Organizing as a management function

1. Organizing as a management function Theodocia Ama Avle doe 19/05/2015

2. Session objectives • By the end of this session students should acquire • 1. understanding of organizing function • 2. insight into major components of organizational structure and charts • 3.Knowledge about formal and informal organization • 4. Understanding of Hierarchy and span of control

3. introduction • Organizing is defined as the process of establishing orderly use of all resources within the management system • It emphasizes attainment of objectives and assist managers in making objectives clear and clarifying resources that would be used to attain them.

4. Organizing also refers also how activities are divided up grouped and coordinated. (grouping of activities, assigning each grouping to a manager with the authority necessary to supervise them)

5. Every organizational resource represent an investment to which a return has to be made • Organization of resources increases efficiency and effectiveness

6. Henry Fayol developed 16 general guidelines for organizing resources • 1. judiciously prepare and execute operating plan • 2. organize human and materials to be in line with objective and resources • 3. establish single competent guiding authority • 4. Coordinateall activities and efforts

7. Fayol 16 general guidelines for organizing resources • 5. Formulate precise,distinct and cleardecisions • 6. Arrange for efficient selection so that each department is headed by a competent, energetic manager and each employee is placed where he can render greatest service

8. 16 general guidelines for organizing resources • 7. define duties • 8. Encourage initiative and responsibility • 9. Fair and suitable rewards for services rendered • 10. Use of sanctions against faults and errors • 11. Maintain discipline • 12. Ensure individual interest are consistent with general interest of the organization

9. 16 general guidelines for organizing resources • 13. Recognize unity of command • 14.Promote material and human coordination • 15. Institute and effect controls • 16. Avoid regulation, red tape and paperwork

10. Importance of organizing • Mechanism with which managers activate plans • Creates and maintains relationship between and among organizational resources (which resources to be used for specific activity, when, where and how the resources are to be used) • Prevent duplication of efforts

11. Organizing process • Five steps • Reflect on objectives • Establish major tasks • Divide major task into sub tasks • Allocating resources and directives for subtask • Evaluate results of implemented strategy • The steps should be repeated so as to help get usefulfeedback for improvement

12. Organizing showing how activities are divided up grouped and coordinated is shown on an organizational structure • Structure is set forth by the design of the major components or subsystems; showing pattern of relationships, • In the formal sense structure is set fourth by organizational charts, by positions and job descriptions, and by rules and procedures • Structure is also concerned with patterns of authority, communication and workflow providing formal relation between technical and psychosocial system

13. The structure of a social system (organization)is not visible but can be inferred from actual operation and behavior of the organization. Though the structure of organization can not be looked as separate from its functions, the two are two separate phenomena

14. Organizing theory • Classical organizing theory –insight into how organization resources can be best used for best goal attainment. The most profound writer on classical organizing theory was Max Weber • According to Max Weber – the main component of organizing effort include; - detailed procedures and rules-; - clearly outlined organizational hierarchy and mainly -impersonal relationships between organization members

15. Weber use the term bureaucracy to label management system that contain these components • Criticisms of Weber’s bureaucracy—state the lack of concern for human variables within the organization

16. Main consideration from classical organizing theory;- • Four main consideration from classical organizing theory all modern managers should include in their organizing efforts are 1. Structure 2. Division of labor 3. Span of control 4. Scalar relationships

17. Structure • Managers must choose appropriate structure • Structure refers to designated relationships among resources of the management system; • Structure helps to facilitate use of each resource individually or collectively

18. Structure; shows pattern of relationships, • In the formal sense structure is set fourth by positions and job descriptions, and by rules and procedures • Structure is also concerned with patterns of authority, communication and workflow providing formal relationship between technical and psychosocial system

19. Structure is primarily represented by graphic illustration known as organizational chart-; graphic illustration of authority and responsibility • Organization chart is traditionally constructed in a pyramid form, with individuals towards top having more authority and responsibility than those towards bottom.

20. Talcot Parson defined organizational structure as ‘ an expression of rational action and involves institutionalized pattern and procedures which hold in an authoritative manner’

21. In reality two basic Types of organizational structure exist within management system • Formal and informal • Formal organizational structure- is defined as relationships between organizational resources and it is represented primarily by organizational chart • Informal structure-; is defined as patterns of relationships that develop as a result of informal existence of organization members. It evolves naturally and tend to be molded by individual norms, values and or social relationships. It coexist with formal organization but not necessarily identical to it

22. Importance of org.structure • Contributes to successful implantation of plans – formal allocation of people and resources • Members of org. know what is expected from them;- structure and operating mechanisms for coordination clearly spelt • Helps in decision-making and its associated information processing

23. Major components of organizational structure • The basic structure-; allocation of people and resources , mechanisms for coordination, / formal pattern of relationship and duties – takes the form of job description, organizational charts, committees, task force • Differentiation – ways various activities or tasks are assigned to different departments and or people in the organization. [2 ways; vertical and horizontal differentiation]. Vertical is about hierarchy (DDNS, PNO, SNO, NO, SSN, SN) Horizontal same as departmentalization

