PRINCIPLE OF MANAGEMENT

CHAPTER 7

ORGANIZING

OUR GROUP MEMBER

Nur Rafidah Binti Sahidan Nor Badariah Binti Zulkifli Siti Raizliza Binti Muhamed Haizan

Tiffany Junit Binti Louis

Definition :

The process of determining what needs to be done, how it will be done and who is to do it.

Importance of organizing : Identification of organizational activities Departmentalization of organizational activities Classifying authority Coordination between authority and

responsibility

Types of Organizational Relationship

1) Chart and Chain of Command

2) Span of Control

3) Line, Staff, and Functional Authority

4) Delegation

5) Centralization and Decentralization

Chart & Chain of Command An organization chart is a graphic

representation of a formal organization structure.

Important tool for analyzing problems in organization.

Organization Chart

PRESIDENT

VP (MARKETING)

VP( HR )

SALES MANAGER

ADVERTISING MANAGER

STAFFINGMANAGER

Organization chart helps managers to ascertain the following factors :

Level of management Chains of command Positions and types of work performed Departmentalization of division of work

Span of control

- known as span of management

- refers to the number of subordinates or employees that is managed by a manager.

- there are two types of span of control :

1) Narrow span of control

2) Wide span of control

Narrow span of control

Requires manager to supervise a small group of employees

More costly compared to a wide span of management

Wide span of control

Requires a manager to supervise a larger group of employees

ADVANTAGE:

- Less overhead cost of supervision

- Prompt response from employees

- Better communication and

coordination

- Suitable for respetitive jobs or tasks

Factors of manager span of control :

Complexity of tasks assigned to

subordinates

Similar tasks are performed repeatedly

Tasks are closely interconnected and

interdependent

Operation takes place in unstable

enviroment

Line, Staff and Functional Authority

In many organization , managers apply authority by dividing it into line , staff , and functional authority .

There are differ each other depending by the types of power which they are based on.

Line AuthorityFor those who are directly responsible to achieve organizational goals , they are in line authority.

It is represented by standard chain of command that start with a board of directors and extends downward.

Based on legitimate power.

The activities categorized as line will differ in each organization.

Staff AuthorityIt is belongs to individual or group in organization who provide various types of service and advice to line managers.

Staff provide planning via research , analysis , and option development.

Staff also assist in policy implementation , monitoring and control , legal and financial matters and in design and operation of data- processing systems.

It is based on expert power .

Manager

Human Resource Manager Production Manager Finance Manager Sales Manager

Production Control

Manager

Industrial Engineering

Manager

Regional Sales

Manager

Regional Sales

Manager

RegionalSales

Manager

DepartmentHead

DepartmentHead

DepartmentHead

ProductionSupervisor

ProductionSupervisor

ProductionSupervisor

Employees

Salespersons

Functional AuthorityProviding advice and service to line members .

Functional authority is the right to control the activities of other department which are related to specific staff responsibilities .

This is common in organizations. It is necessary in carrying out many organizational activities.

It is based on legitimate and expert power.

DelegationProcess of delegating or assigning authority to another person and accountability of carrying out specific activity.

Known as empowerment

It is necessary for efficient functioning in organization as no manager can completely done everything in the organization.

Manager also hold employees accountable for their performance.

Centralization and Decentralization

Most business must make decisions about general pattern of authority in an organization . It may be largely centralized or decentralized.

Centralized organization is the extent to which authority is retained by upper level management in an organization .

Decentralization organization appears when the authority making decision is delegated from one unit to another.

Factors that influence Centralization or Decentralization :

The philosophy held by top level management

The history of an organization's growth

An organization's geographic location

The quality of managers and their availability of controls

The process of mergers, acquisitions and joint ventures

TYPES OF ORGANIZATIONAL STRUCTURES

Are choosen by influences from certain factor:Nature of an organizationSpecialization

Decision-making hierarchy

TYPES OF DEPARTMENTALIZATION

Process in which an organization select its

organizational structure.

FUNCTIONAL DEPARTMENTALIZATION

The grouping of related work activities according to function.

ADVANTAGE: Maintains the power and prestige of the major function Creates efficiency through the principles of

specialization. Centralizes an organizations expertise Permits tighter top level management control of the

function Reduces duplication of personnel and equipment

DIVISIONAL DEPARTMENTALIZATION

Corporate divisions operate as relatively autonomous businesses under a larger corporate umbrella

Can be grouped according to the:ProductsCustomer servesProduction process

PRODUCT DEPARTMENTALIZATION According to product or service available

ADVANTAGE:

1. Increased attention on specific product lines or service

2. Improved coordination of function at divisional levels

3. Better placement of profit responsibility

4. Ease in obtaining or developing executive with broad managerial experience in running an entire entity

CUSTOMER DEPARMENTALIZATION Group related work activities according to what

customers are likely to buy in term of an organizations products or services

PROCESS DEPARTMENTALIZATION

• Related work activities according to production process

GEOGRAPHICAL DEPARTMENTALIZATION

Related work activities according to area that are served by a business.

MATRIX DEPARTMENTALIZATION

When teams are formed in which individuals report to two or more managers

Usually the functional manager and project manager

ADVANTAGE Its hierarchy enables open communication and coordination of

activities among relavent functional specialist

Allows for hierarchy flexibility that enables an organization to respond rapidly to the need for change

Can accommodate a wide variety of project orientated business activities