Outcomes
- To explain the meaning of the vocabulary associated with “organizing”.
- To know the factors which affect the choice of structure of the organization.
- To recognize the different types of organizational structure.
- To discuss the advantages and disadvantages of each type of organization structure.
- To explain the “Principles of Good Organization”.
Vocabulary
Organizing
- determining the structure of relationships between individuals to facilitate the accomplishment of business objectives.
Organizational Structure
- formal system of working relationships that separates and integrates tasks.
- Authority
the right to make a decision
- Responsibility
an employee’s obligation to perform assigned tasks
- Accountability
the expectation that each employee/subordinate must accept credit or blame in performing assigned tasks
Delegation of Authority
process by which the manager assigns authority and responsibility to subordinates
Principles include-
- establish objectives and standards
- define boundaries of authority and responsibility
- involve subordinates
- require completed work
- provide training
- establish adequate controls
Organization Charts
Structures - formal and informal
Organization Charts
-
Convey 5 points about structure
- tasks
- subdivisions
- type of work
- levels of management
- lines of authority
Management
- Line Management
those specifically responsible for achieving goals: sales targets, prod levels
- Staff Management
those responsible for advising line management: personnel, accountants
Factors Affecting Choice of Structures
- Variety of Activities
1 product and market then functional structure best ;more products and more markets increases variety of tasks required to be performed which best dealt with on divisional basis
- Nature of the Environment
as more changes occur in the E. more info needs to be processed at the different Organization levels. These become overloaded and delays arise. By allowing decisions to be made at a lower level there is a freeing of senior man time
Types of Organizational Structure
FUNCTIONAL
Departments organized by business function - sales, production, finance etc.
Advantages
- promotes skills specialization
- eliminates duplication of resources
- enhances career development with a department
- bosses and employees share common experiences
- promotes high quality technical problem-solving.
Types of Organizational Structure
DIVISIONAL
Departments organized by other than function - product, geographic area, market.
Advantages
- all equipment in one place to do the job
- managers get to know problems of customers in one region
- managers develop expertise in solving problems at one location
Types of Organizational Structure
MATRIX
Functional specialists still concentrated in functional departments but seconded to particular projects as they arise.
Advantages
-
greater flexibility to managers in assigning people
- encourages interdisciplinary co-operation
- makes specialized knowledge available to all projects
Principles of Good Organization
- Unity of Objective
- Span of Control
- Delegation
- Unity of Command
- Scalar Principle
- Responsibility