Principles of Management unit 3 organizing

Prepared and presented by,
N . Ganesha Pandian,
Assistant professor,
Madurai School of Management
BA 5102 Principles of
Management
Unit 3: Organizing

Contents
 Nature and purpose of organizing
 Organization structure
 Line and staff authority
 Departmentation
 Span of control
 Centralization and decentralization
 Delegation of authority
MSM - MBA content prepared by Ganesha
Pandian . N2

Contents
 Staffing
 Selection and Recruitment
 Career development
 Career Stages
 Training
 Performance appraisal
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Why do we organize
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Why organization role?
 Verifiable objectives
 A clear idea of major duties or activities
involved
 Authority to whom the accomplished tasks
were reported
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What is organizing
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 The term organizing means a formalized
intentional structure of roles and position.
 Two types of organization: Formal and
Informal organization

Organizational division
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 Organizational division or Department - it
designates any area, division or branch where
the authority assigned for the performance of
specified activities.
 The span of management – the number of
persons limited to numbers managed by a
supervisor

Contd…
Pandian . N8
 Two types: Narrow span of management
and wide span of management
Narrow span of management:
Advantages:
1. Close supervision and control
2. Fast communication
Disadvantages:
1. many levels of management
2. High cost due to many levels

Contd…
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 Wide span of Management:
Advantages:
1. Superiors are forced to delegate
2. Sub ordinates carefully watched
Disadvantages:
1. Tendency of overload
2. Danger of loss of control

Diagram of Narrow and Wide span of
organization structure
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Problems of organization levels
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 Communication may be distorted or manipulated
 Greater the organization structure then greater
the costs involved
 Level of Co-ordination is needed – proper
functioning of org.
 Division of activities lacks co-ordination

Re- Engineering the organization
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 Hammer and Champy define re-
engineering as “the fundamental
rethinking and radical redesign of
business process to achieve dramatic
improvement in terms of performance”.

What is Re- engineering?
Pandian . N13
 Revamping of old procedures, systems and
outdated technology
 New thinking – provide new perspective about
the management.
 In place of customers meeting too many
people to get work done – replaced with
single time transaction

Logic of Organizing
Pandian . N14
 Precise organizational objective
 Support Formulating objectives, plans and
policies
 grouping of activities to be accomplished
 Delegation of authority
 Identification, analysis and classification of
activities to be done.

Departmentation
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 Department by Enterprise function – based on the
functions of an organization.
 Department by Territory or Geography – grouping of
activities based on Geographic area
 Departmentation by Customer grouping – reflects a
primary interest in customers.
 Departmentation by product – according to products
or product lines

Matrix organization
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 Also called as Matrix or Grid Organization
 Combining functional and project or product
pattern of Departmentation in same organization
 Commonly used in Engineering and Research
and Development

Strategic Business Units (SBU’s)
Pandian . N17
 In larger MNC and corporate companies product lines
are handled separately as a Unit.
 An independent company under a roof of common
seal
 SBU manager is responsible for all the functional
activities Like
Marketing
Finance
Packing
Distributing
R&D

Virtual organization
Pandian . N18
 - a rather loose concept – group of
independent firms or people connected
with the help IT
 Pushed after the digitalization and IT
revolution

Line/Staff and Functional
Authority
Pandian . N19
 Power – ability of individual in changing the
belief and actions of the group
 Authority – right in position to exercise the
discretion in decision making
 Power – Referent power, legitimate power,
reward power and Coercive power.

Empowerment
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 Means that employee, managers, or teams at
all levels – given with the power to make
decisions without prior permission
 Power, Responsibility and Empowerment
were related to one another
 Empowerment – also called as worker’s
participation and employee engagement

Line or Staff concepts
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 Scalar principle – there is a flow of the chain
from the top level supervisors to the low rank
employees
 This principle stresses on more clearer the
line, more effective the organization
 Staff relationship is advisory in organization
structure
 It is the relationship of superior exercise their

Functional Authority
Pandian . N22
 - it is the right delegated to an individual
or to a department to control specified
processes, practices, policies or other
matters – exclusively undertaken by
other department

Line and staff Authority
Pandian . N23

Centralization and
Decentralization
Pandian . N24
 This deals with the dispersion of
authority in organization
 Decentralization – tendency to disperse
the decision making authority
 Complete decentralization would cease
the work of manager

Different kinds of centralization
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 Centralization of performance - based
on geographical location
 Departmental centralization – based on
specialized activity
 Centralization of Management –
tendency to restrict delegation of
decision making.

