Organizing Business

Activities
Organizing
Organizing is a management function which relates to the
structuring of resources and activities to accomplish
objectives in an efficient and effective manner.

 The aim of organizing activities is to have a collection of

people in the organization who perform activities for a
specific purpose.
Reasons for organizing
To facilitate the implementation of plans
To break up the total job into more manageable size
Possible to assign particular task to a particular person
To help facilitate the assignment of authority,
responsibility and accountability for certain functions and
tasks
To have easier coordination among the various activities.
The determinants of an organization
structure are:
1. Strategy or plans for achieving the company’s objective;
2. Technology that will be used in carrying out the
strategy;
3. People employed at all levels and their functions; and
4. Size of the organization
The Formal Organization
 The formal organization as describe by Nelson and Quick
“ is the part of the system that has legitimacy and official
recognition’’
The formal structure is describe by
management through:

1. Organizational Chart – is a diagram of the

organization’s official positions and formal lines of authority.

2. Organization Manual – provides written description of

authority relationships, details the functions of major
organizational units, and describes job procedures.

3. Policy Manual – describes personnel activities and

company policies.
Informal Groups
 Informal groups are oftentimes very useful in the
accomplishment of major task, especially if these task
conform to the expectations of the members of the
informal group. Valentine, however, stresses caution,
“informal groups are vulnerable to expediency,
manipulation, and opportunism”.
 Is a group formed by employees of an organization that is
created under no directive from management but simply
because group members have friendship relationship or
have shared common interest, proximity, need satisfaction,
collective power, or group goals.
Levels of Management
and Supervision
The flat organization has few levels of
management
Advantages

a. Communication is generally faster and less distorted;

b. Decisions can be made quickly; and

c. Supervisor’s salaries are eliminated.

Disadvantages
a. They require managers with experience with in the
various tasks;
b. Manager may have a little time for all subordinates;
c. When the manager is out, the group is without a leader;
and
d. Managers may have little time to anticipate problems.
Flat Structure
MANAGER

Sales Documents Parts collector

Driver s MECHAN Cashier
Utility Clerks Clerks
Clerks ICS
 Tall GENERAL
Structure MANAGER

a
Area Manager Area
Manager

Branch Branch
Manager Manager

C & C Manager Sales Manager

Sales Manager Documents

Manager
Tall Structure
Advantages
a. Since the average span of control is narrower, the
supervisory load is less for manager;
b. There are more opportunities for promotion because
there are more levels of positions;
c. Managers are provided with opportunities to
specialized;
d. There is less demand for managers with multiple
skills; and
e. Managers are afforded with more time to attend to their
important problems.
Disadvantages
a. Communication tends to be slower and distorted
because of the number of levels it has to pass
through;
b. The number of management levels also hinders
effective decision making rendering such activity
slower and less accurate ; and
c. It is more expensive to maintain as there are more
managers to compensate.
Basics Elements of Organizational
Structure
1. Work specialization
2. Departmentation
3. Pattern of authority
4. Span of control
5. Coordination of activities
1. Work Specialization

 The degree to which tasks are divided in the

organization.
 MANAGER

Sales, Credit & Sales, Credit &

Collection Supervisor Collection Supervisor

SSC Clerk SSC Clerk SSC Clerk SSC Clerk

STUCTURE A – NO
SPECIALIZATION
 Manager

Credit & Collection

Sales , Supervisor
Supervisor

SSC Clerk Credit Collector

SSC Clerk
Investigator

STRUTURE B – WITH
SPECIALIZATION
ALTERNATIVE
STRUCTURE
 ALTERNATIVE
STRUCTURE
Without Specialization

EMPLOYEE A Employee B
Credit Investigator / Collector Credit Investigator/Collector

Work Output for One Day Work Output for One Day

1. Investigated three credit 1. Investigated three credit applications

applications 2. Collected three accounts
2. Collected three accounts

TOTAL OUTPUT: 6 Investigations and 6 Collections

 With Specialization

EMPLOYEE A EMPLOYEE B
Credit Investigator Collector

Work Output for One Work Output for One

Day Day

- Investigated eight
- Collected eight
credit applications
accounts

TOTAL OTPUT: 8 investigation and 8

Collections
DEPARTMENTATION
 DEPARTMENTATION

- Refers to the grouping jobs based on criteria that managers believe help in
the coordination and control of activities

