Chapter 3B - ORGANIZING

Organizing Is the process of grouping together of men and establishing relationships among them, defining the authority and responsibility of personnel by using the company’s other basic resources to attain predetermined goals or objectives.

Organizing as a Process Organizing as a process should consider several factors or fundamentals: The structure must reflect objectives and plans because activities of the organization are based on them. 2. The structure must reflect authority given to top and middle management. 3. Structure, like any other plan, should reflect their external environment. 4. Organization must be manned.

What is an Organization? Organization is the “executive structure of a business.” Organization also connotes a creative process.

Types of Organization Structures Line Organization This is the simplest form of structure and refers to a direct straight-line responsibility and control from the top management to the middle management and to the lower level. Manager Foreman Foreman Worker Worker Worker Worker Worker Worker

2. Line and Staff Organization -- This utilizes the assistance of experts or specialists. Business leaders have recognized – as their companies expand from simple to complex organizations – that a small number of managers could not personally assume direct responsibility for all the functions, such as research, planning, distribution, public relations, industrial relations and many other activities of business.

Managing Director Marketing Manager Personnel Manager Production Manager Engineering Manager Finance Manager Marketing Research Advertising Sales Quality Control Purchasing Plant Supervisor Maintenance Line and Staff Type

3. Functional Organization It utilizes the pure services of experts or specialist. The development of staff departments and positions led quite naturally to attempt complete reorganization on a functional basis. This removed the staff specialist from his “assisting” capacity and gave him the pure authority and responsibility for supervision and administration of the function replacing the operating foreman.

Gang boss Inspector Work boss Shop boss Instruction boss Speed boss Repair boss Time boss Subordinate Functional Type

4. Committees It is another common organizational form used in situations where group participation and decision are required. It is a tool for the development of ideas and procedures It is a strong right arm of a tactful administration that realizes the importance of getting its people to work together in the solution of its own problem.

Committees may be classified as: Ad Hoc Committee - Undertakes temporary activities Standing Committee - Sometimes called permanent committee which undertakes permanent activities, such as budget committee.

Types of Organization Chart Master Chart or Chart of Authority This shows the entire organizational structure. It is a master plan of the principal departments, with lines of authority and responsibility and the mutual relationships of all departments or major components. Functional Chart The functional chart shows at a glance the functions and activities of the positions and / or departments. It shows the major responsibilities of departments or positions. Listed below each job title are brief statements of the responsibilities.

Personnel Chart This shows the departments in the same relative manner as the functional chart. But instead of listing the functions, the titles of the positions of the names of persons are indicated. The chart also shows the class titles of all positions in the department together with their locations in the organization.

How to draw an Organization Chart Before drawing an organization chart, one should observe the following procedures. First, gather the necessary information on the following: 1. Existing positions and / or departments; 2. Objectives, functions, and activities of positions and / or departments; 3. Organization;

4. Lines of authority and responsibility from top management to middle management; 5. Functional relationships between line and staff positions / departments; 6. Positions and job titles; 7. Physical location of each position / department.

The following rules should be observed drawing an organizational chart. 1. Boxes or rectangles representing various positions/jobs in the organization should be grouped and placed according to their levels (top management, middle management, rank and file) in the organization. 2. The boxes indicating the organizational functions on the same level should be of the same sizes, top management level, 3/8” x 2 ½”

3. Solid / block lines should connect boxes or rectangles to designate managerial control or line of authority. Lines of authority do not pass through a box or rectangle. Each box should have lines indicating its relation to the organizational units above and below it. 4. When an assistant to the head of an organizational position acts in the capacity of a staff or technical assistant without exercising managerial authority over the line organization, the box should be drawn to the side of the line organization. It could either be on the right or left side. 5. Staff and service functions are placed under the office or units served, usually to the right using the dotted lines. They should be drawn of the same sizes.

