OUTLINE NO.03 ORGANIZATION

Span of control

o Factors determining an effective span

Departmentalization

Types of departmentalization

o Departmentalization by numbers

o Departmentalization By time

o Departmentalization By function

o Departmentalization By geography

o Departmentalization By customer

o Departmentalization By process

o Departmentalization By product

Formal & Informal organization

Authority & power

Line and staff concepts

o Line authority

o Staff concept

Line and staff organization of a typical manufacturing company

o Nature of line & staff concepts

o Benefits of staff

o Weaknesses of staff

Delegation of authority

o Splintered authority

o Recovery of delegated authority

o The art of delegation of authority

Personal attitude toward delegation

Guidelines for overcoming weak delegation

ORGANIZATION

INTRODUCTION

Organization involves division of work among people whose efforts must be coordinate

To achieve specific objectives and to implement pre-determined strategies.

Organization is the foundation upon which the whole structure of management is

built? It is the backbone of management. After the objectives of an enterprise are

determined and the plan is Prepared, the next step in the management process is to

organize the activities of the Enterprise to execute the plan and to attain the objectives

of the enterprise. The term Organization is given a variety of interpretations. In any

case, there are two broad ways in which the term is used. In the first sense,

organization is understood as a dynamic process and a managerial activity which is

necessary for bringing people together and tying them together in the pursuit of

common objectives. When used in the other sense, Organization refers to the structure

of relationships among positions and jobs which is Built up for the realizations of

common objectives. Without organizing managers cannot function as managers.

Organization is concerned with the building, developing and maintaining of a

structure of working relationships in order to accomplish the objectives of the

enterprise. Organization means the determination and assignment of duties to People,

and also the establishment and the maintenance of authority relationships among

these grouped activities. It is the structural framework within which the various

efforts are coordinated and related to each other. Sound organization contributes

greatly to the Continuity and success of the enterprise. The distinguished industrialist

of America, Andrew Carnegie has shown his confidence in organization by stating

that: "Take away our factories, take away our trade, our avenues of transportation, our

money, leave nothing but our organization, and in four years we shall have reestablished

ourselves." That shows the significance of managerial skills and

organization. However, good organization structure does not by itself produce good

performance. But a poor organization structure makes good performance impossible,

no matter how good the individual may be.

The term 'Organization' connotes different things to different people. Many writers

have attempted to state the nature, characteristics and principles of organization in their own way. It can be used as a group of persons working together or as a structure

of relationships or as a process of management. Now, let us analyze some of the

important definition of organizing or organization, and understand the meaning of

organization.

ACCORDING TO SHELDON

"Organization is the process of so combining the work which individuals or groups

have to perform with facilities necessary for its execution, that the duties so

performed provide the best channels for efficient, systematic, positive and

coordinated application of available effort."

In the words of Chester I Bernard, "Organization is a system of co-operative activities

of two or more persons."

MC FERLAND HAS DEFINED

Organisation as, "an identifiable group of people contributing their efforts towards the

attainment of goals".

ACCORDING TO LOUIS A ALLEN,

"Organisation is the process of identifying and grouping the 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.

ACCORDING TO NORTH WHITEHEAD

Organisation is the adjustment of diverse elements, so that their mutual relationship

may exhibit more pre-determined quality.

IN THE WORDS OF THEO HAIMANN

Organizing is the process of defining and grouping the activities of the enterprise and

establishing the authority relationships among them. In performing the organizing

function, the manager defines, departmentalizes and assigns activities so that they can

be most effectively executed.

IN THE WORDS OF MOONEY AND RAILEY,

"Organisation is the form of every human association for the attainment of a common

purpose.”

ACCORDING TO JOHN M PFIFFNER AND FRANK P SHERWOOD,

"Organisation is the pattern of ways in which large number of people, too many to

have intimate face-to-face contact with all others, and engaged in a complexity of

tasks, relate themselves to each other in the conscious, systematic establishment and

accomplishment of mutually agreed purposes.”

SPAN OF CONTROL

(1) Span of control refers to the number of immediate

subordinate who report a

manager.

(2) Different level of organization level is also called span of control.

FACTORS DETERMINING AN EFFECTIVE SPAN

There are several factors which influence the span of management.

1- TRAINING OF SUBORDINATES

The better training of subordinates increases the necessary superior subordinate’s

relationship. Well trained subordinates require less time of their managers also they

have less contact with their managers. Training programs increase in new and more

complex industries.

