Organizing and Staffing

1. Week _14 Lecture_1&2
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2. Organizing and Staffing
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3.  Organization is defined as two or more people
working together in a coordinated manner to
achieve group results.
◦ A group of people working together in a structured and
coordinated fashion to achieve a set of goals.
◦ Organizing is the process of participating formal
relationships among people and resources to accomplish
goals
 Organizations are systems of human and physical
elements interacting to achieve goals.
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4.  Once the managers have established objectives and
developed plans to achieve them, they must design
and develop a human organization that will be able
to carry out those plans successfully
 Organizing involves:
◦ Dividing work into convenient tasks or duties
◦ Grouping of such duties in the form of positions
◦ Grouping of various positions into departments and
sections
◦ Assigning duties to individual positions and
◦ Delegating authority to each position so that the work
is carried out as planned.
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5.  Consideration of objectives: Objectives
determine resources and the various activities
which need to be performed and the type of
organization which needs to be built for this
purpose.
 Identification and grouping of activities: For
group members to pool their efforts
effectively, there must be proper division of
the major activities. Each job should be
properly classified and grouped.
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6.  Assignment of duties: After classifying and grouping
the activities into various jobs, they should be
allotted to the individuals for ensuring certainty of
work performance. Each individual should be given a
specific job to do according to his ability and made
responsible for that.
 Delegation of authority: Authority without
responsibility is dangerous and responsibility
without authority is an empty vessel. Corresponding
to the responsibility authority is delegated to the
subordinates for enabling them to show work
performance.
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7.  Objectives: The objectives of the enterprise
influence the organization structure. Every part of the
organization and organization as a whole should be
geared to the basic objective determined by the
enterprise.
 Specialization: Effective organization must promote
specialization. The activities of the enterprise should
be divided according to functions and assigned to
persons according to their specialization.
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8.  Span of control:
◦ A manager can directly supervise only a limited number of
executives.
◦ It is necessary to have a proper number of subordinates
answerable to a manager.
 Scalar principle or Chain of Command:
◦ There must be clear lines of authority running from the top
to the bottom.
◦ Every subordinate must know who his superior is and to
whom policy matters beyond his own authority must be
referred for decision.
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9.  Unity of command: Each subordinate should have
only one supervisor whose command he has to
obey.
 Delegation: The manager should have enough
authority to accomplish the task assigned to him.
 Responsibility:
◦ A superior should be held responsible for the acts of his
subordinates.
◦ No superior should be allowed to avoid responsibility by
delegating authority to his subordinates.
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10.  Authority:
◦ The authority is the tool by which a manager is able to
accomplish the desired objective.
◦ The authority of each manager must be clearly defined.
 Efficiency: The organization should be able to
attain the mission and objectives at the minimum
cost.
 Simplicity: The organization structure should be as
simple as possible with minimum number of levels.
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11.  Flexibility:
◦ The organization should be flexible, and adaptable to
changing circumstances.
◦ It should permit expansion and replacement without
dislocation and disruption of the basic design.
 Personal abilities:
◦ As organization is a formal group of people there is need
for proper selection, placement and training.
◦ Organization structure must ensure optimum use of human
resources.
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12.  Authority is the right by which managers get the
things done through others. Authority is a legal or
rightful power, a right to command or to act
 Authority is the right to order or command and is
delegated from the superior to the subordinate to
discharge his responsibilities
 Without authority a manager cannot function
 If the subordinates does not obey, the superior has
right to take disciplinary action.
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13.  The power may be defined as the capacity or
ability to influence the behavior of other
individuals.
 If a person has a power, it means that he is
able to influence the behavior of others.
 The essence of power is control over the
behavior of others
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15.  Responsibility is defined as the obligation of a
subordinate, to whom a duty has been assigned, to
perform the duty
 Authority is the right of a superior to issue
commands while responsibility is the obligation of
a subordinate to obey those commands.
 Responsibility arises from a superior-subordinate
relationship, from the fact that some one has the
authority to require specified service from another
person.
 The essence of responsibility is then obligation
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16.  The capacity of a manager to do the work and to take
decisions is limited, and cannot do all the tasks
necessary for the accomplishment of group goals.
 Delegation of authority is assignment of some part of
manager’s work to his subordinates with necessary
authority to make decisions.
 By delegating authority, a manager does not
surrender his authority but he retains the overall
authority which was assigned to him to perform his
functions.
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17.  Organizational Chart is a diagrammatic
representation of all the positions in an
organization and their formal relationships to
one another.
 It illustrates an organization's overall shape
and the levels of management in a
comprehensible manner.
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18.  Centralization means retention or concentration of managerial
authority in few key managerial positions at the nerve center of
an organization i.e., at the top level.
