ORGANIZATION A formal intentional structure of positions, roles and functions

ORGANIZATION STRUCTURE A framework of an organization expressed by its degree of complexity, formalization and centralization

A framework of an organization expressed by its degree of complexity, formalization and centralization

ORGANIZATION DESIGN The development or changing of an organization structure

FORMALIZATION The degree to which an organization relies on rules and procedures to direct the behavior of its employees

CENTERALIZATIO N The concentration of decision –making authority in upper management

DECENTERALIZATION The handing down of decision – making authority to lower levels in an organization

PURPOSES OF ORGANIZING Divide work to be done into specific jobs & departments Assign tasks and responsibilities associated with individual jobs Coordinate diverse organizational tasks Clusters jobs into units Establish relationships among individuals , groups and departments Establish formal lines of authority Allocate and deploys organizational resources.

Divide work to be done into specific jobs & departments

Assign tasks and responsibilities associated with individual jobs

Coordinate diverse organizational tasks

Clusters jobs into units

Establish relationships among individuals , groups and departments

Establish formal lines of authority

Allocate and deploys organizational resources.

ORGANIZATION DIMENTIONS Vertical horizontal

Vertical

horizontal

ASPECTS OF VERTICAL DIMENTION Unity of command Authority & responsibility

Unity of command

Authority & responsibility

ASPECTS OF HORIZONTAL DIMENSION Departmentalization Division of labor

Departmentalization

Division of labor

UNITY OF COMMAND The principle that subordinate should have one and only one superior to whom he (or she) is directly responsible.

The principle that subordinate should have one and only one superior to whom he (or she) is directly responsible.

CHAIN OF COMMAND The flow of authority from the top to the bottom of an organization

The flow of authority from the top to the bottom of an organization

DEPARTMENTALIZATION The process of grouping individuals into separate units or departments to accomplish organizational objectives

The process of grouping individuals into separate units or departments to accomplish organizational objectives

DEPARTMEN T Department designates a distinct area, division or branch of an organization over which a manager has authority for the performance of specified activities

Department designates a distinct area, division or branch of an organization over which a manager has authority for the performance of specified activities

DIVISION OF LABOUR The break down of jobs in narrow, respective tasks.

The break down of jobs in narrow, respective tasks.

PROCESS OF ORGANIZATION STEPS Establishing objective Formulating supporting plans& policies Identifying activities necessary to accomplish these (1&2 above) Grouping these activities in the light of human and material resources available and to the best way of using them Delegating to the head of each group the authority necessary to perform the activities Tying the groups together vertically and horizontally through chain of command and flow of communication

STEPS

Establishing objective

Formulating supporting plans& policies

Identifying activities necessary to accomplish these (1&2 above)

Grouping these activities in the light of human and material resources available and to the best way of using them

Delegating to the head of each group the authority necessary to perform the activities

Tying the groups together vertically and horizontally through chain of command and flow of communication

SPAN OF MANAGEMENT The number of subordinates a manager can supervise effectively and efficiently Narrow (or vertical) Wide (or horizontal)

The number of subordinates a manager can supervise effectively and efficiently

Narrow (or vertical)

Wide (or horizontal)

NARROW SPAN No of subordinates four or less than four

NARROW SPAN Advantages Close supervision Close control Fast communication Disadvantages Many level of management Excessive distance between the top &lowest level Superior tend to get too involved in subordinates work High cost due to many levels

Advantages

Close supervision

Close control

Fast communication

Disadvantages

Many level of management

Excessive distance between the top &lowest level

Superior tend to get too involved in subordinates work

High cost due to many levels

WIDE SPAN No of subordinate six or more than six

WIDE SPAN Advantages Superiors are obliged to delegate Clear policies are made Subordinates are carefully selected Disadvantages Overloaded superiors become decision bottlenecks Superiors may lose control Require exceptional quality of managers