2-CLARITY OF DELEGATION OF AUTHORITY

Although training enables managers to reduce the freq

uency of time consuming

contact but delegation of authority should be clear. If a manager clearly delegates

authority to task with a minimum of the managers tim

e and attention. But if a

manager delegate’s authority unclearly than subordinate give his maximum.

3-CLARITY OF PLANS

If plans are well defined if they are workable, if the delegation of authority toward

plan is clear, if the subordinate understands what expected than little of a supervisor

time will be required on the other hand if plan can

not be drawn accurately and

subordinates do much of their own planning, they may require considerable guidance.

4- USE OF OBJECTIVE STANDARD

A manager must find out, either by personal observation or through the use of

objective standards, whether subordinates are following plans. Obviously, good

objective standards enable managers to avoid man

y time consuming contact.

5- RATE OF CHANGE

Certain enter rises change much more rapidly than others. The rate of change is very

important in formulating and maintaining policies. It may explain the organization

structure of company’s railroad, banking and public utility companies.

6- COMMUNICATION TECNIQUES

Communication techniques also influence the span of management. If every plan,

instruction, order or direction has to be communica

ted by personal contact than

managers time will be heavily burdened. An ability to communicate plans and

instructions clearly and concisely also tends to increase a managers span.

7- AMOUNT OF PERSONAL CONTACT NEEDED

Many instances, face to face meetings are necessary. Many situations cannot be

completely policy statements planning documents

or other communications that do

not involves personal contact. An executive may and valuable information’s by

meeting to subordinates and by discuss problems with them. Some problems can be

handled only in face to face meeting so the best way of communicating problems,

instructor, and subordinates is to spend time in personal contact.

8- VARIATION BY ORGANIZATION LEVEL

Several research projects have found that the size o

f the most effective span differs by

organizational level. For example, it was studied that when a greater number of

specialties were supervised, effective spans were narrower at lower and middle levels

of organization but were increased at upper levels.

9- COMPETENCY OF MANAGERS

A manager who is competent and well trained can effectively supervise more people

than who is not.

10- MATURITY AND MOTIVATION OF SUBORDINATES

The more mature subordinates may delegate more authority, thus widening the span.

TABLE: - FACTORS INFLUCING THE SPAN OF CONTROL

DEPARTEMENTATION:

Departmentation is process of grouping activities and people onto department make it

possible to expend organization. After reviewing the plan, usually the first step in the

organization process is departmentalization. Once job have been classified through

work specialization, they are grouped so those common tasks can be

coordinated.Departmentlization is the biases on which work or individuals are

grouped into manageable units. There are five traditional methods for grouping work

activities.

Thus workflow analysis can be used tighten the connection between employees’ work

and customers needs. Also it can help to make major performance breakthroughs

throughout business process reengineering (BPR).A functional rethinking and

radical redesign of business process to achieve dramatic improvements in costs,

quality, service, and speed.BPR use workflow analysis to identify jobs that can be

eliminated or recombined to improve company.

TYPE OF DEPARTMENTATION:

1-DEPARTMENTATION BY NUMBERS:

Dpartmentation by number is telling off persons who are to perform the same duties

and putting them under the superior of a manager the essential fact is not what these

people do, where they work? Or what they work with, it is that the success of the understanding depends only on the number of persons include in it. This method is

rapidly applying in army.

DISADVANTAGES OR DECLINES REASONS;

There are many reason of decline of departmentation by numbers.

1-It has declined due to advance technology and demand of specialized and different

skills.

2-A second reason is groups composed of specialized personnel are more efficient

then those based on number.

3-Departmentation by number is useful only at the lowest level of the organization.

4-Departation by number fails to produce good results.

DEPARTMENTATION BY TIME

DEPARTMENTATION BY TIME
Reviewed by Hammad Naziron Apr 01 2013
Rating: 5

DEPARTMENTATION BY TIME:

DEPARTMENTATION BY TIME is grouping activities on the basis of time. Departmentation by time is oldest form of departmentation and it is generally used in low level of departmentation. It is particularly applied in hospitals and steel manufacturing enterprise where continue process of service and manufacturing is used.

ADVANTAGES Of DEPARTMENTATION BY TIME:

1- It is process of working and services throughout 24 hours.

2- It is continuing service process.

3- Expensive machinery is used in shifts.

4- Students can work evening or at night.

DISADVANTAGES Of DEPARTMENTATION BY TIME

1- There is lacking supervision at night.

2- Exhaustion factor.

