ORGANIZING

Chapter 4- Organizing

The Need to Organize

          Without proper organization, our families, clubs, government or business enterprises will not be able to achieve its ends for which they are established.

          A manager who has been in business for quite a long time realizes that a poor organization can run a good product into the ground  and that a good organization with a poor product can run a good product out of the market.

Organizing Defined

          Organizing is the process of grouping and assigning activities and providing the necessary authority to carry out the activities.

          It is differentiated from staffing in that in organizing, the manager decides what jobs will have to be filled and what the people who hold them must do. In staffing, he attempts to find, train and develop the right person for each job.

Types of Organization

1.       Line Organization:

          The simplest and the oldest type of organization. It is characterized by the direct vertical flow of authority from the top man through the various managers down to the workers. Members of the organization find n difficulty in determining to whom they report and who is responsible to them because of the clear authority structure.

                                                    A Simplified Line-Staff Organizational Structure

                                                              

2.       Line an Staff Organization:

          It consists of the addition of staff specialists to the simple line organization. This addition of the becomes necessary as a line grows in size.

          In  essence, the staff component of this organization type is advisory and supportive in nature and added to contribute efficiency and maintenance of the organization. The line component efforts directly affect the finance, manufacturing or marketing of the organization’s goods and services.

A Simplified Line-Staff Organizational Structure

3.       Matrix Organization

          The matrix organization evolved as a way of forming teams within the line and staff  organization for a specific project.

          A project, in this regard, is “a combination of human and non-human resources pulled together in a temporary organization for a specified purpose.”  The manufacturing of a new product, absorbing a small company, and opening a foreign plant are examples of projects.

          A project manager is appointed for each clear cut mission and then assign the personnel needed from each of the functional departments of the parent organization to complete the mission.

          An advantage of the matrix organization is its ability to meet unusual, innovative or complicated projects often shunned by the typical organization with its functional departments.

          One potential disadvantage is a conflict in authority. This may come when conflicting instructions are received from the project manager and functional manager by the personnel in the field. This conflict can be avoided if the authority of the project manager is clearly distinguished from that of the functional managers from the very start.

                                                                                    Matrix Organization

Developing an Organizational Structure

          The shape the organizational structure takes comes from careful and detailed study and application of many organizational principles.

Principles of Organization

          Regardless of the size and type of organization, a few principles have been found to be universally applicable in developing or modifying an organizational structure.

          This principles apply to all organizations developed or organized to run.

1.       Consideration of Objectives

          The organizer should have clearly in mind what he wants to accomplish. Once the objective has been clearly defined, he should develop a structure that will help him reach his objective.

          Aside from this, the organizer must also define the objective of each position in the organization.

          These objectives should be logically related to one of the overall objectives in such a way that if each position holder attains objectives assigned to him, the goals of the entire organization will be realized.

2.       Division of Work or Specialization

          Division of work or specialization is the narrowing of the scope of a person’s job to one or a few major functions to enable him to specialize on theses few and to increase his efficiency.

          This enables the person to concentrate on a limited range of duties, understand these duties thoroughly and learn them well and thereby be in a better position to improve his work.

Two Basic Requirements for the Successful Use of Division of Work

a.        Relative Large Volume of Work – enough volume must be produced to allow for specialization and also to keep the worker busy.

b.       Stability in the Volume of Work – work attendance, quality of new materials, product design, and production technology.

In organizing, what is sought is synergism. This refers to the action of separate but related parts producing a sum greater than its components.

3.       Delegation of Authority

          Authority is the right to command or act and expend resources. In an organization, this authority to take action or make decisions should be delegated to individuals who have the necessary knowledge and ability to take intelligent action.

Reasons why a manager should delegate:

a.        Delegation frees the management from overall planning and decision making.

b.       The delegate gains feelings of belonging, and being needed.

c.        Delegating is one of the best methods for developing subordinates.

          Delegation can be accomplished easily if clear lines of authority have been established. These lines should run from that person or group who has the supreme authority down to the bottom of the hierarchy.

          Failure to establish clear line of authority from top to bottom of the organization may result to overlapping actions or improperly conceived job responsibilities.

This lines of authority must:

-          point out who is responsible for what

-          show who report to whom

-          indicate how the various functions of the organization are grouped

          However, the manager should understand exactly what authority is within his power to grant. He should not confuse it with unlimited power. Typically, a manager is permitted to act strictly within the company policy in accordance with established procedures.

4.       Parity of Responsibilities and Authority

          Responsibility and accountability is the obligation of a subordinate to a superior to perform assigned activities to the best of his ability.

          When a subordinate is made responsible for reaching a given objective, he should be given enough authority to take steps to reach it. Authority should be commensurate with responsibility.

          Unlike authority, responsibility and accountability cannot be delegated. This is because a superior can never shed the responsibility of his job by passing them on to subordinates.

5.       Span of Control

          Span of Control refers to the number of subordinates a manager can effectively control. The question that has been bugging experts for years is, “How Many?’

          The rule to be followed by each manager is that he should have no more people reporting to him than he is capable of controlling effectively and efficiently

          
Generally speaking, the span of control tends to be short at top organization levels, especially if the work has non-recurring problems.

