Prepared and presented by,

N . Ganesha Pandian,

Assistant professor,

Madurai School of Management

BA 5102 Principles of

Management

Unit 3: Organizing

Contents

Nature and purpose of organizing

Organization structure

Line and staff authority

Departmentation

Span of control

Centralization and decentralization

Delegation of authority

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Contents

Staffing

Selection and Recruitment

Career development

Career Stages

Training

Performance appraisal MSM - MBA content prepared by Ganesha

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Why do we organize

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Why organization role?

Verifiable objectives

A clear idea of major duties or activities

involved

Authority to whom the accomplished tasks

were reported

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What is organizing

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The term organizing means a formalized

intentional structure of roles and position.

Two types of organization: Formal and

Informal organization

Organizational division

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Organizational division or Department - it

designates any area, division or branch where

the authority assigned for the performance of

specified activities.

The span of management – the number of

persons limited to numbers managed by a

supervisor

Contd…

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Two types: Narrow span of managementand wide span of management

Narrow span of management:

Advantages:

1. Close supervision and control

2. Fast communication

Disadvantages:

1. many levels of management

2. High cost due to many levels

Contd…

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Wide span of Management:

Advantages:

1. Superiors are forced to delegate

2. Sub ordinates carefully watched

Disadvantages:

1. Tendency of overload

2. Danger of loss of control

Diagram of Narrow and Wide span of

organization structure

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Problems of organization levels

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Communication may be distorted or manipulated

Greater the organization structure then greater

the costs involved

Level of Co-ordination is needed – proper

functioning of org.

Division of activities lacks co-ordination

Re- Engineering the organization

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Hammer and Champy define re-

engineering as “the fundamental

rethinking and radical redesign of

business process to achieve dramatic

improvement in terms of performance”.

What is Re- engineering?

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Revamping of old procedures, systems and

outdated technology

New thinking – provide new perspective about

the management.

In place of customers meeting too many

people to get work done – replaced with

single time transaction

Logic of Organizing

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Precise organizational objective

Support Formulating objectives, plans and

policies

grouping of activities to be accomplished

Delegation of authority

Identification, analysis and classification of

activities to be done.

Departmentation

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Department by Enterprise function – based on the

functions of an organization.

Department by Territory or Geography – grouping of

activities based on Geographic area

Departmentation by Customer grouping – reflects a

primary interest in customers.

Departmentation by product – according to products

or product lines

Matrix organization

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Also called as Matrix or Grid Organization

Combining functional and project or product

pattern of Departmentation in same organization

Commonly used in Engineering and Research

and Development

Strategic Business Units (SBU’s)

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In larger MNC and corporate companies product lines

are handled separately as a Unit.

An independent company under a roof of common

seal

SBU manager is responsible for all the functional

activities Like

Marketing

Finance

Packing

Distributing

R&D

Virtual organization

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- a rather loose concept – group of

independent firms or people connected

with the help IT

Pushed after the digitalization and IT

revolution

Line/Staff and Functional

Authority

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Power – ability of individual in changing the

belief and actions of the group

Authority – right in position to exercise the

discretion in decision making

Power – Referent power, legitimate power,

reward power and Coercive power.

Empowerment

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Means that employee, managers, or teams at

all levels – given with the power to make

decisions without prior permission

Power, Responsibility and Empowerment

were related to one another

Empowerment – also called as worker’s

participation and employee engagement

Line or Staff concepts

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Scalar principle – there is a flow of the chain

from the top level supervisors to the low rank

employees

This principle stresses on more clearer the

line, more effective the organization

Staff relationship is advisory in organization

structure

It is the relationship of superior exercise their

Functional Authority

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- it is the right delegated to an individual

or to a department to control specified

processes, practices, policies or other

matters – exclusively undertaken by

other department

Line and staff Authority

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Centralization and

Decentralization

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This deals with the dispersion of

authority in organization

Decentralization – tendency to disperse

the decision making authority

Complete decentralization would cease

the work of manager

Different kinds of centralization

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Centralization of performance - based

on geographical location

Departmental centralization – based on

specialized activity

Centralization of Management –

tendency to restrict delegation of

decision making.

