The document provides an overview of organizing as a management function. It discusses the organizing process which includes determining objectives, identifying activities, grouping activities, allocating duties and responsibilities, and delegating authority. It also describes the importance of organizing, types of organizational structures like functional, divisional, and matrix structures. Finally, it discusses concepts related to organizing individuals like responsibility, authority, and delegation.

1. Management Theory And
Practice
Lecture#4

2. Organizing
• Organizing
• Table of Contents
• Introduction
• Objectives
• Unit 4 Organizing
• 4.1 Fundamentals of Organizing
• 4.1.1 Organizing Process
• 4.1.2 Importance of Organizing
• 4.1.3 Downsizing
• 4.1.4 Types of Organizational Structures
• 4.2 Organizing the activity of Individuals
• 4.2.1 Responsibility
• 4.2.2 Authority

3. Organizing
• 4.2.2.1 Types of Authority
• 4.2.2.2 Accountability
• 4.2.3 Delegation
• 4.2.3.1 Steps in the delegation Process
• 4.2.3.2 Obstacles to the Delegation Process
• 4.2.3.3 Centralization and Decentralization
• 4.3 Organizational Change and Development

4. Organizing
• Introduction
• Organizing in general sense means systematic arrangement of activities. Organizing as a process
of management essentially relates to sub- dividing and grouping of activities. Organizing becomes
necessary when two or more persons work together to achieve some common objectives.
• In this unit we will study about the process of organizing which leads to setting up of an
organization structure. We will also discuss about the organizing activity of individuals
(responsibility, authority and delegation). Finally, we will discuss about organizational change and
development.

5. Organizing
• Objectives
• The study of this unit will enable the student to:
• State the meaning and process of organizing.
• Enumerate the steps in the organizing process.
• State the meaning of responsibility, authority and accountability.
• Describe how an organizational structure is created.
• Explain how organizational change is related to the development of an organization.

6. Fundamentals of Organizing
• Fundamentals of Organizing
• A business is a composite whole of many parts. It is a single entity made out of multiple
coordinate interdependent entity. The creation of this single unit from multiple units is the result
of organizing. Organizing can thus be simply understood as a function involving the process of
bringing together resources of diverse nature and putting them together in such a manner that
the system works.
• Giving it a more formal definition, “Organizing is the process of identifying and grouping the work
to be performed, defining and delegating responsibility and authority, and establishing relations
for the purpose of enabling people to work most effectively together in accomplishing objectives”

7. Fundamentals of Organizing
• The working relationships — vertical and horizontal associations between individuals and groups
— that exist within an organization affect how its activities are accomplished and coordinated.
Effective organizing depends on the mastery of several important concepts: work specialization,
chain of command, authority, delegation, span of control, and centralization versus
decentralization. Many of these concepts are based on the principles developed by Henri Fayol.
• Organizing Process
• Organizing is a process of maintaining the flow of work and information and grouping of activities,
identification of authority and responsibility of employees in the organization.

9. Organizing Process
Various steps of organizing process are as follows:
Determination of objectives: In the first step of organizing process, the objective of the enterprises
is to be determined. This determination of objective is the basic of organizing a process of the
enterprise. Without determining objectives, an organizational process will not proceed and
organizing function will become meaningless. Virtually, the organization structure is so designed
which could help to accomplish the objectives. Thus, organization should have clear objective to
achieve its goal.
Identification of activities: The next step in organizing is to identify and determine the activities to
be performed in order to achieve the goals. The activities should be identified considering the
present and changing environment. The total work of the organization is systematically divided into
various activities and sub-activities. It facilitates the assignment of duties and delegation of
authority.

10. Organizing Process
Grouping Activities: After identifying the necessary activities closely related and similar activities
are grouped into division and departments. The act of grouping of activities is called depart
mentation. Activities may be grouped on different bases. For example; Functions, product,
territories, customers, etc.
Allocation of duties and responsibility: Now the fourth step in the organizing process, is the
assignment of the duties and the responsibilities. This assignment of job should be based as per the
ability and capacity of the person to be assigned. Organizing has to allocate the duties and
responsibilities of the person very carefully so as to achieve the departmental as well as
organizational goals.

11. Delegation of Authority
A delegation of Authority: Delegation of authority is the most important device to ensure about the
attainment of goals. Under the organizing process, the top level management should delegate
authority to lower level management. While delegating authority, the responsibility should be
delegated too otherwise, it will be meaningless. So, the authority and responsibility should be
balanced.
Coordination: In the last step of organizing process, coordination is given a due emphasis. For the
successful operation of any organization, there should be proper and effective coordination
between the activities and efforts of various departments

12. Importance of Organizing
• Importance of Organizing
• A comprehensive approach to organizing helps the management in many ways. Organizing aligns
the various resources towards a common mission.
• Efficient Administration
• It brings together various departments by grouping similar and related jobs under a single
specialization. This establishes coordination between different departments, which leads to
unification of effort and harmony in work.
• It governs the working of the various departments by defining activities and their authority
relationships in the organizational structure. It creates the mechanism for management to direct
and control the various activities in the enterprise.

