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Organization In Principal of management
- 1. ORGANIZATION ORGANIZATION A formal intentional structure A formal intentional structure of positions, roles and of positions, roles and functions functions
- 2. ORGANIZATION STRUCTURE ORGANIZATION STRUCTURE A framework of an organization expressed A framework of an organization expressed by its degree of complexity, formalization by its degree of complexity, formalization and centralization and centralization
- 3. ORGANIZATION DESIGN ORGANIZATION DESIGN The development or changing The development or changing of an organization structure of an organization structure
- 4. FORMALIZATION FORMALIZATION The degree to which an The degree to which an organization relies on rules and organization relies on rules and procedures to direct the behavior procedures to direct the behavior of its employees of its employees
- 5. CENTERALIZATIO CENTERALIZATION N The concentration of decision – The concentration of decision – making authority in upper making authority in upper management management
- 6. DECENTERALIZATION DECENTERALIZATION The handing down of decision – The handing down of decision – making authority to lower levels in making authority to lower levels in an organization an organization
- 7. PURPOSES OF ORGANIZING PURPOSES OF ORGANIZING Divide work to be done into specific jobs & departments Divide work to be done into specific jobs & departments Assign tasks and responsibilities associated with Assign tasks and responsibilities associated with individual jobs individual jobs Coordinate diverse organizational tasks Coordinate diverse organizational tasks Clusters jobs into units Clusters jobs into units Establish relationships among individuals , groups and Establish relationships among individuals , groups and departments departments Establish formal lines of authority Establish formal lines of authority Allocate and deploys organizational resources. Allocate and deploys organizational resources.
- 9. ASPECTS OF VERTICAL ASPECTS OF VERTICAL DIMENTION DIMENTION Unity of command Unity of command Authority & responsibility Authority & responsibility
- 10. ASPECTS OF HORIZONTAL ASPECTS OF HORIZONTAL DIMENSION DIMENSION Departmentalization Departmentalization Division of labor Division of labor
- 11. UNITY OF COMMAND UNITY OF COMMAND The principle that subordinate should have The principle that subordinate should have one and only one superior to whom he (or one and only one superior to whom he (or she) is directly responsible. she) is directly responsible.
- 12. CHAIN OF COMMAND CHAIN OF COMMAND The flow of authority from the top to the The flow of authority from the top to the bottom of an organization bottom of an organization
- 13. DEPARTMENTALIZATION DEPARTMENTALIZATION The process of grouping individuals into The process of grouping individuals into separate units or departments to separate units or departments to accomplish organizational objectives accomplish organizational objectives
- 14. DEPARTMEN DEPARTMENT T Department designates a distinct area, Department designates a distinct area, division or branch of an organization over division or branch of an organization over which a manager has authority for the which a manager has authority for the performance of specified activities performance of specified activities
- 15. DIVISION OF LABOUR DIVISION OF LABOUR The break down of jobs in narrow, The break down of jobs in narrow, respective tasks. respective tasks.