BOARD OF DIRECTORS PRESIDENT VICE-PRESIDENT CORPORATE SECRETARY CORPORATE TREASURER Rule 1 Top Management Rule 1 Middle Management CONSULTANT PRODUCTION MANAGER ACCOUNTING MANAGER MARKETING MANAGER PERSONNEL MANAGER E W E E E E W E Rule 5 Rule 3

Reoganization Is the process by which an existing organization undergoes changes in the size and shape of the organization structure. The change may range from simple to complex. Departmentation Departmentation results from grouping of work ,the desire to obtain organization units of manageable size, and to utilize managerial ability An organization structure and design are shaped significatly by the departmentation followed.

Departmentation by function involves identifying major functions to be performed in achieving the goals of an organization and the grouping of other related functions and activities accordingly. Managing director Production Manager Marketing Manager Finance Manager Personnel Manager Legal Adviser R & D Director

Departmentation by Product involves grouping the activities and functions on the basis of products manufactured by the company. Managing Director Fans Division Stoves Division Lamps Division Refrigerators Division

In some organization the grouping of activities is done on the basis of the natures of work being done ,that is by process. Managing Director Inspecting Shipping Dyeing Bleaching Weaving Spinning Separating Receiving

Finally, the grouping may be done on the basis of geographical location. In this method, the entire service area of the organization is divided into geographical locations or territories. Managing Director NCR Luzon Visayas Mindanao

Result of Good Organization 1.Establishing a responsibility and preventing “buck passing.” 2. Providing a easier communication; 3. Eliminating jurisdictional disputes between individuals; 4. Helping develop executive ability; 5. Aiding in measuring a person’s performance against his charges and responsibilities; 6. Aiding in equitable distribution of work, functions, and / or personnel supervision; 7. Permitting expansion and contraction without with out seriously disrupting the structure;

8.Pointing out “dead- end” jobs; 9. Affording movement in the direction of the “ideal” organization, in times of change; 10. Establishing closer cooperation and higher morale; 11. Delineating avenues of promotion; 12. Preventing duplication of work; 13. Making growth possible with adequate control and without literally killing top executives through overwork; 14. Aiding in wage and salary administration through forced job analysis and description.

The Elements of Delegation Delegation is the process of entrusting and transferring responsibility and authority by the top management to the lowest level. The Elements of Delegation Responsibility Authority Accountability

Responsibility This is the work or duty assigned to a particular position. Responsibility involves mental and physical activities which must be performed to carry out a task or duty. Authority It refers to the power or the right to be obeyed. It is also the sum of powers and rights entrusted to make possible performance of the work delegated. Accountability This is the answerability of the obligation to perform the delegated responsibilities to exercise the authority for the proper performance of the work.

THE ART OF DELEGATION -Is considered an art and a science. It is an art because it is a skill that the manager performs effectively if he practices it. The Exception Principle - states that manager should concentrate their efforts on matters that deviate significantly from the normal and let subordinates handle routine matters.

Formal Informal Formal and Informal Organizations have planned structure deliberate attempts to create patterned relationships usually shown by a chart traditional theory advocates formal organization. Not formally planned - arise spontaneously as a result of interactions not depicted in a chart

Centralized and Decentralized Organization Conduct Research & Analysis Provide an Objective Viewpoint Monitor Specific Operations Submit Regular Advisory reports Identify Options To Solve Problems THE MANY FUNCTIONS OF STAFF Make Recommendations for Future Courses Of Action Communicate Management Decisions to Subordinate Alert Management To Potential Trouble Sports

Control by few because men at the top believe they are indispensible. Don’t trust subordinates, and like to build empires within. As a result of the above attitude. Decisions are made by the top management. The drawback is potential paralys of decision making and poor manual. CENTRALIZED

DECENTRALIZED Control by few because men at the top believe that participation will increase efficiency and effectiveness. As a result of the above attitude, decisions are made throughout the organization. The drawback may be controlled by many.

THE NATURE OF LINE AND STAFF RELATIONSHIP -As the organization matures, though, it usually begins to increase its staff personnel because of the complexity of the work; it is simply no longer possible to use only line personel.

FLAT STRUCTURE TALL STRUCTURE “FLAT” and “TALL” STRACTURES It has four levels with a span of two. Has two levels with a span of ten It involves more organizational layers or level than “flat” structure. This permits general supervision. This leads to close or tight supervision. Communication is much faster here.

Chapter 3B - ORGANIZING

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Chapter 3B - ORGANIZING