Module 8: Organizing

NATURE OF ORGANIZING
Organizing involves assigning tasks, grouping tasks into
departments, delegating authority, and allocating resources across the
organization. During the organizing process, managers coordinate
employees, resources, policies, and procedures to facilitate the goals
identified in the plan.
Differentiation in organization involves division of labor and specialization according to Bateman and Snell (2008) These
necessarily result from the organization’s composition– many different work units with different kinds of tasks, using different skills and
work activities coordination with one another for a common end. Division of labor involves assigning different tasks to different people
in the organization’s different work units. Related to specialization, the process in which different individuals and units perform different
tasks. Integration is another process in the organization’s internal environment which involves the collaboration and coordination of its
different work units or work divisions. Coordination refers to the procedures that connect the work activities of the different work
divisions/units of the firm to achieve its overall goals

THE NATURE AND DEVELOPMENT OF ORGANIZATION

Organization involves people, machinery, methods of work, relationships, coordination and so on. Organization development is
an ongoing, systematic and continuous process. This process is initiated to implement any sort of change in the organization.

TYPES OF ORGANIZATION STRUCTURES

Four principal organization types with different degrees of complexity appropriate to the business in terms of its size and type of
product.
I. Line organization
Line organization is the simplest framework for the whole
administrative organization. Line organization approaches the
vertical flow of the relationship. In line organization, authority flows
from the top to the bottom. It is also known as the chain of command
or scalar principle.

2. Line and staff organization

Line refers to those positions and elements of the organization
which have responsibility and authority and are accountable for the
accomplishment of primary objectives. Staff means to those
elements which have responsibility and authority for providing
advice and service to the line in attainment of objectives. – Louise A.
Allen

3. Functional organization
The functional structure is the most common type of
 organizational structure that businesses use, grouping employees by specialty, skill or related roles. It is based on levels of
hierarchy that include different departments, under the direction of designated leaders. Businesses commonly operate under a
functional structure because it groups people together who have similar knowledge, and when used in a team environment, it
helps companies achieve their goals.

4. Committees
Involves groups of people, typically from within an organization, who are brought together to focus on a specific task or area
of responsibility. These committees can be formal or informal, temporary or permanent, and their structure and roles vary
depending on their purpose and the organization's needs.
Committees may be classified as:
a. Ad Hoc Committee. -This undertakes temporary activities; or
b. Standing Committee - This is sometimes called a
permanent committee which undertakes permanent
activities, such as the budget committee

ORGANIZATION CHART
An organization chart is a diagram or drawing showing the
important aspects of an organizational structure. It shows the
relationship among positions as to authority, responsibility and
accountability, and the people who occupy them.

"An organization chart is a diagrammatical form which shows

important aspects of an organization including the major functions
and respective relationships, the channels of supervision, and the
relative authority of each employee who is in charge of each
function.' - George Terry

Purpose of an Organization Chart

 Assists one in view of the firm's structure.
 Assists management to divide the different duties or functions in the establishment of business so that they will be performed
effectively and efficiently.
 The organization chart shows all of those involved in any undertaking, what each of them is to do and to whom each is
responsible.
 The grouping of departments for easier direction, and control of activities.
 The way of sorting the responsibilities of the positions so that time and effort are not duplicated and, therefore, wasted.

Types of Organization Chart

1. Master Chart or Chart of Authority

The master chart shows the entire organizational structure. It is a master plan of the principal departments, with lines of authority
and responsibility and the mutual relationships of all departments or major components.
2. Functional Chart
The functional chart shows at a glance the functions and activities of the positions and/or departments. It shows the major
responsibilities of departments or positions. Listed below each job title are brief statements of the responsibilities.
3. Personnel Chart
The personnel chart shows the departments in the same relative manner as the functional chart. But instead of listing the
functions, the titles of the positions of the names of people are indicated. The chart also shows the class titles of all positions in the
department together with their locations in the organization.

How to Draw an Organization Chart

 First, gather the necessary information on the following:
 existing positions and/or departments.
 objectives, functions, and activities of positions and/or departments.
 organization.
 functional relationships between line and staff positions/departments.
  positions and job titles.
 physical location of each position/department.
 The second step is to draw a temporary chart and check it for accuracy with the managers of the various departments or
sections.
 Finally, the chart drawn must be submitted and recommended to top management for approval and implementation.

