ORGANISING

THE HP WAY
• HP leading computer company.-(1992)
• Profitable company compared to competitors
• No mergers, no joint ventures.
• New CEO Platt’s Vision-in Digital revolution.
• Objectives- restructure to improve profitability,
Customer satisfaction
Enlighten management in company culture.
• Reengineering team for to spruce up new products
and restructure.
What is Organising?
• Social unit or human grouping deliberately
structured for purpose of attaining specific
goals.

• The process of coordinating and allocating

a firm’s resources so that the firm can carry
out its plans and achieve its goals
At HP Lewis Platt must decide on pattern of working relationship to capitalize
what they know and learned in past.
Challenge to build future structure.
PURPOSE OF ORGANISING
• Implementation of plans, Strategies.
• To increase efficiency of work.
• Personal Identity
• Determination of responsibility
• Determination of Authority
• Coordination.
• Optimum staff use.
• Specialization.
• To study human behavior.
 PROCESS OF ORGANISING

Identification of Activities Division of Work

Grouping of Activities Departmentation

Assigning Activities Hierarchy

Co-Ordination Delegation of Authority Decentralization

PRINCIPLES OF ORGANISING
• Objectives • Delegation
• Specialization • Responsibility
• Span of Control • Authority
• Exception • Efficiency
• Scalar Principle
• Simplicity
• Unity of
Command
ORGANIZATION DESIGN
AREAS OF IMPORTANCE
• Work specialization
• Departmentalization
• Chain of command
• Span of control
• Formalization
• Decision-making authority
 DEPARTMENTATION
The process of grouping jobs together so that
similar or associated tasks and activities can be
coordinated

Departmentation

functional Product Customer Geography Process

1. FUNCTIONAL
PRESIDENT

VICE PRECIDENT VICE PRESIDENT VICE PRESIDENT VICE PRESIDENT

Production Marketing Finance HR

Disadvantages
Advantages
•De- emphasizes overall objective.
•Development of expertise
•Narrow view point of key persons
•Clear career path within function
•Reduction in co-ordination.
•Simplifies training
•Responsibility of profit at Top
•Furnishes means of Tight control at top.
•Slow adoption to changes.
 2. PRODUCT/MARKET

PRESIDENT

GENERAL MANAGER GENERAL MANAGER GENERAL MANAGER

Pharmaceutical Customer Cosmetic
Products Products Products

Hewlett Packard

Imaging and Personal Enterprise HP Financial

HP Services
Printing Group Systems Group Systems Group Services
2. PRODUCT/MARKET
Advantages Disadvantages
• More focus on products • Duplication of resources.

• Easier to evaluate • Problems for customers

performance of product purchasing across multiple
product groups
• Product responsiveness
to market changes • Conflicts between product
group and corporate
• Less burden on the top objectives
executive in making
operating decisions • Conflict between product
groups
 3. GEOGRAPHY/AREA

PRESIDENT

GM GM GM GM GM
NORTH INDIA SOUTH INDIA EAST INDIA WEST INDIA CENTRAL INDIA

Advantages
•Responsibility at a lower level.
•Emphasis on local market & Problems.
•Improves co-ordination in a region.
•Better face to face communications.
Disadvantages
•More persons with manager ability.
•Increases problem at top level.
•Tends to make maintenance of central
services difficult.

•Take advantages of local economies.

4. CUSTOMER
PRESIDENT

VICE PRECIDENT
Advantages Disdvantages
VICE PRESIDENT VICE PRESIDENT
Industrial Consumer Military
•Focus on Customer needs. •May be difficult to coordinate operations
between competing customer demands.
•Gives customer a feeling that they have
an understanding supplier.. •Requires managers & staff expert in
customer problems.
•Develops expertness in customer area.
•Customer groups may not be always
defined
5. PROCESS

PLANT SUPRITENDENT

SPINNING DYING WEAVING PRINTING

Advantages Disadvantages

•Use of heavy and costly machinery •Opportunity for overall development of

equipment in efficient manner. managerial talent.

•Difficult to compare performance.

•It follows principle of specialization
LINE & STAFF AUTHORITY
PRESIDENT

Assistant

ADMINISTRATION
HR
LEGAL OFFICERS
AUDITORS

VP & GM VP & GM VP & GM VP & GM

Division C Division D Division B Division A

ASSISTANT ASSISTANT ASSISTANT ASSISTANT

SPECIALIED STAFF PERSONAL STAFF LINE POSITIONS

Li ne Pos iti ons
• directly concerned with producing goods
and services and which are directly
connected from top to bottom

• Typically found in areas such as:

– production
– marketing
– finance
Staff Positions
• Provide the administrative and support
services that line employees need to
achieve the firm’s goals

• Typically found in areas such as:

