Organizing

Course: BBA

Subject: Principles of Management

Unit: II

Topics

• Organizing: Nature, importance, process, formal & informal organizations, Organizational Charts

• Departmentaion: Definition, Bases ofdepartmentation, Types of organization structure-functional, divisional, project, matrix organization.Authority: definition, types, responsibility &accountability, delegation; definition, steps indelegation, obstacles to delegation and theirelimination, what is decentralization andcentralization. (Ch.11 to 15 – Principles andPractice of Management by L.M.Prasad)

What is organizing

• Planning focuses on deciding what to do -Organizing focuses on how to do it

• Planning- obj/goal

• Organizing- organizing people and allocateresources to carry out the plan

Definition• When 2 or more persons work together towards

a common goal, authority & responsibilities areallocated among them so that their efforts maybecome effective.

Authority and Responsibility

1 2

Definition

• It’s a mgt. function involves assigning duties, groupingtasks, delegating authority and responsibility andallocating resources to carry out a specific plan

• System of cooperative activities of two or more persons

• Urwick: ‘org. is the process of dividing up of theactivities which are necessary to any purpose andarranging them in groups which are assigned toindividual’

A. & R.

• Authority:A right inherent in a managerial position to tell peoplewhat to do and to expect them to do it, right to makedecisions and carry out actions to achieveorganizational goals.

Ex. Taking decision of launching new product, decision ofgiving holiday, signing a document

• Responsibility:An obligation or expectation to perform and carry outduties and achieve goals related to a position

Ex. To achieve the target/function, problem solving

Importance

• Helps individual about the tasks he or she isexpected to accomplish.

• creates channels of communication and thussupports decision-making and control.

• Smooth flow of work activities• efficient use of its resources and avoid conflict and

duplication of effort.• harmonious relationships• supports planning and control activities by

establishing accountability and an appropriate lineof authority.

Formal and informal organization

• Formal:

- For specific goal

- Definite authority, responsibility

- Ex. Marketing department, HR department

• Informal:

- Natural grouping of people on basis of similarity in thoughts/beliefs, habits

- Ex. Lunch group, sports group, festival/events, south Indian employees, smoke/music

Formal and informal org

Basis Formal org Informal org

Formation Planned and deliberate

Spontaneous, unknowingly

Aim To achieve goal Social interaction

Nature Official Unofficial

Focus Position Person

Leadership Superior Anyone

Source of power Delegated Given by group

Process Of Organizing

1. Determining the obj.

2.Preparing a list of activities

3. Grouping of activities

4. Determining the positions

5. Delegation of authority and responsibility

6. Establishing interrelationship

1. Determining the obj.

• System / structure should be designed

ex. Structure of cement industry is diff. frombanking

2.Preparing list of applications

• Activities must be decided

Ex. Functions and sub functions

• To know if any function is left or duplicated

Ex. In manufacturing units, Activities may bepurchase of raw material, prod., marketing,advertisements, market Research, accounting. Etc.

3. Grouping of activities

• Similar activity should be in a same group

Ex. Selling, advertising, distribution, m.r.

• Departmentation: Various activities areclassified in various groups to form departments

Departmentation:

• Based on function: production, marketing, finance, acc.

• Based on geographical areas: govt org. i.e., post, railways, telephone

- requirement of local people can be fulfilled

• Based on products:

• Based on customers:

4. Determining the positions

• One official as in charge of each department

-Ex. Purchase officer for purchase section

• Departmental head

5. Delegation of authority and

responsibility

• One person can not perform all function so itsdivided to other persons(subordinates)

• To perform the task certain authority andresponsibility must be given

• Officer must be responsible for the performanceof his subordinates

• Decentralization: required if the size of thebusiness is greater

6. Establishing interrelationship

• Interrelationship between various departments forperfect coordination

• Manager must be informed about duties, authorityand inter-relationship with other departments

• Org chart can be prepared

Organizational charts

• Providing information about organizationalrelationship

• It’s a diagrammatic representation of the majorfunctions and their relationship, channel ofauthority

Organizational charts

3

References:

1. http://www.h-lapoal.co.il/wp-content/uploads/2014/07/9088529.jpg

2. https://lh5.ggpht.com/alEdnVq8WwbEN2PiJgT0sd2RY2hJ2L5CaOUxwSYIlL4Lrg_-O9SKWzRehEAF3AuF_9ROxw=s85

3. https://lh4.ggpht.com/N0nt8asFlBNVM2_LF92wpQg_g-I5ICGHVTqGkjUWXDQj5UhVft8PWOGgp6xATVvD6I9RPQ=s108