ORGANIZING

ORGANIZING

-is a management function which prefers to “the structuring of resources and activities to accomplish objectives in an efficient and effective manner.”

THE PURPOSE OF THE STRUCTURE

1. It defines the relationships between task and authority for individuals and departments.

2. It defines formal reporting relationships, the number of levels in the hierarchy of the organization, and the span of control.

THE PURPOSE OF THE STRUCTURE

3. It defines the groupings of individuals into departments and departments into organization.

4. It defines the system to effect coordination of effort in both vertical (authority) and horizontal (tasks) directions.

CONCERNS WHEN STRUCTURING AN ORGANIZATION

1. DIVISION OF LABOR- determining the scope of work and how it is

combined in a job.

2. DELEGATION OF AUTHORITY- the process of assigning various degrees of decision-

making authority to subordinates.

3. DEPARTMENTATION

-the grouping of related jobs, activities, or processes into major organizational subunits

CONCERNS WHEN STRUCTURING AN ORGANIZATION

4. SPAN OF CONTROL

-the number of people who report directly to a given manager.

5. COORDINATION

-the linking of activities in the organization that serves to achieve a common goal or objective.

▪  

Chester Barnard says:

“an organization is formal when activities are coordinated towards a common objective. According to him, the essence of formal organization is conscious common purpose.”

He found that formal organization comes into being when persons:

1. are able to communicate with each other

2. are willing to act, and

3. share a purpose

Formal organization

- is the structure that details lines of responsibilities, authority, and position.

-It is the planned structure and it represents the deliberate attempts to establish patterned relationships among components that will meet the objective effectively.

The formal structure is described by management through:

1. organization chart

2. organizational manual and

3. policy manuals.

Organizational Chart

-is the diagram of the organization’s official positions and formal lines of authority.

Organizational Manual

▪ provide written description of authority relationships

▪ details the function of organizational units

▪ and describe jobs procedure

Policy manual

- describes personnel activities and company policies

Informal Group

▪ It is formed when members of organization spontaneously group with friendship as a principal reason for belonging.

▪ It is not a part of organization and does not have a formal performance purpose.

Informal Group

▪ It is created by choice promoting the goals of the group. This group may oppose or support the formal organizational objective because it is built on like, dislikes, feelings or emotion of the members of the group.

 Informal Groups

▪ Are very useful in the accomplishment of major task, especially when this task conforms with the expectation the members of the informal group.

 Informal Groups

Is most likely vulnerable to: (according to Valentine)

- Expediency

- Manipulation

- Opportunism

“Its low visibility makes it difficult for management to detect perversion and considerable harm can be done to the company.” – Valentine

Therefore:

The engineer manager must be warned that he must be on the look out for the possible difficulties that the informal groups may do to the organization. It will be to his best interest if he could make the informal groups work for the organization.

TYPES OF ORGANIZATIONAL STRUCTURES

1. Functional Organization – this is a form of departmentalization in which everyone engaged in one functional activity, such as engineering or marketing, is a grouped into one unit.

2. Product or market Organization – this is refers to the organization of a company by division that brings together all those involved with a certain type of product or customer.

TYPES OF ORGANIZATIONAL STRUCTURES

3. Matrix Organization – an organizational structure in which each employee reports to both a functional or division manager and to a project or group manager.

Factors for Joining or Forming a

Group

Friendship

Common Interest

Proximity

Need Satisfacti

on

Collective Power

Group Goals

TYPICAL FUCNTIONAL ORGANIZATIONAL CHART of a CONSTRUCTION COMPANY

PRESIDENT

Vice President Marketing

Vice President

Construction

Vice President Finance

Vice President Human

Resources

Functional Organization

- Functional organizational structures are very effective in smaller firms, especially “single-business firms where key activities revolve around well-defined skills and areas of specialization.”

ADVANTAGES:

1. The grouping of employees who perform common task permit economies of scale and efficient resource use.

2. Decision-making is centralized, providing a unified direction from the top

3. Excellent communication and coordination among employees within each department

ADVANTAGES:

4. Promotes high-quality technical problem-solving

5. Depth skill specialization and development is provided

6. Career progress within functional departments is provided to the employees

DISADVANTAGES

1. Poor communication and coordination between the departments

2. Decision involving more than one department pile up at the top management level and are often delayed.

3. Work specialization and division of labor, which are stressed in a functional organization, produce routine, non-motivating employee tasks.

DISADVANTAGES

4. Difficulty in identifying which section or group is responsible for certain problems.

5. Limited view of organizational goals by employees.

6. Limited general management training for employees.

Product or Market Organization

- The Product or market organization, with its feature of operating by divisions, is “appropriate for a large corporation with many product lies in several related industries.”

