ORGANIZING

• Organizations are experimenting with different approaches to

organizational structure and design.
• Organizational structure can play an important role in an
organization’s success. The process of
• ORGANIZING—the second management functions—is how an
organization’s structure is created.
 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.
BASIC ELEMENTS OF ORGANIZING
• Organizing is the process of creating an organization’s structure.

• Organization structure is the formal pattern of interactions and

coordination designed by management to
• link the tasks of individuals and groups in achieving organizational
goals. An organizational structure is
• the formal framework by which job tasks are divided, grouped, and
coordinated.
Organization structure consists primarily of four elements:

• a. Job design
• b. Departmentalization
• c. Vertical coordination
• d. Horizontal coordination
 Job design
• A. Job design is an essential part of organizational structure.
1. Job design is the specification of task activities, usually repeated on a
regular basis, associated with each particular job.
• a. Task activities need to be grouped in reasonably logical ways for
each job.
• b. The way the jobs are configured influences employee motivation.
• Work specialization is the degree to which the work necessary to
achieve organizational goals is broken down into various jobs.

• In Work specialization the tasks in an organization are divided into

separate jobs. Another term for this is division of labor.
 Departmentalization
• Departmentalization refers to the formal
structure of the organization, composed of
various departments and managerial positions
and their relationships with each other. As an
organization grows, its departments grow and
more sub-units are created, which in turn add
more levels of management.
• Departmentalization is the clustering of individuals into units and units into departments and
larger units in order to facilitate achieving organizational goals.
• There are four major patterns of departmentalization.
• a. The functional structure groups jobs into units based upon similarity of expertise, skills, and
work activities, e.g., marketing, accounting.
b. The divisional structure groups jobs into units according to the similarity of products or
markets.
c. The hybrid structure combines aspects of both the functional and divisional forms, with some
jobs grouped into departments by functions and other grouped by products or markets.
d. The matrix structure superimposes a horizontal set of divisional reporting relationships onto a
hierarchical functional structure.
 Departmentalization

• Definition: Departmentalization or Departmentation is a process

wherein jobs/teams are combined together into functional units
called as departments on the basis of their area of specialization, to
achieve the goals of the organisation. So, in this way, the entire
organization is divided into parts, i.e. departments which comprise of
a group of employees, who carry out activities of similar nature.
 Objectives of Departmentalization

• To specialize activities.
• To simplify the process and operations of the organization
• To maintain control
• Departmentalization of activities results in the increase in efficiency
of the management and ultimately the enterprise. It is helpful in
fixing responsibilities and accountability.
 Methods of Departmentalization

• Departmentalization by Function: When the creation of department

is on the basis of specified functions, such as production, marketing,
purchase, finance etc. In this method, all the activities related to a
function or which are of similar nature are combined in a single unit,
to give proper directions to the entire group in one go.
 Departmentalization by Process:
• In departmentalization by the process, the activities are grouped as
per the production processes. These departments require manpower
and material so as to carryout operations.
 Departmentalization by Product
• When the activities related to product development and delivery are
combined into a particular division, it is called as product
departmentalization. It is appropriate for large-scale multi-product
enterprises.
 Departmentalization by Customer
• The grouping of the organization according to the different classes of
customer or clients. It focuses on special customer needs.
• Departmentalization by Territory: When the division is based on the
geographical area, it is called as territorial departmentalization. This is
suitable for the organizations, that have widespread operations at
different locations.
• Departmentalization by Project: In project departmentalization, the
organizational activities are classified by differentiated or special
ventures or activities.

• The choice of departmentalization basis is influenced by the factors

such as the degree of specialization, coordination, control, cost
consideration, adequate attention to key areas, etc.
• Functional structure is a type of departmentalization in which
positions are grouped according to their main functional (or
specialized) area.
• Divisional structure is a type of departmentalization in which
positions are grouped according to similarity of products, services, or
markets.
• Hybrid structure is a form of departmentalization that adopts parts of
both functional and divisional structures at the same level of
management.
• A matrix structure is a type of departmentalization that
superimposes a horizontal set of divisional reporting relationships
onto a hierarchical functional structure.
• Vertical coordination is the linking of activities at the top of the
organization with those at the middle and lower levels in order to
achieve organizational goals.

• Span of management or span of control is the number of

subordinates who report directly to a specific manager.
• Spans of management determine the number of hierarchical levels in
an organization.
• a. A tall structure is one that has narrow spans of management and
many hierarchical levels in an organization.
• b. A flat structure is one that has broader spans of management and
few hierarchical levels and wide spans of control.
• The degree to which authority in an organization is centralized or
decentralized affects the pattern of decision making in the
organization.
1. Centralization is the extent to which power and authority are
retained at the top organizational levels.

2. Decentralization is the extent to which power and authority are

delegated to lower levels.
• Horizontal coordination is the linking of activities across departments
at similar levels.
• 1. The need for horizontal coordination in an organization is directly
proportional to the information processing needs of the organization.

• 2. Organizations need to process more information under certain

circumstances.
• a. The organization faces complex and/or changing technology.
• b. The environment is uncertain.
• c. The company is growing.
• 3. In facilitating information processing across the organization,
horizontal coordination also promotes innovation.
• a. New ideas are more likely to emerge when views are shared.
• b. Awareness of problems and opportunities across areas may spark
creative solutions.
• c. Involving employees in the development of ideas promotes
commitment to proposed changes.
• A managerial integrator is a manager who is given the tasks of
coordinating related work that involves several functional departments.
• 1) Project managers usually are responsible for coordinating the work
associated with a particular project until its completion.
• 2) Product managers orchestrate the launching of new products and
services and may then continue coordinating interdepartmental work
related to the new products and services.
• 3) Brand manager coordinate organizational efforts involving particular
brand-name products, most often within the soap, food, and toiletries
industries.
Managerial integrators do not have the line authority and must gain the
cooperation of staff mangers to implement their proposals.