Chapter -8_-_organizing_the_business1.0


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Chapter -8_-_organizing_the_business1.0

  1. 1. Introduction to Business ORGANIZING THE BUSINESS Chapter # 8 Shafayet Ullah SECTION: A3 and A4
  2. 2. ORGANIZE Organizing is the management function of assigning activities and grouping people (Designing and Developing a Blueprint or structure) so that the firm’s objectives can be accomplished.
  3. 3. Organization Structure The arrangement of work to be done in a business. Managers need to keep the following issues in mind when organizing the business : Clear Objectives Clearly stated, meaningful, specific, and challenging. The objectives must give meaning to the business and what it is attempting to accomplish. The objectives could be multiple (Like, profit, market share, human resource development) of a business that provides the direction for those organizing the firm. Coordination    Coordination must be in Organizational, Departmental, Subunit and Individual Objectives. They all must fit together. Team Work must be there. Should not underestimate the group members.
  4. 4. Formal and Informal Organizations Formal Organization The management designed official structure of the business. The formal organization is displayed in the organization chart, the graphical representation of the formal structure of the business. Informal Organization The network of personal and social relationships that emerges when people work together.
  5. 5. Formal Authority Formal Authority: The right to give orders Delegation Is the process by which authority is distributed or pushed downward in an organization. That is, giving an employee at a lower level in the organization, the responsibility for a given task as well as the authority to carry it out.
  6. 6. Formal Authority Line Authority Each position in the managerial hierarchy has the line authority or unquestioned direct authority to make decisions and take actions. Example: At Pizza Hut, the manager has authority over the sales people and the cooks. Staff Authority An advisory authority in which a person studies a situation and makes recommendations but has no authority to take action.
  7. 7. Centralization and Decentralization Centralized Business An organization in which all or nearly all authority to make decisions is retained by a small group of managers and hold most of the power and authority. Decentralized Business An organization in which a significant amount of the authority to make decisions is delegated to lower- level managers.
  8. 8. Organization Chart A graphic blueprint, or map of positions, people and formal authority relationships in the organization.
  9. 9. Top Manager President Legal Counsellor Middle Manager Director of Engineering Project A Project B Engineer Supervisor Engineer Supervisor Team of Three Engineers Line Manager with direct Line Authority Staff Position – expert in law Staff Authority Team of Three Engineers ORGANIZATION CHART : LINE AND STAFF AUTHORITY
  10. 10. Principles of Organizing Principles The guidelines that managers can use in making decisions. Some principles are used exactly as they are stated: other times they are modified or completely ignored. Division of Labor A principle of organization that a job can be performed more efficiently if the jobholder is allowed to specialize. Unity of command The principle of organization that no employee should report to more than one superior. Subordinates should know from whom they receive the authority to make decisions and do the job.
  11. 11. Principles of Organizing Scalar Principle The principle of organization that authority and responsibility should flow in a clear unbroken line from the highest to the lowest manager. Because managerial levels are arranged in a hierarchy, the importance of the scaler chain from Top to Bottom is obvious. Downsizing Cutting out entire layers of management.
  12. 12. Principles of Organizing Span of Control The principle of organization that limits the number of subordinates reporting to a supervisor. There is a limit to the number of subordinates one superior should supervise. However, some supervisors can handle more subordinates than others. The minimum span of control depends on many factors, such as type of skill and the experience levels of subordinates, the nature of the job, the supervisor’s skill in handling the subordinates, the situation and the time available to do the job.
  13. 13. How to Organize a Business Functional Structure A structure in which each unit or department has a different set of activities and responsibilities.
  14. 14. How to Organize a Business Functional Structure Advantages:  Specific set of activities  Day by day become skilled  Stable improvement
  15. 15. How to Organize a Business Functional Structure Disadvantages:  De-emphasizes the exchange of ideas and cooperation with other departments  Each department only concentrated on their own department activities  If necessary the coordination, the situation becomes obstruction  Lack of flexibility  Slow in reacting
  16. 16. END OF CHAPTER # 8