2. The manager needs to
acquire various skills, in
management, including those
for organizing business
activities.
3. Organizing is a management
function which relates to the
structuring of resources and
activities to accomplish objectives
in an efficient and effective
manner.
4. Organizing is undertaken to
facilitate the implementation of
plans. In effective organizing, steps
are undertaken to break up the total
job into more manageable man-size
jobs.
5. The structure is the means
by which the organization
will attain its objectives and
goals.
6. The determinants of an organization structure
are:
1. Strategy or plans for achieving the company’s
objectives;
2. Technology that will be used in carrying out
the strategy;
3. People employed at all levels and their
functions; and
4. Size of the organization.
7. Strategy determines the lines of authority and
channels of communication that will have to be
set up between the managers and their
respective units.
The formal organization, as describe by Nelson
and Quick “is the part of the system that has
legitimacy and official recognition
8. The formal structure is described by management
through:
1. Organization Chart – is a diagram of the
organization’s official positions and formal lines
of authority.
2. Organization Manual – provides written
descriptions of authority relationships, details
the functions of major organizational units, and
describes job procedures.
9. Formal organizations require the formation of formal
groups, which will be assigned to perform specific tasks
aimed at achieving organizational objectives.
When members of an organization spontaneously form a
group with friendship as a principal reason for belonging
(Figure 21). This group is referred to as an informal purpose.
3. Policy Manual – describes personnel activities
and company policies.
10. FRIENDSHIP
COMMON
INTEREST
Propels people to form or join
AN INFORMAL
GROUP
Propels people to form or join
PROXIMITY
Like, concern for
environment or love
for classical music
PROXIMITY
Propels people to form or join
Which gives people the
chance to share ideas,
opinions, and feelings
AN INFORMAL
GROUP
AN INFORMAL
GROUP
11. NEED
SATISFACTION
COLLECTIVE
POWER
GROUP
GOALS
AN INFORMAL
GROUP
AN INFORMAL
GROUP
AN INFORMAL
GROUP
which is derived from
joining unions, cultural
societies, fraternities,
etc.
which is derived
from joining unions,
fraternities, etc.
which attract persons to
join groups like consumer
society, sports club, etc.
Propels people to form or join
Propels people to form or join
Propels people to form or join
Figure 21
Reasons or Factors for Joining or Forming An Informal Group
12. The management and supervision of an
organization may be done through levels of
hierarchy, which may be flat or tall.
MANAGER
Utility Driver Sales
Clerk
Documents
Clerk
Mechanics Parts
Clerks
Cashier Collector/
Cl
FLAT STRUCTURE
14. 1. Flat Structure
The flat organization has few levels of management.
This characteristic provides it with the following
advantages:
a. communication is generally faster and less
distorted;
b. decisions can be made quickly; and
c. supervisors’ salaries are eliminated.
15. Flat structures, however, have the following
distinct disadvantages:
a. they require managers with experience in the
various tasks;
b. a manager may have little time for all
subordinates;
c. when the manager is out, the group is without
a leader; and
d. managers may have little time to anticipate
problems.
16. 2. Tall Structure
The tall structure has many levels of management.
It has the following advantages:
a. since the average span of control is narrower, the supervisory load
is less for each manager;
b. there are more opportunities for promotion because there are
more levels of positions;
c. managers are provided with opportunities to specialize;
d. there is less demand for managers with multiple
skills; and
e. managers are afforded with more time to attend to other
important problems.
17. Tall structures are also saddled with disadvantages
such as the following:
a. communication tends to be slower and distorted
because of the number of levels it has to pass through;
b. the number of management levels also hinders
effective decision making rendering such activity slower
and less accurate; and
c. it is more expensive to maintain as there are more
managers to compensate.
18. 1. work specialization;
2. departmentation;
3. pattern of authority;
4. span of control; and
5. coordination of activities.
19. The degree to which tasks
are divided in the
organization is referred to as
work specialization.
20. MANAGER
Sales, Credit &
Collection Supervisor
SSC Clerk
Sales, Credit &
Collection Supervisor
SSC Clerk SSC Clerk SSC Clerk
MANAGER
Sales Clerk Sales Clerk Collector
Credit
Investigator
Sales, Supervisor Credit & Collection
Supervisor
STRUCTURE A – No Specialization
STRUCTURE B – With Specialization
Figure 23
Work specialization: To
What Extent?
