UNIT-3

Organizing
Organising is the process of identifying and grouping the work to be performed, defining and
delegating responsibility and authority, and establishing relationships for the purpose of
enabling people to work most effectively together in accomplishing objectives.
Organizing refers to the process of arranging resources, tasks, and activities to achieve
organizational goals effectively.
Benefits:

• Clear structure
• Defined Roles and Responsibilities
• Efficient Resource Allocation
Limitations:

• Rigidity
• Resistance to change
• Potential for bureaucracy

De-centralization and Delegation of Authority

De-centralization involves distributing decision-making authority throughout the
organization.
Decentralization is the process of shifting control from one main group to several smaller
ones. The decentralization of government, for example, gives more power to the individual
states, rather than concentrating it at the federal level.
Delegation of authority is the process of assigning decision-making authority to lower levels
of the organization.
Delegation is the process of distributing and entrusting work to another person. In
management or leadership within an organisation, it involves a manager aiming to efficiently
distribute work, decision-making and responsibility to subordinate workers in an
organization
Benefits:

• Faster decision-making
• Empowerment of employees
• Better responsiveness to local needs
Limitations:

• Loss of control
• Potential for inconsistency in decision-making
Authority versus Power
• Authority is the legitimate right to make decisions and issue orders.
• Power is the ability to influence others and make things happen, regardless of formal
authority.
• Authority is derived from the organizational structure, while power can be personal
or situational.
• Authority refers to the legal and formal right to give commands and make decisions,
while Power refers to the ability or potential for an individual to influence others and
control their behaviour.

Mechanistic Versus Organic Organization

Mechanistic organizations

• Are characterized by centralized authority

• Formalized procedures
• Clear hierarchies
• Structure is hierarchical, rigid and has clear lines of authority, ideal for stable
environments
Organic organizations

• Are more flexible

• Decentralized
• Adaptable to change
• Flexible
• Focuses on employee empowerment
• Suitable for dynamic and uncertain environments.

Common Organizational Designs

1. Functional Structure:
• Organizes employees into departments based on specialized functions or
tasks (e.g., finance, marketing, operations).
• Promotes efficiency and expertise within each functional area.
• May lead to silos and coordination challenges across departments.

•
2. Divisional Structure:
• Divides the organization into semi-autonomous divisions based on products,
services, geographic regions, or customer groups.
• Each division operates as a separate entity with its own functions such as
marketing, finance, and operations.
• Facilitates focus and responsiveness to specific market segments but may
result in duplication of resources.

3. Matrix Structure:
• Combines functional and divisional structures, creating dual reporting
relationships.
• Employees report to both a functional manager (e.g., marketing manager)
and a divisional manager (e.g., product manager).
• Enhances flexibility, cross-functional collaboration, and resource allocation
but can lead to role confusion and power struggles.

•
4. Virtual Organization:
• Operates primarily through digital platforms and remote collaboration tools,
with a minimal physical presence.
• Relies on technology to connect dispersed employees, contractors, and
partners.
• Offers flexibility, cost savings, and access to global talent but requires robust
communication infrastructure and cybersecurity measures.
5. Network Structure:
• Relies on external partnerships, alliances, and outsourcing arrangements to
perform various functions.
• Core organization coordinates and integrates activities with external partners
who provide specialized services or resources.
• Offers flexibility, scalability, and access to external expertise but requires
strong coordination and relationship management.

6. Team-Based Structure:
• Organizes employees into self-managing teams responsible for specific tasks
or projects.
• Teams have autonomy to make decisions and solve problems, fostering
innovation and employee engagement.
• Promotes collaboration, accountability, and adaptability but may face
challenges in team dynamics and coordination.