13. Importance of Organizing
• Resource Optimization
• Organizing ensures effective role-job-fit for every employee in the organization. It helps in
avoiding confusion and delays, as well as duplication of work and overlapping of effort.
• Benefits Specialization
• It is the process of organizing groups and sub-divide the various activities and jobs based on the
concept of division of labor. This helps in the completion of maximum work in minimum time
ensuring the benefit of specialization.
• Promotes Effective Communication
• Organizing is an important means of creating coordination and communication among the various
departments of the organization. Different jobs and positions are interrelated by structural
relationship. It specifies the channel and mode of communication among different members.

14. What is Downsizing ?
• What is Downsizing ?
• Downsizing or layoffs is the term used to refer to the practice of firing employees for various
reasons in organizations. These reasons can range from poor performance by the employees, the
poor performance of the organizations in economic downturns that necessitates laying off
employees to save costs, and for disciplinary reasons. There are other reasons as well which
include the shuttering or the closing of the organization.
• Whatever be the reason, downsizing is a painful process for both the employees and the
organization and more for the former. Therefore, the Human Resources Function must handle
downsizing with utmost care and caution and with sensitivity.

15. Types of organizational structures
• Types of organizational structures
• Large or small, every organization should operate with a defined organizational structure. A well
thought out and strategic business configuration clarifies reporting relationships and
supports good communication – resulting in efficient and effective work process flow.
• The board and senior leadership should be the group who determines the type of organizational
structure that would best support the internal operations, how work is carried out and the chain-
of-command.

17. Types of organizational structures

18. Types of organizational structures

19. Types of organizational structures
• Determining the best structure is done by answering the questions:
• What are the functional groupings of work processes?
• Are there natural groupings of teams, work groups or units?
• Senior leadership looks at all functions and determines how they would like work activities to be
organized and carried out. This process also identifies natural reporting relationships and chain-
of-command. Reporting relationships can be both vertical as well as horizontal.

20. Organizing the activity of Individuals
Organizing the activity of Individuals
• Responsibility
• Responsibility indicates the duty assigned to a position. The person holding the position has to
perform the duty assigned. It is his responsibility. The term responsibility is often referred to as an
obligation to perform a particular task assigned to a subordinate. In an organization, responsibility
is the duty as per the guidelines issued.
• Definitions of Responsibility
• According to Davis, "Responsibility is an obligation of individual to perform assigned duties to the
best of his ability under the direction of his executive leader." In the words of Theo Haimann,
"Responsibility is the obligation of a subordinate to perform the duty as required by his superior".

21. Characteristics of Responsibility
• Characteristics of Responsibility
• The essence of responsibility is the obligation of a subordinate to perform the duty assigned.
• It always originates from the superior-subordinate relationship.
• Normally, responsibility moves upwards, whereas authority flows downwards.
• Responsibility is in the form of a continuing obligation.
• Responsibility cannot be delegated.
• The person accepting responsibility is accountable for the performance of assigned duties.
• It is hard to conceive responsibility without authority.

22. Authority
• Authority
• Definitions of Authority
• According to Henri Fayol, "Authority is the right to give orders and the power to exact obedience."
• According to Mooney and Reily, "Authority is the principle at the root of Organization and so
important that it is impossible to conceive of an Organization at all unless some person or persons
are in a position to require action of others."
• Authority
• Authority is the right or power assigned to an executive or a manager in order to achieve certain
organizational objectives.
• A manager will not be able to function efficiently without proper authority. Authority is the
genesis of organizational framework. It is an essential accompaniment of the job of management.

23. Authority
Without authority, a manager ceases to be a manager, because he cannot get his policies carried
out through others. Authority is one of the founding stones of formal and informal organizations. An
Organization cannot survive without authority. It indicates the right and power of making decisions,
giving orders and instructions to subordinates. Authority is delegated from above but must be
accepted from below i.e. by the subordinates. In other words, authority flows downwards.
Max Weber’s 3 types of authority
First, charismatic authority points to an individual who possesses certain traits that make a leader
extraordinary. This type of leader is not only capable of but actually possesses the superior power of
charisma to rally diverse and conflict-prone people behind him. His power comes from the massive
trust and almost unbreakable faith people put in him.

