ORGANIZING <ul><li>Organizing – Merit of vagueness? – Team work and co-operation  </li></ul><ul><li>Essentials of a meanin...
ORGANIZING <ul><li>Organizing? </li></ul><ul><li>Identification and classification of activities </li></ul><ul><li>Groupin...
DEFINITION: <ul><li>Organization is the process of identifying and grouping work to be performed, defining and delegating ...
ORGANIZING <ul><li>Formal Organization:  Intentional structure of roles in a structured organization  -- Flexibility/Infle...
ORGANIZING <ul><li>Informal Organization:  Any joint personal activity without conscious joint purpose, even though contri...
ORGANIZING <ul><li>Organizational Division –The Department </li></ul><ul><li>A distinct area or a division or a branch wit...
ORGANIZING <ul><li>Organization Levels and the Span of Management. </li></ul><ul><li>Levels speak of the depth of the stru...
The span of management /Span of control <ul><li>The span of management /Span of control/refers to the number of subordinat...
ORGANIZING <ul><li>What factors influence the span of management? </li></ul><ul><li>Degree of training </li></ul><ul><li>D...
ENTREPRENEURING <ul><li>Entrepreneuring skills: Generally applied to managing small businesses.  </li></ul><ul><li>Further...
INTERPRENEUR <ul><li>Intrapreneur is a person who focuses on innovation and creativity and who transforms an idea into a p...
INNOVATION AND ENTREPRENEURSHIP <ul><li>Situations leading to innovations </li></ul><ul><li>1)The unexpected event, succes...
REENGINEERING <ul><li>Definition by Michael Hammer and James Champy: </li></ul><ul><li>Re-engineering is the fundamental r...
REENGINEERING <ul><li>Key Aspects </li></ul><ul><li>Fundamental rethinking </li></ul><ul><li>Radical redesigning </li></ul...
Know these before you organize <ul><li>Organizing is not over specialization </li></ul><ul><li>Activities are not made rou...
ORGANIZATIONAL  STRUCTURE/ DEPARTMENTATION <ul><li>1.VERTICAL/ TALL/LINE ORGANISATION - </li></ul><ul><li>Vertical/ Tall o...
ORGANIZATIONAL  STRUCTURE <ul><li>3.Departmentation by Functions  –  Production, Sales, Finance, Design, R&D, HR,……. </li>...
ORGANIZATIONAL  STRUCTURE <ul><li>STRATEGIC BUSINESS UNITS – SBU </li></ul><ul><li>SBUs are distinct little businesses set...
ORGANIZATIONAL  STRUCTURE <ul><li>MERITS OF AN SBU </li></ul><ul><li>Product yielding large sales or profits is not lost a...
ORGANIZATIONAL  STRUCTURE <ul><li>DEMERITS OF AN SBU / POTENTIAL PROBLEMS </li></ul><ul><li>The allocation of resources to...
ORGANIZATIONAL  STRUCTURE <ul><li>How to make matrix organization more effective? </li></ul><ul><li>Define the objectives....
<ul><li>9.  </li></ul>
 
AUTHORITYAND POWER <ul><li>Authority : The right in the position and hence the right in the person occupying the position ...
LINE /STAFF AUTHORITY <ul><li>Note: </li></ul><ul><li>Line and staff are distinguished by authority relationships and not ...
LINE /STAFF AUTHORITY <ul><li>CENTRALIZATION: </li></ul><ul><li>The act of bringing together the activities under the cont...
LINE /STAFF AUTHORITY <ul><li>DECENTRALIZATION: </li></ul><ul><li>More than Delegation.  </li></ul><ul><li>Reflection of M...
<ul><li>MERITS OF DECENTRALIZATION </li></ul><ul><li>Relieves top management. </li></ul><ul><li>Encourages decision making...
LINE /STAFF AUTHORITY <ul><li>DEMERITS OF DECENTRALIZATION </li></ul><ul><li>Difficult to have a uniform policy. </li></ul...
LINE /STAFF AUTHORITY <ul><li>Delegation of authority: </li></ul><ul><li>The process of Delegation: </li></ul><ul><li>Dete...
LINE /STAFF AUTHORITY <ul><li>Golden Rules of Delegation: </li></ul><ul><li>What a superior delegates is his authority and...
LINE /STAFF AUTHORITY <ul><li>Splintered Authority. </li></ul><ul><li>Wherever a problem cannot be solved without pooling ...
LINE /STAFF AUTHORITY <ul><li>Art of Delegation: </li></ul><ul><li>Personal attitudes towards delegation. </li></ul><ul><l...
<ul><li>Guidelines to overcome weak delegation. </li></ul><ul><li>Assignment of tasks and delegation of authority should b...
MATRIX ORGANISATION <ul><li>combination of functional and product patterns of departmentation in the same organization str...