 Decentralization means dispersal of decision-making power to
lower levels of the organization.
 According to Allen “Decentralization refers to the systematic
effort to delegate to the lower levels all authority except that
which can only be exercised at central points”.
 In the words of Henry Fayol, “Everything that goes to increase
the importance of subordinates role is decentralization and
everything that reduces it is centralization”.
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19.  Advantages
◦ It eases the burden of top
level managers
◦ It permits quicker and
better decision making
◦ Decentralization develops
capable managers
◦ Promotes participation in
decision making and
improves morale and
motivation
 Disadvantages
◦ It increases
administrative expenses
◦ It may create problems in
bringing coordination
among various units
◦ Lack of following uniform
procedures for the same
type of work in various
divisions may bring
about inconsistencies in
the company.
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20.  The process of dividing the organization into
manageable subunits.
 The subunits are often referred to as departments,
divisions, or sections.
 Departmentation involves:
◦ grouping of operating tasks into jobs
◦ combining of jobs into effective work group
◦ combining of groups into divisions or departments.
 There are several ways of departmentation, each of
which is suitable for particular corporate sizes,
strategies and purposes.
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21.  In this form each major function of the enterprise
is grouped into a department.
◦ For example production, finance, marketing and personnel
department
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22.  Advantages
◦ It is simple and suitable
for small organization
◦ It promotes specialization
◦ It leads to improve
planning and control
◦ Manpower and other
resources of the company
are effectively used
 Disadvantages
◦ It fosters sub-goal loyalty
◦ Department goal
becomes important than
organizational goal
resulting into inter
departmental conflicts
◦ Difficult to set up specific
accountability and profit
centers within functional
departments with the
result that performance
cannot be accurately
measured
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23.  The grouping of activity on the basis of product or product lines
is followed in multi-lines large scale organizations. Activities
related to a particular product line may be grouped together
under the direction of a semiautonomous division manager
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24.  Advantages
◦ It focuses individual attention on each product line
◦ It is easier to evaluate and compare the
performance of various product division
◦ It keeps problems of production isolated from
others
◦ It leads to specialization of physical facilities on the
basis of product which results in economy
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25.  Under this classification, the market area is broken
up into sales territories and a responsible executive
is put in-charge of each territory. The territory may
be known as district, division or region
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26.  This is used in the enterprises engaged in
providing specialized services to different classes
of customers.
 Management groups the activities on the basis of
customers to cater to the requirements of clearly
defined customer Groups
◦ For example, an automobile service company may organize
its departments as heavy vehicles servicing division, car
servicing division and scooter servicing division.
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27.  In this method various manufacturing process are
taken as basis for dividing the activities.
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28. Types of Organization
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29.  Concepts of organizational structure apply to
all kinds of organizations—companies,
institutions, agencies—as well as to their
subunits—divisions, departments, projects,
and teams
 Formal organization structure is publicized in
a chart that reveals both the organizational
hierarchy and groupings for specialized
tasks.
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30. ◦ Line organization is the simple and oldest type of
organization and is also known of scalar or military
organization.
◦ The line organization represents the structure in a direct
vertical relationship through which authority flows
◦ The line of authority flows vertically downward from top to
bottom throughout the organization, while the line of
responsibility flows from bottom to top in opposite direction
◦ Under line organization, each department is generally a
complete self-contained unit
◦ This type of organization is followed in military
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32. Advantages Disadvantages
 Simplicity
 Quick decision and speed
of action
 Unity of control
 Clear division of
authority and
responsibility
 Discipline and better
coordination
 Direct communication
 The organization is rigid
and inflexible
 Being an autocratic
system, managers may
become dictators and not
leaders
 There is scope of favor-
ism and nepotism
 Red-tape and
bureaucracy
 Lack of specialization
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33.  Under functional organization, various activities of
the enterprise are classified according to certain
functions like production, marketing, finance,
personnel etc., and are put under the charge of
functional specialists.
 A functional in charge directs the subordinates
throughout the organization in his particular area
of business operation
 Subordinates receives orders and instructions not
from one superior but from several functional
specialists
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35. Advantages Disadvantages
 Specialization
 Reduces the burden on the
top executives
 A functional manager is
required to have expertise
in one function only. This
makes it easy for executive
development.
 Offers greater scope for
expansion
 Violates principles of unity
of command
 The operation of functional
organization is too
complicated
 It develops specialists
rather than generalists
 Lack of coordination among
functional executives which
delays decision making
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36.  In line and staff organization, the line
authority remains the same as it does in the
line organization.
 Authority flows from top to bottom.
