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CHAPTER 4: ORGANIZING

MODULE 12
NATURE OF ORGANIZATIONS
TYPES OF ORGANIZATION STRUCTURES
ELEMENTS OF DELEGATION

[Objectives]
At the end of the module, the learners will able to:
1. Describe the process of organizing,
2. Differentiate each types of organization structures,
3. Discuss delegation and why it is important for managers to delegate

[Activity] Word Search

T Y E B H O N E S T G M A L Q U E
D I V I S I O N O F W O R K E R S
N O I T A Z I L A R T N E C E D

S R H A C H A I R K O R S T R A C
C U S T O M E R S T R U C T U R E
O W N F O R Y O U V B B E T T G N
I Q K E R V G G Y T U I H S C V T

T N K L D B H A X X S O H O U R R
H O R R I B L E N E R S T U R R A
N I L L N O K Y O I Z X C V T J L
L T N S A R H M T V Z R Q Z S Y I

Y A J S T E U Y E R L I W X X T Z
T G H G I L R V M G E W N C I P A
T E H L O V E R S N O T H G R I T
E L W M N V E J S W E E T Y T O I
R E I J F G L E I F S T Y N A I O
P D O O R T N E M E G A N A M M N

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Date Developed: September 2020
Accountancy, Business Management - ABM 12 Page
Organization and Management Developed by: Nikki A. Pajadan 1 of 9
(Grade 11 -ABM) Checked by: Arnel S. Gallo
 Division of work Centralization
Customer structure Decentralization
Organizing Authority
Matrix structure Delegation
Management Coordination

[Discussion]
Reading: Nature of organizations, Types of organization structures and Elements of delegation

ORGANIZING
 “The process of determining the tasks to be done, who will do them, and how those tasks will be managed
and coordinated”
 To structure or arrange the relationship between people, the work to be done, & the facilities so that goals
are achieved.

Why Organize?
 Managers have to organize the activities they want to perform for the following reasons:
☺ So that they can divide the work according to the nature & similarity of tasks.
☺ So that they can pool resources & increase the efforts which lead to efficiency.
☺ So that they can build continuity & synergy.
 A manager who wants to organize his/her department must address these issues:
☺ Determine what is to be done
☺ Assigning tasks
☺ Decide how to achieve coordination
☺ Decide on a span of management
☺ Decide how much authority you should designate
☺ Draw an organizational chart
What is organizational structure?
 Shows the flow of interactions within the organization
 Specifies its division of work activities and shows how different functions of activities are linked
 Shows level of specialization of work activities
 Indicates the organization’s hierarchy and authority structure
 Shows organization’s reporting structure
THE ORGANIZING PROCESS

Module for MODULE

Date Developed: September 2020
Accountancy, Business Management - ABM 12 Page
Organization and Management Developed by: Nikki A. Pajadan 2 of 9
(Grade 11 -ABM) Checked by: Arnel S. Gallo
1st stage - developing the foundation of the organizational system
 Determining tasks and defining jobs
- Tasks are determined and assigned to specific job positions
 Defining work relationship
-specify the working relationships between individuals and work groups
2nd. stage - developing the organizational design
 Grouping organizational members into work units
- creating departments by grouping tasks on the basis of some common characteristics such as function,
product or geographic market
 Developing and integrating system
- develop mechanisms to coordinate the efforts individuals and work groups
 Determining the locus of the decision making
- determine who make decisions (centralized or decentralized decision making)
DIVISION OF WORK/LABOUR
 The work has to be divided among the members so that individuals are responsible for a limited set of jobs
instead doing the task as a whole.

ADVANTAGES & DISADVANTAGE OF DIVISION OF WORK/LABOUR

Advantages Disadvantages
Higher degree
Person-to- fit (based on talents and interests) - the job given can be fit based on individual’s of control
ability.
Creates job specification Boredom
Increases productivity

ORGANIZATIONAL CHART
 A formal diagram that shows the lines of authority
 The purpose of organization chart – to indicate responsibility and to whom each reports, to coordinate
division of work and make it clear, to show work to be done, and, to indicate line of promotion
DEPARTMENTALIZATION @ ORGANIZATIONAL STRUCTURES
 Departmentalization :
- A process of grouping jobs into separate units’ activities or tasks that are proposed.
 There are six (6) types of Departmentalization/Organizational Structure:
a) Functional structure
b) Product structure
c) Customer structure
d) Geographical structure
e) Matrix structure
f) Network structure
FUNCTIONAL STRUCTURE
 Used mainly by smaller firms that offer a limited line of products because it makes efficient use of specialize
resources.
 This method eliminate overlapping in the execution of organizational activities.

PRESIDENT.

