ORGANISING- A MANAGEMENT FUNCTION

▪ Organising is the function of management which follows planning. It is the process

of establishing orderly uses for all resources within the management system of the
organization. It is a function in which the synchronization and combination of
human, physical, financial, and information resources takes place for the
achievement of the results. Organizing function is essential because it facilitates
administration as well as the functioning of the organization.
➢ According to Louis A. Allen, “Organising is the process of identifying and
grouping of the works to be performed, defining and delegating responsibility
and authority and establishing relationships for the purpose of enabling people
to work most efficiently”
➢ According to Chester Barnard, “Organizing is a function by which the concern is
able to define the role positions, the jobs related and the co-ordination between
authority and responsibility”
▪ Organizing is the next important function of management after the planning. In
case of planning the management decides what is to be done in future. In case of
organizing, it decides on ways and means through which it becomes easier to
achieve what has been planned.
▪ Divides work to be done into specific jobs and departments.
▪ Assigns tasks and responsibilities associated with individual jobs.
▪ Coordinates diverse organizational tasks.
▪ Clusters jobs into units.
▪ Establishes relationships among individuals, groups, and
departments.
▪ Establishes formal lines of authority.
▪ Allocates and deploys organizational resources.
 Identification of
Vision of the activities
Organisation
Mission of the
Organisation Grouping of activities

Goals set
Assignment of
Business environment responsibilities/duties
(external/internal)

Granting authority

Establishing
relationship
▪ Organizational structure is the formal arrangement of jobs
within an organization. This structure, which can be shown
visually is an organizational chart. When managers create
or change the structure, they’re engaged in organizational
design, a process that involves decisions about six key
elements: work specialization, departmentalization, chain
of command, span of control, centralization and
decentralization, and formalization.
 Horizontal
Vertical
▪ Work Specialization: Dividing work activities into separate job tasks. Individual
employees “specialize” in doing part of an activity rather than the entire activity in
order to increase work output. It’s also known as division of labor, a concept we
introduced in the management history module.
▪ Departmentalization: How jobs are grouped together is called departmentalization.
Five common forms of departmentalization are used, although an organization may
develop its own unique classification. (For instance, a hotel might have departments
such as front desk operations, sales and catering, housekeeping and laundry, and
maintenance.) Departmentalization can be based on:
➢ Function
➢ Product
➢ Process
➢ Geography
➢ Customer
One popular departmentalization trend is the increasing use of customer
departmentalization. Because getting and keeping customers is essential for success, this
approach works well because it emphasizes monitoring and responding to changes in
customers’ needs.
 VP, Sales
GM

Sales, Sales Sales Sales,

Manager, Manager, Manager, Manager, Director , Director, Director, Director,
Finance Production Marketing HR
West East North South

FUNCTIONAL DEPARTMENTATION GEOGRAPHICAL/TERRITORIAL DEPARTMENTATION

Plant, Head

Ginning Spinning Weaving Dyeing Printing

Deptt, Deptt Deptt . Deptt Deptt,
Manager Manager Manager Manager Manager

PROCESS DEPARTMENTATION
 Director, Sales

CUSTOMER DEPARTMENTATION
Manager, Manager, Manager,
Retail, Wholesale, Government
Accounts Accounts Accounts

Chief Executive

Product Product
Division Division
A(Pharma) B(Cosmetics
)

PRODUCT DEPARTMENTATION
Manager, Manager, Manager, Manager,
Manager, Manager Sales &
Production , Finance Sales & Production Finance
Marketing Marketing
▪ Chain of Command: The chain of command is the line of authority extending from
upper organizational levels to lower levels, which clarifies who reports to whom.
Managers need to consider it when organizing work because it helps employees
with questions such as “Who do I report to?” or “Who do I go to if I have a problem.
▪ Authority: It refers to the rights inherent in a managerial position to tell people
what to do and to expect them to do it. Managers in the chain of command had
authority to do their job of coordinating and overseeing the work of others.
Authority could be delegated downward to lower-level managers, giving them
certain rights while also prescribing certain limits within which to operate. It can
be two types:
➢ Line authority entitles a manager to direct the work of an employee. It is the
employer–employee authority relationship that extends from the top of the
organization to the lowest echelon, according to the chain of command. As a
link in the chain of command, a manager with line authority has the right to
direct the work of employees and to make certain decisions without consulting
anyone. Of course, in the chain of command, every manager is also subject to
the authority or direction of his or her superior.
 ➢ Staff authority: functions is to support, assist, advise, and generally reduce some of
their informational burdens. For instance, a hospital administrator who cannot
effectively handle the purchasing of all the supplies the hospital needs creates a
purcahasing department, which is a staff function.
▪ Responsibility: When managers use their authority to assign work to employees, those
employees take on an obligation to perform those assigned duties. This obligation or
expectation to perform is known as responsibility. And employees should be held
accountable for their performance.
▪ Unity of Command: states that a person should report to only one manager. Without
unity of command, conflicting demands from multiple bosses may create problems.
▪ Span of Control: The traditional view was that managers could not—and should not—
directly supervise more than five or six subordinates. Determining the span of control is
important because to a large degree, it determines the number of levels and managers
in an organization—an important consideration in how efficient an organization . All
other things being equal, the wider or larger the span, the more efficient an
organization will be.
LINE AUTHORITY & STAFF AUTHORITY
▪ Factors influencing: the skills and abilities of the manager and the employees, and
the characteristics of the work being done. For instance, managers with well-
trained and experienced employees can function well with a wider span. Other
contingency variables that determine the appropriate span include similarity and
complexity of employee tasks, the physical proximity of subordinates, the
degree to which standardized procedures are in place, the sophistication of the
organization’s information system, the strength of the organization’s culture,
and the preferred style of the manager.
▪ Centralization and Decentralization: Centralization is the degree
to which decision making takes place at upper levels of the
organization. If top managers make key decisions with little input
from below, then the organization is more centralized. On the other
hand, the more that lower-level employees provide input or actually
make decisions, the more decentralization there is. Keep in mind that
centralization-decentralization is not an either-or concept. The
decision is relative, not absolute—that is, an organization is never
completely centralized or decentralized.
▪ Formalization: Formalization refers to how standardized an
organization’s jobs are and the extent to which employee behavior is
guided by rules and procedures. In highly formalized organizations,
there are explicit job descriptions, numerous organizational rules,
and clearly defined procedures covering work processes. Employees
have little discretion over what’s done, when it’s done, and how it’s
done. However, where formalization is low, employees have more
discretion in how they do their work.
 DIFFERENT TYPES OF
ORGANISATIONAL STRUCTURES
FROM TRADITIONAL TO
CONTEMPORARY
 SALES &
MARKETING
COMPANY

CORE
R&D & DESIGN FUNCTION HRM
COMPANY (Operations COMPANY
& Finance)

TRANSPORT &
DISTRIBUTION
COMPANY
▪ Benefits of specialisation
▪ Clarity in working relationship
▪ Optimum utilization of resources
▪ Adaptation to change
▪ Effective administration
▪ Development of personnel
▪ Expansion & growth
Thank you