7. Boundaryless Organization:
• Eliminates traditional boundaries within and outside the organization, such as
hierarchy, geography, and function.
• Encourages cross-functional teams, open communication, and fluid roles.
• Promotes innovation, knowledge sharing, and agility but may face challenges
in maintaining coherence and accountability.
Contemporary Organizational Designs
Contemporary organization design is a type of business design that emphasizes speed,
flexibility, and customer responsiveness. It is often seen in organizations that operate in fast-
paced industries or in companies that are constantly innovating.
Businesses invest in organizational design because it allows them to compete better against
large corporations by being more agile and flexible.
Characteristics:

• A focus on customer needs

• A flattened hierarchy

• Decentralization of authority

• An emphasis on team-based work

Types of contemporary organization designs

There are 5 types of contemporary organizational designs: Functional, divisional, matrix,

team, and networking. Each type has its strengths and weaknesses, so it’s important to
choose the right one for your business.

1. Functional structure:

In a functional organization, the business is structured by grouping similar functions

together within a department, usually aligned to a specific knowledge area. Each
department has a specific function or set of functions to carry out. For example, the
marketing department is responsible for creating and executing marketing
campaigns. This type of structure is common in small businesses because it’s simple
to set up and manage.

2. Divisional structure:

A divisional structure is a type of organizational structure that groups people who

work on similar products, services, or projects. This type of structure is also known as
a product structure. Businesses often use it in the manufacturing industry, but it can
be used by any business with multiple product lines to design its organization. This
structure is also popular for organizations with multiple brands, where each brand is
structured independently.
 3. Matrix structure:

A matrix structure is a type of organizational design in which employees report to

more than one supervisor or manager. Companies can do this in several ways, such
as functional/departmental lines, project teams, and regions. Matrix structures can
be beneficial because they promote communication and collaboration between
employees. However, they can also be disadvantageous because they can lead to
confusion and conflict, with matrix structures notorious for high red tape or
bureaucracy levels. It’s usually referred to as solid and dotted reporting lines in a
matrix structure.

4. Team structure:

The purpose of a team structure is to group different skills into a team with one goal
or objective. To accomplish this, they will employ members from various
departments who come together to accomplish any task or explore new
opportunities. The intention is to lower barriers that exist between departments and
improve cooperation when it comes to solving ongoing problems. In a team
structure, it is not uncommon for teams to form, reform and dissolve on a
continuous basis.

Contingency Factors
The main contingency factors are size, task uncertainty, and diversification. Each organization
varies on its levels on these contingency factors and on corresponding structural variables.
Size: Size refers to the magnitude or scale of an organization, typically measured by the
number of employees, revenue, or market share.

Task Uncertainty: Task uncertainty refers to the unpredictability and ambiguity inherent in
an organization's environment or tasks.

Diversification: Diversification refers to the variety of products, services, markets, or

industries in which an organization operates.
Formal and Informal Organization
Organization Chart, Structure, and Process
Organization chart visually represents the formal structure, showing reporting relationships
and hierarchy. An organizational chart is a visual representation of a company's internal
structure. Also known as organograms or org charts, these assets show how teams and
departments are organized, showcase relationships across an organization and each
individual's role and responsibilities.
Structure refers to the arrangement of roles, responsibilities, and relationships. An
organizational structure defines how job titles, roles, and responsibilities are assigned within
a company. It helps determine who reports to whom, and who makes decisions about what.
Startups often have a matrix organizational structure, with different departments working
together on projects.
Process involves the flow of activities, information, and decision-making within the
organization.

The Learning Organization

In business management, a learning organization is a company that facilitates the learning of
its members and continuously transforms itself. The concept was coined through the work
and research of Peter Senge and his colleagues.
Learning organizations are organizations where people continually expand their capacity to
create the results that they truly desire, where new and expansive patterns of thinking are
nurtured, where collective aspiration is set free and where people are continually learning
how to learn together.
Learning organizations continuously adapt and improve through knowledge creation,
sharing, and application.
Purpose:

• Enhance competitiveness
• Innovation
• Adaptability

Departmentalization by Different Strategies

Departmentalization is the process of grouping activities and people into departments or
units based on certain criteria. Here are different strategies for departmentalization:

1. Functional Departmentalization: Grouping activities based on functions or roles

(e.g., marketing, finance, operations). Benefits include specialization and efficiency
within each department, but it may lead to coordination challenges across functions.
 2. Product Departmentalization: Grouping activities based on specific products or
product lines. This allows for focused attention on each product line, but it may
result in duplication of functions across products.
3. Geographical Departmentalization: Grouping activities based on geographic regions
or locations. This strategy facilitates customization based on regional needs but may
lead to redundancy in functions.
4. Customer Departmentalization: Grouping activities based on types of customers or
market segments served. This allows for tailored services or products, but it may
increase complexity in managing diverse customer needs.
5. Matrix Departmentalization: Combining two or more forms of departmentalization
within the same organization. This can provide both functional expertise and
product/customer focus but may lead to dual reporting relationships and potential
conflicts.