24. Authority
Second, traditional authority indicates the presence of a dominant personality. This leader is
someone who depends on established tradition or order. While this leader is also a dominant
personality, the prevailing order in society gives him the mandate to rule. This type of leadership,
however, is reflective of everyday routine and conduct.
Third, legal-rational authority is one that is grounded in clearly defined laws. The obedience of
people is not based on the capacity of any leader but on the legitimacy and competence that
procedures and laws bestow upon persons in authority. Contemporary society depends on this type
of rationalization, as the complexities of its problems require the emergence of a bureaucracy that
embodies order and systematization.

25. Accountability
• Accountability
• Definition of Accountability
• According, to McFarland, "accountability is the obligation of an individual to report formally to his
superior about the work he has done to discharge the responsibility."
• When authority is delegated to a subordinate, the person is accountable to the superior for
performance in relation to assigned duties. If the subordinate does a poor job, the superior
cannot evade the responsibility by stating that poor performance is the fault of the subordinate. A
superior is normally responsible for all actions of groups under his supervision even if there are
several layers down in the hierarchy. Simply stated, accountability means that the subordinate
should explain the factors responsible for non-performance or lack of performance.

26. Accountability
• Accountability
• Every employee/manager is accountable for the job assigned to him. He is supposed to complete
the job as per the expectations and inform his superior accordingly. Accountability is the liability
created for the use of authority. It is the answerability for performance of the assigned duties.
• Authority, Responsibility and Accountability are Inter-related
• They need proper consideration while introducing delegation of authority within an Organization.
In the process of delegation, the superior transfers his duties/responsibilities to his subordinate
and also give necessary authority for performing the responsibilities assigned. At the same time,
the superior is accountable for the performance of his subordinate.

27. Delegation
• Delegation
• Delegation can be described as an administrative process under which things are made to be
done by others and for this purpose; responsibility is also given to them. For example, the board
of directors takes all the significant decisions in an organization. The execution of these decisions
is given to the Chief Executive Officer (CEO) of the organization. The chief executive assigns
particular tasks to the managers of different departments and in turn these managers delegate
the authority to complete the task to their subordinates.
• In this way, all the superiors in an organization delegate authority to their subordinates in the
organization so that a particular task may be completed. This process goes on to the level where
the employees perform the actual task. The person who has been given the responsibility to get a
particular task completed is also provided the required authority so that the person may get the
task completed.

28. Characteristics of Delegation
• Characteristics of Delegation
Delegation can be described as the assignment of authority to subordinates in a particular area
and also to make them responsible for the results. In this context, there are the following
characteristics of delegation:-
• Delegation is said to have taken place when some of the powers are granted by a manager to the
subordinates.
• Delegation can take place only when the person who is going to delegate the authority himself
has the authority. For example, the manager who wants to delegate, should have the authority
himself.

29. Characteristics of Delegation
• In case of delegation, only a part of authority is dedicated to the subordinates.
• A manager who is going to delegate authority can enhance, reduce or take it back. In this regard,
the manager exercises full control on the activities of the subordinates even after the authority
has been delegated to them.

30. Process of Delegation

31. Delegation Process
• Steps in the Delegation Process
• Delegating is one of the most important tasks you have as a manager—but delegating and
delegating effectively are two very different things.
• Effective delegation means that you know that the task/project that you will delegate will get
done at a minimum with the results that you expect.
This includes five steps :
1 - Assess the capability and willingness of the team to do the task. Often, people will volunteer for
a cool assignment, but can/will they really do it?
2 - Communicate what success looks like to the people you are delegating to. What is the timeline,
quality, etc.?

32. Delegation Process
3 - Ensure they know that if they encounter problems, you are there to guide them. Overall, you
are still accountable for the results.
4 - Establish checkpoints to monitor progress and avoid getting any nasty surprises at the end.
5 - When the team delivers, celebrate its success.
The more confidence a team or person has with being delegated to, the less structured set-up you
need to do to make it work. But if you haven't taught your team to work independently, then it is
often a recipe for disaster.

33. Delegation Process
Obstacles to Delegation Process
• Delegation is crucial to any well-functioning organization. Recognizing how to get tasks done in
the most efficient manner and by the most appropriate employee frees up company resources
and allows the management team to focus on strategic policies, business development and other
forward-looking elements. Identifying the common obstacles to delegation is the first step toward
better delegation.

34. Centralization and Decentralization
Centralization and Decentralization
• Centralization and Decentralization are the two types of structures, that can be found in the
organization, government, management and even in purchasing. Centralization of authority
means the power of planning and decision making are exclusively in the hands of top
management. It alludes to the concentration of all the powers at the apex level.
• On the other hand, Decentralization refers to the dissemination of powers by the top
management to the middle or low-level management. It is the delegation of authority, at all the
levels of management.

36. Organizational Change and Development
• Organizational Change and Development
• As they grow and evolve, organizations undergo a series of changes throughout their life cycle.
These changes create the need for a well planned development process. To understand the
differences between organizational change and development, it is important to know the
meaning of each term and to conceptualize the relationship between the two.