5. Organizing
Summary
In general terms, ‘organizing’ refers to the systematic
arrangement of things and activities. However, in the context of management,
‘organizing’ may be interpreted in two ways—as a structure and as a process.
Meaning of organizing As a process, organizing is
concerned with the productive integration of human, physical and financial
resources to meet the goals of an organisation. As a structure, organizing
involves creating a structural framework within which the individual efforts
are coordinated to meet the needs of an organisation.
Importance of organizing and organizational structure
• Organizing lends to specialization, as the whole work is
sub-divided into specific activities and allocated to different Individuals.
• Organizing helps to create a well-defined structure of jobs,
as the roles and responsibilities of each job position are clearly defined in
the organizing process.
• Organizational structure clarifies the authority and power
associated with each job position in the organisation.
• Organizing helps to avoid duplication of work through a
clear-cut distribution of work between individuals and groups.
• Organizing facilitates: coordination between the various
levels of management by synchronizing the efforts of people at various levels.
• Organizing serves as a source of support and security by
assigning a definite job designation to each employee.
• Organizing facilitates
adaptation of a business to changes in external environment.
Process of organizing
• Division of work
is the first step in the organizing process. It
involves subdivision of the total work to be done into specific jobs to
promote specialization, efficiency and economy.
• Grouping of jobs, or departmentation, is the second step in
the organizing process. It relates to grouping similar jobs into departments on
the basis of functions, type of product, geographical area, etc.
• Establishing authority-responsibility relationships is the
third step in organizing process, involving the linking of all
jobs in a hierarchy by authority-responsibility relationships.
Structure of organisation
• An organizational structure is a system of job positions
reflecting the roles and responsibilities associated with each job position and authority
responsibility relation between them. The organizational structure appears like
a pyramid with a narrow top and wide bottom.
• The following factors
need to be
kept in mind
while designing an organizational structure job design, departmentation,
span of control and delegation of authority.
Types of organizational structure
• Functional structure is created by grouping the various
activities of an organisation on the basis of basic functions to be performed,
like finance, marketing, production and personnel.
• Divisional structure is created by grouping the various
activities to be performed in an
organisation on the basis of various product lines. It is useful in large and
diversified organisations.
Formal organisation
•
Formal organisation is a deliberately planned and created
structure of activities and authority-responsibility relationships to meet the
organizational goals.
Features of formal organisation
• It is deliberately
planned and created by management.
• It strives to
achieve organizational goals.
• It is rigid in
nature.
• It contains a
well-defined structure of authority and responsibility.
• It follows the
formal channel of communication, i.e., scalar chain.
Informal organisation
• Informal organisation is a
network of social relationships which arises
spontaneously from within a formal
organisation to meet the social and cultural
needs of its members.
Features of informal organisation
• It arises spontaneously from within a formal organisation as
a result of social interaction among members of the organisation.
• It strives to meet social and cultural needs of the members.
• It is flexible in nature.
• It is a complex network of human relationships.
• It follows informal channels of communication.
Delegation of Authority
The process by which a
manager shares some of his work and authority with his
subordinate is known as delegation
of authority.
Importance of delegation of authority
• Delegation of authority reduces the workload of managers, as
through delegation the manager shares his workload with his subordinates.
• It provides the basis for superior-subordinate relationships,
as grant of authority by superior to subordinates gives meaning to
superior-subordinate relationships.
• It improves managerial effectiveness, as by delegating
routine work to the subordinates, the managers can concentrate on important
matters.
• It motivates subordinates, as it gives them a sense of
importance and also an opportunity to apply their creativity and skill to their
job.
• It helps to develop managers, as it gives the subordinates an
opportunity to individually handle and solve managerial problems.
• It facilitates the growth of the organisation, as it develops
the potential of employees.
Elements of Delegation
• The three elements in the process of delegation are the
assignment of tasks, grant of authority and creation of responsibility and
accountability.
• The principle of delegation by results expected states that
there should be a relation between the results expected from a subordinate and
the amount of authority granted to him.
• Principle of parity of authority and responsibility states
that there should not be any disparity between
the authority granted to a
subordinate and responsibility imposed on him because responsibility without
authority makes the person ineffective and grant of excessive authority to
subordinates makes him misuse it.
• The principle of absolute responsibility states that
authority can be delegated but responsibility cannot be delegated by a
superior. The superior remains responsible, or accountable, to his superior for
the tasks which may be assigned to his subordinate. The responsibility of the
superior is absolute.
• The authority level principle states that before taking a
decision, a manager should ensure that he has due authority to take a decision
at his level and if he does not have authority to take decisions at his level,
he should refer to his superior.
Centralization of authority
• Centralization of authority refers to concentration of authority for decision-
making
and actions in the hands of a few managers at the higher level.
Decentralization of authority
• Decentralization of authority refers to the systematic delegation
of authority at all
levels of management and in all departments of the
organisation for decision-
making and actions appropriate at the respective
levels:
I Importance of decentralization: Decentralization helps an
organisation to cope
with changes, reduces the workload of managers,
facilitates growth of an
organisation, helps to develop managers, facilitates
decision-making, ensures
smooth running of an organisation and promotes
initiative and creativity.
Meaning and Importance of Organizing
Very-Short-Answer Questions
1. What is meant by
organizing?The managerial function of
organizing refers to
the process of integrating human, physical and financial resources
required to
meet the goals of an organisation. It also involves determining the
various
activities / jobs to be performed, grouping similar jobs into
departments, then
designing the organizational. Structure accordingly and
establishing authority-
responsibility relationships among various job
positions.