Advantages

Superiors are obliged to delegate

Clear policies are made

Subordinates are carefully selected

Disadvantages

Overloaded superiors become decision bottlenecks

Superiors may lose control

Require exceptional quality of managers

FACTORS AFFECTING SPAN Training of subordinates Clarity of delegation of authority Clarity of plans Use of objective standards Rate of change Communication techniques Amount of personal contact needed

Training of subordinates

Clarity of delegation of authority

Clarity of plans

Use of objective standards

Rate of change

Communication techniques

Amount of personal contact needed

DEPARTMENTATION The process of grouping individuals into separate units or departments to accomplish organizational objectives

The process of grouping individuals into separate units or departments to accomplish organizational objectives

DEPARTMENTATION By time By function By territory By product By process of manufacturing By customer’s interest

By time

By function

By territory

By product

By process of manufacturing

By customer’s interest

Departmentation by Time Grouping activities on the basis of time, generally at lower levels. Continuous round the clock Shifts

Grouping activities on the basis of time, generally at lower levels.

Continuous round the clock

Shifts

Advantages Service available 24 / 7 Processes work uninterrupted Utilization of equipment Helping people utilize available time Lack of supervision especially at night Problem of coordination & communication Cost of overtime Fatigue factor Disadvantages

Service available 24 / 7

Processes work uninterrupted

Utilization of equipment

Helping people utilize available time

Lack of supervision especially at night

Problem of coordination & communication

Cost of overtime

Fatigue factor

DEPARTMENTATION BY FUNCTION MD MARKETING ENGINEERRING PRODUCTION FINANCE MARKETING ` PLANNING SALES ADMIN DESIGN QULITY CONTROL PLANNING PURCHASING GEN PRODUCTION PLANNING BUDGETING ACCOUNTING

Advantages Is Logical reflection of functions Maintains power and prestige of major functions Follows principle of occupational specialization Simplifies training Furnishes means of tight control at top Deemphasis of overall company objective Overspecializes and narrows viewpoint of key personnel Reduces coordination between functions Responsibility for profits is at the top only Slow adaptation to changes in environment Limits development of general managers Disadvantages

Is Logical reflection of functions

Maintains power and prestige of major functions

Follows principle of occupational specialization

Simplifies training

Furnishes means of tight control at top

Deemphasis of overall company objective

Overspecializes and narrows viewpoint of key personnel

Reduces coordination between functions

Responsibility for profits is at the top only

Slow adaptation to changes in environment

Limits development of general managers

DEPARTMENTATION BY TERRITORY (HQ) MD WESTERN REIGON CENTERAL SOUTHERN NORTHERN ESTERN REGION

Advantages Places responsibility at a lower level Places emphasis on local markets and problems Improves coordination in a region Takes advantage of economies of local operations Better face-to-face communication with local interests Furnishes measurable training ground for general managers Requires more persons with general manager abilities Tend to make maintenance of economical central services difficult and may require services such as personnel or purchasing at the regional level Increases problem of top management control Disadvantages

Places responsibility at a lower level

Places emphasis on local markets and problems

Improves coordination in a region

Takes advantage of economies of local operations

Better face-to-face communication with local interests

Furnishes measurable training ground for general managers

Requires more persons with general manager abilities

Tend to make maintenance of economical central services difficult and may require services such as personnel or purchasing at the regional level

Increases problem of top management control

DEPARTMENTATION BY PRODUCT MD HEAVY ELECTRICAL TELEPHONE /MOBILE KITCHEN APPLIANCE RADIO/TV/VCR

Advantages Places attention and effort on product line Facilitates use of specialized capital, facilities, skills, and knowledge Permits growth and diversity of products and services Improves coordination of functional activities Places responsibility for profits at the division level Furnishes measurable training ground for general managers Requires more persons with general managers abilities Tends to make maintenance of economical central services difficult Presents increased problem of top management control Disadvantages