VICE VICE VICE

PRESIDENT PRESIDENT PRESEDENT
Module for
PRODUCTION MARKETING FINANCE MODULE
Date Developed: September 2020
Accountancy, Business Management - ABM 12 Page
Organization and Management Developed by: Nikki A. Pajadan 3 of 9
(Grade 11 -ABM)
PRODUCTION Checked by: FINANCIAL
CUSTOMER Arnel S. Gallo
PLANNING SERVICE PLANNING
 ADVANTAGES & DISADVANTAGE OF FUNCTIONAL STRUCTURE

Advantages Disadvantages

Staffed by experts of each functions.

Difficult to get quick decisions or actions on a problem or situation.
Easier supervision. Difficult to monitor performance, especially among individual.
Easy to coordinate activities.

PRODUCT STRUCTURE
 Grouping the activities and functions on a basis of products manufactured by the company.

PRESIDENT

GENERAL GENERAL
MANAGER MANAGER
PHARMACEUTI PERSONAL
CAL PRODUCT CARE PRODUCT

ADVANTAGES & DISADVANTAGE OF PRODUCT STRUCTURE

Advantages Disadvantages

Activities can be easily focuses and coordinated. Focus only on own products.
Enhance speed and effectiveness of decision making. Increase the administrative costs.
Easy to assess performance and identify accountability/liability

CUSTOMER STRUCTURE
 Is the grouping of activities to reflect the interests of different customers.

PRESIDENT

LOANS
REAL MODULE
COMMUNIT
Module for CORPORAT Date Developed: September
AGRICULT2020
ESTATE
Y BANKING E BANKING URAL 12
Accountancy, Business Management - ABM MORTGAGE Page
BANKING
Organization and Management Developed by: Nikki A. Pajadan 4 of 9
(Grade 11 -ABM) Checked by: Arnel S. Gallo
 ADVANTAGES & DISADVANTAGE OF CUSTOMER STRUCTURE

Advantages Disadvantages

Encourage concentration on customers’ needs. Difficult to coordinate operations between competing customer demands.
It gives customers the feeling that they haveRequires
an understanding
managers &supplier.
staff expert in customers’ problems.
It develops expertise in the customer handling.

GEOGRAPHICAL STRUCTURE
 A company or a part of it is organized around the places where operations are located.
 It is commonly found in sales or manufacturing operations.

PRESIDENT

WEST SOUTHEAS CENTRAL EAST

REGION T REGION REGION REGION

PRODUCTIO MARKETIN
N G

ADVANTAGES & DISADVANTAGE OF

GEOGRAPHICAL STRUCTURE

Advantages Disadvantages

It offers better services at low cost.

It requires more staff with general manager abilities.
It place emphasis on local marketsTop&management
problems. has less control of the regional managers since they are independent.
It offers better face to face communication with local interests.

Module for MODULE

Date Developed: September 2020
Accountancy, Business Management - ABM 12 Page
Organization and Management Developed by: Nikki A. Pajadan 5 of 9
(Grade 11 -ABM) Checked by: Arnel S. Gallo
MATRIX STRUCTURE
 Also known as Multiple Command System.
 Focus on two or more dimensions at the same time.

ADVANTAGES &
DISADVANTAGE OF MATRIX STRUCTURE

Advantages Disadvantages

More efficient use of resources than single hierarchy.

Frustration & confusion from dual chain of command.
Flexibility, adaptability, to changing environment.
High conflict between 2 sided of matrix.
More meetings, more discussion than action.

NETWORK STRUCTURE
 Disaggregates major functions into separate companies that are brokered by a small headquarter
organization.
 Manufacturing, engineering, sales & accounting is provided by separate organization which specialized on
that areas.

DISTRIBU
DESIGN
TION
COMPANY
COMPANY
COMP
ANY A

MANUFAC
TRANSPOR TURING
TATION COMPANY
COMPANY

Module for MODULE

Date Developed: September 2020
Accountancy, Business Management - ABM 12 Page
Organization and Management Developed by: Nikki A. Pajadan 6 of 9
(Grade 11 -ABM) Checked by: Arnel S. Gallo
 ADVANTAGES & DISADVANTAGE OF NETWORK STRUCTURE

Advantages Disadvantages
Global competitiveness. No hands-on control.
Workforce challenge. Can lose organization part.
Reduce administrative cost. Employee loyalty weakened.
SPAN OF MANAGEMENT
 Definition : A
number of subordinates who report directly to a given manager of supervision
 Also called ‘span of control’
◦ In theory, when tasks are very complex, span of control should be relatively narrow.
◦ In contrast, where jobs are highly standardized and routine (low complexity), a manager will not
need to spend as much time supporting individual subordinates, and the span of control may be
larger.
MAJOR FACTORS THAT INFLUENCE THE SPAN OF MANAGEMENT
 The type of work
 The strength of the organization structure
 The ability of the manager
 The amount & type of communication required among the members

