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ORGANIZATION

Group 1
HRIM 112
Defining "Organizing"
identification and classification of required
activities
grouping of activities necessary to attain
objectives
assignment of each grouping to a manager
with the authority (delegation) necessary to
supervise it
provision for coordination horizontally and
vertically in the organization structure
Defining "Organization Structure"
designed to clarify who is to do what task and
who is rssponsible for what results, to remove
obstacles to performance caused by confusion
and uncertainty of assignment, and to furnish
decision making and communications
network reflecting and supporting enterprise
objectives.
Defining "Organization"
A formalized intentional structure of roles or
position
Business Organizational
Structures
Four Main Types
Sole proprietorship
Partnership
Corporation
Cooperative
Sole Proprietorship
Also known as: sole trader, proprietorship
Simplest organizational structure
Involves one individual who owns and
operates the whole business
Total control over business operations
Examples: home-based, shop or retail, one-
person consulting
Sole Proprietorship
Advantages
Easy formation, dissolution, and organization
Lower start-up costs and low operational overhead
Higher degree of flexibility
Owner receives all profit
Disadvantages
Limited resources
Little to no protection
Unlimited liability for business debts
Continuation is difficult after death of owner
Partnership
Formed when two or more people join to run
the business
Equal share in net profits and losses
Two kinds of partners:
General - obligation of strict liability
Silent uninvolved in management
Examples of partners: supplier, customer,
channel intermediary, complementary vendor

Partnership
Advantages:
Relatively easy to establish
Distribution of responsibilities, ability, and capital
Greater borrowing capacity
Income splitting (for resultant tax savings)
Disadvantages:
Sharing of profits
Joint and several liability for partnerships debts
Unlimited liability
Risk of disagreements and friction
Corporation
Most complex organizational structure
Separation of liabilities and obligations from
responsibility of owners/ shareholders
Generally have a distinct name (Ltd, Inc, Corp)
Corporation
Advantages:
Unlimited commercial life
Greater flexibility in raising capital (sale of stock)
Ease of transferring ownership
Limited liability
Disadvantages:
Regulatory restrictions; more closely monitored
Higher operational costs
Double taxation
Risk of conflict between shareholders and executives

Cooperative
Owned and controlled by its members
Members usually have close association with the
business/ enterprise
Pooling of resources to provide themselves and
patrons with benefits
Provides the following:
Democratic control based on OMOV
Open and voluntary membership
Patronage dividends
Cooperative
Advantages:
Democratic control
Limited liability
Profit distribution in proportion to service rendered
Disadvantages:
Risk of conflict between members
Longer decision-making process
Participation of members required
Less incentive to invest more capital
Line, Staff and Functional Relationships
Definition of Terms
Power = the ability of individuals or groups to
induce or influence the beliefs or actions of
other persons or groups
Authority = right in a position (and through, it
the right of the person occupying the position)
to exercise discretions in making decisions
affecting others
Line Authority
relationship in which a superior exercises direct
supervision over a subordinate - an authority
relationship in direct line or steps
Line Authority: Scalar Principle
The clearer the line of authority from the ultimate
management position in an enterprise to every
subordinate position, the clearer will be the
responsibility for decision making and the more
effective will be organization communication.
Staff Relationship
Nature is advisory.
The function of people in a pure staff capacity
is to iinvestigate, research, and give advice to
line managers.
Functional Authority
the right that is delegated to an individual or a
department to control specified processes,
practices, policies, or other matters relationg to
activities undertaken by persons in other
departments
Benefits of Staff
Line managers get to consider ideas and
suggestions from specialist before making
decisions
Staff help line managers to be effective and
effecient
Limitations of Staff
Danger of Undermining Line Authority
Lack of Staff Responsibility
Thinking in a vacuum
Managerial Problems
Decentralization of Authority
Defining
Decentralization of Authority
tendency to disperse decision-making authority
in an organized structure
Defining Centralization
Centralization of Performance
Geographical concentration
Departmental Centralization
Concentration of specialized activities in one
department
Centralization as an Aspect of Management
tendency to restrict delegation of decision
making
Process of Delegation
determining the results expected from a
position
assigning tasks to the position
delegating authority for accomplishing these
tasks
holding the person in that position responsible
for the accomplishment of the tasks
Splintered Authority
exists wherever a problem cannot be solved or
a decision made without pooling the authority
of two or more managers
Personal Attitude towards Delegation
Receptieness
Willingness to let go
Willingness to let others make mistakes
willingness to trust subordinates
willingness to establish and use broad controls

Overcoming Weak Delegation
Define assignments and delegate authority in
light of results expected
Select person in light of the job to be done.
Maintain open lines of communication.
Establish proper controls.
Reward effective delegation and successful
assumption of authority.
Factors Deterining the Degree of
Decentralization of Authority
Costliness of the Decision
Desire for Uniformity of Policy
Size and Character of the Organization
History and Culture of Enterprise
Management Philosophy
Desire for Independence
Availability of Managers
Control Techniques
Decentralization of Performance

Business Dynamics: The Pace of Change
Environmental Influences

Factors Deterining the Degree of
Decentralization of Authority
Organizational Culture
What is organizational culture?
Also known as corporate culture
Behavior of those part of an organization
Collection of values, visions, norms,
systems, working language, beliefs, habits
Contribute to social and psychological
environment of the business
Very difficult to change
Basis
Shared attitudes, beliefs, customs, rules,
mental assumptions
May be written or unwritten
Developed over time
Considered valid by the organization
Manifestations
The manner of conducting business
Treatment of employees and customers
Extent of freedom allowed
Flow of information and power
Commitment to collective objectives
Primary Characteristics
Language
Customs
Mission
Values


Climate
Habits
Symbols
Four Types
Control (hierarchy)
Compete (market)
Collaborate (clan)
Create (adhocracy)
Results
Affects productivity and performance
Influences interactions within and beyond the
organization
Provides guidelines on multiple aspects of the
business
Customer service
Product development and quality
Production methods
Marketing and advertising
Concern for the environment