 Specialists are attached to line managers to
advice them on important matters
 The specialists staff do not have any power of
command in the organization as they are
employed to provide expert advice to the line
manager
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38. Advantages Disadvantages
 Specialized knowledge
 Reduction of burden on line
managers
 Better decisions, as staff
specialists help the line
managers
 Unity of command
 Flexible when compared to
functional organization
 Allocation of duties
between line and staff is
not clear
 There is generally conflict
between line and staff
executives
 Since staff is not
accountable, they may not
be performing well
 Line executive deals with
problem in a more practical
manner while staff, tend to be
more theoretical
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39.  A committee is a body of persons appointed or
elected to meet on an organized basis for the
consideration of matters brought before it
 The area of operation of a committee is determined
by its constitution
 Committees can be broadly classified into advisory
committees and executive committees
◦ Advisory committees have only a recommender’s role and
cannot enforce implementation of their advice or
recommendation
◦ Executive committees not only take decisions but also
enforce decisions and thus perform a double role of taking
decision and ordering its executive
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40.  The span of control indicates the number of subordinates
who can be successfully directed by a supervisor
◦ It is often referred to as span of management, span of supervision,
span of authority.
 If the span is too wide, managers are overburdened and
subordinates receive little guidance.
 If the span of management is too narrow, the managers
are under utilized and subordinates are over controlled
◦ A narrow span results in tall organization with many levels of
supervision which creates more communication and cost
problems
◦ A wide span for the same number of employees results in
flat organization with fewer management levels between top
and bottom
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41. ◦ Ability of the manager
◦ Ability of the employees
◦ Type of work
◦ Geographic location
◦ Well-defined authority and responsibility
◦ Level of management
◦ Economic considerations
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42.  Ability of the manager: Some managers are more
capable than others and hence can handle a large
number of subordinates.
 Ability of the employees: If employees are more
competent, less attention from the managers is
required and a larger span of management can be used.
 Type of work: If employees are doing similar jobs, the
span of management can be large. If their jobs are quite
different, a small span may be necessary.
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43.  Geographic location: If all subordinates are located at
the same place span of management can be large. If
subordinates are geographically distributed, a lower
span is essential.
 Well-defined authority and responsibility: Clear-cut
authority and responsibility helps a manager to
supervise large number of subordinates.
 Level of management: The span of management is
narrow at higher level of management, and span can be
wider at lower levels.
 Economic considerations: Narrow the span, taller is
the structure and more is the cost. On the other hand,
wider span reduces the number of levels and cost.
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44. Decrease in span of control increases the number of levels
Management experts suggest that the ideal number of
subordinates is four in case of higher level management and
eight to twelve in case of lower level management
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45.  Staffing involves managing various positions of the
organizational structure.
 Staffing involves selecting and placing the right
person at the right position.
 Staffing includes:
◦ Identifying the gap between manpower required and
available.
◦ Identifying the sources from where people will be
selected.
◦ Selecting and Training people
◦ Fixing the financial compensation and appraising
them periodically.
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46.  Staffing involves the determination of
manpower requirements of the enterprise and
providing it with adequate competent people
at all levels.
 The staffing function performs the following
sub functions:
◦ Manpower planning
◦ Recruitment
◦ Selection of the best qualified from those who
seeks job
◦ Training and Development.
◦ Performance appraisal and compensation
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47.  Every manager is engaged in performing the
staffing function, when they participate in
selection, training and evaluating their
subordinates.
 The various reasons that have increased the
importance of staffing functions include:
◦ Increasing size of organization
◦ Advancement of technology
◦ Long-range needs of manpower
◦ Recognition of human relations
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48.  Recruitment is managerial process of:
◦ Identifying the sources for prospective candidates
◦ Stimulating prospective candidates to apply for the
jobs
◦ Selecting the right person for the right job from this
pool
 Recruitment is a linking activity that brings
together those offering jobs and those
seeking jobs.
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49.  The various sources of recruitment are
broadly divided into two categories:
◦ Internal Sources
◦ External Sources
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50.  Internal sources involve transfer and
promotion.
 Transfer involves the shifting of an employee
from one job to another.
 Many companies follow the practice of filling
higher jobs by promoting employees who are
considered fit for such positions.
 Filling higher positions by promotion
motivates employees, boosts employee’s
morale.
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51. ◦ Direct recruitment
◦ Unsolicited applications
◦ Advertising
◦ Employment agencies
◦ Educational institutions
◦ Labor contractor
◦ Recommendations
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52.  The process of selection leads to employment
of persons having the ability and qualifications
to perform the jobs which have fallen vacant in
an organization.
 It divides the candidates into two categories;
those who will be offered employment and
those who will not be.
 The basic purpose of the selection process is
choosing right type of candidates to man
various positions in the organization.
