Chapter 2

The Organizing Process

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by Zane Quible Pearson Prentice Hall
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 Organizing Function is Helpful By:

1. Assuring more efficient use of the organization’s

resources.
2. Improving employee understanding of job duties
and responsibilities.
3. Improving employee morale.
4. Providing a sense of direction for each of the
organization’s functional areas.

Administrative Office Management, 8/e ©2005 Pearson Education, Inc.

by Zane Quible Pearson Prentice Hall
2 Upper Saddle River, NJ 07458
 Organization’s Objectives

Should be written in context of outcomes,

understood and accepted by employees, be
measurable, contain a time reference, and
be challenging but attainable.

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by Zane Quible Pearson Prentice Hall
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 Span of Control

Refers to the number of subordinates

an individual is able to supervise.

Administrative Office Management, 8/e ©2005 Pearson Education, Inc.

by Zane Quible Pearson Prentice Hall
4 Upper Saddle River, NJ 07458
 As an example, a manager with five direct
reports has a span of control of five

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by Zane Quible Pearson Prentice Hall
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 Interrelated Functions

Organization’s functions have become so

interrelated that when a problem arises in one
functional area, other related functions are also
likely to be affected.
Administrative Office Management, 8/e ©2005 Pearson Education, Inc.
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Interrelated means that the results of each activity influence the other
activities and tasks. It is the responsibility of management to see that
essential activities are done efficiently (in the best possible way) and
effectively (doing the right thing).

Administrative Office Management, 8/e ©2005 Pearson Education, Inc.

by Zane Quible Pearson Prentice Hall
7 Upper Saddle River, NJ 07458
 Chain of Command

Identifies who reports to whom within

an organization.

Administrative Office Management, 8/e ©2005 Pearson Education, Inc.

by Zane Quible Pearson Prentice Hall
8 Upper Saddle River, NJ 07458
 An example of chain of command is when an
employee reports to a manager who reports to a
senior manager who reports to the vice president
who reports to the CEO. The CEO makes final
decisions binding on everyone, followed by the vice
president and so on down the line.

Administrative Office Management, 8/e ©2005 Pearson Education, Inc.

by Zane Quible Pearson Prentice Hall
9 Upper Saddle River, NJ 07458
 Unity of Command

States that each employee should be

directly responsible to one supervisor.

Administrative Office Management, 8/e ©2005 Pearson Education, Inc.

by Zane Quible Pearson Prentice Hall
10 Upper Saddle River, NJ 07458
Example of Unity of Command
Correct Unity of Command flows from Manager to Assistant Manager,
Assistant Manger to Supervisor, Supervisor to Executive, and finally from
executive to workers. According to the Principle Of Unity Of Command, the
organization shall follow a Correct Unity of Command.

Administrative Office Management, 8/e ©2005 Pearson Education, Inc.

by Zane Quible Pearson Prentice Hall
11 Upper Saddle River, NJ 07458
 Authority and Responsibility

States that individuals who are given the

responsibility to undertake a task must also
be given an appropriate amount of authority to
ensure task completion.
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by Zane Quible Pearson Prentice Hall
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 Work Assignment

States that each employee’s work assignments

should be based on his/her special
strengths and talents.

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by Zane Quible Pearson Prentice Hall
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 Employee Empowerment

States that empowered employees are

encouraged to participate as much as possible in
making decisions that affect all aspects of
their job tasks.

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by Zane Quible Pearson Prentice Hall
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Line
Line and Staff
Functional Organizational
Structures
Product
Committee
Matrix

Administrative Office Management, 8/e ©2005 Pearson Education, Inc.

by Zane Quible Pearson Prentice Hall
15 Upper Saddle River, NJ 07458
 Line Structure

Is the oldest and simplest of structures.

Has direct authority flowing vertically

from the top.

Is generally found in small organizations

because support staff is needed once they
begin to grow.
Administrative Office Management, 8/e ©2005 Pearson Education, Inc.
by Zane Quible Pearson Prentice Hall
16 Upper Saddle River, NJ 07458
Administrative Office Management, 8/e ©2005 Pearson Education, Inc.
by Zane Quible Pearson Prentice Hall
17 Upper Saddle River, NJ 07458
 Advantages of Line Structure

1. Employees are fully aware of the boundaries of

their jobs.
2. Decision making is expedited.
3. Is a simple structure to understand.
4. Employees can be held directly accountable
when they fail to perform as expected.
Administrative Office Management, 8/e ©2005 Pearson Education, Inc.
by Zane Quible Pearson Prentice Hall
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 Disadvantages of Line Structure

1. Fails to provide specialization needed when

organization begins to grow.
2. Line managers need to begin to perform
specialized activities.