ADVANTAGES

1. Flexible and responsive to change

2. Provides a high concern for customer’s needs

3. Provides excellent coordination across functional departments

ADVANTAGES

4. Easy pinpointing of responsibility for product problems

5. Emphasis on overall product and division goals

6. Provide opportunity for the development of general management skills

DISADVANTAGES

1. High possibility of duplication of resources across divisions

2. Less technical depth and specialization in divisions

3. Poor coordination across divisions

DISADVANTAGES

4. Less top management control

5. Competition for corporate resources

Matrix Organization

- A matrix organization, according to thompson and Strickland,”is a structure with two (or more) channels of command, two lines of budget authority, and two sources of performance and reward.” Higgins declared to keep employees in a central pool and to allocate them to various projects in the firm according to the length of the time they were needed.

ADVANTAGES:

1. There is more efficient use of resources than the divisional structure.

2. There is flexibility and adaptability to changing environment.

3. The development of both general and functional management skills are present.

ADVANTAGES:

4. There is interdisciplinary cooperation and any experties is available to all divisions.

5. There are enlarged task for employees which motivate them better.

DISADVANTAGES:

1. There is frustation and confusion from dual chain of command.

2. There is a high conflict between divisional and functional interests.

3. There are many meetings and more discussion than action.

DISADVANTAGES:

4. There is a need for human relations training for key employees and managers.

5. There is a tendency for power dominance by one side of the matrix.

President

Vice President Government Accounts

marketing

construction

finance

human resource

Vice President Industrial Account

marketing

construction

finance

human resource

Vice President Residential Accounts

marketing

construction

finance

human resource

TYPES OF AUTHORITYThe delegation of authority is a requisite for effective organizing. It consists of three types. They are as follows:

1. Line authority – a manager’s right to tell subordinates what to do and then see that they do it.

2. Staff authority – a staff specialist’s right to give advice to a superior.

3. Functional authority – a specialist’s right to oversee lower level personnel involved in that specialty, regardless of where the personnel are in the organization.

PRESIDENT

Vice PresidentFor

Construction

Vice PresidentFor

Resources

Vice PresidentFor

Finance

ProjectsManager

ConstructionManager

PurchasingManager

ContractAdministrationManager

Project XManager

Project YManager

Project ZManager

ContractNegotiator

PurchasingSpecialist

Engineer

ContractNegotiator

PurchasingSpecialist

Engineer

ContractNegotiator

PurchasingSpecialist

Engineer

• Line departments perform tasks that reflect the organization’s primary goal and mission.

• Staff departments include all those that provide specialized skill in support of line departments.

Staff officers may be classified into the following:

1. Personal staff – those individuals assigned to a specific manager to provide needed staff services.

2. Specialized staff – those individuals providing needed staff services for the whole organization.

Functional department

▪ - is one given to a person or a work group to make decisions related to their expertise even if these decisions concern other departments. This department is given to most budget officers of organizations, as well as other officers.

THE PURPOSE OF COMMITTEES

COMMITTEE- a formal group of persons formed for a specific purpose.

- a person or group of persons elected or appointed to perform some service or function, as to investigate, report on, or act upon a particular matter.

CLASSIFICATIONS OF COMMITTEES

1. EXECUTIVE COMMITTEE- has well-defined executive powers and meets frequently to manage the affairs and further the purposes of an organization or entity.

2. AD HOC COMMITTEE- one created for a short-term purpose and has a limited life.

3. STANDING COMMITTEE- it is a relatively permanent committee that deals with issues on an ongoing basis.

DIFFERENT FUNCTIONS OF COMMITTEE

1. Governance- in organizations considered too large for all the members to participate in decisions affecting the organization as a whole, a committee (such as a Board of Directors or "Executive Committee") is given the power to make decisions, spend money, or take actions.

DIFFERENT FUNCTIONS OF COMMITTEE

2. Coordination-  individuals from different parts of an organization (for example, all senior vice presidents) might meet regularly to discuss developments in their areas, review projects that cut across organizational boundaries, talk about future options, etc. 

DIFFERENT FUNCTIONS OF COMMITTEE

3. Research and recommendations- committees are often formed to do research and make recommendations on a potential or planned project or change.

4. Tabling-  as a means of public relations by sending sensitive, inconvenient, or irrelevant matters to committees, organizations may bypass, stall, or disacknowledge matters without declaring a formal policy of inaction or indifference.

THE END