21. In the alternate structure, a supervisor is assigned
to handle sales while another is in charge of credit
and collection.
Without Specialization
Employee A
Credit Investigator/Collector
Employee B
Credit Investigator/Collector
Work Output for One Day:
1. investigated three credit
applications
2. collected three accounts
Work Output for One Day:
1. investigated three credit
applications
2. collected three accounts
TOTAL OUTPUT: 6 Investigations and 6 Collections
22. With Specialization
Employee A
Credit Investigator
Employee B
Collector
Work Output for One Day:
- investigated eight credit
applications
Work Output for One Day:
- collected eight accounts
TOTAL OUTPUT: 8 Investigations and 8 Collections
Figure 14
An Example of the Effect of Specialization
Why Specialization? Specialization promotes efficiency.
23. Departmentation refers to the grouping of jobs
based on criteria that managers believe help in
the coordination and control of activities.
NURSING
UNIVERSITY
NURSING BUSINESS
Figure 25
A Sample Grouping of Jobs According to Knowledge and Skills
24. SERVICE
COMPANY
CREDIT AND
COLLECTIONS
SALES
Figure 26
A Sample Grouping of Jobs According To Work Process And Function
First Shift
6:00 A.M. to 2:00 P.M.
COMPANY
Second Shift
2:00 P.M. to 10:00 P.M.
Third Shift
10:00 P.M. to 6:00 A.M.
Figure 27
A Sample Grouping of Jobs According to Time
25. APPLIANCE LUBRICANTS
MOTORCYCLE
COMPANY
Figure 28
A Sample Grouping of Jobs According to Product
SSC Clerk
SSC Clerk
CASH
CONSUMERS
SERVICE
GOVERNMENT
Figure 29
A Sample of Grouping of Jobs According to Customer
26. COMPANY
LUZON DIVISION VISAYAS DIVISION MINDANAO DIVISION
Figure 30
A Sample Grouping of Jobs According to Location
Advantages of Grouping Jobs:
1. Supervision is made easier.
2. The sharing of resources, such as men, machines, and materials
results in maximum use of such resources.
3. Common measures of performance are
established.
4. Communication is encouraged.
27. The pattern of authority as an element in
designing organizational structure refers to the
extent by which organization members are
allowed to make decisions without getting the
approval of another member.
Authority patterns may either be centralized or
decentralized.
28. The Appropriate Pattern of Authority.
The environments of organizations differ and
so no single pattern of authority is appropriate for
all. Instead, the pattern of authority must match
the organization’s environment.
Centralized authority is better suited for stable
environment, while decentralized authority is for
complex and changing environments.
29. Decentralized authority offers the following
advantages:
1. Efficiency. Red tapes and bottlenecks are reduced.
2. Flexibility. Managers can cope with situations as
they come.
3. Initiative. Managers are highly motivated by the
challenge.
4. Development. Managers are provided with
opportunity for training.
30. Decentralized authority has some disadvantages.
These are as follows:
1. Control. Coordinating overall activities is more
difficult.
2. Duplication. There is a great chance of duplication of
efforts between departments.
3. Centralized Expertise. Home office experts may be
overlooked or disregarded.
4. Competency. The organization may not be able to
produce competent managers at all levels.
31. Span of control is another consideration in designing
the organizational structure. It refers to the number of
subordinates reporting to a single supervisor.
The span of control may either be narrow or wide.
The narrow span of control is characterized by the
following:
1. there is closer relationship between manager and
subordinates;
32. 2. there is less delegation of authority;
3. controlling activities is more tight; and
4. there is more time for rewarding behaviour.
