems. Multiple levels complicate communication. Omission and misinterpretations occur as information passes down the line. Excessive distance between lowest level and top level. Numerous levels complicate planning and control.

Downsizing and restructuring

Because of problems with tall structures, many companies have downsized. Downsizing is a process of significantly reducing middle management layers, increasing spans of control and shrinking workforce size for better organizational efficiency and effectiveness. Restructuring is a process of making a major change in organization structure involving reducing management levels and possibly changing components of the organization through divestiture and acquisition, as well as shrinking workforce size.

Factors affecting optimum span

Competence of supervisor and subordinates (the greater the competence, the wider the span). Physical dispersion of subordinates (the greater the dispersion, the narrow the span). Physical proximity. Extent of non-supervisory works in managers job. Degree of required interaction. Extent of standardized procedures, Similarity of tasks being supervised, Frequency of new problems, Preference of supervisors and subordinates

Delegation of authority

Delegation is the process by which manager assigns a portion of his workload to others. It is the assignment of authority and responsibility for the completion of specific tasks to subordinates. The chief executive cannot perform all the tasks of the organization himself, so he must share his duties with his immediate subordinates, who in turn delegate to their subordinates and the process continues until all activities are assigned to persons who are made responsible for performing them. The delegation of a specific task means that the manager is still responsible for the accomplishment of the overall task.

Reasons for delegation

The main reason for delegation is to enable the manager gets more works done. Subordinates help ease managers burden by doing major portions of organizations tasks. A subordinate may have more expertise in addressing critical problems than a manager does. Delegation also helps subordinates. It may improve their managerial skills

Delegation process

The delegation process involves three steps. Assigning responsibility or giving the subordinates a job to do. Granting the subordinates the authority to do the job. Creating or establishing the subordinates accountabilitythat is, the subordinate accepts an obligation to carry out the task assigned to him. He must be accountable to the boss for finishing

Merits of delegation

Delegation gives executives more time for strategic planning and policymaking. Delegation is a motivational factor. Employees become more satisfied and committed when they are given an opportunity to tackle significant problems. Delegation can expedites innovation. Delegation can be a training ground for executive ability

Problems in delegation

A manager may be reluctant to delegate. Fear of being called lazy. Delegation may reveal managerial shortcomings. Low self-confidence. Some managers may worry that

subordinates will do too well and pose a threat to their own advancement. They have a tendency to want do things personally. Managers have a desire to dominate. Managers may not trust the subordinate to do the job well. They hold that subordinates are incapable of using authority properly. Poor example set by bosses who do not delegate.

Some subordinates are reluctant to accept the delegation because failure may result in a reprimand. They may feel that there is no reward for accepting additional responsibility. They may prefer to avoid risk and want their boss to take all responsibility.

Decentralization and Centralization

In general, the amount of delegation in the organization refers to the degree of decentralization or centralization in the organization. The degree of centralization of a firm will affect the span of management. Decentralization is the process of systematically delegating power and authority throughout the organization to middle and lower-level managers. It is the delegation of many tasks and of the associated authority to subordinates throughout the organization. A decentralized organization is one in which decisionmaking power and authorities are delegated as far down the chain of command as possible.

Centralization, on the other hand, is the process of systematically retaining power and authority in the hands of higher-level managers. It tends to concentrate decision-making power at the top of the organization. What factors determine the degree of centralization or otherwise? These are: Missions and goals of the organization, organizations external environment, the history of the organization, size and complexity of the organization, competency of top level management, competency of subordinates and location of target market.

Advantages of Centralization Centralization produces such advantages as: Power and prestige are provided the chief executive. Uniformity of policies, practices and decision are fostered. Duplication of functions is minimized. A strong coordinated top management team is developed. Elaborate controlling procedures are not required.

Advantages of decentralization: Stresses delegation of decision-making and thus lightens the load of top managers. The development of generalists rather than specialists is encouraged. People develop more under a decentralized arrangement. Delegation leads to prompt actions and quick decisions. Provides foundations for development of future executives. Intimate personal ties and relationships are promoted, resulting in greater employee enthusiasm and coordination. Risks involving possible losses of personnel, facilities and plans are spread out.

. Conflicts between Line and Staff

Brown and Robert (1984) have identified a good number of factors that cause conflicts between line and staff personnel. Since staff generally advises and the line decides and acts, the staff often feels powerless. Staff provides advice and the line managers may resist an idea because they did not think of it in the first place, which hurts their ego. Staff employees may be resented because of their specialized knowledge and expertise. Staff has easier access to top management, which is resented by the line management. Line is action-oriented, staff studies in depth. Lines seek simple solution while staff complicates the situation in detail.

Staff has easier access to top management, which is resented by the line management. Staff is generally younger and more educated and hence their idea may be more theoretical and academic rather than practical. There is a conflict about the degree of importance between the line and staff as far as the contribution towards the growth of the company is concerned. The line usually complains that if things go right, then the staff takes credit and if the things go wrong, then the line gets the blame for it.

Line and staff positions

Line Position has authority and responsibility for

achieving the major goals of organization. It has authority to give order and to make decision. Staff position has the primary purpose of giving line positions specialized expertise and assistance. Functional authority. Staff departments have functional authority- authority over others in the organization in issues related directly to their respective functions.

Power VS authority

Power is much broader concept than authority. power is the ability of individuals and groups to induce or influence the beliefs and actions of other persons or groups. Authority is power in an organization setting. It is the right in a position to exercise discretion in making decisions affecting others.

Management VS organization

Refers to activities that lead to get things done by people. It has many functions like planning, organizing, leading and controlling. It can not be effected unless organization is built up. It is compared with human which has different organs.

Refers to the divisions of various activities and integration of them. It is one of the functions of management. It is regarded as the part of mgt process. It is compared with the organs of the human body.

Formal VS informal organization

Official. Authority ad responsibility. Main focus is on position Power is delegated by mgt. Rules guide behavior Source of control: reward and punishment

Unofficial Power and politics. Focus in on person Power is given by group. Norms guide behavior. Sanctions.