University

NURSING NURSING BUSINESS

A Sample Grouping of Jobs According to knowledge and Skills

 Company

CREDIT AND
SALES COLLECTION SERVICE

A Sample Grouping of Jobs According to

Work Process and Function

Company

Second Shift Third Shift

First Shift 10:00 P.M.-6:00
2:00-10:00 P.M.
6:00-2:00 P.M. A.M.
A Sample Grouping of Jobs According to Time
A Sample Grouping of Jobs According to Customer

Company

Cash Service

Company

Government Consumers
 Company

LUZON VISAYAS MINDANAO

DIVISION DIVISION DIVISION

A Sample Grouping of Jobs According to Location

Advantages of Groping
Jobs
1. Supervision made easier
2. Sharing of resources (men, machines, materials) and
results use of such resources.
3. Common measures of performance are established
4. Communication is encouraged.
Pattern of Authority
 Refers to the extent by which organization members are
allowed to make decisions without getting the approval of
another member.

 May either centralized (when decision making is

concentrated in the hands of higher-level manager) or
decentralized ( when decision making authority is granted
to middle and lower level management positions.
Decentralized authority advantages:

1. Efficiency- red tapes and bottlenecks are reduced.

2. Flexibility- managers can cope with situations as they
come.
3. Initiative- managers are highly motivated by the
challenge.
4. Development- managers are provided with opportunity
for training.
Decentralized authority disadvantages
1. Control- coordinating overall activities is more difficult.
2. Duplication- there is a great chance of duplication
between departments.
3. Expertise- home office experts may be overlooked or
disregarded.
4. Competency- the organization may not be able to
produce competent managers at all levels.
Span of Control
 Refers to the number of subordinates reporting to a single
supervisor.

 May either narrow (few subordinates reporting to a

supervisor) or wide (many subordinates reporting to a
supervisor)
Narrow span of control:
1. Closer relationship between manager and subordinates
2. Less delegation of authority
3. Controlling activities is more tight
4. More time for rewarding behavior
Wide span of control:
1. Employees work with little supervision
2. High level delegation of authority
3. Controlling is higher
4. Less time for rewarding behavior
Coordination
 Refers to the linking of activities in the organization that
serve to achieve a common goal or objective.
BASIC ORGANIZATIONAL DESIGNS
There are four basic organizational designs
Functional Design
 Functional Design
PRESIDENT

AUDIT
FINANCE

SALES PRODUCTIO
N

HUMAN
LEGAL RESOURCE
Strength:
1. Efficient use of resources
2. In-depth skill development
3. Clear career paths
4. Unity of direction
5. Enhanced coordination within functions
Weaknesses:
1. Slow decision making
2. Less innovation
3. Unclear performance responsibility
4. Limited management training
5. Poor coordination across function
Divisional Design
 Divisional Design

PRESIDENT

DIVISION B
DIVISION A DIVISION C

AUDIT AUDIT AUDIT

SALES SALES SALES
LEGAL LEGAL LEGAL
FINANCE FINANCE FINANCE
PRODUCTIO PRODUCTION PRODUCTIO
N HUMAN N
HUMAN RESOURCE HUMAN
RESOURCE RESOURCE
Strengths: Weaknesses:
1. Adaption to unstable 1. Inefficient use of
environment resources
2. High customer 2. Low in-depth training
satisfaction for personnel
3. High task coordination 3. Focus is on division
4. Clear performance objectives
responsibility 4. Loss of control
5. General management
training
 Hybrid Design
PRESIDENT

HUMAN
AUDIT PRODUCT PRODUC
SALES LEGAL ION TION
RESOURCES

Area 1 Area 2 Area 3 Area 4 Area 5

Strengths: Weaknesses:
1. Simultaneous 1. Slow responses to
coordination exceptional situations
2. Integration of goals 2. Conflict between
with objectives headquarters and
3. Efficient and highly divisions
adaptable 3. Administrative
overhead
 Matrix Design
PRESIDENT

PRODUCT
MANAGEMENT ACCOUNTING HRD
SALES FINANCE

PRODUCT
SALES ACCOUNTI HRD UNIT FINANCE
MANAGER A
UNIT NG UNIT UNIT

PROJECT
MANAGEMENT B SALES ACCOUNTI HRD UNIT FINANCE
UNIT NG UNIT UNIT

PROJECT ACCOUNTIN
SALES HRD UNIT FINANCE
MANAGER C G UNIT
UNIT UNIT
Strengths:
1. Allows demands from the environment to be met
simultaneously;
2. Allows flexibility;
3. Encourages resource efficiency;
4. Enhances skill development;
5. Increases motivation and commitment among
employees ; and
6. Aids top management in planning;
Weaknesses :
1. Creates confusion
2. Power struggles within the group are potential problems
3. Places stress on individual