3- DEPARTMENTATION BY FUNCTION

DEPARTMENTATION BY FUNCTION
Reviewed by Hammad Naziron Apr 01 2013
Rating: 5

DEPARTMENTATION BY FUNCTION

DEPARTMENTATION BY FUNCTION Introduction:

is grouping activities on the basis on function of an enterprise. The basic enterprise functions are production, selling, and financing functional departmentation is bases for organizing activities and in organizational structure. It organizes by function to be performed. The function reflects the nature of the business. The advantage of the DEPARTMENTATION BY FUNCTION is obtaining efficiencies from consoliding similar specialties and people with common skills, knowledge and orientations together in common units.

ADVANTAGES Of the DEPARTMENTATION BY FUNCTION

1- It is logical reflection of function.

2- Maintains power of major functions.

3- Simplifies training.

DISADVANTAGES Of the DEPARTMENTATION BY FUNCTION

1- De-emphasis of overall company objectives.

2- Reduces coordination between function.

3- Slow adoption to change in environment.

4- DEPARTMENTATION BY GEOGRAPHY

DEPARTMENTATION BY GEOGRAPHY
Reviewed by Hammad Naziron Apr 01 2013
Rating: 5

Departmentation by geography is followed where geographic marked appear to offer

advantages. Geographic department most often use in sales and production, it is not

use in finance. Departmentalization by geographical regions groups jobs on the basis

of territory or geography. For example merek, a major

pharmaceutical company, have

its domestic sales departmentalized by regions such as Northeast, Southeast, &

Northwest

ORGANIZING CHART

ADVANTAGES

1- It emphasis on local markets and problems.

2- Improves coordination in a region.

3- Better face to face communication.

DISADVANTAGES

1- Increases problem of top management control.

2- Requires more persons with general manager abilities.

5. DEPARTMENTATION BY CUSTOMER

DEPARTMENTATION BY CUSTOMER
Reviewed by Hammad Naziron Apr 01 2013
Rating: 5

DEPARTMENTATION BY CUSTOMER:

Departmentalization by customer groups jobs on the basis of a common set of needs or problems of specific customers. For instance, a plumbing firm may group its work according to whether it is serving private sector, public sector, government, or not for-profit organizations. A current departmentalization trend is to structure work

according to customer, using cross-functional teams. This group is chosen from

different functions to work together across various departments to interdependently

create new products or services. For example, a cross-functional team consisting of

managers from accounting, finance and marketing is created to prepare a technology

plan.

ORGANIZING CHART Of DEPARTMENTATION BY CUSTOMER

There is different difficult decision to be made in separating some type of customer

departments from product departments. Business owners and managers arrange

activities on the basis of customer requirements. Departmentation by customer can be

defined by figure

ADVANTAGES Of DEPARTMENTATION BY CUSTOMER

1- Departmentation by customer emphasis on customer needs.

2- It develops experience in customer area.

DISADVANTAGES Of DEPARTMENTATION BY CUSTOMER

1- It may be difficult to analysis customer demands.

2- It requires managers and staff expert in customer problems.

3- Customer groups may not always be clearly defined.

6- DEPARTMENTATION BY PROCESS

DEPARTMENTATION BY PROCESS
Reviewed by Hammad Naziron Apr 01 2013
Rating: 5

This type of departmentation is found in production and operative levels. Such type of

departmentation can be found in paint or elec

troplating process. Departmentalization

by process groups jobs on the basis of product or customer flow. Each process

requires particular skills and offers a basis for homogeneous categorizing of work

activities. A patient preparing for an operation

would first engage in preliminary diagnostic tests, and then go through the admitting process, undergo a procedure in

surgery, receiver post operative care, be discharged and perhaps receive out-patient

attention. These services are each administered by different departments.

ADVANTAGES

1- It simplifies training.

2- Achieve economic advantage.

3- Uses specialized technology.

DISADVANTAGES

1- Coordination of departments is difficult.

2- Responsibility for profit is at the top.

7- DEPARTMENTATION BY PRODUCT

DEPARTMENTATION BY PRODUCT
Reviewed by Hammad Naziron Apr 01 2013
Rating: 5

DEPARTMENTATION BY PRODUCT:

Departmentation by product is used in organization where more than one product is

producing. In Departmentation by product all the sources and authority are placed under the

control of one manager. Departmentalization by product assembles all functions needed

to make and market a particular product are placed under one executive.

For instance,major department stores are structured around product groups such as home

accessories, appliances woman’s clothing, men’s clothing and children clothing.

Structure/Diagram of DEPARTMENTATION BY PRODUCT:

ADVANTAGES Of DEPARTMENTATION BY PRODUCT:

1- Places attention on production.

2- Increase growth of product.