– legal counseling
– public relations
– human resource management
 Mechanistic vs. Organic
Structure
Structural Mechanistic Organic
Characteristic
Job specialization High Low
Departmentalization Rigid Loose
Management Tall (many Short (few
hierarchy levels) levels)
Span of control Narrow
Matrix Wide
Organization
LINE ORGANISATIONS
Decision making Centralized
HorizontalDecentralized
Organization
BUROCREACY
authority Virtual Organization
Chain of command Long Short
 MATRIX ORGANISATION
General
Manager

Arrows denote Head of R&D Head of

Head of Head of
reporting channels and Manufactur
Engineering Marketing Finance
ing
Business/
Project/ Engineering/R& Production Marketing Finance
Venture D Specialists Specialists Specialists Specialists
Manager 1

Business/
Project/ Engineering/R& Production Marketing Finance
Venture D Specialists Specialists Specialists Specialists
Manager 2

Business/
Project/ Engineering/R& Production Marketing Finance
Venture D Specialists Specialists Specialists Specialists
Manager 3

Business/
Project/ Engineering/R& Production Marketing Finance
Venture D Specialists Specialists Specialists Specialists
Manager 4
 MATRIX ORGANISATION
• Advantages
– teamwork
– efficient use of resources
– flexibility
– ability to balance conflicting objectives
– higher performance
– opportunities for personal and professional growth

• Disadvantages
– power struggles
– confusion among team members
– lack of cohesiveness
 DELEGATION OF
AUTHORITY
• Power & Authority.

Process
• Assigning Responsibility.
• Granting Authority.
• Creating Accountability.
 DELEGATION OF
AUTHORITY

ADVANTAGES
Maximum effectiveness of Organization.
Improvement of self confidence & high morale.
willingness to take initiative.
Better & Speedy decisions
Simplifies problem of management succession
DECENTRALISATION
The process of pushing decision-making
authority down the organizational hierarchy,
giving lower-level workers more responsibility

•History of organization
•Philosophy of organization
•Availability of competent subordinates
•Dispersal of operations (Geographically).
•Size of organization.
•Degree of diversification.
DECENTRALISATION

DEGREE OF CENTRALIZATION

DEGREE OF DECENTRALIZATION

Judging by the size of the desk, where do decisions get made?

Which organization looks more appealing to you?
 DECENTRALISATION
Disadvantages:
•Problems of Co-Ordination.
•Increase in Administrative Cost.
•Scope of unhealthy Competition.
•Communication Gap between levels.
 SPAN OF MANAGEMENT
•SPAN OF CONTROL is the number of
people who report to one manager.

•Ability of Subordinates.
•Nature of Work
•Degree of team work.
•Faith & trust in Subordinates
 Factors Determining
Effective Spans

Number of relationships with n subordinates

300000

[ ]
n 2(n-1)+n-1
250000

200000

Relationships
150000
For n=1, 1 relationship
100000
n=2, 6 relationships
50000
n=3, 18 relationships
0
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
Number of Subordinates
TALL ORGANIZATION
NARROW SPAN
FLAT ORGANIZATION
WIDE SPAN

Competitive scenario
No long chain of command-Cant afford to take months for decisions.
HP-computers and scientific instruments each with own sales force.
Downsizing
 Contrasting Spans of Control
(Highest) Assuming Span of 4 Assuming Span of 8
1 1 1
Organization Level

2 4 8

3 16 64

4 64 512

5 256 4,096

6 1,024

7 4,096

Span of 4: Span of 8:
4,096 Operatives. 1,365 Managers 4,096 Operatives. Only 585 Managers!

Which organization looks more appealing to you?

Current Trends in Spans
To increase the spans of control (decreases number of
organizational levels)

Results of Wider Spans

1. Significant reduction of administrative costs
2. More effective and efficient organization communication
3. Faster Decisions and closer interaction between levels
4. Requirement for more personnel training for all levels
5. Better leadership at all levels
FORMAL & INFORMAL
ORGANISATION
FORMAL

INFORMAL
INFORMAL ORGANISATION
• The network of connections and channels of
communication based on the informal relationships of
individuals inside an organization

FUNCTION
• Friendships and social contact

• Information and sense of control over their work

• Source of status and recognition

COORDINATION 2. INCREASE
COORDINATION
POTENTIAL

f. Vertical
Information
1.BASIC System.
MANAGEMENT i. Lateral
TECHNIQUE Relationships.
d. Management
Hierarchy.
f. Rules & 3. REDUCE
Procedure. NEED FOR
h. Plans & Goals. COORDINATION

f. Slack
Resources
h. Independent
1.MBWA Units.
2.BOUNDRY SPANNING ROLE
TRENDS IN ORGANISATION
• Virtual corporation
– technology
– opportunism
– excellence
– trust
– no borders
• Structural issues for global mergers

Partnership with AT & T and Citizen Watch co. of Japan to

accelerate the project on disk drives
Platt “ We cant do it all Ourselves.”
AMIT M. RAMPURE (5)
NAMRATA BAHULE (7)