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Fundamental Of Management MGT 162 : Chapter 4 Organizing

Fundamental of management (mgt162), universiti teknologi mara.

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Preview text, chapter 4: organizing, 4 definition of organizing.

 A plan for arranging and coordinating the activities of an organization for the purpose of fulfilling its mission and achieving its goals.

Components of Organizational Design

 Overall organizational design is defined by three primary components:  Organizational structure  Integrating mechanisms  Locus of decision making

 Organizational Structure  Defines the primary reporting relationships that exist within an organization.

o Definition of organizing o Organizational structure o Span of management o Types of organization chart o Authority o Delegation o Coordination

SPOT...... a) Define organizing?(2M) (Sep 2014)

 The chain of command and hierarchy of responsibility, authority, and accountability are established through organizational structure.

4 ORGANIZING PROCESS

4.2 Detailing of Work  Various tasks of the organization must first be determined  For example: A restaurant owner, before he operate a new restaurant, he must detail the number of person involved, the type of cooking**. 4.2 Division of Work**  Dividing the total workload into activities that can logically and comfortably be performed by one person of by a group. 4.2 Departmentalization  Group individuals into related assigned tasks.  For example: Individuals involved in sales, promotions, advertising to be grouped under the marketing department. 4.2 Coordination of work  Reconcile differences in approach, timing effort, or interest and to harmonize individual goals to contribute to organizational goals. 4.2 Monitoring and Reorganizing Work  Periodical reassessment of the four preceding steps is necessary.

Detailing of work

Division of work, departmentalization, coordination of, monitoring and, reorganizing.

4.4.1 Divisional Structure  Members of the organization are grouped on the basis of:  Common products  Geographic markets  Customers served

 Types of Divisional Structure I) Product

ADVANTAGES DISDVANTAGES

 Members of the organization are grouped according to the particular function that they perform within the organization.  Appropriate when an organization’s greatest source of complexity comes from the diverse tasks that must be performed rather than from its products, geographic markets, or consumer groups.

 Facilitates specialization  Cohesive work groups  Improved operational efficiency

 Focus on departmental vs. organizational issues  Difficult to develop generalists needed for top-level management  Only top-level management held accountable for profitability

PRODUCT DIVISIONAL ADVANTAGES DISADVANTAGES

Most appropriate for organizations with relatively diverse product lines that require specialized efforts to achieve high product quality.

 Enhanced coordination.  Better assessment of manager performance and responsibility.  Development of generalist managers.

 Managers may lack expertise to operate in wide geographic areas.  Duplication of resources.

II) Geographic divisional

III) Customer divisional

GEOGRAPHIC ADVANTAGES DISADVANTAGES

Most appropriate for organizations with limited product lines that either have wide geographic coverage or desire to grow through geographic expansion.

 Allows for focus on specific new markets.  Good structure for growth along geographic lines.  Adaptable to local needs.

 Duplication of product or product/technology efforts.  Coordination and integration are difficult.  May be difficult to manage diverse product lines.

CUSTOMER ADVANTAGES DISADVANTAGES

Most appropriate for organizations that have separate customer groups with very specific and distinct needs.

 Based department is that the organization will focus all its efforts in fulfilling the needs of consumers  An organization will establish different units in order to provide services to specific consumers and also allow the organization to specialize and adapt its products and

 the existence of duplication of work and use of resources and difficulty to coordinate between departments that provide services to different types of consumers . Consumer departmentalization causes employees to overemphasize effort to fulfill consumers’ needs until it affects the

• Dynamic network  A network structure that makes extensive use of outsourcing through alliances with outside organizations.

Sample Network Structure

4 SPAN OF MANAGEMENT

 Definition - How many people are directly reporting to one manager?  Also known as span of control means how many subordinates are handled by a superior.  The number of individuals a manager supervises or the number of employees who report to a single manager.  The more individuals a manager supervise, the greater the span of management.  The span of management has a significant effect on how well manager can carry out their responsibility.

• With the aid of a diagram, discuss four (4) types of organizational structure. (20M) (Mar 2017, Mar 2015 & Sep 2013)
• Departmentalization is a process in which an organization selects its organizational structures. With the aid of a diagram, discuss five (5) types of departmentalization. (20M) (June 2019 &Oct 2016).