3- Places responsibility for profit at division level.

DISADVANTAGES Of DEPARTMENTATION BY PRODUCT:

1- Requires more persons with general manager abilities.

2- Presents problems of top management control.

Formal and Informal Organization

Formal and Informal Organization
Reviewed by Hammad Naziron Apr 01 2013
Rating: 5

Formal and Informal Organization:
Let us explain formal and informal organization individually.

FORMAL ORGANIZATION:

Formal organization means the intentional structure of rods informally organized

enterprise. Formal organization must be flexible. Formal organization does not mean

that there is anything inflexible. If a manager is to

organize well, the structure must furnish an environment in which individual performance, both present and future contributes most effectively to group goals.

Structure/ Diagram of Formal Organization:

INFORMAL ORGANIZATION

Informal organizational is define by different authors one says, Informal organization

is any joint personal activity without conscious joint purpose, even though

contributing to joint results. Thus informal relation ships established in the group of

people playing chess during lunch time may aid in the achievement of organization

goals. It is much easier to ask for help on an organization problem from someone you

know personally, even if he or she may be in different departments than from some

one you know only as a name on an organization chart. Another author describes

informal organization as a network of personal and social relationships not required

by the formal organization but arising spontaneously as people but associate with one another.

AUTHORITY & POWER

Power is much broader concept than authority power is the ability of individuals or

groups to informal the actions of other persons or groups.

AUTHORITY:

Authority is the legal right to command actions by others and to enforce compliance.

Authority may also be defined as

the degree of discretion in organizational position

conferring on persons occupying these positions the right to use their judgment in

decision making.

POWER:

Power is border concept then authority. I may be defined as a strong influence on

direction on individuals is behaviors power may also define as the ability of

individuals or groups to influence the action of other persons. There are five bases /

sources or kind of power.

1- LEGITIMATE POWE

The official position of a person is an organization is known as legitimate power . for

example, a major in army has power over Captain and subordinate.

2- COERCIVE POWER

A person’s ability to create fear in other individuals and is based on subordinates

expectation that punishment will be received for not completing work. It is closely

related to reward power and normally arising from legitimate.

3- REWARD POWER

Power arises from ability of some people to grant reward reward is known as reward

power. University Professors have considerable reward. power they made high grade.

4- EXPERT POWER

Power may also come from the expertness of a person or a group. This power of

knowledge. Physician lowers, &university professors may have considerable

influence for their special knowledge.

5- REFERENT POWER

This is the power of admiring high esteemed leader by individuals.

6- DECESION MAKING POWER

This power arises from the power of positions. When people speak pf authority in

managerial setting, they are usually referring to the decision making power.

LINE & STAFF CONCEPT

LINE & STAFF CONCEPT
Reviewed by Hammad Naziron Apr 01 2013
Rating: 5

LINE & STAFF CONCEPT

Line and staff concept include "Line Authority" and "Staff Concept".

LINE AUTHORITY

Line authority gives a superior a line of authority over subordinates. It exists in all

organizations. Line authority can also be defined as the superior – subordinate

authority relationship where by a superior makes decision and tells them to a

subordinate who is turn makes decision and tells to his subordinates and on from a

line from top to low level of organization structure. This line of authority is known as

line of authority. It is directly from superior to his sub

ordinate.

LINE AUTHORITY chain of command

STAFF CONCEPT

The nature of the staff relationship is advisory. The function of people in pure staff

capacity is to investigate research and give advice to line managers. In other words,

staff functions are those that help the lin

e persons work more effectively in

accomplishing the objectives.

LINE & STAFF ORGANIZATION OF A TYPICAL MANUFACTURING COMPANY

LINE & STAFF ORGANIZATION OF A TYPICAL MANUFACTURING COMPANY
Reviewed by Hammad Naziron Apr 01 2013
Rating: 5

NATURE OF LINE & STAFF CONCEPT

Line authority gives a superior a line of a authority over a subordinate. Line authority

is that relationship in which superior exercises direct supervision over a subordinate.

On the other hand the nature of the staff relationship is advisory. The function of a

person in staff capacity is to investigate research and give advice to line manager.

BENEFITS OF STAFF

1. Provide highly specialized knowledge indifferent areas, i-e- economics,

technical, legal etc.

2. Specialist staff avails lines to analysis collected data and make advice for

managers.

3. Staff analysis and advices help in resolving prob

lems arrised during process

WEAKNESSES OF STAFF

1. Danger of understanding line authority.

2. Lake of staff responsibility.

3. Thinking in a vacuum

4. Managerial problems.