PREPAIRED BY MICHAEL ANGELO DE LEON

CHAPTER CONTENTy REASONS FOR ORGANIZING y ORGANIZING DEFINED y THE PURPOSE OF STRUTURE y THE FORMAL ORGANIZATION y INFORMAL GROUP y TYPES OF ORGANIZATIONAL STRUCTURES y TYPES OF AUTHORITY y THE PURPOSE OF COMMITTEES

INTRODUCTIONy The engineer manager needs to acquire various

skills in management, including those for organizing technical activities. In this highly competitive environment, unskilled manager will not be able to bring his unit, or his company, as the case maybe, to success.

y The opportunities offered by skillful

organizing are to important for an engineer manager to ignore. This chapter is intended to provide him with some background and insight in organizing.

REASONS FOR ORGANIZINGy Organizing is undertaken to facilitate the

implementations of plans. In effective organizing, steps are undertaken to breakdown the total job into more manageable man-size jobs. Doing these will make it possible to assign particular task to particular persons. In turn this will help facilitate the assignment of authority, responsibility, and accountability for certain functions and tasks.

ORGANIZING DEFINEDy Organizing is a management function which

refers to the structuring of resources and activities to accomplish objectives in an efficient manner. y The arrangement or relationship of positions within an organization is called the structure. The result of the organizing process is the structure.

THE PURPOSE OF THE STRUCTUREyThe structure serves some very

useful purposes. They are the following:

1. It defines the relationships between tasks 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. 3. It defines the groupings of individuals into departments into organizations. 4. It defines the system to effect coordination of effort in both vertical (authority) and horizontal (tasks) directions.

When structuring an organization, the engineer manager must be concerned with the following:

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 decisionmaking authority to subordinates. 3. Departmentation- the grouping of related jobs, activities, or processes into major organizational subunits. 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 objectives.

THE FORMAL ORGANIZATIONThe formal organization is the structure that details lines of responsibilities, authority, and position. What is depicted in the organization chart is formal organization. It is the planned structure and it represent the deliberate attempt to establish patterned relationships among components that will meet the objectives effectively.

The formal structure is described by management through:1. ORGANIZATIONAL CHART 2. ORGANIZATIOINAL MANUAL AND 3. POLICY MANUAL

y The organization chart is a diagram of the

organization s official positions and formal lines of authority. y The organizational manual provides written description of authority relationships, details the functions of major organizational units and describes job procedures. y The policy manual describes personnel activities and company policies.

INFORMAL GROUPSy There some instances when members of an

organization spontaneously form a group with friendship as a principal reasons for belonging. This group is called an informal group. It is not a part of formal organization and it does not have a formal performance purpose. y The informal organization, useful as it is, is vulnerable to expediency, manipulation, and opportunism, according to Valentine. Its low visibility, Valentine added, makes it difficult for management to detect these previsions, and considerable harm can be done to the company.

TYPES OF ORGANIZATIONAL STRUCTURESy Before the commencement of activities, the

decision makers in an organization will have to decide on what structure to adapt. Depending on the size and type of operations, a certain structural type may best fit the requirements.

Organizations may be classified into three types. They are the following:1.

2.

Functional organization- his is a form of departmentalization in which everyone engaged one functional activity, such as engineering or marketing, is grouped into a unit. Product or market organization- this refers to the organization of the company by divisions that brings together all those involved with a certain type of product or consumer. Matrix organization- an organizational structure in which each employee reports to both a functional or division manager and to a project or group manager.

3.

Reason or Factors for Joining or Forming a Groupy FRIENDSHIPCOMMON INTEREST Like: concern for environment or love for classical music

PROXIMITYWhich gives people the chance to share ideas, opinions, and feelings NEED SATISFACTION Which are are derived from unions, cultural societies, fraternities, etc. COLLECTIVE POWER Which is derived from unions, fraternities, etc.

WHI H

FORM OR JOIN

AN INFORMAL GROUP

GROUP GOALSWhich attract individuals like: consumer society, sports club, etc.

FUNCTIONAL ORGANIZATIONy Functional organization structures are very

effective in smaller firms, especially singlebusiness firms where key activities revolve around well-defined skills and area of specialization .

Functional organizations have certain advantages. They are the following:1. 2. 3. 4. 5. 6.

The grouping employees who perform a common task permit economies of scale and efficient resource use. Since the chain of command converges at the top of the organization, decision-making is centralized, providing a unified direction from the top. Communication and coordination among employees within each department are excellent. The structure promotes high-quality technical problemsolving. The organization is provided with in dept skill specialization and development. Employees are provided with career progress within functional department.