TYPES OF ORGANIZATION CHART TALL & LEAN (FLAT) STRUCTURES

NARROW / TALL STRUCTURE
WIDE / FLAT STRUCTURE

NARROW/TALL SPAN MANAGEMENT

 Have short span of authority with many organization levels
 Advantages – close supervision, close control, and rapid communication between subordinates and
superiors
 Disadvantage – superiors tend to get involved with subordinates work, high cost, excessive distance
between the lowest level and the highest level.
WIDE/FLAT SPAN OF MANAGEMENT
 Have few organization levels with wide span of authority
 Advantages – superiors are forced to delegate, clear policies must be made and subordinates must be
carefully selected
 Disadvantages – decisions made by managers tend to be bottleneck, superior’s loss of control, and requires
exceptional quality manager.
CHAIN OF COMMAND

Module for MODULE

Date Developed: September 2020
Accountancy, Business Management - ABM 12 Page
Organization and Management Developed by: Nikki A. Pajadan 7 of 9
(Grade 11 -ABM) Checked by: Arnel S. Gallo
  Definition: Separate lines of authority/power among all position in an organization.
 It has two (2) components:-
1. UNITY OF COMMAND
- Suggests that each person within an organization must have a clear reporting relationship to only one
superior.

2. SCALAR RELATIONSHIP
- Suggests that there must be a clear and unbroken line of authority that extends from the lowest to the
highest position in the organization.
AUTHORITY
 Definition: “The right to make decisions with respect to work assignments & to require subordinates to
perform assigned tasks in accordance with the decision made”.

LINE & STAFF AUTHORITY

 Line Authority
◦ Those organizational members that are directly involved in delivering the products and services of
the organization.
 Staff Authority
◦ Those organizational members that are not directly involved in delivering the products and services
to the organization, but provide support for line personnel.
DELEGATION
 Definition: “The process of transferring the authority for a specific activity or task to another member of
the organization and empowering that individual to accomplish the task effectively”.
 Transforming the responsibility for a specific activity or task to another member of the organization.
 Empowering that individual to accomplish the task effectively.
STEPS IN DELEGATION
 Decide which goals or tasks to delegate
 Make assignments
 Grant authority
 Hold responsible/accountable
 Monitor
BENEFITS OF DELEGATION
1. Empowerment
2. Better decision-making
3. Provide an opportunity for the development of analytical and problem-solving skills
4. Managers magnify their accomplishments
BARRIERS OF DELEGATION
1. Manager may refrain to delegate because they are insecure about their value to the organization.
2. Managers simply lack confidence in the abilities of their subordinates.
3. Manager experience dual accountability.
4. Subordinate are reluctant to accept delegation.
OVERCOMING BARRIERS TO THE DELEGATION
• Allow subordinates to develop their own solutions & to make mistake.
• More support & training.
• Improved communication.
CENTRALIZATION & DECENTRALIZATION

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Date Developed: September 2020
Accountancy, Business Management - ABM 12 Page
Organization and Management Developed by: Nikki A. Pajadan 8 of 9
(Grade 11 -ABM) Checked by: Arnel S. Gallo
 ☺ Centralization is the process of systematically maintain the power and authority in the hands of higher-level
managers.
☺ Decentralization is the process of systematically hand over/assign power and authority throughout to middle
and lower manager.

COORDINATION
 Keeping organization units that interact with or influence each other in contact with each to share
information & other things in a way that enhances accomplishment of tasks.

[Activity]
Directions: Match Column A with Column B.

Column A
1. A process of determining the tasks to be
done, who will do them and how those tasks
will be managed and coordinated.
2. Work delegated amongst members so that
individuals are responsible for a limited set of
jobs instead of doing the whole task.
3. A number of subordinates who report directly Column B
to a given manager of supervision.
4. It suggests that each person within an a. Delegation
organization must have a clear reporting
b. Unity of command
relationship to only one superior.
5. The process of transferring the authority for a
c. Span of management
specific activity or task to another member of
the organization and empowering that
d. Division of work
individual to accomplish the task effectively.
e. Organizing

f. Coordination

[Reference]
https://www.academia.edu/34982762/Chapter_4_organizing

Be honest to yourself!

Cheating won’t give you learning. God bless.

Module for MODULE

Date Developed: September 2020
Accountancy, Business Management - ABM 12 Page
Organization and Management Developed by: Nikki A. Pajadan 9 of 9
(Grade 11 -ABM) Checked by: Arnel S. Gallo