Delegation of Authority

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Superior gives the sub-ordinate the

discretion of decision making –

”Delegation of Authority”

In order to get work done from the sub-

ordinate the superiors has to delegate

some authority to the sub-ordinates.

Delegation of authority – an art

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Ineffective in delegating the authority to sub-

ordinate may be caused by many factors.

Some of the personal attitude of the Sub-ordinate

may influence such as:

1. Receptiveness

2. Willingness to let go

3. Willingness to allow mistakes by sub-ordinates

4. Willingness to establish and use broad control

Overcoming weak delegation

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1. Define assignments and delegate authority

(for expected results)

2. Select the person (job to be done)

3. Maintain open lines of communication

4. Establish proper control

5. Reward effective delegation

Recentralization of Authority

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- centralization of already decentralized

authority – not whole withdrawal

For effective management of sub-

ordinates : some control were backed

with the manager

Organization structure and

culture

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Organization structure to an extent influence the

organizational culture.

Culture is a set of norms and values to be followed by

particular group of people.

Positive organization culture will increase the

productivity, morale and value of the organization

Whereas Negative Organization culture will detoriate

all the above said.

Staffing - a managerial function

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Staffing – personnel management –

importance of measuring the human assets

Staffing defined as filling, keeping filled and

positions in the organization structure.

Performance appraisal, recruitment, selection,

career planning, compensation and training

are some of the functions of staffing.

Factors affecting staffing

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Head hunt depends on the

1, turnover rate

2, Expansion plan

3, complexity of organization

Demand and supply of Managers

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The management inventory

Inventory contains the details of the employees

potential to the managerial position.

Management inventory chart helps an

organization to promote the potential

candidate to the managerial position

Personnel action based on demand

and supply matrix

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High Low

High Selection

Placement

Promotion

Training and

development

Recruitment

Low Layoffs

Demotions

Early

retirement

Training and

development

if exp. In

future

Dem

and f

or

managers

Supply for managers

Situational factors affecting staffing

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Affected by many environmental factors such as

Legal

Political

Socio-cultural

Economical

Equal employment opportunity

Women in management

Diversity in workplace

Internal environment

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Promotion from within

Promotion from within in large companies

The policy of open competition

Responsibility for staffing

Selection

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Position requirement and job design

1. Identifying job requirements

2. Appropriate scope of the job

3. Meeting managerial skills required by job design

Job design

1. Design of jobs for individuals and work teams

2. Factors influencing job design

Skills and personal characteristics

needed in manager

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Analytical and problem solving abilities

Personal characteristics

1. Desire to manage

2. Communication skills and empathy

3. Integrity and honesty

4. Past performance as manager

Recruitment and selection

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Recruitment - attracting candidates to fill the

positions in the organization structure

Selection – choosing the right candidate for the job

Selection process – reliable and valid

Interviews

Tests – intelligent test, proficiency and aptitude test,

vocational test and personality test.

Assessment centers

Orientation and socialization

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Orientation – introduction of the new

employees into the job.

Large firms have a formal orientation program

explains the culture, history, functions, tasks

and people of the company

Socialization is the process of making the

employee formalized with the process of the

company.

Performance appraisal

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Measuring the performance of the

accomplished goals and plans as well as

performance as manager.

1. Performance in accomplishing goals

2. Performance as managers

Different views on Appraisal

issues

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Subjective versus objective evaluation

Judging Vs self-appraisal

Assessing past performance Vs future

development

Kinds of performance reviews

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A comprehensive review

Progress or periodic review

Continuous monitoring

Performance appraisal in

organization

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Some of the popular performance appraisal

methods are:

Assessment Centre Method

Behaviourally Anchored Rating Scale

Critical Incident Technique

Essay Evaluation

Human Asset Accounting Method

Management By Objective

Paired Comparison Method

Rating Scale

Career stages

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Training

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Training is a process of learning a sequence of

programmed behavior.

It is the application of knowledge & gives people

an awareness of rules & procedures to guide their

behavior

It helps in bringing about positive change in the

knowledge, skills & attitudes of employees.

References

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1. Koontz, H. (2012). Essentials Of

management: an international and

leadership perspective. New Delhi: McGraw-

Hill.