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53. ◦ Receipt of applications
◦ Screening of applications
◦ Employment tests
◦ Interviews
◦ Final selection
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54. Project Organization
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55.  Organizations are systematic arrangements of entities (persons
and/or departments) aimed at accomplishing a purpose, which
may involve undertaking projects.
 An organization’s culture and style affect how it conducts
projects.
 A project manager should therefore understand the different
organizational styles and cultures that may affect a project.
 The project manager needs to know which individuals in the
organization are the decision makers or influencers and work
with them to increase the probability of project success.
 Organizational structure is an enterprise environmental factor,
which can affect the availability of resources and influence how
projects are conducted
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56.  A project that affects or is the responsibility of only one
functional area should be located in that area
◦ For example, a project to survey customer attitudes about a new
product would ordinarily be placed entirely within the marketing
department because the necessary resources and expertise are
there.
 The project team prepares the survey questionnaire,
obtains mailing lists, distributes the survey, and
processes the results.
 Project teams such as this are managed by a project
expeditor someone selected by the manager of the area
wherein the project lies.
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57. Project expeditor within a single-functional department.
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58. Each department in a functional organization will do its project work
independently of other departments.
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59.  Multifunctional project teams are formed for company or
corporate-wide systems that ties together information about
forecasting, order entry, purchasing, and inventory with
functions such as accounting, finance, and human resources.
◦ An example of a project that might use a multifunctional team is one for
the development of an enterprise resource planning (ERP) system.
 This team, which might be called the “ ERP Task Force,” would
include representatives from all the departments that would
provide inputs to the system or would utilize its outputs, such
as accounting, inventory control, purchasing, manufacturing,
engineering, and information technology
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60. Multifunctional project team.
The multifunctional project team may be located either in the functional area
most responsible for the project or at a higher-level position
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61.  In pure project organization the project is separated
from the rest of the parent system
 It becomes a self-contained unit with its own technical
staff, its own administration
 It is tied to the parent firm by the periodic progress
reports and oversight.
 Some parent organizations prescribe administrative,
financial, personnel, and control procedures in detail--
while -- others allow the project almost total freedom
within the limits of final accountability.
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62. Pure project organization.
A pure project is a separate organization, similar to its own company, created
especially for and singularly devoted to achievement of the project goal.
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64.  The project manager has full line authority over the
project, like the CEO of a firm that is dedicated to
carrying out the project.
 All members of the project work force are directly
responsible to the PM.
 When the project is removed from the functional
division, the lines of communication are shortened. The
PM communicates directly with senior corporate
management.
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65.  When there are several successive projects of a similar
kind, the pure project organization can maintain a more
or less permanent cadre of experts who develop
considerable skill in specific technologies.
 The project team that has a strong and separate identity
of its own tends to develop a high level of commitment
and motivation from its members.
 Unity of command exists.
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66.  When the parent organization takes on several projects,
it is common for each one to be fully staffed which leads
to considerable duplication of effort both from clerical
staff to technological support units
 PM attempt to hire people with critical technical skills
when they are available rather than when they are needed
in order to be certain that it will be available when
needed. Similarly, they tend to be maintained on the
project longer than needed.
 Above disadvantages combine to make this way of
organizing projects very expensive
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67.  Uncertainty exists about what will happen when the
project is completed.
◦ Will team members be laid off?
◦ Will they be assigned to low-prestige work?
◦ Will their technical skills be too rusty to be successfully integrated
into other projects?
◦ Will project team be broken up?
 In pure project organizations, team members form
strong attachments to the project and to each other. A
strong we–they divisiveness grows, between project team
members and their counterparts in the parent
organization
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68.  The matrix organization is a combination of pure project
organization and functional organization.
 It is a pure project organization overlaid on the
functional divisions of the parent firm
 Being a combination of pure project and functional
organization structures, a matrix organization can take
on a wide variety of specific forms:
◦ The “project” or “strong” matrix most resembles the pure
project organization.
◦ The “functional” or “weak” matrix most resembles the
functional form of organization.
◦ the “balanced” matrix lies in between the other two.
Primary difference between these forms has to do with the relative
power/decision authority of the project manager and the functional manager.
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69.  The functional part provides a pool or repository of
technical expertise and physical resources needed by
projects
 Each project manager creates a project team by
negotiating with functional managers and then “
borrowing ” the expertise and physical resources needed
for her project.
 Each project is composed of workers who are on loan to
work together as a team during the course of the
project.
 Because the same workforce is time-shared among
several projects, duplication of effort is reduced.
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70. 11/22/2023 70

71. Weak Matrix Organization Strong Matrix Organization
Balanced
Matrix
Organization
Source: PM Body of knowledge 5th edition
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72. 11/22/2023 72

73. Q&A
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