The following characteristics are inherent to an
organization with wide span of control:
1. Employees work with little supervision;
2. There is a high level of delegation of authority;
3. Controlling is lighter; and
4. There is less time for rewarding behavior.
33. NON-PROFESSIONAL
SUBORDINATES
SUBORDINATES HAVE
LITTLE TRAINING
SUBORDINATES ARE
SCATTERED THROUGHOUT A
WIDE AREA
MORE INTERACTION IS
REQUIRED BETWEEN
SUPERIOR AND SUBORDINATE
WHEN TASKS AMONG
SUBORDINATES ARE NOT
SIMILAR
WHEN TASKS ARE PERFORMED
WITHOUT SPECIFIC AND
UNIFORM PROCEDURES
TASKS PERFORMED BY
SUBORDINATES CONTAIN
FREQUENT AND HARD-TO-
SOLVE PROBLEMS
NARROW SPAN
TASKS ARE PERFORMED WITH
UNIFORM AND SPECIFIC
PROCEDURES
1
3
4
5
6
7
2
8
Figure 31
Situations Appropriate for Narrow Span of Control
34. PROFESSIONAL
SUBORDINATES
SUBORDINATES ARE FULLY
TRAINED
SUBORDINATES ARE
LOCATED IN ONE OFFICE
LESS INTERACTION IS REQUIRED
BETWEEN SUPERVISORS AND
SUBORDINATE
TASKS AMONG
SUBORDINATES ARE SIMILAR
TASKS ARE PERFORMED WITH
UNIFORM AND SPECIFIC
PROCEDURES
TASKS PERFORMED ARE
ROUTINE AND SIMPLE
TASKS OF SUBORDINATES DO
NOT REQUIRE INTEGRATION
WIDE SPAN
1
3
4
5
6
7
2
8
Figure 32
Situations Appropriate for Wide Span
35. Another basic element considered in
designing the organizational structure is
coordination. This term refers to the linking
of activities in the organization that serve to
achieve a common goal or objective.
36. There are four basic organizational designs. These are
the following:
Functional Design
Divisional Design
Hybrid Design
Matrix Design
37. Functional Design
An organization may be designed basically
according to function.
AUDIT
PRESIDENT
FINANCE
PRODUCTION
HUMAN
RESOURCE
SALES
LEGAL
Figure 33
An organization with Functional Design
38. Strengths of the Functional Design:
1. efficient use of resources;
2. in-depth skill development;
3. clear career paths;
4. unity of direction;
5. enhanced coordination within functions.
39. 1. slow decision making;
2. less innovation;
3. unclear performance resonsibility
4. limited management training; and
5. poor coordination across functions.
Weaknesses of the Functional Design:
40. Divisional Design
The organizational with divisional
design is that type where all activities
needed to produce a good or service
are grouped together into independent
units.
42. Strengths of the Divisional Design:
1. adaptation to unstable environment;
2. high customer satisfaction;
3. high tasks coordination;
4. clear performance responsibility; and
5. general management training.
43. Weaknesses of the Divisional Design:
1. inefficient use of resources;
2. low in-depth training for personnel;
3. focus is on division objectives; and
4. loss of control.
44. Hybrid Design
The hybrid design, also called the matrix structure,
is a combination of divisional units and functional
departments.
SALES LEGAL AUDIT HUMAN
RESOURCES
PRODUCTION
PRODUCTION
PRESIDENT
AREA 5
AREA 4
AREA 3
AREA 2
AREA 1
Figure 35
The Hybrid Design
45. Strengths of the Hybrid Design:
1. simultaneous coordination;
2. integration of goals with objectives; and
3. efficient and highly adaptable
Weaknesses of the Hybrid Design:
1. slow responses to exceptional situations;
2. conflict between headquarters and divisions; an
3. administrative overhead.
46. Matrix Design
An organization with a matrix design is one that
implements functional and divisional structures
simultaneously in each department.
The following conditions favor the use matrix design:
1. Environmental pressures exist for a dual focus, such as
innovation and quality;
2. Large quantities of information must be processed; and
3. Efficiency is needed in the use of resources.
48. Strengths of the Matrix Design:
1. allows demands from the environment to be met
simultaneously;
2. provides flexibility;
3. encourages resource efficiency;
4. enhances skills development;
5. increases motivation and commitment among
employees; and
6. aids top management in planning.
49. Weaknesses of the Matrix Design:
1. creates confusion;
2. power struggles within the group are
potential problems; and
3. places stress on individuals.