A Typical Functional Organization Chart of a Construction Company

PRESIDENT

Vice President Marketing

Vice President Construction

Vice President Finance

Vice President Human Resources

The disadvantages of functional organization are the following:1. 2. 3. 4. 5. 6.

Communication and coordination between the department are often poor. Decisions involving more than one department pile up the top management level and are often delayed. Work specialization and division of labor and division of labor, which are stressed in functional organization, produce routine, non motivating employee task. It is difficult to identify which section or group is responsible for certain problems. There is limited view of organizational goals by employees. There is limited general management training for employees.

PRODUCT OR MARKET ORGANIZATIONy The product or market organization, with its

feature of operating by divisions, is appropriate for a large corporation with many product lines in several related industries.

A Typical Product/Market Organization Chart of a Construction Company

PRESIDENTVice President Government Accounts Vice President Industrial Accounts Vice President Residential Accounts

Marketing Construction FinanceHuman Resources

Marketing Construction FinanceHuman Resources

Marketing Construction FinanceHuman Resources

The advantages of a product or market organization are as follows:1. 2. 3. 4. 5. 6.

The organizations are flexible and responsive to change. The organization provides a high concern for customer's needs. The organizations provides excellent coordination across functional departments. There is easy pinpointing of responsibility for product problem. There is emphasis on overall product and division goals. The opportunity for the development of general management skills is provided.

The i p i1. 2. 3. 4. 5.

ti

es ket e s

he ll s:

There is a high possibility of duplication of resources across divisions. There is less technical depth and specializations in divisions. There is poor coordination across divisions. There is less top management control. There is competition for corporate resources.

MATRIX ORGANIZATIONy 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 that matrix structure was designed to keep employees in a central pool and to allocate them to various projects in the firm according to the length of time they were needed .

A Typical Matrix Organization Chart of a Construction Firm

PRESIDENTVice President For Finance Vice President For Constuction Vice President For Human Resource

Project Manager

Constructio n Manager

Purchasing Manager

Contract Administrati on Manager

Project X Manager

Engineer

Purchasing Specialist

Contract Negotiator

Project Y Manager

Engineer

Purchasing Specialist

Contract Negotiator

Project Z Manager

Engineer

Purchasing Specialist

Contract Negotiator

The matrix organization is afforded with following advantages:1. 2. 3. 4. 5.

There is more efficient use of resources than the divisional structure. There is flexibility and adaptability to changing environment. The development of both general and functional management skills are present. There is interdisciplinary cooperation and any expertise is available to all divisions. There are enlarge tasks for employees which motivate them better.

The matrix organization has some disadvantages, however. There are the following:1. 2. 3. 4. 5.

There is frustration and confusion from dual chain of command. There is a high conflict between divisional and functional interests. There are many meetings and more discussion than action. There is a need for human relations training for key employees and manager. There is a tendency for power dominance by one side of the matrix.

TYPES OF AUTHORITY1. 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 in the organization.

y Line departments perform tasks that reflect the organization primary goal and mission. In a construction firm, the department that negotiates and secures contracts for the firm is a line department. The constructions division is also line function.

Staff departments include all those that

provide specialized skills in support of line department. Examples of staff departments include those which perform strategic planning, labor relations, research, accounting, and personnel.

A Line and Staff Organization

PRESIDENTCorporate Planning Legal Counsel

Director of Research and Development

Director Of Marketing

Director Of Manufacturin g

Director Of Finance

Director Of Personal

Industrial Engineering Manager

Factory Manager

Quality Control Manager

First Ship Supervisor

Second Ship Supervisor

Third Ship Superviso r

STAFF OFFICER 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.

y Functional authority is one given to a person

or a work group to make decisions related their expertise even if this decisions concern other departments. This authority is given to most budget officers of organizations, as well as other officers.

THE PURPOSE OF COMMITEESy A committee is a formal group of persons

formed for a specific purpose. For instance, the product planning committee, as described by Millevo, is often staffed by top executive from marketing, production, research engineering, and finance, who work part-time to evaluate and approve product ideas.

COMMITTEES MAY BE CLASSIFIED AS FOLLOWS:1. Ad hoc committee- one created for a short-term

purpose and have a limited life. An example is the committee created to manage the anniversary festivities of a certain firms. 2. Standing committee- it is a relatively permanent committee that deals with issues on an ongoing basis. An example is the grievance committee set up to handle initially complaints from employees of the organization.

The end