ORGANIZING

SECOND FUNCTION OF MANAGEMENT

GROUP 2
 The function of management which follows planning.
A function in which the synchronization and combination of human,
physical and financial resources takes place.
 According to Chester Barnard,
“Organizing is a function by which the concern is able to
define the role positions, the jobs related and the co-
ordination between authority and responsibility.”

ORGANIZING
1. Identification of activities – all the activities which have to be
performed in a concern have to bee identified first. For example,
preparation of accounts, making sales, record keeping, quality
control, etc.

A MANAGER PERFORMS ORGANIZING

FUNCTION WITH THE HELP OF THE
FOLLOWING STEPS:
2. Identification of activities – all the activities which have to
be performed in a concern have to bee identified first. For
example, preparation of accounts, making sales, record
keeping, quality control, etc.

A MANAGER PERFORMS ORGANIZING

FUNCTION WITH THE HELP OF THE
FOLLOWING STEPS:
3. Departmentally organizing the activities – in this step,
the manager tries to combine and group similar and related
activities into units or departments. This organization of
dividing the whole concern into independent units and
departments is called departmentation.

A MANAGER PERFORMS ORGANIZING

FUNCTION WITH THE HELP OF THE
FOLLOWING STEPS:
4. Classifying the authority – the manager classify the
powers and its extent to the managers. This activity of giving
a rank in order to the managerial positions is called hierarchy.
 Top level management – formulation of policies
 Middle level management – departmental supervision
 Lower level management – supervision of foremen
This helps in achieving efficiency, avoid wastage of time,
money, effort, and bring smoothness in working.

A MANAGER PERFORMS ORGANIZING

FUNCTION WITH THE HELP OF THE
FOLLOWING STEPS:
5. Co-ordination between authority and responsibility –
each individual is made aware of his authority and he/she
knows whom the have to take orders from and to whom they
are accountable and to whom they have to report.

A MANAGER PERFORMS ORGANIZING

FUNCTION WITH THE HELP OF THE
FOLLOWING STEPS:
1. Specialization
2. Well defined jobs
3. Clarifies authority
4. Co-ordination
5. Effective administration
6. Growth and diversification
7. Sense of security
8. Scope for new changes

IMPORTANCE OF ORGANIZING
FUNCTION:
TYPES OF ORGANIZATIONAL
STRUCTURES:
An organization’s structure is typically represented by an organization chart or simply
“org chart” – a diagram showing the interrelationships of its positions. This chart
highlights the chain of command and the number of layers between the top and lowest
managerial levels.
Organizational structure also dictates the span of control or the number of subordinates
a supervisor has.

1. Divisional Structure
-- each organizational function has its own division.
-- each division contains all the necessary resources and functions within
it to support that particular product line or geography:
 Product departmentalization: a divisional structure
organized by product departmentalization means that the
various activities related to the product or service are
under the authority of one manager.

Geographic departmentalization: involves grouping

activities based on geography, such as an Asia/Pacific or
Latin American division.
2. Functional Structure
-- an organization is divided into smaller groups by
areas of speacility, such as IT, finance, operations, and
marketing. Some refer to these functional areas as
“silos” – entities that are vertical and disconnected
from one another.

TYPES OF ORGANIZATIONAL STRUCTURES:

3. Matrix Structure
-- a type of organizational structure in which individuals
are grouped by two different operational perspectives at
the same time
-- the company is organized by both product and
function

TYPES OF ORGANIZATIONAL STRUCTURES:

1. Principle of Specialization
-- the whole work should be divided amongst the
subordinates on the basis of qualifications, abilities and skills.
2. Principle of Functional Definition
-- all the functions in a concern should be completely and
clearly defined to the managers and subordinates. This can
be done by clearly defining the duties, responsibilities,
authority and relationships of people towards each other.