4.5 Factor that influence the span of management

4.5 TYPES OF ORGANIZATIONAL CHART

 There is a definite relationship between span of management and the type of an organizational chart.  An organizational chart is a diagram that shows the structure of an organization and the relationships and relative ranks of its part and position.  An organizational chart of a company usually shows the managers and subordinate who make up an organization.  It also shows the relationships between the organization staff members

4.5.2 Tall structure

 Is an organizational chart characterized by many levels and a relatively narrow span of management.

4.5.2 Flat structure

 Is an organizational chart characterized by few levels and a relatively wide span of management.

Similarity of function. If similarity of subordinates’ activities increases, the span of management appropriate for the situation is widens Geographic Continuity The degree to which subordinate are physically separated. In general, the closer subordinates are physically, the more of them managers supervise effectively. Complexity of functions The more difficult and involved the activities are, the more difficult it is to manage a large number of individuals effectively. Coordination The greater the amount of time that must be spent on such coordination, the smaller span of management should be. Planning. The more time managers must spend on planning activities, the fewer individuals they can manage effectively

TOP MANAGER

ASST. MANAGER ASST. MANAGER

W1 W2 W3 W4 W1 W2 W3 W

4 DELEGATION

 The process of transferring the responsibility for a specific activity or task to another member of the organization.  Empowering that individual to accomplish the task effectively.

4.7 Benefit of Delegation  Leads to a more involved and empowered workforce.  Improved response time as a result of decisions and information not needing to be passed up and down the organization.  Leads to better decision making.  Provides opportunity for employee to develop analytical and problem solving skills.  Provides managers the opportunity to accomplish more complicated, difficult, or important tasks.

4.7 Barriers of Delegation a) Obstacles related to supervisor:

 Supervisors resist delegating their authority to subordinates because they find using their authority very satisfying - more authority means more power!!!  Supervisors may be afraid that their subordinates will not do a job well- lack of confidence in subordinate’s ability.  Supervisors may feel that if they surrendering some of their authority to the may be seen by others as a sign of weakness subordinates it - people may think the supervisor as incapable/having insufficient knowledge and skills  If the supervisors are insecure in their job or see specific activities as being extremely important to their personal success, they may find it difficult to put the performance of these activities into the hands of others- if subordinates successfully perform the task, they will get credit not the supervisor

b) Obstacles related to subordinate:

 Subordinates may be reluctant to accept delegated authority for fear of failure, lack of self-confidence, or because of a feeling that the supervisor doesn’t have confidence in him or her. Especially for subordinates who never used delegated authority before.  Other obstacles include the feeling that the supervisor will not be available for guidance once the delegation is made or that being a recipient of additional authority may complicate comfortable working relationships

An effective delegation can benefit manager, employee and organization. Define delegation and discuss four (4) benefits of delegation. (20M) (June 2018 & Sep 2015)

4.7 Steps for Delegation  Identify the desired result  Decide the guidelines and standards  Define the resources (employees)  Assure rewards and consequences  Let them practice  Entrust the total responsibility  Monitor their progress

4 Centralization  Definition: The process of transferring and assigning decision-making authority to higher levels of an organizational hierarchy.  In a centralized organization, the decision-making has been moved to higher levels or tiers of the organization, such as a head office, or a corporate center.  Knowledge, information and ideas are concentrated at the top, and decisions are cascaded down the organization.  The span of control of top managers is relatively broad, and there are relatively many tiers in the organization.

4 Decentralization  Definition: The process of transferring and assigning decision-making authority to lower levels of an organizational hierarchy.  In a decentralized organization, the decision-making has been moved to lower levels or tiers of the organization, such as divisions, branches, departments or subsidiaries.  Knowledge, information and ideas are flowing from the bottom to the top of the organization.  The span of control of top managers is relatively small, and there are relatively few tiers in the organization, because there is more autonomy in the lower ranks.

4 Coordination  Definitions: Co-ordination is the orderly synchronization of efforts to provide the proper amount, timing, and directing execution resulting in harmonious and unified actions to a stated objective.  Co-ordination is the integration of several parts into an orderly whole to achieve the purpose of undertaking.  Co-ordination is the integrating process in an orderly pattern of group efforts in an organization toward the accomplishment of a common objective.

Describe all the necessary steps in delegation. (10M) (Mar 2014)

• Multiple Choice

Course : fundamental of management (mgt162)

University : universiti teknologi mara.

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