MANAGEMENT FUNDAMENTALS ORGANIZING ORGANIZING Lesson 3 Part 2 - - PowerPoint PPT Presentation

MANAGEMENT FUNDAMENTALS ORGANIZING ORGANIZING

Lesson 3 – Part 2

Page 304

After developing plans, managers need to execute them. For that they need to organize people and necessary resources

Organising is the ‘deployment of organisational resources and grouping activities to achieve strategic goals’

Organizing - Definition

To execute plans.. Organise people What to be done? Who will do? Organise Resources

Making structure

Over-deployment vs. Under-deployment

Two common mistakes in resource allocation

Organization Structure and Chart

The way an organization has arranged its people and tasks is called as STRUCTURE Visual presentation of structure is called as ORGANIZATION CHART

CEO Director / General Manager

• Operations

Marketing Manager Sales Manager Finance Manager Human Resource Manager Director / General Manager

• Administration

Senior Executive

ORGANIZATION CHART Positions are arranged as per the hierarchy of authority

Organisational Structural Design

A process that involves decisions about six key elements

• 1. Chain of command
• 2. Span of control
• 3. Work specialization
• 4. Centralization and Decentralization
• 5. Formalization
• 6. Departmentalization

6/17/2019 GDM M 401 PB: HDM

1 - Chain of Command

Formal reporting relationships including lines of authority

Page 308

CEO

Director / General Manager – Operations Production Manager Purchasing Manager Stores Manager Director / General Manager Marketing Manager Sales Manager (02) Sales executives (10) Finance Manager Director / General Manager - Administration Human Resource Manager Senior Manager (02) IT Manager

Chain of Command – The line or chain through which commands will flow Scalar Principle Rule that subordinates at every level should follow the chain of command and communicate with their seniors only through the immediate senior

02 - The Span of Control

The span of control is the number of subordinates reporting directly to the person above them in the hierarchy.

6/17/2019 GDM M 401 PB: HDM

Page 312

03 - Work Specialization

 Dividing work activities into separate job tasks.  Also known as division of labour  People become more expert in one task than they could be in several and

are more likely to come up with improved ideas or methods. Page 307

04 - Centralization and Decentralization

 Centralization is when a relatively large number of

decisions are taken by management at the top of the

• rganization.

 Decentralization is when a relatively large number of

decisions are taken lower down the organization in the

• perating units.

Page 312

05 - Formalization

 Formalization refers to how standardized an organization’s jobs are

and the extent to which employee behavior is guided by rules and procedures

• These include rules, procedures, instruction manuals, job descriptions

(things which people must do)

6/17/2019 GDM M 401 PB: HDM

 Traditional approaches:  Vertical Functional  Divisional  Matrix  Innovative approaches:  Teams  Virtual Networks

• 6. Departmentalization

Types of Organization Structures

There are two types of basic structures

Flat structure

(Horizontal)

Tall structure

(Vertical)

WHERE CAN YOU SEE…...

• More hierarchical levels
• Wider span of control
• Longer chain of command
• Quicker communication
• More employee empowerment

Tall vs. Flat Organisational Structures

6/17/2019 GDM M 401 PB: HDM

• 1. Vertical Functional Approach

Grouping of positions into departments based on skills, expertise, work activities, and resource use

17

Page 317

• 2. Divisional Approach

Grouping based on organisational divisions: – Product, Program, Business divisions (self- contained unit), Geographies, etc.

18

Example: Divisional Approach

Care Place Child Care Youth & Adult Care Environmental Care

19

Divisional structuring could also be done based on the geographic presence

• 3. Matrix Approach
• Matrix approach combines functional and

divisional approaches

– Improve coordination and information – Dual lines of authority

Functional

D i v i s i

• n

a l

Page 319

Dual-Authority Structure in a Matrix Organisation

D i v i s i

• n

s Functions

Global Matrix Structure

Combining two divisional dimensions

• 4. Team Approach
• Two types  Cross Functional Teams and

Permanent teams

New product Development Team

Brand manager Production manager R & D manager Marketing manager CEO

CEO Team 1 Team 2 Team 3

Virtual network structure means that the firm subcontracts most

• f its major

functions to separate companies

• 5. Virtual Network Approach

Based on outsourced model

Delegation

Authority, Responsibility and Accountability

 Authority  Formal and legitimate right given to

take decisions, issue orders and allocate resources

Authority

Given to a position (not to a person) Increases upwards in the hierarchy

Authority increases

Authority, Responsibility and Accountability

 Responsibility  Duties to carryout or assigned

activities

E.g. Sales manager is responsible in brining money to the organization by selling products and services

 Accountability  The obligation to report to

superiors on performance ( also called as reporting)

• 3. Delegation of Authority

The act of assigning formal authority and responsibility for completion of specific activities to subordinate/s

Question: What are the critical factors that managers have to consider whilst delegating work to subordinates?

A B C D E F

Responsibility + Authority

Additional Reading

 Exhibit 10.9, page 326, Structural advantageous

and Disadvantageous

The End Thank You