- 16. PROCESS OF ORGANIZATION PROCESS OF ORGANIZATION STEPS STEPS • Establishing objective Establishing objective • Formulating supporting plans& policies Formulating supporting plans& policies • Identifying activities necessary to accomplish these Identifying activities necessary to accomplish these (1&2 above) (1&2 above) • Grouping these activities in the light of human and Grouping these activities in the light of human and material resources available and to the best way of material resources available and to the best way of using them using them • Delegating to the head of each group the authority Delegating to the head of each group the authority necessary to perform the activities necessary to perform the activities • Tying the groups together vertically and horizontally Tying the groups together vertically and horizontally through chain of command and flow of communication through chain of command and flow of communication
- 17. SPAN OF MANAGEMENT SPAN OF MANAGEMENT The number of subordinates a manager can The number of subordinates a manager can supervise effectively and efficiently supervise effectively and efficiently Narrow (or vertical) Narrow (or vertical) Wide (or horizontal) Wide (or horizontal)
- 18. NARROW SPAN NARROW SPAN No of subordinates four or less than four
- 19. NARROW SPAN NARROW SPAN Advantages Advantages Close supervision Close supervision Close control Close control Fast communication Fast communication Disadvantages Disadvantages Many level of management Many level of management Excessive distance between the top &lowest level Excessive distance between the top &lowest level Superior tend to get too involved in subordinates work Superior tend to get too involved in subordinates work High cost due to many levels High cost due to many levels
- 20. WIDE SPAN WIDE SPAN No of subordinate six or more than six
- 21. WIDE SPAN WIDE SPAN Advantages Advantages Superiors are obliged to delegate Superiors are obliged to delegate Clear policies are made Clear policies are made Subordinates are carefully selected Subordinates are carefully selected Disadvantages Disadvantages Overloaded superiors become decision Overloaded superiors become decision bottlenecks bottlenecks Superiors may lose control Superiors may lose control Require exceptional quality of managers Require exceptional quality of managers
- 22. FACTORS AFFECTING FACTORS AFFECTING SPAN SPAN Training of subordinates Training of subordinates Clarity of delegation of authority Clarity of delegation of authority Clarity of plans Clarity of plans Use of objective standards Use of objective standards Rate of change Rate of change Communication techniques Communication techniques Amount of personal contact needed Amount of personal contact needed
- 23. DEPARTMENTATION DEPARTMENTATION The process of grouping individuals into The process of grouping individuals into separate units or departments to separate units or departments to accomplish organizational objectives accomplish organizational objectives
- 24. DEPARTMENTATION DEPARTMENTATION By time By time By function By function By territory By territory By product By product By process of manufacturing By process of manufacturing By customer’s interest By customer’s interest
- 25. Departmentation by Time Departmentation by Time Grouping activities on the basis of time, Grouping activities on the basis of time, generally at lower levels. generally at lower levels. Continuous round the clock Continuous round the clock Shifts Shifts
- 26. Advantages Advantages Service available 24 / 7 Service available 24 / 7 Processes work uninterrupted Processes work uninterrupted Utilization of equipment Utilization of equipment Helping people utilize available time Helping people utilize available time Lack of supervision especially at night Problem of coordination & communication Cost of overtime Fatigue factor Disadvantages
- 27. DEPARTMENTATION BY DEPARTMENTATION BY FUNCTION FUNCTION MD MARKETING ENGINEERRING PRODUCTION FINANCE MARKETING` PLANNING SALES ADMIN DESIGN QULITY CONTROL PLANNING PURCHASING GEN PRODUCTION PLANNING BUDGETING ACCOUNTING
- 28. Advantages Advantages Is Logical reflection of functions Is Logical reflection of functions Maintains power and prestige of major functions Maintains power and prestige of major functions Follows principle of occupational specialization Follows principle of occupational specialization Simplifies training Simplifies training Furnishes means of tight control at top 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
- 29. DEPARTMENTATION BY DEPARTMENTATION BY TERRITORY TERRITORY MD WESTERN REIGON CENTERAL SOUTHERN NORTHERN ESTERN REGION (HQ)
- 30. Advantages Advantages Places responsibility at a lower level Places responsibility at a lower level Places emphasis on local markets and problems Places emphasis on local markets and problems Improves coordination in a region Improves coordination in a region Takes advantage of economies of local operations Takes advantage of economies of local operations Better face-to-face communication with local interests Better face-to-face communication with local interests Furnishes measurable training ground for general Furnishes measurable training ground for general managers 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