 
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Module 3

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Module 3

  1. 1. ORGANIZING <ul><li>Organizing – Merit of vagueness? – Team work and co-operation </li></ul><ul><li>Essentials of a meaningful organizational role: Verifiable objectives, </li></ul><ul><li>Clarity of major duties and activities and Boundaries of one’s authorities. </li></ul>
  2. 2. ORGANIZING <ul><li>Organizing? </li></ul><ul><li>Identification and classification of activities </li></ul><ul><li>Grouping of activities to achieve goals </li></ul><ul><li>Assigning of each group to manager with authority </li></ul><ul><li>Provision of co-ordination horizontally and vertically </li></ul><ul><li>Who has to what? And Who is responsible for what results? </li></ul>
  3. 3. DEFINITION: <ul><li>Organization is the process of identifying and grouping work to be performed, defining and delegating responsibility and authority and establishing relationships for the purpose of enabling people to work most effectively together in accomplishing objectives. - Louis Allen </li></ul><ul><li>It is the establishment of authority relationships with provision for co-ordination between them, both vertically and horizontally in the enterprise structure. - Koontz and O’Donnell </li></ul>
  4. 4. ORGANIZING <ul><li>Formal Organization: Intentional structure of roles in a structured organization -- Flexibility/Inflexibility, -- Conduciveness for performance, --Meeting group and organizational goals,……. </li></ul>
  5. 5. ORGANIZING <ul><li>Informal Organization: Any joint personal activity without conscious joint purpose, even though contributing to joint results. (Network of personal and social relations) </li></ul><ul><li>Morning joggers </li></ul><ul><li>Evening club mates </li></ul><ul><li>Tennis players </li></ul><ul><li>Good neighbors </li></ul><ul><li>Temple devotees, all these groups formulated informally out of the same organization’s employee larger group </li></ul>
  6. 6. ORGANIZING <ul><li>Organizational Division –The Department </li></ul><ul><li>A distinct area or a division or a branch within the organization where a manager has the authority and responsibility for the performance of specified activities. Production, Design, Finance, Sales, Advertisement, HR, R&D, Admin, Public Relations, Security, ….. </li></ul><ul><li>Application of terminology of designations vary from co. to co. / Ind. to Ind. </li></ul>
  7. 7. ORGANIZING <ul><li>Organization Levels and the Span of Management. </li></ul><ul><li>Levels speak of the depth of the structure </li></ul><ul><li>Span speak of the width of the structure </li></ul><ul><li>Merits and Demerits of both? Regarding supervision , control, involvement, cost, distance, rapport, …… </li></ul>
  8. 8. The span of management /Span of control <ul><li>The span of management /Span of control/refers to the number of subordinates who report directly to the superior. It is also known as the number of subordinates who report to a superior manager. If the subordinates who report to a superior are more in number, it is called the ‘wide span’ and the vice versa is called the ‘narrow span.’ </li></ul>
  9. 9. ORGANIZING <ul><li>What factors influence the span of management? </li></ul><ul><li>Degree of training </li></ul><ul><li>Degree of clarity of objective. </li></ul><ul><li>Verifiability of objectives </li></ul><ul><li>Degree of change in environment </li></ul><ul><li>Type of communication </li></ul><ul><li>Complexity of tasks </li></ul><ul><li>Competency levels of employees </li></ul><ul><li>Maturity levels </li></ul><ul><li>Delegation levels, …… </li></ul>
  10. 10. ENTREPRENEURING <ul><li>Entrepreneuring skills: Generally applied to managing small businesses. </li></ul><ul><li>Further applicable to large organizations and managers in terms of initiating changes to take advantages of opportunities. </li></ul><ul><li>Peter Drucker: The essence of entrepreneurship is innovation, i.e., goal oriented change to utilize the enterprise’s potential. </li></ul>
  11. 11. INTERPRENEUR <ul><li>Intrapreneur is a person who focuses on innovation and creativity and who transforms an idea into a profitable venture by operating within the organizational environment </li></ul><ul><li>General concept: The term entrepreneur designates an enterprising person working within or outside the organization in terms of exploiting the opportunities with innovative ideas. </li></ul>
  12. 12. INNOVATION AND ENTREPRENEURSHIP <ul><li>Situations leading to innovations </li></ul><ul><li>1)The unexpected event, success or failure </li></ul><ul><li>2) When assumptions & reality are far off </li></ul><ul><li>3) Task or process demands improvement </li></ul><ul><li>4)Changes in the structure of mkt/industry </li></ul><ul><li>5)Changes in demographics </li></ul><ul><li>6)Changes in perception / meaning </li></ul><ul><li>7) Updating with latest knowledge……… </li></ul>