Places attention and effort on product line

Facilitates use of specialized capital, facilities, skills, and knowledge

Permits growth and diversity of products and services

Improves coordination of functional activities

Places responsibility for profits at the division level

Furnishes measurable training ground for general managers

Requires more persons with general managers abilities

Tends to make maintenance of economical central services difficult

Presents increased problem of top management control

DEPARTMENTATION BY MANUFACTURING PROCESS MD FOUNDRY NICKLE PLATING PAINTING CASTING/ FORGING

Advantages Achieves economic advantage Uses specialized technology Utilizes special skills Simplifies training Coordination of departments is difficult Responsibility for profit is at the top Is unsuitable for developing general managers Disadvantages

Achieves economic advantage

Uses specialized technology

Utilizes special skills

Simplifies training

Coordination of departments is difficult

Responsibility for profit is at the top

Is unsuitable for developing general managers

DEPARTMENTATION BY CUSTOMERS MD HIRE-PERCHASE HIGH END PRODUCTS BOUTIQUE BUDGET ITEM

Advantages Encourages concentration on customer needs Gives customers feeling that they have an understanding supplier Develops expertness in customer area May be difficult to coordinate operations between competing customer demands Requires managers and staff expert in customers problems Customer groups may not always be clearly defined (For Example, large corporate firms vs. other corporate businesses) Disadvantages

Encourages concentration on customer needs

Gives customers feeling that they have an understanding supplier

Develops expertness in customer area

May be difficult to coordinate operations between competing customer demands

Requires managers and staff expert in customers problems

Customer groups may not always be clearly defined (For Example, large corporate firms vs. other corporate businesses)

TYPES OF ORGANIZATIONS Mechanistic ( or bureaucratic ) Organic ( or adhocracy) Team-based Boundary-less Matrix

Mechanistic ( or bureaucratic )

Organic ( or adhocracy)

Team-based

Boundary-less

Matrix

MECHANISTIC ORGANIZATION (Bureaucracy) A structure that is high in complexity, formalization and centralization Permanent Shared responsibility Work by the book

A structure that is high in complexity, formalization and centralization

Permanent

Shared responsibility

Work by the book

ORGANIC ORGANIZATION (Adhocracy) A structure that is low in complexity , formalization and centralization . Transient Adhocism creative

A structure that is low in complexity , formalization and centralization .

Transient

Adhocism

creative

TEAM-BASED ORGANIZATION An organization made of work groups or teams that perform organization’s work

An organization made of work groups or teams that perform organization’s work

BOUNDARY – LESS ORGANIZATION An organization whose design is not defined or limited to the boundaries imposed by a pre-defined structure [ Also knows as Network org, modular ,or virtual corporation]

An organization whose design is not defined or limited to the boundaries imposed by a pre-defined structure

[ Also knows as Network org, modular ,or virtual corporation]

MECHANISTIC Vrs ORGANIC ORGANIZATION Rigid hierarchical relationship Fixed duties High formalization Formalized communication channels centralized Collaborative/flexible (both vertical horizontal) Adaptable duties low formalization Informal communication decentralized MECHANISTIC Organic

Rigid hierarchical relationship

Fixed duties

High formalization

Formalized communication channels

centralized

Collaborative/flexible (both vertical horizontal)

Adaptable duties

low formalization

Informal communication

decentralized

MATRIX ORGANIZATION An organization that assigns specialists from different functional departments to work on one or more projects that are led by a project manager

An organization that assigns specialists from different functional departments to work on one or more projects that are led by a project manager

MATRIX ORGANIZATION WORKING Define objectives of the project or task Clarify roles , authority and responsibility of managers and team members based on knowledge &experience rather than rank Balance power of functional and project managers Install appropriate cost , time and quality control

Define objectives of the project or task

Clarify roles , authority and responsibility of managers and team members based on knowledge &experience rather than rank

Balance power of functional and project managers

Install appropriate cost , time and quality control

STRATEGIC BUSINESS UNIT (SBU) A single business that is independent of main organization and formulates its own strategy. It will have its own: Unique mission Competitors Plans Organization/setup recourses

A single business that is independent of main organization and formulates its own strategy.

It will have its own:

Unique mission

Competitors

Plans

Organization/setup

recourses