ORGANIZING Definition It is like a bridge connecting the planning function to the accomplishment of reality. The word “organizing” came from the word organism, which means to create a structure with parts fully integrated. It is a structure or a network of defined relationships among given individuals or units. It is also referred as a process, or as an executive function such as planning and directing. It is also grouping of activities necessary to attain objectives; the assignment of each grouping to a manager with adequate authority and proper coordination in the organizational structure. Why Organizing? It is required in management because it is the means for gaining effective group action. A primary reason for organizing is to have each member know what activities he is to perform Managers engage in three distinct levels of change behavior: Intervention – to return the system to equilibrium Restructuring – to improve system performance Major reorganizations – in response to serious internal workflow defects or new external problems. Organizational Evolutions in Developing Countries The one-man operation – where owner is himself the single manager. The father-son or manager-assistant type – in which one or more sons or daughters or one or more assistants are used to multiply the efforts of the boss. The function organization – in which is introduced the concept of delegation of authority and permits the use of professional management The functional organization plus a central headquarters and geographical dispersion – which is an extension of the third form above but allows manufacturing or marketing operations in two or more locations. The multidivisional firm – which has a separate division for each product line and/or for each geographical location. The conglomerate – where the central headquarters maintain only financial control over a number of wholly-owned companies. Organization It implies structuring and integrating activities, and people working and cooperating together in interdependent relationships. Characteristics: Goal-oriented – meaning people with a purpose or a mission Psychosocial systems – meaning people working in groups with different behavioral styles and different social backgrounds Technological systems – involving the use of appropriate tools and techniques to achieve organizational goals Structural systems – in which people divide and coordinate the work among and between superiors, peers and subordinates Management systems – which integrates these diverse elements into a total organizational effort for more effective and efficient accomplishments. Formal Organization It refers to the defined and visible organizational structure. The table of organization reflects the lines of authority and relationships. Organization Chart It specifies the relationships, levels of authority, and responsibilities of people, parts and activities. Classical Principles Objectives – The organization should have clearly defined objectives towards which it mobilizes and direct its resources and capabilities. There should be overall objectives and goals for the entire institution as a whole. Specialization – Related functions are grouped together under one head. Coordination – The proper synchronization and coordination of all efforts are required for the attainment of common ends. Organizations are made up of different people with varying backgrounds and of different functional units. All of these must be put in proper harmony so that their individual efforts can be optimized toward a greater whole. Authority – this refers to clear lines of authority running from the top down to the bottom of the business firm. This reduces the sphere of authority at the top. Responsibility – Authority is commensurate with responsibility. This means that when anyone is made responsible for achieving a given objective, he should have enough authority to take the necessary steps to reach it. Efficiency – This refers to the attainment of given objectives at the lowest possible cost, either in terms of money or human costs or both. Delegation – Decisions should be made as far down in the organization as possible, commensurate with the responsibility that goes with such decisions. Coordination Process Unity of command – This refers to the arrangement in an organization where there is a chain of authority in which every member knows to whom he reports and who reports to him in turn. Span of control – This refers to the number of people a manager can effectively control and manage. Delegation of authority – Authority refers to the right command and flows downward from top management. On the other hand, accountability is the implicit or explicit contract that a subordinate accepts to perform according to the formal organization, and flows upward to higher management. If authority is delegated downward, then top management has more time to plan and control rather than be burdened with day-to-day operations. Decentralization – This refers to a high degree of delegation of responsibility and authority at the lowest level usually. Line and staff relationships – In the typical manufacturing company, the line man would be concerned with direct operations, work assignments and supervision of others. On the other hand, the staff man influences the work of others through suggestions, advice and recommendations. Line units normally mean a comman relationship. Staff units refer to an advisory relationship. Location of staff units Department The term department designates a distinct area, division or branch of an enterprise over which the manager has the authority and responsibility. Examples: Marketing Department (Business firm) or Academic Affairs Department (University Basic Departmentalization There is no single best way of departmentalizing that is applicable to all organizations or to all business situations. Groupings of activities and employees into departments or divisions makes possible the expansion of organizations in many ways. Departmentalization by numbers – this is used to be the most popular way of dividing people since it had its beginnings in the organization of tribes, clans, armies and religious groups. People with different backgrounds are grouped together under a single leader or supervisor to accomplish a given task. But with the passage of time, this approach is no longer very practical. Departmentalization by time – this usually applies to rank-and-file or the lowest levels of the organization. Some big companies may have three shifts and work on a 24-hour basis. Departmentalization by enterprise function – Enterprise functions are those performed by the organization, such as in case of: (1) business firm – marketing, production, financing, physical distribution, and others are done; (2) universities – instruction, research, student counselling and extension services; (3) hospitals – prevention, rehabilitation, diagnosis and therapy, ancillary services, and residential facilities. Such functional departmentalization is the most widely used for organizing activities. Departmentalization by territory – All activities in a given area or territory are grouped and assigned to a manager of firms with physically-dispersed activities. Large corporations like San Miguel Corporation, Philippine Refining Company and banks have established plants, branches, extension campuses or provincial offices according to a geographic area or market area. Departmentalization by product – Companies with multi-line products and large-scale operations usually group their activities by products or product lines. Departmentalization by customers – Some companies group their activities by customers. Sometimes, the departmentalization is focused on the market and the marketing channel. Departmentalization by service – For purpose of control or efficiency, some activities are grouped as if they were staff or line units. Examples in business firms are such service departments as personnel, accounting, purchasing, computer service, secretarial pools, security, janitorial services, etc. Informal Organization This refers to the behavioral, informal, and undefined interrelationships and working climate within the organization. There is much flexibility and sometimes, creativity in the informal organization. People in the firm may group together during coffee or lunch breaks and even after office hours
