PRINCIPLE OF MANAGEMENT
CHAPTER 7
ORGANIZING
OUR GROUP MEMBER
Nur Rafidah Binti Sahidan Nor Badariah Binti Zulkifli Siti Raizliza Binti Muhamed Haizan
Tiffany Junit Binti Louis
Definition :
The process of determining what needs to be done, how it will be done and who is to do it.
Importance of organizing : Identification of organizational activities Departmentalization of organizational activities Classifying authority Coordination between authority and
responsibility
Types of Organizational Relationship
1) Chart and Chain of Command
2) Span of Control
3) Line, Staff, and Functional Authority
4) Delegation
5) Centralization and Decentralization
Chart & Chain of Command An organization chart is a graphic
representation of a formal organization structure.
Important tool for analyzing problems in organization.
Organization Chart
PRESIDENT
VP (MARKETING)
VP( HR )
SALES MANAGER
ADVERTISING MANAGER
STAFFINGMANAGER
Organization chart helps managers to ascertain the following factors :
Level of management Chains of command Positions and types of work performed Departmentalization of division of work
Span of control
- known as span of management
- refers to the number of subordinates or employees that is managed by a manager.
- there are two types of span of control :
1) Narrow span of control
2) Wide span of control
Narrow span of control
Requires manager to supervise a small group of employees
More costly compared to a wide span of management
Wide span of control
Requires a manager to supervise a larger group of employees
ADVANTAGE:
- Less overhead cost of supervision
- Prompt response from employees
- Better communication and
coordination
- Suitable for respetitive jobs or tasks
Factors of manager span of control :
Complexity of tasks assigned to
subordinates
Similar tasks are performed repeatedly
Tasks are closely interconnected and
interdependent
Operation takes place in unstable
enviroment
Line, Staff and Functional Authority
In many organization , managers apply authority by dividing it into line , staff , and functional authority .
There are differ each other depending by the types of power which they are based on.
Line AuthorityFor those who are directly responsible to achieve organizational goals , they are in line authority.
It is represented by standard chain of command that start with a board of directors and extends downward.
Based on legitimate power.
The activities categorized as line will differ in each organization.
Staff AuthorityIt is belongs to individual or group in organization who provide various types of service and advice to line managers.
Staff provide planning via research , analysis , and option development.
Staff also assist in policy implementation , monitoring and control , legal and financial matters and in design and operation of data- processing systems.
It is based on expert power .
Manager
Human Resource Manager Production Manager Finance Manager Sales Manager
Production Control
Manager
Industrial Engineering
Manager
Regional Sales
Manager
Regional Sales
Manager
RegionalSales
Manager
DepartmentHead
DepartmentHead
DepartmentHead
ProductionSupervisor
ProductionSupervisor
ProductionSupervisor
Employees
Salespersons
Functional AuthorityProviding advice and service to line members .
Functional authority is the right to control the activities of other department which are related to specific staff responsibilities .
This is common in organizations. It is necessary in carrying out many organizational activities.
It is based on legitimate and expert power.
DelegationProcess of delegating or assigning authority to another person and accountability of carrying out specific activity.
Known as empowerment
It is necessary for efficient functioning in organization as no manager can completely done everything in the organization.
Manager also hold employees accountable for their performance.
Centralization and Decentralization
Most business must make decisions about general pattern of authority in an organization . It may be largely centralized or decentralized.
Centralized organization is the extent to which authority is retained by upper level management in an organization .
Decentralization organization appears when the authority making decision is delegated from one unit to another.
Factors that influence Centralization or Decentralization :
The philosophy held by top level management
The history of an organization's growth
An organization's geographic location
The quality of managers and their availability of controls
The process of mergers, acquisitions and joint ventures
TYPES OF ORGANIZATIONAL STRUCTURES
Are choosen by influences from certain factor:Nature of an organizationSpecialization
Decision-making hierarchy
TYPES OF DEPARTMENTALIZATION
Process in which an organization select its
organizational structure.
FUNCTIONAL DEPARTMENTALIZATION
The grouping of related work activities according to function.
ADVANTAGE: Maintains the power and prestige of the major function Creates efficiency through the principles of
specialization. Centralizes an organizations expertise Permits tighter top level management control of the
function Reduces duplication of personnel and equipment
DIVISIONAL DEPARTMENTALIZATION
Corporate divisions operate as relatively autonomous businesses under a larger corporate umbrella
Can be grouped according to the:ProductsCustomer servesProduction process
PRODUCT DEPARTMENTALIZATION According to product or service available
ADVANTAGE:
1. Increased attention on specific product lines or service
2. Improved coordination of function at divisional levels
3. Better placement of profit responsibility
4. Ease in obtaining or developing executive with broad managerial experience in running an entire entity
CUSTOMER DEPARMENTALIZATION Group related work activities according to what
customers are likely to buy in term of an organizations products or services
PROCESS DEPARTMENTALIZATION
• Related work activities according to production process
GEOGRAPHICAL DEPARTMENTALIZATION
Related work activities according to area that are served by a business.
MATRIX DEPARTMENTALIZATION
When teams are formed in which individuals report to two or more managers
Usually the functional manager and project manager
ADVANTAGE Its hierarchy enables open communication and coordination of
activities among relavent functional specialist
Allows for hierarchy flexibility that enables an organization to respond rapidly to the need for change
Can accommodate a wide variety of project orientated business activities