Delegation of Authority
Pandian . N26
 Superior gives the sub-ordinate the
discretion of decision making –
”Delegation of Authority”
 In order to get work done from the sub-
ordinate the superiors has to delegate
some authority to the sub-ordinates.

Delegation of authority – an art
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 Ineffective in delegating the authority to sub-
ordinate may be caused by many factors.
 Some of the personal attitude of the Sub-ordinate
may influence such as:
1. Receptiveness
2. Willingness to let go
3. Willingness to allow mistakes by sub-ordinates
4. Willingness to establish and use broad control

Overcoming weak delegation
Pandian . N28
1. Define assignments and delegate authority
(for expected results)
2. Select the person (job to be done)
3. Maintain open lines of communication
4. Establish proper control
5. Reward effective delegation

Recentralization of Authority
Pandian . N29
 - centralization of already decentralized
authority – not whole withdrawal
 For effective management of sub-
ordinates : some control were backed
with the manager

Organization structure and
culture
Pandian . N30
 Organization structure to an extent influence the
organizational culture.
 Culture is a set of norms and values to be followed by
particular group of people.
 Positive organization culture will increase the
productivity, morale and value of the organization
 Whereas Negative Organization culture will detoriate
all the above said.

Staffing - a managerial function
Pandian . N31
 Staffing – personnel management –
importance of measuring the human assets
 Staffing defined as filling, keeping filled and
positions in the organization structure.
 Performance appraisal, recruitment, selection,
career planning, compensation and training
are some of the functions of staffing.

Factors affecting staffing
Pandian . N32
 Head hunt depends on the
1, turnover rate
2, Expansion plan
3, complexity of organization

Demand and supply of Managers
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 The management inventory
Inventory contains the details of the employees
potential to the managerial position.
Management inventory chart helps an
organization to promote the potential
candidate to the managerial position

Personnel action based on demand
and supply matrix
Pandian . N34
High Low
High Selection
Placement
Promotion
Training and
development
Recruitment
Low Layoffs
Demotions
Early
retirement
Training and
development
if exp. In
future
Demandformanagers
Supply for managers

Situational factors affecting staffing
Pandian . N35
 Affected by many environmental factors such as
Legal
Political
Socio-cultural
Economical
 Equal employment opportunity
 Women in management
 Diversity in workplace

Internal environment
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 Promotion from within
 Promotion from within in large companies
 The policy of open competition
 Responsibility for staffing

Selection
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 Position requirement and job design
1. Identifying job requirements
2. Appropriate scope of the job
3. Meeting managerial skills required by job design
Job design
1. Design of jobs for individuals and work teams
2. Factors influencing job design

Skills and personal characteristics
needed in manager
Pandian . N38
 Analytical and problem solving abilities
Personal characteristics
1. Desire to manage
2. Communication skills and empathy
3. Integrity and honesty
4. Past performance as manager

Recruitment and selection
Pandian . N39
 Recruitment - attracting candidates to fill the
positions in the organization structure
 Selection – choosing the right candidate for the job
 Selection process – reliable and valid
Interviews
Tests – intelligent test, proficiency and aptitude test,
vocational test and personality test.
Assessment centers

Orientation and socialization
Pandian . N40
 Orientation – introduction of the new
employees into the job.
 Large firms have a formal orientation program
explains the culture, history, functions, tasks
and people of the company
 Socialization is the process of making the
employee formalized with the process of the
company.

Performance appraisal
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 Measuring the performance of the
accomplished goals and plans as well as
performance as manager.
1. Performance in accomplishing goals
2. Performance as managers

Different views on Appraisal
issues
Pandian . N42
 Subjective versus objective evaluation
 Judging Vs self-appraisal
 Assessing past performance Vs future
development

Kinds of performance reviews
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 A comprehensive review
 Progress or periodic review
 Continuous monitoring

Performance appraisal in
organization
Pandian . N44
Some of the popular performance appraisal
methods are:
 Assessment Centre Method
 Behaviourally Anchored Rating Scale
 Critical Incident Technique
 Essay Evaluation
 Human Asset Accounting Method
 Management By Objective
 Paired Comparison Method
 Rating Scale

Career stages
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Training
Pandian . N46
 Training is a process of learning a sequence of
programmed behavior.
 It is the application of knowledge & gives people
an awareness of rules & procedures to guide their
behavior
 It helps in bringing about positive change in the
knowledge, skills & attitudes of employees.

References
Pandian . N47
1. Koontz, H. (2012). Essentials Of
management: an international and
leadership perspective. New Delhi: McGraw-
Hill.

Principles of Management unit 3 organizing

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