24. 3. Integration- how separate activities are coordinated 4. Authority system i.e. power status 5. Administrative system- planned and formal policies, procedures, controls that guide activities and relationships

25. Organization chart convey the following useful information • Division of labor- position to which work is assigned along with someone to do it • Type of work performed-; formal titles tells about the nature of work assignee to the position holder • Supervisor-subordinate relationships-; lines between positions show who reports to whom in the hierarchy of authority

26. Formal communication channel- lines on chart show formal channels for information movement throughout the organization • Major subunits-position grouped together under managers form subunits, usually called divisions or department • Levels of management- vertical linkages show management levels in the entire hierarchy of authority

29. Formal structure and departmentalization • Formal relationship between resources are established by departments • A department is a unique group of resources established by mgt. to perform organizational task. • The process known as departmentalization, is based on situational factors such as work functions being performed, the product being assembled, the territory to be covered the target customer and the process designed to manufacture a particular product

30. Type of Work function or activities (marketing, production[health service], finance). • If structure is based on function workers and other resources are departmentalized accordingly • Structure based on product- departmentalization is based on the type of product.

31. E.g producing medical equipment Resources needed to produce each product for example in producing medical equipment-; • Structure based on territory departmentalize according to the place work is done or the geographical market for the product • As Market areas and work locations expand, management tasks become cumbersome; to overcome or minimize the effect of distances, resources are departmentalized according to location

32. Structure based on customer, establishes department in response to major customer; based on the assumption that major customers can be identified and divided into logical categories • Structure based on process departmentalize according to major phases of the process used to manufacture products

33. Forces influencing formal structure • 1. forces in the manager • 2.Forces in the task • 3. Forces in the environment • 4. Forces in the subordinate

34. 1. Forces In The Manager -; the unique way manager perceives organizational problems ( personality), background, knowledge, experience, values, influence his or her perception of how formal structure should exist or be changed • 2.Forces in the task [ include degree of technology involved in the task, complexity of the task

35. 3. Forces in the environment [ customers, suppliers, social and political structures • 4. Forces in the subordinate[ needs, skill level, • As the environment and subordinates vary forces are created to change the org.forces

36. DIVISION OF LABOR • The second main consideration of organizing effort is how to divide labor i.e. the assignment of portions of task among org. members; several individuals perform different parts of total activity. In effect, individuals specialize in doing part of the task. For example in production of car • Advantages;- 1. As workers specialize in a particular task -;Skills increase 2. Workers do not lose valuable time in moving from one task to the other 3. increase productivity and efficiency

37. Disadvantages of division of labor 1. Work tends to be boring may reduce production rate

38. Division of labor requires coordination for efficiency Coordination defined by Mooney ‘ the orderly arrangement of group effort to provide unit of action in the pursuit of a common purpose’

39. Span of management or span of control • The 3rd main consideration of organizing effort is span of management • Span of management refers to the number of individuals a manager supervises • Greater span of control means manager supervises a lot of individuals, smaller span of control implies the manager has only a few individuals to supervise

40. To use human resources efficiently managers should supervise as many individuals as they can best guide towards goals; supervising too few may waste productive capacity; too many too may reduce efficiency

41. For adequate span of control Harold Koontz suggested the use of situational factors to guide managers in designing the span of control • 1. similarity of functions- the degree to which activities performed by the supervised are similar or dissimilar (similar activities easy supervision ) • 2. geographical contiguity- degree of physical separation; the closer the subordinates are physically the more mangers are able to effectively manage • 3. complexity of function-the more difficult and involving activities, the more difficult it is for the managers to effectively supervise

42. 4. coordination- the amount of time managers must spend to synchronize activities of their subordinates with the activities of other workers. If great then the span of control should be small • 5. Planning[ more time spent on planning, less time for supervision]

43. Tall and flat organization- this reflects the span of control i.e. the number of subordinates working for the superior, it defines the shape of the org. • The greater the height of the org. chart the smaller the span of control • The smaller the height the greater span of control • Tall or flat • Tall has large number of managerial hierarchies • Advantages-increases commitment, • Flat organization has small number of hierarchy levels

44. Scalar relationships • The 4th consideration of any organizing effort is scalar relationship • It refers to a chain of command. • Assumption -; Individuals at the top possesses the most authority, the lower the position on the organization chart the less authority • The scalar relationship is related to the unity of command concept; a concept that recommends that an individual should have only one boss -; too many people giving command result in confusion, contradiction, frustration== ineffectiveness and inefficiency

45. Scalar chain- this describes org.’s hierarchy i.e. the chain of superiors from lowest to highest rank • Chain of command-; it refers to a line of authority from the top of the management hierarchy to employees at the bottom