Line and Staff Authority

Line Authority: Line authority represents the direct chain of command from top
management to lower levels of the organization. It gives managers the power to make
decisions, issue orders, and oversee the work of subordinates within their respective
departments or units.
Benefits

• Clear chain of command

• Prompt decision-making
• Accountability
• Streamlined communication
Limitations

• May lead to overburdened managers

• Lack of specialization
• Limited staff involvement in decision-making

Staff Authority: Staff authority provides support, advice, and expertise to line managers to
help them full fill their responsibilities effectively. Staff positions typically do not have direct
authority over operations but offer specialized knowledge and assistance to improve
decision-making and problem-solving.
Benefits

• Provides specialized expertise and support to line managers

• Enhances decision quality
• Fosters innovation.
Limitations

• May create conflicts with line managers

• Unclear accountability
• Potential for staff to overstep their authority
De-Centralization and Delegation of Authority Versus Staffing
Decentralization: Decentralization involves distributing decision-making authority
throughout the organization, empowering lower levels of management to make decisions.
Delegation: Delegation of authority is the process of assigning decision-making authority
from a manager to a subordinate.
Staffing: Staffing is the process of hiring eligible candidates in the organization or company
for specific positions. In management, the meaning of staffing is an operation of recruiting
the employees by evaluating their skills, knowledge and then offering them specific job roles
accordingly.
Relationship: De-centralization and delegation of authority affect how staffing decisions are
made. In centralized organizations, staffing decisions may be made by top management,
whereas in decentralized organizations, lower-level managers may have more autonomy in
staffing decisions.

Human Resource Inventory

Human resource inventory refers to a systematic collection of information about an
organization's employees, including their skills, qualifications, experience, and performance.
The inventory helps HR professionals and managers assess the capabilities and potential of
the workforce, identify skill gaps, plan for succession, and make informed decisions
regarding recruitment, training, and development. (Purpose)
HR inventory can be maintained through databases, spreadsheets, or specialized software
systems. It typically includes information such as employee demographics, educational
background, training records, performance evaluations, and career aspirations. (Method)

Job Analysis
Job analysis is the process of systematically gathering, documenting, and analyzing
information about the duties, responsibilities, tasks, and requirements of a particular job.
Job analysis provides essential data for various HR functions, including recruitment,
selection, performance appraisal, training, and compensation. It helps ensure that job
descriptions are accurate, relevant, and aligned with organizational goals. (Purpose)
Job analysis techniques include interviews, questionnaires, observation, and task analysis.
Information collected may include job tasks, skills, knowledge, abilities, qualifications,
physical demands, and working conditions. (Method)
Job Description
A job description is a formal document that outlines the duties, responsibilities,
qualifications, and other essential details of a specific job position within an organization.
Job descriptions serve as a foundational tool for recruitment, performance management,
training, and legal compliance. They provide clarity to employees regarding their roles and
expectations and help managers assess job performance and provide feedback. (Purpose)

Recruitment
Recruitment is the process of attracting, sourcing, evaluating, and selecting qualified
candidates to fill job vacancies within an organization.
Recruitment aims to ensure that the organization has a pool of talented and capable
individuals to meet its current and future staffing needs. It involves creating awareness
about job opportunities, generating interest among potential candidates, and ultimately
hiring the best-fit candidates. (Purpose)
Recruitment methods vary and may include internal promotions, employee referrals, job
postings, campus recruitment, social media, professional networks, recruitment agencies,
and headhunting. The process typically involves screening resumes, conducting interviews,
assessments, and reference checks. (Method)