  13. 13. REENGINEERING <ul><li>Definition by Michael Hammer and James Champy: </li></ul><ul><li>Re-engineering is the fundamental rethinking and radical redesign of business processes to achieve dramatic improvements in critical contemporary measures of performance, such as cost, quality, service and speed. </li></ul>
  14. 14. REENGINEERING <ul><li>Key Aspects </li></ul><ul><li>Fundamental rethinking </li></ul><ul><li>Radical redesigning </li></ul><ul><li>Downsizing / Rightsizing </li></ul><ul><li>Dramatic results </li></ul><ul><li>Business processes </li></ul><ul><li>Technological and human systems </li></ul><ul><li>Total managerial system </li></ul>
  15. 15. Know these before you organize <ul><li>Organizing is not over specialization </li></ul><ul><li>Activities are not made routine and mechanical </li></ul><ul><li>Not a tool to control one’s discretion </li></ul><ul><li>There is no singularly best way to organize – It is only what is suitable to you in the given situation </li></ul><ul><li>Formal organization is only an intentional structure of roles </li></ul>
  16. 16. ORGANIZATIONAL STRUCTURE/ DEPARTMENTATION <ul><li>1.VERTICAL/ TALL/LINE ORGANISATION - </li></ul><ul><li>Vertical/ Tall organization : Authority and Responsibility flow from the top to the bottom through all the levels of the managerial hierarchy. </li></ul><ul><li>2. Horizontal/ Flat /Staff organisation </li></ul><ul><li>Horizontal/ Flat organization refers to an increase in breadth of an organization structure. the number of levels of an organizational hierarchy are a few </li></ul>
  17. 17. ORGANIZATIONAL STRUCTURE <ul><li>3.Departmentation by Functions – Production, Sales, Finance, Design, R&D, HR,……. </li></ul><ul><li>4.Departmentation by Territory – NEWS,.. </li></ul><ul><li>5.Departmentation by Customer type – Wholesale buyers, Retail buyers, Corporate customers, Individual customers, Savings Bank a/c holders, Current account holders. </li></ul><ul><li>6.Departmentation by products </li></ul><ul><li>7. Matrix or Combo organization </li></ul><ul><li>(Combination of functional and product or project patterns of organization). </li></ul><ul><li>8.Strategic business unit structure . </li></ul>
  18. 18. ORGANIZATIONAL STRUCTURE <ul><li>STRATEGIC BUSINESS UNITS – SBU </li></ul><ul><li>SBUs are distinct little businesses set up as units in a large company. </li></ul><ul><li>Basic concept – Independent business units </li></ul><ul><li>Criteria for being called an SBU </li></ul><ul><li>Own and Distinct mission </li></ul><ul><li>Own integrative plans </li></ul><ul><li>Independent resource management in key areas </li></ul><ul><li>Have an optimum size – Neither too small nor big </li></ul>
  19. 19. ORGANIZATIONAL STRUCTURE <ul><li>MERITS OF AN SBU </li></ul><ul><li>Product yielding large sales or profits is not lost among others </li></ul><ul><li>Preserve entrepreneurial attention and drive </li></ul><ul><li>Means of promoting entrepreneurship </li></ul><ul><li>SBU – A SMALL POND WITHIN A LARGE POND. </li></ul>
  20. 20. ORGANIZATIONAL STRUCTURE <ul><li>DEMERITS OF AN SBU / POTENTIAL PROBLEMS </li></ul><ul><li>The allocation of resources to an SBU may lead to underinvestment in core competencies. </li></ul><ul><li>SBU leaders / managers may not share or lend their Human Resources. </li></ul><ul><li>Potential danger of developing one upmanship among different SBUs. </li></ul>
  21. 21. ORGANIZATIONAL STRUCTURE <ul><li>How to make matrix organization more effective? </li></ul><ul><li>Define the objectives. </li></ul><ul><li>Clarify the roles, authorities and responsibilities. </li></ul><ul><li>Basis is knowledge and info, not the rank. </li></ul><ul><li>Balance the power between functional and project managers. </li></ul><ul><li>Assign to a manager who is first a leader </li></ul><ul><li>Undertake organization and team development – continuous process. </li></ul><ul><li>Install control parameters – quality, time and cost. </li></ul><ul><li>Establish an appropriate reward mechanism </li></ul>
  22. 22. <ul><li>9. </li></ul>
  23. 24. AUTHORITYAND POWER <ul><li>Authority : The right in the position and hence the right in the person occupying the position to exercise discretion in making decisions affecting others and the performance of individuals and others. </li></ul><ul><li>Power: The ability of individuals or groups to induce or influence the beliefs or actions of other individuals or groups. </li></ul><ul><li>- The Presidential Authority. </li></ul><ul><li>- The PM’s Authority. </li></ul><ul><li>- The power of a leader (ex. Mr. Vajpayee, Mrs. Sonia Gandhi) </li></ul>
