ORGANIZATION

AND
MANAGEMENT
(Commercial Bank)

BSTM 1C:

Micaella B. Posugac

Rhonie Joy Flores Marilyn Libao

Ritchelle Pagsanghan Airish Nea Trillana

Princess Lopez Annjanet Reyes

Ashley Polintan Vincent Vennard Villaroman

Erika Mariz Crisostomo Jhon Rey Villacora

Organizing

A management function which involves assigning tasks, allocating resources, and coordinating
work activities in order to achieve a common purpose.

Nature of Organization

 Division of Labor

-Involves assigning of tasks to different people in the organization’s different work units.

 Specialization

-The process in which different individuals and units perform different task.

 Integration of Work Units

Involves the collaboration and coordination of it’s 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 in order to achieve its overall goal.

Types of organization structures

1. Vertical Structure

A vertical structure clears out issues related to authority rights, responsibilities, and reporting
relationships. Authority rights of individuals, appointed in positions like president, manager and the
like, to give orders to their subordinates, who in turn, report to them what they have done.

2. Horizontal Structure

Refers to the departmentalization of an organization into smaller work units as tasks become
increasingly varied and numerous.

TWO TYPES OF DEPARTMENTS:

 Line Departments

Deal directly with the firms primary goods and services; responsible for manufacturing, selling,
and providing services to clients.

 Staff Departments

Support the activities of the line departments by doing research, attending to legal matters
performing public relations duties, etc.
 THREE APPROACHES:

 Functional Approach- where the subdivisions are formed based on specialized activities such as
marketing, production, financial management, and human resources management.

 Divisional Approach- where departments are formed based on management of their products,
customers, or geographic areas covered.

 Matrix Approach- is a hybrid form of departmentalization where managers and staff personnel
report to the superiors, the functional manager, and the divisional manager.

3. Network Structure

It is a collection of independent, usually single function organizations/companies that work together

in order to produce a product or service.

Such network organizations are each capable of doing their own specialized work activities
independently, like producing, distributing, designing, etc., but are capable of working effectively at the
same time with other network members.

Often their communication is by electronic means where sharing of information is speedy. This
results in their ability to respond at once to their customers’ demands.

Organization Theories and Applications

TWO MAIN CLASSIFICATIONS OF THEORIES

A. Traditional Organizational Design Theories

1. 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 little
formalization of work; usually used by companies that start out as a entrepreneurial ventures.

2. Functional

This organizational design groups together similar or related specialties. It is, generally,
functional departmentalization utilized and put into practice in an entire organization.

3. Divisional

This organizational design is made up of separate business divisions or units, where the parent
corporation acts as overseer to coordinate and control the different divisions and provide financial and
legal support services.
B. Modern Organizational Design Theories

 Team Design

The entire organization is made up of work groups or teams.

 Matrix-Project Design

Matrix Design refers to an organization design where specialists from different departments work
on projects that are supervised by a project manager.

Project Design refers to an organizational design where employees continuously work on a

project.

 Boundary-less Design

There are no hierarchical levels that separate employees, no departmentalization, and no

boundaries that separate the organization from customers, suppliers and other stakeholders.

Delegation

 It refers to assigning a new or traditional task to a subordinate; it may also refer to getting work
done through others by giving them the right to make decisions and take action.

Steps in delegation:

1. Defining the goal clearly

2. Selecting the person who will be given the task

3. Assigning of responsibility

4. Asking the person assigned about his or her planned approaches to accomplish the task objectives

5. Granting the assigned person the authority to act

6. Giving the assigned person enough time and resources to do the task, while at the same time
emphasizing his or her accountability

7. Checking the task accomplishment progress

8. Making sure that the task objectives has been achieved

 ADVANTAGES DISADVANTAGES
It prevents work overload among organization It may cause laziness among organization
managers. managers.

It provides opportunities for employee or It may encourage too much dependence on

subordinates assigned to do the task to fully others.
utilize their talents on the job.

It leads to empowerment of employees or It may cause lack of control over priority

subordinate assigned to do the task, as it allows management problems.
them freedom to contribute ideas and to
perform their job in the best possible way.

It increases job satisfaction among the assigned It may cause low self-confidence among
employees or subordinates, that may lead to managers.
better job performance.

Formal and Informal Organizations

 Formal Organizations

Organizations formed by the company owner or manager to help the firm accomplish it’s
goals; made up of formal groups (work groups/project team/ committee) similarly formed by company
authorities to support their activities and achieve their objectives.

ADVANTAGES DISADVANTAGES
1. Working systematically. 1. Delay in feedback and action due to the
established chain of command.

2. Established on and for the organization’s 2. Ignores the psychological and social needs of
objectives. employees.

3. No duplication or overlapping of work. 3. Emphasis on work only and overlooks the

human relations, talents and creativity of
employees.

4. Efficient coordination among departments.

5. Implementation of chain of command and

professional relationship.
 Informal Organization

Organization that exist because of friendship or common interest; made up of informal

groups which exist for the members’ need for social affiliation.

ADVANTAGES DISADVANTAGES
1. Fast communication due to the absence of 1. More susceptible to rumour mongering.
standard operating procedures and protocols.

2. Gives importance to the psychological and 2. There is no systematic workflow in place.

social needs of employees.

3. Top managers can solicit feedback directly 3. Difficulty in implementing new rules and
from the employees on new policies and plans. policies.

4. More emphasis on the individual interest of

each employee rather than the overall goal of the
company.