          In recent years, the trend in span of control at lower levels has been toward an increase in number.udies showed that as a result of increasing the span of control at this level, a rise n morale, sales, and profit was noted. This rise is attributed to the fact that a manager who has a large number of people reporting to him is forced to delegate authority to his subordinates because he cannot personally supervise them all. Because the manager has to delegate more often, he becomes more careful in selecting his subordinates.

6.       Unity of Command

          This principle states that each member of an organization should be accountable to, and receive directions from only one supervisor, hi immediate supervisor. This practice prevents conflicting orders which might result in confusion.

          As much as possible, no subordinate in any organization must be subject to the orders of more than one superior.

7.       Short Chain of Command

          This principle states that there should be as few levels of supervision between the highest authority in an organization and the rank and file as possible. This minimizes distortion in the down ward and upward communication.

          Studies have proven that the longer the scalar chain or the chain of command, the greater the distortion of communication.

8.       Coordination

          This principle states that all individual activities in the organization must be synchronized with respect to their amount, time and direction to avoid the duplication of work that results in wasted effort and to obtain consolidated action toward a common goal. This coordination is achieved through clearly written objectives and job descriptions.

          Coordination can also be achieved by providing common superiors for those whose activities are interrelated. The first-line supervisor coordinates the work of the rank-and-file and his own activities are coordinated those of other first-line supervisors by the manager of the next higher level and so on up to the president, who coordinates the efforts of the top-level managers.

          Another device for ensuring coordination is the use of a general staff man or group to act as a clearing house of information, seeing to it that those who will be interested in a particular information are informed promptly.

          Still another device is the appointment of special coordinators, temporary or permanent committees for the various phases of the organization to consider or decide matters.

9.       Efficiency

          This principle in organizing specifies that “the organization should be so planned that the objectives can be attained with the lowest possible cost, which may mean either money cost or human cost or both.”

10.    Separation of Line and Staff Functions

          This principle states that where separation of functions is possible, no individual or department should be given both line and staff functions.

          Line functions are directly involved in producing and marketing the organization’s goals and services; whereas staff functions are advisory and supportive in nature and are designed to contribute to the efficiency of the organization.

          Combining both functions in an individual or department often leads to a confusion of authority.

        

11.    Consideration of Policies, Procedures, and Rules

          Policies, procedures, and rules are all guides to actions which relate to goal attainment. They outline the boundaries within which objectives must be pursued. They help the manager to make decisions and yet stay within the boundaries that are believed desirable.

          Written policies, procedures and rules represent the law of the organization. They are of great help in the proper operation of the organization in as much as they give the manager a better understanding of his authority and responsibility over particular functions.

12.    Job Groupings

          In developing the organizational structure \, the organizer creates operating jobs. Basic operations are assigned to different individuals.

          These jobs are logically grouped into sections, sections into departments, and so on until all functions are covered.

          This grouping activities into jobs, sections, and departments should be done with extreme care. Once a job is established, employees often guard their roles jealously. this has often resulted in costly jurisdictional controversies which have paralyzed companies and even whole industries.

13.    Flexibility

          An organization is not a static entity. The environment in which it exists and the [people who make it up continue to change.

          An organization must be flexible if it is to cope with these changes. Without a certain amount of flexibility, the organization will not be able to withstand pressures from within and without, nor give away to the demands for genuine changes thereby impairing its organizational structure.

14.    Communication

          The organizer must design and install an honest-to-goodness communication system in the organization to help provide both the manager and the employees the information they need, promptly and accurately.

          If they are well informed, the work will proceed smoothly and they can take pride in their accomplishments.

15.    Balance

          The organization should be periodically assessed to ensure that a reasonable balance exists in the size of it various segments.

          A reasonable balance should be struck between standardization of procedures between centralization and decentralization of decision making. Without this reasonable balance, the objective of the organization cannot be realized economically and effectively.

Developing an Organization

          Successful organization or reorganization requires that manager considers the principles and practices mentioned above. However, these principles will not in itself  bring about the development of a new organization.

          The manager must develop a organizational structure by following some time-tested steps:

          

1.       Define precisely the new objectives the new organization is set to accomplish. This is imperative because precise objectives determine the structure and permanency of the organization. This step will bring into clear focus the basic organizational characteristics.

2.       List down all the activities required to achieve the objectives and group them into practical units. Products, tools and processes are possible areas within which to group or regroup the activities listed.

3.       Determine the organizational structure that will be most effective in accomplishing the activities listed, considering, the principles previous discussed.

4.       Ascertain the availability of qualified personnel from within and from without to man the organization. If the manager is reorganizing, it is important that he secures information about work performed, authority possessed and duties assumed by the present staff. He should consider changes in certain activities to bring about better results.

5.       Consider the new organization in the light of available personnel, money, facilities, time and other limitations. These constraints bring “blue sky” proposals down to earth.

6.       Prepare for the new organization and implement it. Prior to implementation, acceptance of the new organization by those affected by it must be won by the top manager.

7.       Conduct periodic organization audits to check whether the new organization encourages the attainment of goals, utilizes present personnel to the fullest and contributes to their growth.

          The manager should accomplish all these without losing sight of the principles of organization.

Organizing is a never-ending task. The manager should remember that his organization, his employees and the world they operate in are always changing.

          Even the best plan soon becomes outdated by changes in work and personnel. The need for adjustment – often minor, occasionally major – is continual.