 ORGANIZING

Meaning

 An organization is a social unit or human

grouping , deliberately structured for the
purpose of attaining specific goals

 Corporations, armies, schools, hospitals

are organizations, but friendship & ethnic
groups, families are not organizations
Steps involved in organizing a business
enterprises

 Outlining the objective

 Identifying and enumerating the activities
 Assigning the duties
 Defining and granting the authority
 Creating authority relationship
Principles of an organization

 Principle of Unity of objective

 Principle of Co-ordination
 Principle of Efficiency
 Principle of Direction
 Principle of Command
 Principle of Specialization
Formal and informal organization

 A formal organization is a system of well

defined jobs with a prescribed pattern of
communication, coordination and
delegation of authority
.
Informal…….

 An informal organization
 comes in to existence due to social
interactions and interpersonal
relationships and exists out side the formal
authority system ,without any set rigid
rules.
Organizational Structure- Design
 Organizational Structure: arrangement of activities and
assignment of personnel to these activities in order to
achieve the organizational goals in an efficient manner.

 Organizational design: refers to the process of

coordinating these structural elements in the most
effective manner.

 Successful organizational design depends on

the organization’s unique situation.
Forms of organizational structure
 1. line
 2. Functional
 3. Divisional
 4. Project
 5. Matrix
 6. Product
 7. Customer
 8. Territory
Line

 The line structure is defined by its clear

chain of command
 most often used in small organizations—
such as small accounting offices and law
firms,
 Line structures by nature are fairly informal
and involve few departments
Functional structure

 Functional structure is created by grouping

the activities on the basis of functions
required for the achievement of
organizational objectives.

 All functions required are classified in to

basic, secondary and supporting
Function

President

Finance personnel Marketing Production Engg:

Divisional Structure

 The organization is divided into several

fairly autonomous units

 Each unit is relatively self contained

 It has the resources to operate
independently of other divisions
Project organizational structure

 Organizations take up various activities on

project basis.
 Project work can be managed in two forms
 Pure project organization/matrix
organization
 Pure project organization is capable of
taking small number of larger projects with
long duration
Project organization
GM
project A Project B

Qlty admn R&D scheduling Qlty admn R&D scheduling

Eng Purchasing Eng Purchasing

MFG
Matrix Organization
This structure is suitable for large number
of smaller projects and the activities of
various projects can be accomplished
through temporary departments

employees report to two bosses

increased cross-functional interaction
significant interaction between functional and
project managers required
Matrix Structure Sample
Product
Vice President marketing

Radio product division Television Stereo systems

Customer
Vice President marketing

institutional Retail international

Geographic Territory

Vice President-Marketing

Southern Rgn: Western Rgn: Eastern Regn:

Organizational Chart & Titles

 A chart is prepared to show formal

organizational relationships
 It shows who supervises whom
 It shows the main line of communication,
downward flow of authority, upward flow of
responsibility.
 It enables top management to assign
responsibility
Concept of authority

 In an organizational context ,authority may

defined as the legitimate right to give
orders and get these orders obeyed
 Authority in an organization is the power in
a position to exercise discretion in making
decisions affecting others.
Features of authority

 Existence of right –This right is given to a

manager by his superiors
 The right of giving orders is legitimate
 Authority gives right of decision making
 Managers use authority to achieve
organizational objectives
Responsibility

 The obligation of an individual to carry out

assigned activities to the best of his ability

 Obligation to secure results

 Accountable to superiors
Delegation of Authority

The assignment of direct authority and

responsibility to a subordinate to complete
tasks for which the manager is normally
responsible
 Three transfers from manager to
subordinate
 transfer of full responsibility of assignment
 transfer of authority over required resources
 transfer of accountability
How to Be a
More Effective Delegator

1. Trust your staff to do a good job

2. Avoid seeking perfection
3. Give effective instructions
4. Know your true interests
5. Follow up on progress
How to Be a
More Effective Delegator
6. Praise the efforts of your staff
7. Don’t wait until the last minute to delegate
8. Ask questions, expect answers and assist
employees
9. Provide sufficient resources
10. Delegate to the lowest possible level
Centralization and Decentralization

 The power to take decisions vests in one

/few persons at the top is centralization
 Decentralization means dispersal of
decision making power to lower levels of
organization