PRINCIPLES OF ORGANIZING:
3. Principle of Span of Control / Supervision
-- span of control is a span of supervision which depicts the number of employees
that can be handled and controlled effectively by a single manager.
Two types of Span of Control:
1. Wide Span of Control – a manager can supervise and control effectively a
large group of persons at one time.
Features:
i. Less overhead cost of supervision
ii. Prompt response from the employees
iii. Better communication
iv. Better supervision
v. better co-ordination
vi. Suitable for repetitive jobs

PRINCIPLES OF ORGANIZING:
 2. Narrow Span of Control – the work and authority is
divided amongst many subordinates and a manager
supervises a selected number of employees at one time.
Features:
i. work which requires tight control and supervision,
i.e. handicrafts, ivory work, etc.
ii. Co-ordination is difficult to be achieved
iii. Communication gaps can come
iv. Messages can be distorted
v. Specialization work can be achieved
Factors influencing Span of Control:
i. Managerial abilities
ii. Competence of subordinates
iii. Nature of work
iv. Delegation of authority
v. Degree of decentralization
4. Principle of Scalar Chain
-- Scalar Chain is a chain of command or authority
which flows from to bottom.
-- Scalar Chain facilitates work flow in an organization
which helps in achievement of effective results.

PRINCIPLES OF ORGANIZING:
5. Principle of Unity of Command
-- it implies one subordinate – one superior relationship.
-- every subordinate is answerable and accountable to one boss at one time.
Authority Flows from Top to Bottom
Managing Director

Marketing Manager

Sales/Media Manager

Salesmen

PRINCIPLES OF ORGANIZING:
1. Formal Organization – refers to a structure of well
defined jobs each bearing a measure of authority and
responsibility. Has a formal set up to achieve pre –
determined goals.
2. Informal Organization – refers to a net work of personal
and social relationships which spontaneously originates
within a formal set up. It develop relationships which are
built on likes, dislikes, feelings and emotions.

CLASSIFICATION OF ORGANIZATIONS:
FORMAL: INFORMAL:
BOTH ARE • ORIGINATES FROM
• ORIGINATES FROM THE
NEEDED FOR: FORMAL ORGANIZATION
SET ORGANIZATIONAL
• EFFICIENT • DEPENDS TOTALLY UPON
STRUCTURES
WORKING THE FORMAL
• CAN WORK
ORGANIZATION, ORGANIZATION
INDEPENDENTLY
AND • HELPS TO SECURE CO-
• MEMBERS UNDERTAKE
• SMOOTHNESS OPERATION BY WHICH
THE ASSIGNED DUTIES
IN A CONCERN GOALS CAN BE ACHIEVED
TO IN COOPERATION
WITH EACH OTHER SMOOTH

RELATIONSHIP BETWEEN FORMAL AND

INFORMAL ORGANIZATION
DELEGATION OF AUTHORITY – means division of authority
and powers downwards to the subordinate.
For achieving delegation, a manager has to work in a system
and has to perform following steps:
1. assignment of tasks and duties
2. granting of authority
3. Creating responsibility and accountability

DELEGATION OF AUTHORITY –
MEANING, IMPORTANCE AND ITS
PRINCIPLE
1. Authority – can be define as the power and right of a
person to use and allocate the resources efficiently, to take
decisions and to give orders so as to achieve the
organizational objectives. Accountability rest with the person
having the outmost authority.

ELEMENTS OF DELEGATION
2. Responsibility – the duty of the person to complete the
task assigned to him/her. Responsibility without adequate
authority leads to discontent and dissatisfaction among the
person.

ELEMENTS OF DELEGATION
3. Accountability – means giving explanations for any
variance in the actual performance from the expectation set.
Accountability can not be delegated. Accountability arises
from responsibility.

ELEMENTS OF DELEGATION
AUTHORITY
• The legal right of a person or a
superior to command his
subordinates.
• Authority is attached to the position
of a superior in concern.
• Authority can be delegated by a
superior to a subordinate.
• Flows from top to bottom.
DIFFERENCES BETWEEN AUTHORITY AND
RESPONSIBILITY
RESPONSIBILITY
• The obligation of subordinate to
perform the work assigned to him.
• Responsibility arises out of superior-
subordinate relationship in which
subordinate agrees to carry out duty
given to him.
• Responsibility cannot be shifted and
is absolute.
• Flows from bottom to top.
1. Through delegation, a manager is able to divide the work and allocate it to
the subordinates.
2. With the reduction of load on superior, he can concentrate his energy on
important and critical issues of concern.
3. Delegation of authority is the ground on which the superior-subordinate
relationship stands.
4. Delegation of authority in a way gives enough room and space to the
subordinates to flourish their abilities and skill.
5. Delegation of authority is help to both superior and subordinates. This, in a
way, gives stability to a concern’s working.

IMPORTANCE OF DELEGATION