ORGANIZATIONAL THEORIES AND APPLICATIONS

There are two main classifications of theories regarding organizational design according to Robbins and Coulter (2009):
traditional and modern. Traditional pertains to the usual old-fashioned ways, while modern refers to contemporary or new design
theories.
Traditional organizational design theories include:
 Simple
This organizational design has few departments, wide spans of control, or a big number of subordinates directly reporting to
a manager; has a centralized authority figure and has very litter formalization of work; usually used by companies that start
out as entrepreneurial ventures. When applied, its strength and weaknesses are revealed

 Functional
This organizational design groups together similar or related specialties. Generally, functional departmentalization is utilized
and put into practice in an entire organization. For example: A marketing firm that markets cars and related products like
tires, cars, batteries, and accessories. It also has strengths and weaknesses.

 Divisional
This organization is made up of separate business
divisions or units, where the parent corporation
acts as an overseer to coordinate and control the
different divisions and provide financial and legal
support services

Modern organizational design theories include:

 Team Design
In team design, the entire organization is made up of
work groups or teams. Its advantages include
empowerment of team members and reduced
barriers among functional areas. It also has
disadvantages, including a clear chain of command
and great pressure on teams to perform

 Matrix-Project Design
Matrix design refers to organization design where
specialists from different departments work on
projects that are supervised by a project manager.
This design results in a double chain of commands
wherein workers have two managers-their functional
area manager and their project manager-who share
authority over them.
Advantage: specialists are involved in the project.
Disadvantages: task and personality conflicts

Project design refers to an organizational design where employees continuously work on a project.
Advantages: flexible designs and fast decision-making
 Disadvantages: complexity of assigning people to projects and tasks and personality conflicts

 Boundary-less Design
This is another modern organizational design where the design is not defined or limited by vertical, horizontal, and external
boundaries. In other words, there are no hierarchical levels that separate employees, no departmentalization, and no
boundaries that separate the organization from customers, suppliers, and other stakeholders. Virtual organization design is
often used in this design; small groups of full-time employees and outside specialists are temporarily hired to work on projects.
Advantages: including being highly flexible and responsive
Disadvantages: are lack of control and problems in communication

THE ELEMENTS OF DELEGATION

Delegation refers to assigning a new or additional task to a subordinate; or getting the work done through others by giving
them the right to make decisions or act

Steps in delegation include:

1. Defining the goal clearly. Managers must clearly explain the task objective and the work or duties someone else is expected to do.
2. Selecting the person who will be given the task. The selected subordinate must be competent and must share the manager’s
task objectives.
3. Assigning responsibility. Managers must explain that the responsibility assigned to the selected subordinate is an expectation for
him or her to perform the assigned tasks well.
4. Asking the person assigned about his or her planned approaches to accomplishing the task objectives. It is expected that
the person chosen to do the task already has a tentative plan of action that may be presented to the manager, to assure him or her that
the person assigned could achieve the task objective.
5. Granting the assigned person the authority to act. If the manager is satisfied with the tentative plan of action presented, granting
of the authority to act immediately follows. Authority is a right to act in ways needed to carry out the assigned task.
6. Giving the assigned person enough time and resources to do the task, while at the same time emphasizing his or her
accountability. Accountability is the assigned person’s willingness to complete the job, as agreed upon.
7. Checking the task accomplishment progress. Following up and discussing task accomplishment progress at regular intervals is
necessary.
8. Making sure the task objective has been achieved. The above steps of delegation were given by Weihrich and Krontz (2005

FORMAL AND INFORMAL ORGANIZATION

Formal organizations– refer to organizations formed by the company owner or manager to help the firm accomplish its goals;
made up of formal groups (work groups/project team/committee) similarly formed by company authorities and achieve their objectives.
Informal organizations– refer to organizations that exist because of friendship or common interest; made up of informal
groups which exist for the members’ need for social affiliation

Whether an organization is formal and informal is determined by the kind of relationship that prevails in each organization
type. Formal organizations are characterized by hierarchical and reporting relationships among groups or members. On other hand,
informal organizations consist of informal groups born out of the need for social affiliation. Both formal and informal organizations may
exist in the same organization structure. Formal organizations and informal organizations both have functions and advantages that
benefit the organization and its members

Formal organizations have the following

function:
1.Accomplish goals that require cooperation
or collaboration among formal groups in
the organization.
2.Produce or bring about new and creative
ideas and solutions to company problems.
3.Coordinate interdepartmental activities.
4.Implement company rules/regulations and
policies; and
5.Orient/train new employees

Informal organizations’ function includes the

following:
1.Satisfy with the members’ need for
affiliations.
2. Give the individuals members a chance to
develop their self-esteem.
3.Give individual members a chance to develop their self-esteem.
4.Lessen individual members’ insecurities; and
5.Provide a mechanism to solve members’ personal and interpersonal problems