Administrative Office Management, 8/e ©2005 Pearson Education, Inc.

by Zane Quible Pearson Prentice Hall
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 Line and Staff Structure

Has line authority similar to line structure.

Specialized staff activities are added that

support line activities.

Staff employees assist the line function.

Administrative Office Management, 8/e ©2005 Pearson Education, Inc.
by Zane Quible Pearson Prentice Hall
20 Upper Saddle River, NJ 07458
Administrative Office Management, 8/e ©2005 Pearson Education, Inc.
by Zane Quible Pearson Prentice Hall
21 Upper Saddle River, NJ 07458
 Line employees are directly
Line Employees concerned with the organization’s
primary objectives.

Staff Employees Staff employees support the

line employees.

Administrative Office Management, 8/e ©2005 Pearson Education, Inc.

by Zane Quible Pearson Prentice Hall
22 Upper Saddle River, NJ 07458
 Advantages of Line and Staff Structure

1. Line employees have time to focus on those

activities directly related to the organization’s
primary objectives.
2. Staff employees can lend their specialized
support.
3. Flexibility of staff units facilitates undertaking
new projects.
Administrative Office Management, 8/e ©2005 Pearson Education, Inc.
by Zane Quible Pearson Prentice Hall
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 Disadvantages of Line and Staff Structure

1. Line and staff employees sometimes are

in conflict with one another.
2. Line employees sometimes suppress the
talents of staff employees.

Administrative Office Management, 8/e ©2005 Pearson Education, Inc.

by Zane Quible Pearson Prentice Hall
24 Upper Saddle River, NJ 07458
 Functional Structure

Tends to parallel the departments in many

organizations.

Line managers have both line and

functional authority.

Administrative Office Management, 8/e ©2005 Pearson Education, Inc.

by Zane Quible Pearson Prentice Hall
25 Upper Saddle River, NJ 07458
 An example of a functional structure. ... An important benefit of
adopting a functional structure is that each person tends to learn
a great deal about his or her particular function.

Administrative Office Management, 8/e ©2005 Pearson Education, Inc.

by Zane Quible Pearson Prentice Hall
26 Upper Saddle River, NJ 07458
 Line Managers Can take disciplinary
action against those for
whom they have line
authority.

Line Managers Cannot take disciplinary

action against those for
whom they have functional
authority.
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 Advantages of Functional Structure

1. It provides expertise by functional specialists.

2. It prevents employees from slighting

certain specialized areas in the
organization.

Administrative Office Management, 8/e ©2005 Pearson Education, Inc.

by Zane Quible Pearson Prentice Hall
28 Upper Saddle River, NJ 07458
 Disadvantages of Functional Structure

1. Some employees may appear to have two or

more supervisors.
2. Some managers evade those areas for
which they have functional authority.

Administrative Office Management, 8/e ©2005 Pearson Education, Inc.

by Zane Quible Pearson Prentice Hall
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 Product Structure

Company’s products provide a basis for

its structure.

Each major product is given division

status.

Incorporates line and staff structure into

these divisions.
Each product tends to operate independently
of other divisions.
Administrative Office Management, 8/e ©2005 Pearson Education, Inc.
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Product Organizational Structure
Each product group falls within the reporting structure of an executive
and that person oversees everything related to that
particular product line. For example an executive over
Kraft products would be responsible for every product under that label –
dressings, meats, sauces, etc.

Administrative Office Management, 8/e ©2005 Pearson Education, Inc.

by Zane Quible Pearson Prentice Hall
31 Upper Saddle River, NJ 07458
 Advantages of Product Structure

1. Enables divisions to develop processes that

best meet their needs.
2. Divisions can coordinate their own
activities without constraint from main
unit.

Administrative Office Management, 8/e ©2005 Pearson Education, Inc.

by Zane Quible Pearson Prentice Hall
32 Upper Saddle River, NJ 07458
 Disadvantages of Product Structure

1. Divisions can “go their own way” to the

extent that they don’t work toward common
goals.
2. Problems of some divisions may eventually
be felt throughout the entire organization.

Administrative Office Management, 8/e ©2005 Pearson Education, Inc.

by Zane Quible Pearson Prentice Hall
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 Committee Structure

Is often used in conjunction with line,

line and staff, and functional structures.

Some committees perform important

managerial functions; others are
advisory.

Administrative Office Management, 8/e ©2005 Pearson Education, Inc.

by Zane Quible Pearson Prentice Hall
34 Upper Saddle River, NJ 07458
Administrative Office Management, 8/e ©2005 Pearson Education, Inc.
by Zane Quible Pearson Prentice Hall
35 Upper Saddle River, NJ 07458
 Advantages of Committee Structure

1. Recommendations are often widely accepted.

2. Widely varying views of committee members
broaden the nature of their recommendations.
3. Its use reduces the risk of making an incorrect
decision.