- 32. Advantages Advantages Places attention and effort on product line Places attention and effort on product line Facilitates use of specialized capital, facilities, skills, and Facilitates use of specialized capital, facilities, skills, and knowledge knowledge Permits growth and diversity of products and services Permits growth and diversity of products and services Improves coordination of functional activities Improves coordination of functional activities Places responsibility for profits at the division level Places responsibility for profits at the division level Furnishes measurable training ground for general Furnishes measurable training ground for general managers 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
- 33. DEPARTMENTATION BY DEPARTMENTATION BY MANUFACTURING PROCESS MANUFACTURING PROCESS MD FOUNDRY NICKLE PLATING PAINTING CASTING/ FORGING
- 34. Advantages Advantages Achieves economic advantage Achieves economic advantage Uses specialized technology Uses specialized technology Utilizes special skills Utilizes special skills Simplifies training Simplifies training Coordination of departments is difficult Responsibility for profit is at the top Is unsuitable for developing general managers Disadvantages
- 35. DEPARTMENTATION BY DEPARTMENTATION BY CUSTOMERS CUSTOMERS MD HIRE-PERCHASE HIGH END PRODUCTS BOUTIQUE BUDGET ITEM
- 36. Advantages Advantages Encourages concentration on customer needs Encourages concentration on customer needs Gives customers feeling that they have an understanding Gives customers feeling that they have an understanding supplier supplier Develops expertness in customer area 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
- 37. TYPES OF ORGANIZATIONS TYPES OF ORGANIZATIONS Mechanistic ( or bureaucratic ) Mechanistic ( or bureaucratic ) Organic ( or adhocracy) Organic ( or adhocracy) Team-based Team-based Boundary-less Boundary-less Matrix Matrix
- 38. MECHANISTIC ORGANIZATION MECHANISTIC ORGANIZATION (Bureaucracy) (Bureaucracy) A structure that is high in complexity, A structure that is high in complexity, formalization and centralization formalization and centralization Permanent Permanent Shared responsibility Shared responsibility Work by the book Work by the book
- 39. ORGANIC ORGANIZATION ORGANIC ORGANIZATION (Adhocracy) (Adhocracy) A structure that is low in complexity , A structure that is low in complexity , formalization and centralization . formalization and centralization . Transient Transient Adhocism Adhocism creative creative
- 40. TEAM-BASED ORGANIZATION TEAM-BASED ORGANIZATION An organization made of work groups or An organization made of work groups or teams that perform organization’s work teams that perform organization’s work
- 41. BOUNDARY – LESS BOUNDARY – LESS ORGANIZATION ORGANIZATION An organization whose design is not defined An organization whose design is not defined or limited to the boundaries imposed by a or limited to the boundaries imposed by a pre-defined structure pre-defined structure [ Also knows as Network org, modular ,or [ Also knows as Network org, modular ,or virtual corporation] virtual corporation]
- 42. MECHANISTIC Vrs ORGANIC MECHANISTIC Vrs ORGANIC ORGANIZATION ORGANIZATION Rigid hierarchical Rigid hierarchical relationship relationship Fixed duties Fixed duties High formalization High formalization Formalized Formalized communication communication channels channels centralized centralized Collaborative/flexible Collaborative/flexible (both vertical (both vertical horizontal) horizontal) Adaptable duties Adaptable duties low formalization low formalization Informal Informal communication communication decentralized decentralized MECHANISTIC MECHANISTIC Organic Organic
- 43. MATRIX ORGANIZATION MATRIX ORGANIZATION An organization that assigns specialists from An organization that assigns specialists from different functional departments to work on different functional departments to work on one or more projects that are led by a one or more projects that are led by a project manager project manager
- 44. MATRIX ORGANIZATION MATRIX ORGANIZATION WORKING WORKING Define objectives of the project or task Define objectives of the project or task Clarify roles , authority and responsibility Clarify roles , authority and responsibility of managers and team members based of managers and team members based on knowledge &experience rather than on knowledge &experience rather than rank rank Balance power of functional and project Balance power of functional and project managers managers Install appropriate cost , time and quality Install appropriate cost , time and quality control control
- 45. STRATEGIC BUSINESS UNIT STRATEGIC BUSINESS UNIT (SBU) (SBU) A single business that is independent of main A single business that is independent of main organization and formulates its own strategy. organization and formulates its own strategy. It will have its own: It will have its own: Unique mission Unique mission Competitors Competitors Plans Plans Organization/setup Organization/setup recourses recourses