Organizing and StaffingPrepared by: Prof.E.S. BIOSource: Management - A Global Perspective by Weihrich and Koontz 11th Edition

Organizing is…•The identification and classification of

required activities.•The grouping of similar activities

necessary to attain objectives.•The assignment of each group to a

manager with the authority necessary to supervise it.

•The provision for coordination horizontally (on the same or a similar organizational level) and vertically (e.g., between corporate headquarters, division, and department) in the organization structure.

The Logic of Organizing1. Establishing enterprise objectives2. Formulating supporting objectives,

policies, and plans3. Identifying, analyzing, and classifying the

activities necessary to accomplish these objectives

4. Grouping these activities in light of the human and material resources

5. Delegating to the head of each group the authority necessary to perform the activities

6. Tying the groups together horizontally and vertically, though authority relationships and information flows.

The Organizing Process

Feasibility studies and feedback

3. Identification and classification of required activities

4. Grouping of activities in light of resources and situations

5. Delegation of authority

6. Horizontal and vertical coordination of authority and information relationships

1. Enterprise Objectives

2. Supporting objectives, policies, and plans

7. Staffing

8. Leading

9. Controlling

Part 2(Planning)

Part 3(Organizing)

Part 4,5,6(Other Functions)

Organization

•It is a formalized intentional structure of roles or positions.

•It includes all the behaviors of all participants.

•It is the total system of social and cultural relationships.

Formal Organization•Formal Organization means the intentional structure of roles in formally organized enterprise.

•A formal organization must be flexible.

•Individual effort in group situation must be channeled toward group and organizational goals.

Informal OrganizationIt is a network of interpersonal relationships

that arise when people associate with each other.

It can also be described as any joint personal activity without conscious joint purpose, although contributing to joint results.

Thus, informal organizations—relationships that do not appear on the organization chart—might include the machine shop group, the sixth floor crowd, the Friday evening bowling gang, and the morning coffee “regulars”.

Formal and Informal Organizations

etc.

etc.

President

Vice president

Division managers

Department managers

Informal organization:Morning coffee “regulars”

Informal organization:Bowling team

Informal organization:Chess group

Organizational Division: The Department

•One aspect of organizing is the establishment of departments.

•A department is a distinct area, division, or branch of an organization over which a manager has authority for the performance of the specified activities.

Organizational Levels and the Span of Management

• While the purpose of organizing is to make human cooperation effective, the reason for levels of organization is the limitation of the span of management.

• In other words, organizational levels exist because the is a limit to the number of persons a manager can supervise effectively, even thought this limit varies depending on situations.

• A wide span of management is associated with a few organizational levels; a narrow span, with many levels.

* In much of the literature on management, this is referred to as the span of control. Despite the widespread use of this term, in this lecture span of management will be used, since the span is one of management and not merely of control, which is only one function of managing.

Organization Structures with Narrow and Wide Spans

Organization with narrow spans

Organization with wide spans

Advantages:· Close supervision· Close control· Fast communication between subordinates and

superiors

Disadvantages:· Superiors tend to get too involved in

subordinates’ work· Many levels of management· High costs due to many levels· Excessive distance between lowest level and

top level

Advantages:· Superiors are forced to delegate· Clear policies must be made· Subordinates must be carefully selected

Disadvantages:· Tendency of overloaded superiors to become

decision bottlenecks· Danger of superior’s loss of control· Requires exceptional quality of managers

Factors Determining an Effective Span

•The number of subordinates a manager can effectively manage on the impact of underlying factors.

•Aside from such personal capacities as comprehending quickly, getting along with people, and commanding loyalty and respect, the most important determinant is a manager’s ability to reduce the time he or she spends with subordinates.

Factors Determining an Effective Span

Table 1

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Factors influencing the span of management

Narrow spans (a great deal oftime spent with subordinates)

Wide spans (very little time spent with subordinates)

· Little or no training of subordinates· Inadequate or unclear authority

delegation· Unclear plans for nonrepetitive

operations· Nonverifiable objectives and standards· Fast changes in external and internal

environments· Use of poor or inappropriate

communication techniques, including vague instructions

· Ineffective interaction of superior and subordinate

· Ineffective meetings· Greater number of specialties at lower

and middle levels· Incompetent and untrained manager· Complex task· Subordinates’ unwillingness to assume

responsibility and reasonable risks· Immature subordnates

· Thorough training of subordinates· Clear delegation and well-defined tasks· Well-defined plans for repetitive

operations· Verifiable objectives used as standards· Slow changes in external and internal

environments· Use of appropriate techniques, such as

proper organization structure and written and oral communication

· Effective interaction between superior and subordinate

· Effective meetings· Greater number of specialties at upper

levels (top managers concerned with external environment)

· Competent and trained manager· Simple task· Subordinate’s willingness to assume

responsibility and reasonable risks· Mature subordinates

Organization Structure

1. Departmentation by Enterprise Function It is the grouping of activities

according to the functions of the enterprise, such as production, selling, and financing.

