Fundamentals of Organizing

1. Fundamentals of Organizing • Organizing • arranging the activities of the enterprise in such a way that they systematically contribute to the enterprise’s goals • the process of determining how resources are allocated and prepared to accomplish an organization’s mission • the process by which managers establish working relationships among employees to achieve goals • Results of Organizing • tasks and authority, reporting relationships, grouping of jobs, and systems of coordination

2. Nature of organisational structure Formal pattern of interactions and co-ordination designed by management to link the tasks of individuals and groups in achieving organisational goals. OR Layout of jobs and their linkage to one another for the completion of tasks and successful achievement of organizational goals.

3. organizational structure Four elements: • Assignment of tasks and responsibilities to individuals and units. • Clustering these to form a hierarchy. • Mechanisms for vertical co-ordination. • Mechanisms for horizontal co-ordination.

4. Nature of organisational structure • The organisation chart • Line diagram depicting broad outlines of an organisation’s structure. They indicate, how jobs are grouped and who manages the relationships. • Developing an organizational chart is the overall responsibility of the management. • Principles of developing a goog chart design • Charts should show who has authority over who. • Charts should show official lines responsibility & communication.

5. Chairperson, M.D., and C.E.O. Secretary’s Office GM Marketing General Counsel GM Operations GM H.R. GM Finance Communication Insurance Operations H.R. Develop Internal Audit Market Support Actuarial Health Unit Investment Field Mgmt Region 1 IMS Training Real Estate Field Mgmt Region 2 Financial Analysis Tax

6. Organization Chart

7. Chain of Command • Unbroken line of authority that ultimately links each individual with the top position in the organization. • Chain of command also shows the connection at every successive layer.

8. The Chain of Command Chief Executive Officer Executive Vice President Executive Vice President President Vice President Vice President Vice President Vice President Vice President Region 1 Region 2 Region 3 Region 4 Region 5 District A District B District C District D District E District F District G

9. Methods of vertical co-ordination:How People communicate ‘vertically’

10. Formalisation: • Degree to which written policies, rules, procedures, job descriptions and other documents specify what actions are(not) to be taken under a given set of circumstances. (written policies and procedures) • It is all about having a formal base for your organization. • For Example: written policy of how to conduct elections, how to organize a meeting; how to deal with a problem in the finance department etc.

11. Small V/S BIG businesses

12. Span of Management • Number of subordinates reporting to a specific manager. • It is an important element, that affects the shape and height of an organizational structure. • More levels in the organization means more chances of ineffective communication and management.

14. In order to make effective, management, communication and control from top to bottom, it is essential that there not too many or very few levels BUT WHY??????

15. Can we put more people under the supervision of every manager depends upon the following: Factors influencing span of management: • Low interaction requirements. • High competencelevels. • Work similarity (between organisational peers). • Low problem frequency and seriousness. • Physical proximity. • Few non-supervisory duties of managers. • Considerable available assistance. • Highmotivational possibilities of work.

16. Levels in the Hierarchy • Tall Structure • Flat Structure

17. T A L L S T R U C T U R E

18. T A L L S T R U C T U R E

19. F L A T S T R U C T U R E

20. Tall V/S Flat

21. What if you have to go from Tall to Flat???? • Downsizing • Rightsizing

22. Decision Making and AuthorityWho makes decisions in irganizations

24. Centralisation Extent to which power & authority are retained at the top organisational levels. De-centralisation Extent to which power & authority are delegated to lower levels. Factors favouring De-centralisation • Large organisational size • Geographic dispersion • Technological complexity • Environmental uncertainty.

25. Methods of vertical co-ordination ‘… extent to which power and authority will be retained at upper levels’. Influenced by: Large size: larger organisations likely to be more Decentralised. Geographic dispersion: more dispersed likely to be decentralised, to enable control at a number of sites. Environmental uncertainty: with rapid change, need for more employees to be involved in responding to challenges. Technological complexity: with more complex technology,need to devolve authority to lower levels.

26. Delegation Assignment of part of a manager’s work to others, along with both responsibility & authority necessary to achieve expected results. Factors restraining delegation • Fear subordinate failure. • Time to train subordinates. • Enjoy doing tasks.

27. Authorities in an Organization: Configuration of line and staff positions: • Line authority Authority following the chain of command established by the formal hierarchy. • Functional authority Authority of staff over others in the organisation in matters related directly to their respective functions e.g. HRM dept.

28. Methods of horizontal co-ordination Horizontal co-ordination: Linking of activities across departments at similar levels. • Need for information processing across the organisation. • Promotes innovation through dissemination of ideas & information.

29. Methods of horizontal co-ordination Horizontal co-ordination promoted by: • Slack resources Cushion of resources that facilitates adaptations to internal/external pressures, as well as initiation of changes. • Information systems One information source for many users. • Lateral relations Direct contact, liaison roles, task forces, teams.

30. Lecture summary • Methods of vertical co-ordination • Formalisation • Span of management • Centralisation vs de-centralisation • Delegation • Line & staff authority. • Methods of horizontal co-ordination • Slack resources • Information systems • Lateral relations.