  24. 25. LINE /STAFF AUTHORITY <ul><li>Note: </li></ul><ul><li>Line and staff are distinguished by authority relationships and not by what people do. </li></ul><ul><li>A department like R&D, DESIGNS may stand in a predominantly staff position with respect to other departments but within the department, are line relationships. </li></ul><ul><li>Ex. VP – Production – generally line function. </li></ul><ul><li>But, when he advises the CEO on co’s production policy, the relationship is staff in nature. </li></ul>
  25. 26. LINE /STAFF AUTHORITY <ul><li>CENTRALIZATION: </li></ul><ul><li>The act of bringing together the activities under the control of a central authority. </li></ul><ul><li>Types of Centralization: </li></ul><ul><li>Centralization by performance. – Co. operating in a single location. </li></ul><ul><li>Centralization by departments. – Central Maintenance, Central Purchase,…. </li></ul><ul><li>Centralization as an aspect of Management. – High degree of authority held at or close to the top management. – ex. LML. TATA v/s BIRLAS. </li></ul>
  26. 27. LINE /STAFF AUTHORITY <ul><li>DECENTRALIZATION: </li></ul><ul><li>More than Delegation. </li></ul><ul><li>Reflection of Management philosophy. </li></ul><ul><li>Policy making to guide decision making. </li></ul><ul><li>Selection and Training of personnel –critical. </li></ul><ul><li>Essential element of a successful managerial system. </li></ul><ul><li>Signifies readiness to accept new challenges, flexibility, globally dynamic environment. </li></ul>
  27. 28. <ul><li>MERITS OF DECENTRALIZATION </li></ul><ul><li>Relieves top management. </li></ul><ul><li>Encourages decision making </li></ul><ul><li>Develops independent thinking </li></ul><ul><li>Leads to establishing broad controls and measures. </li></ul><ul><li>High chance to increase motivation. </li></ul><ul><li>May establish profit centers. </li></ul><ul><li>Aids product diversification. </li></ul><ul><li>Helps in developing generalists. </li></ul><ul><li>Aids developing flexibility and adaptation. </li></ul>
  28. 29. LINE /STAFF AUTHORITY <ul><li>DEMERITS OF DECENTRALIZATION </li></ul><ul><li>Difficult to have a uniform policy. </li></ul><ul><li>Tough to coordinate multiple decentralized units. </li></ul><ul><li>May lead to loss of control by top management </li></ul><ul><li>Difficult in establishing control measures. </li></ul><ul><li>Short of good managerial talent is a set back. </li></ul><ul><li>Calls for expensive training of managers. </li></ul><ul><li>May not gel in few situations for certain operations under economy of scale. </li></ul>
  29. 30. LINE /STAFF AUTHORITY <ul><li>Delegation of authority: </li></ul><ul><li>The process of Delegation: </li></ul><ul><li>Determine the specific results expected of a position. </li></ul><ul><li>Assign the tasks to the position. </li></ul><ul><li>Delegate the necessary authority to accomplish these tasks. </li></ul><ul><li>Hold the person in that position responsible for accomplishing the tasks. </li></ul>
  30. 31. LINE /STAFF AUTHORITY <ul><li>Golden Rules of Delegation: </li></ul><ul><li>What a superior delegates is his authority and never the responsibility. </li></ul><ul><li>You may hold your subordinate responsible, still you are accountable for all the responsibility. </li></ul>
  31. 32. LINE /STAFF AUTHORITY <ul><li>Splintered Authority. </li></ul><ul><li>Wherever a problem cannot be solved without pooling the authority of two or more managers, there lies “splintered authority. </li></ul><ul><li>Ex. Joint decision by Marketing and Production departments on product mix during the times of short supplies of raw material. Managerial conferences,… </li></ul>
  32. 33. LINE /STAFF AUTHORITY <ul><li>Art of Delegation: </li></ul><ul><li>Personal attitudes towards delegation. </li></ul><ul><li>Receptiveness </li></ul><ul><li>Willingness to Let Go. </li></ul><ul><li>Willingness to let others make mistakes </li></ul><ul><li>Willingness to trust subordinates. </li></ul><ul><li>Willingness to establish and use broad controls – Good Feedback mechanism </li></ul>
  33. 34. <ul><li>Guidelines to overcome weak delegation. </li></ul><ul><li>Assignment of tasks and delegation of authority should be in light of the results expected. </li></ul><ul><li>Select the right person for the job to be done and not the other way. </li></ul><ul><li>Establish and sustain open and transparent communication lines. </li></ul><ul><li>Establish right methods and measures of control. </li></ul><ul><li>Develop a clear feedback mechanism. </li></ul><ul><li>Reward effective delegation and successful assumption of authority. </li></ul>
  34. 35. MATRIX ORGANISATION <ul><li>combination of functional and product patterns of departmentation in the same organization structure </li></ul>

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