Organization Structure

A functional organization grouping (in a manufacturing company)

President

Personnel

Assistant to president

Engineering

Production

Marketing

Finance

Advertising and Promotion

Salesadministration

MarketingPlanning

Sales

MarketResearch

MechanicalEngineering

HydraulicEngineering

ElectricalEngineering

Packaging

Preliminary Design

QualityControl

EngineeringAdministration

Productionplanning

Industrialengineering

Productionengineering

Purchasing

Tooling

Generalproduction

Financialplanning

Budgets

Generalaccounting

Costaccounting

Statistics and data

processing

Advantages:· Logical reflection of functions· Maintains power and prestige of major

functions· Follows principle of occupational

specialization· Simplifies training· Furnishes means of tight control at the top

Disadvantages:· De-emphasizes overall company objectives· Overspecializes and narrows viewpoints of

key personnel· Reduces coordination between functions· Responsibility for profits is at the top only· Slow adaptation to changes in the

environment· Limits development of general managers

Organization Structure

2. Departmentation by Territory or Geography It is the grouping of activities

by area or territory that is common in enterprises operating over wide geographic areas.

Organization Structure

A territorial, or geographic, organization grouping (in a manufacturing company)

President

Personnel

Purchasing

Marketing

Finance

Centralregion

Southwestregion

Western region

Southeastregion

Easternregion

Personnel

Production

Engineering

Accounting

Sales

Advantages:· Places responsibility at a lower level· Places emphasis on local markets and problems· Improves coordination in a region· Takes advantage of economies of local operation· Better face-to-face communication with local

interests· Furnishes measurable training ground for general

managers

Disadvantages:· Requires more persons with general manager

abilities· Tends to make maintenance of economical central

services difficult and may require services such as personnel or purchasing at the regional level

· Makes control more difficult for top management

Organization Structure

3. Departmentation by Customer Group It is the grouping of activities that

reflects a primary interest in customers.

Organization StructureCustomer departmentation (in a large bank)

President

Corporate banking

Agricultural banking

Real estate and mortgage loans

Institutional banking

Community-city banking

Advantages:· Encourages focus on customer needs· Gives customers the feeling that they have an

understanding supplier (banker)· Develops expertness in customer area

Disadvantages:· May be difficult to coordinate operations

between competing customer demands· Requires managers and staff expert in

customers’ problems· Customer groups may not always be clearly

defined (e.g., large corporate firms vs. other corporate business)

Organization Structure

4. Departmentation by Product It is the grouping of activities according

to products or product line, especially in multiline, large enterprises.

Organization StructureA product organization grouping (in a manufacturing company)

President

Personnel

Purchasing

Marketing

Finance

Instrument division

IndicatorLights

Division

Industrial Tools

Division

Sales

Accounting

Engineering

Production

Production

Sales

Engineering

Accounting

NameTitle

Advantages:· Places attention and effort on product line· Facilitates use of specialized capital, facilities, skills,

and knowledge· Permits growth and diversity of products and services· Improves coordination of functional activities· Places responsibility for profits at the division level· Furnishes measurable training ground for general

managers

Disadvantages:· Requires more persons with general manager

abilities· Tends to make maintenance of economical central

services difficult· Presents increased problem on top of management

control

* Product departmentation is also used in in nonmanufacturing companies.

Organization Structure

5. Matrix Organization It is the combining of functional

and project or product patterns of departmentation in the same organization structure.

Organization StructureMatrix Organization (in engineering)

DirectorOf

Engineering

ChiefElectricalEngineer

ChiefHydraulicEngineer

ChiefMechanicalEngineering

ChiefMetallurgical

Engineer

Chief ofPreliminary

Design

Project Amanager

Project Bmanager

Project Cmanager

Project Dmanager

Advantages:· Oriented toward end results· Professional identification is maintained· Pinpoints product-profit responsibility

Disadvantages:· Conflict in organizational authority exists· Possibility of disunity of command· Requires a manager effective in human

relations

Line / Staff Authority and Decentralization

Authority and PowerPower is the ability of individuals or groups to induce or influence the beliefs or actions of other persons or groups.

Authority is the right in a position to exercise discretion in making decisions affecting others.

Bases of Power1. Legitimate Power

It normally arises from and derives from our cultural system of rights, obligations, and duties whereby a “position” is accepted by people as being “legitimate”.

2. Expertness of a person or a group This is the power of knowledge. Physicians,

lawyers, and university professors may have considerable influence on others because they are respected for their specialized knowledge.

3. Referent Power It is an influence that people or groups may

exercise because people believe in them and their ideas.

Bases of Power

4. Reward Power It refers to the power that arises

from the ability of some people to grant rewards.

5. Coercive Power It is the power to punish, whether

by firing a subordinate or by withholding a merit pay increase.

Line / Staff Concepts and Functional Authority

1. Scalar principle “The clearer the line of authority, the clearer

will be the responsibility for decision making and the more effective will be organizational communication.”

2. Line authority The relationship in which a superior

exercises direct supervision over a subordinate.

3. Staff relationship It’s nature is advisory.

Decentralization of Authority

Decentralization is the tendency to disperse decision-making authority in an organized structure.

Delegation of Authority

•Authority is delegated when a superior gives a subordinate discretion to make decisions.

