ORGANIZING

What is an Organization?

Importance of Organizations

Bring together resources to achieve desired goals

and outcomes Produce goods and services efficiently Facilitate innovation Use modern manufacturing and information technologies
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Importance of Organizations Importance of Organizations (contd) Adapt to and influence a changing environment Create value for owners, customers and employees

Accommodate ongoing challenges of diversity, ethics,

and the motivation and coordination of employees

Nature and Purpose of Organizing Verifiable objectives A clear idea of the major duties and activities involved An understood area of discretion or authority so that the person filling the role knows what he can do to accomplish goals

Organization implies a formalized, intentional internal

structure of roles and positions.

Steps in organizing are : The identification and classification of required activities The grouping of activities necessary to attain the objectives.

The assignment of each grouping to a manager with the

authority necessary to supervise it. The provision for co-ordination horizontally and vertically in the organizational structure.

Formal & Informal Organization structures

Formal organization means the intentional structure of

roles in a formally organized enterprise. Informal organization is a network of personal and social relations not established/required by the formal organization but arising spontaneously as people associate with one another.

Tall and Flat Organizations

Tall structures have many levels of authority and narrow

spans of control
Flat structures have fewer levels and wide spans of control

Span of Control
Refers to the number of subordinates who report

directly to an executive or supervisor

The differences in the span of control have direct implications on the shape of the organization Organizations must find the optimal span of control to be effective
Narrow enough to permit managers to maintain control over subordinates Wide enough so that the possibility of micromanaging is minimized
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 The optimal span of control is dependent on the following factors

Is the work clearly defined Are subordinates highly trained and do they have access to information

Is the manager highly capable and supportive

Are jobs similar and performance measures comparable Do subordinates prefer autonomy to close supervisory control Clarity of delegation of authority.`
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 Clarity of plans Use of objective standards Rate of change of organization

Communication Techniques
Amount of personal contact needed Variation by organization level A manager who is competent and well trained can effectively supervise more people. Positive attitude of subordinates towards assumption of responsibility as well as their willingness to take reasonable risk.

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Problems with organizational levels : Expensive Complicates communication

Complicates planning and control

Factors Affecting Organizational Structure

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Five Basic Parts of an Organization

Top Management

Technical Support

Middle Management

Administrative Support

Technical Core

Goals and Strategy Environment Size

Culture Structure 1. 2. 3. 4. 5. 6. Formalization Specialization Hierarchy of Authority Centralization Professionalism Personnel Ratios

Technology

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Differences Between Large and Small Organizations

LARGE

SMALL
Responsive Flexible Regional reach Flat structure Organic Simple Niche finding Entrepreneurs

Economies of scale Global reach Vertical hierarchy Mechanistic Complex Stable market Career longevity and stability

Departmentalization

Process of establishing department in organization

Basic patterns of Departmentation

1. Departmentation by Simple numbers

2. Departmentation by Time
3. Departmentation by Enterprise functions 4. Departmentation by Territory/Geography 5. Departmentation by Product 6. Process/Equipment Departmentation

7. Customer Departmentation
8. Matrix Departmentation

Departmentation by Simple Numbers

This is structural departmentation include tolling off
persons who are to perform the same duties and functions and putting them together under the supervision of a manager.

Age old method and rapidly falling into disuse

Reason for this are 1.The technology is advancing very fast, demanding more specialized and different skills. 2.Groups composed of specialized personnel are more frequently more efficient than merely based on numbers. It is useful only at the lowest level of the organization structure.

Departmentation by time Suitable for lower level of the organization Oldest form structuring organization Grouping of activities according to basis of time

The use of shifts is common in many enterprise because

normal workloads become insufficient and ineffective E.g.: Hospital, Steel mill

Advantages 1. Services offered 24X7 instead of 8 hrs shift

2. Process need not be interrupted which needs a

continuous cycle of operation 3. Expensive capital equipments can be used more than 8hrs/day 4. Students attending classes during the days time can

work in night shift to sustain their living.

Dis-advantages 1. Supervising during night shift becomes difficult 2. There is fatigue factor, since it is difficult for most employees to change their biological clock

3. Having several shifts

may cause problems with

coordination and communication 4. Payment of overtime can increase the cost of production or services rendered.