Administrative Office Management, 8/e ©2005 Pearson Education, Inc.

by Zane Quible Pearson Prentice Hall
36 Upper Saddle River, NJ 07458
 Disadvantage of Committee Structure

1. It sometimes takes a long time to function

properly.

Administrative Office Management, 8/e ©2005 Pearson Education, Inc.

by Zane Quible Pearson Prentice Hall
37 Upper Saddle River, NJ 07458
 Matrix Structure

Is often used by organizations undertaking

complex projects.

Results in the formation of temporary

new units to accommodate the
undertaking of a new project.
Involves temporarily borrowing employees
from other areas of the organization and
assigning them to the new temporary unit.
Administrative Office Management, 8/e ©2005 Pearson Education, Inc.
by Zane Quible Pearson Prentice Hall
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In a matrix structure, individuals work across teams and
projects as well as within their own department or function.

For example, a project or task team established to develop

a new product might include engineers and design
specialists as well as those with marketing, financial,
personnel and production skills.

These teams can be temporary or permanent depending

on the tasks they are asked to complete. Each team
member can find himself/herself with two managers - their
normal functional manager as well as the team leader of
the project.

Administrative Office Management, 8/e ©2005 Pearson Education, Inc.

by Zane Quible Pearson Prentice Hall
39 Upper Saddle River, NJ 07458
 MATRIX TYPE ORGANIZATION

Administrative Office Management, 8/e ©2005 Pearson Education, Inc.

by Zane Quible Pearson Prentice Hall
40 Upper Saddle River, NJ 07458
 Advantages of Matrix Structure

1. Allows companies to assign employees on the

basis of their expertise.
2. Helps companies avoid having to hire new
employees for a project.
3. Enables companies to adapt quickly to new
situations.
Administrative Office Management, 8/e ©2005 Pearson Education, Inc.
by Zane Quible Pearson Prentice Hall
41 Upper Saddle River, NJ 07458
 Disadvantages of Matrix Structure

1. Employees often have two supervisors.

2. Employees may experience job-related
pressures.

3. Managers may have difficulties coordinating

employee activities.

Administrative Office Management, 8/e ©2005 Pearson Education, Inc.

by Zane Quible Pearson Prentice Hall
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 Places related activities under
Centralization
jurisdiction of one individual.

Places related activities under

Decentralization jurisdiction of several
individuals throughout the
organization.

Administrative Office Management, 8/e ©2005 Pearson Education, Inc.

by Zane Quible Pearson Prentice Hall
43 Upper Saddle River, NJ 07458
Companies with centralized structure concentrate
their authority in upper levels of management.

For example, the military has a centralized

organization structure. ...

An example of a decentralized organization is a

fast-food franchise chain.

Administrative Office Management, 8/e ©2005 Pearson Education, Inc.

by Zane Quible Pearson Prentice Hall
44 Upper Saddle River, NJ 07458
 Factors That Determine Feasibility of
Centralization

1. Nature of the organization.

2. Size of the organization.
3. Diversification of the organization.
4. Conformity to standardized processes.
5. Quality of personnel.
6. Distribution of operations.
7. Attitude of personnel.
Administrative Office Management, 8/e ©2005 Pearson Education, Inc.
by Zane Quible Pearson Prentice Hall
45 Upper Saddle River, NJ 07458
 The Organization Chart

Identifies lines of authority.

Gives employees a better understanding of the

formal structure of the organization.
Helps identify areas of overlapping
responsibility that should be eliminated.
Identifies promotional opportunities for job
applicants and new employees.
Identifies areas suitable for training and
orientation.
Administrative Office Management, 8/e ©2005 Pearson Education, Inc.
by Zane Quible Pearson Prentice Hall
46 Upper Saddle River, NJ 07458
 Guidelines for Preparing Organization Charts

1. Place individuals/departments in relation to their

hierarchical level.
2. Identify vertical and horizontal authority by
solid lines.
3. Identify functional authority by dotted lines.
4. Use complete titles on the chart.
5. Include on the chart the name of organization and
the date the chart was prepared.
Administrative Office Management, 8/e ©2005 Pearson Education, Inc.
by Zane Quible Pearson Prentice Hall
47 Upper Saddle River, NJ 07458
Informal Organization Refers to the
spontaneous personal
and social relationships
that exist within
organizations.
Two Common Elements of
Informal Organization

Informal Groups
Informal Communication Patterns
Administrative Office Management, 8/e ©2005 Pearson Education, Inc.
by Zane Quible Pearson Prentice Hall
48 Upper Saddle River, NJ 07458