•Clearly, supervisors cannot delegate authority they do not have, whether they are members, presidents, vice presidents, or supervisors.

Delegation of Authority

The process of delegation involves:1. Determining the results expected

from a position.2. Assigning tasks to the position3. Delegating authority for

accomplishing these tasks.4. Holding the person in that position

responsible for the accomplishment of the tasks.

The Art of Delegation

Personal Attitudes toward Delegation▫Receptiveness An underlying attribute of managers who will delegate authority is a willingness to give other people’s ideas a chance.

Decision making always involves some discretion, and a subordinate’s decision is not exactly the one a superior would have made.

The Art of Delegation

•Willingness to let goA manager who will effectively delegate

authority must be willing to release them to make decisions to subordinates.

A major fault of some managers who move up the executive ladder—or of the pioneer who has built a large business from the small beginning of, say, a garage machine shop—is that they want to continue making decisions for the positions they have left.

The Art of Delegation

• Willingness to allow mistakes by subordinatesAlthough no responsible manager would sit idly

by and let a subordinate make a mistake that would endanger the company or the subordinate’s position in the company, continual checking on the subordinate to ensure that no mistakes are ever made will make true delegation impossible.

Since everyone makes mistakes, a subordinate must be allowed to make some, and their cost must considered an investment in personal development.

The Art of Delegation• Willingness to trust subordinatesSuperiors have no alternative to trusting their

subordinates, for delegation implies a trustful attitude between them.

• Willingness to establish and use broad controlsSince superiors cannot delegate responsibility

for performance, they should not delegate authority unless they are willing to find means of getting feedback, that is, of assuring themselves that authority is being used to support enterprise or departmental goals and plans.

Three (3) Elements of Delegation1. Responsibility – means that a person is

assigned a task that he or she is supposed to carry out.

2. Authority – means that the person has the power and the right to give orders, draws upon resources, and do whatever else is necessary to fulfill the responsibility.

3. Accountability – means that the subordinate’s manager has the right to expect the subordinate to perform the job and to take corrective action in the event the subordinate fails to do so.

Recentralization of Authority and Balance as the Key to Decentralization

•Recentralization is centralization of authority that was once decentralized; normally not a complete reversal of decentralization, as the authority delegated is not wholly withdrawn.

Staffing•It is defined as filling, and keeping filled,

positions in the organizational structure.

•Work specialization – degree to which the work necessary to achieve organizational goals is broken down into various jobs.

•Job design – specification of task activities associated with a particular job (e.g. a job as an administrative assistant may include typing, filing and photocopying, or it could involve such activities as coordinating travels and meetings, investigating trouble spots, and making decisions about a certain range of issues).

Staffing

Approaches to Job Design• Job simplification – the process of designing

jobs so that jobholders have only a small number of narrow activities to perform.

• Job rotation – practice of periodically shifting workers through a set of jobs in a planned sequence.

• Job enlargement – the allocation of a wider variety of similar tasks to a job in order to make it more challenging.

• Job enrichment – process of upgrading the job-task mix in order to increase significantly the potential for growth, achievement, responsibility, and recognition.

Job Simplification

Job Simplification

Worker 1 Worker 2 Worker 3

Task 1 Task 1 Task 1

Job RotationJob Rotation

Worker 1 Worker 2 Worker 3

Task 1 Task 2 Task 3

Job EnlargementJob Enlargement

Worker 1 Worker 2 Worker 3

Task 1,2,3 Task 1,2,3 Task 1,2,3

Movement of Personnel

RECRUITMENT is the process of encouraging, inducing, or influencing applicants to apply for a certain vacant position.

SELECTION is the process of getting the most qualified applicant from among different job seekers.

TRAINING is the systematic development of the attitude/knowledge/behaviour patterns for the adequate performance of a given job or task.

Movement of Personnel

TRANSFER refers to the shifting of an employee from one position to another without increasing his duties, responsibilities, or pay.

PROMOTION refers to the shifting of an employee to a new position to which both his status and responsibilities are increased.

Movement of Personnel

• OUTPLACEMENT is the process of helping people who have been dismissed from the company to regain employment elsewhere.

• LAY-OFF is a type of separation, temporary and involuntary, usually traceable to a negative business condition

• DISCHARGE is a permanent separation of an employee, at the will of an employer, if a person is not competent in his job, guilty of breaking rules like delinquency and insubordination, and other violations

Movement of Personnel•RESIGNATION is voluntary and

permanent separation of an employee due to due to low morale, low salary, etc.

•RETIREMENT can either be voluntary or involuntary; if an employee retires upon reaching the number of years of services in a company as provided for by its policies or upon reaching the age of 65.

•PERFORMANCE APPRAISAL is the process of defining, measuring, evaluating, and recording expectations from employee performance.

Jonathan S. Bio 2010

• EMG20/Section B5• 1st Qtr. S.Y.2014-2015• Group 4Espina, SalrichGayas, Mark RayfielIndefenzo, Alyssa Bianca S.Inocencio, Michael JeffLacorte, Bernard Jezer

• Copyright of Prof. Emilia. S. Bio, P.I.E.,IE-EMG Dept.