Ass. Prof. Dr. Özgür KÖKALAN
İstanbul Sabahattin Zaim University
Chapter Objectives
1.
2.
3.
4.
Define what organizing function is
Describe fundemental concepts of organizing
Indentify the factors that affect organizational structure
Describe types of departmentalization
5-2
Defination of Organizing
 Organizing is a process for grouping and structuring
actitivities, assigning duties and coordinating the
efforts of personnel in their attainment of
organizational goals.
 When a structure is set up, many things should be
consideren as follows:
 To
what extend should
managers encourage
specilization in organizing?
 What would be line and levels of authority that
managers should establish?
 How much formalization should be encouraged?
 To what extend should decision making be centralized
or decentralized?
Chain of
Command
Division of Work
(Specialization)
Centralization &
Decentralization
Authority
Fundementals
of Organizing
Process
Formalization
Span of Control
Delegation
Fundamentals of Organizing
 Specilization (Division of Work); it is concerned
with division of labor within organization. It is
referred to as subdividing the wide variety of tasks
within the organization into individiual jobs to be
performed efficiently by the skilled employees.
 Chain of Command; who orders and reports to
whom. The chain of command shows the authority
structure of an organization.
 Authority; it is
formal and legitimate right of a
managers to make decisions, issue orders, and allocate
resorces.
 There are three categories of authority within the
organization.
 Line
authority; managers working in the line
departments have full and direct authority
 Staff authority; it is a limited authority used by
managers only to advise within the scope of their field of
expertise.
 Functional authority; some managers may have full
and direct authority over other departments than their
own in respect to their specialist function.
Type Of Authority Within The Organization
President
Legal
Counsellor
Human
Resources
R&D
Line Authority
Staff Authority
Functional Authority
Accounting
Product A
Operations
Product B
 Delegation; The right of managers to transfer part of their
legitimate authority to a subordinate is called as
delegation.
 Span of Control (Span of Management); The number of
subordinates that a manager can effectively control.
 Factors affecting the span of control can be described as
follows:








Characteristics of task performed
Degree of standardization in the workplace
Qualification of subordinates
Availability of support and staff services within the organization
Complexity level of tasks
Mangers personal preferences
Local characteristics (single / numerous workstations)
Degree of formalization (written rules and procedures defining
organization)
1
2
Narrow Span of Management
1
2
3
4
Large Span of Management
5
 Examples for Span of Control,
 If the task are standardized and not complex and
subordinates are educated and experienced in their
task
 Span of control would be set …………………….
 If a manager is responsible for seperate and different
units located in numerous and geographically
dispersed places, and when the tasks are very complex
and need strict control
 Span of control would be set …………………….
 Formalization; it is referred to as the degree of
written documentation used to direct and control
employees. These documents may provide such
information as descriptions of taks, procedures in task
performing, responsibilities and decision making.
 Centralization or Decentralization; The decision
at the top organization level describes centralization.
The decisions are made by lower organizational level
that is called as decentralization.
Factors Affecting Organizational
Structure
 Managers should study some contingency factors
when they attempt to design an organization.
 Some contingecy factors that influence the
organization structure as fallows:
 Strategic Goals and Strategy
 The Environment
 Technology
 Departmental Interdependence
 Strategic Goals and Strategy; strategic goals pertain
to an organization as whole. An organization’s
structure is very much related with strategy. There are
mainly two kinds of strategy applied by organizations
 Cost leadership strategy; the goal is to minimize the
costs to accomplish more appropriate prices for
organizastion’s standard product.
 Differentation strategy; the goal is to produce
different products with premium prices charged to
customers to serve their unique needs
 The
Environment; the envoriment creates
uncertainty. The sturucture design of an organizations
is vey much dependent on the level of uncertainty in
the environment in which it operates.
 When the environment is stable, organization should
have a mechanistic structure that emphasizes rigid
managerial control in traditional vertical chain of
command.
 In an environment with uncertainty, the best structure is
likely the organic structure that emphasizes flexible,
loose managerial control and lateral relationship within
the hierarchical positions.
 Technology,
technology affects organizational
structure
directly.
There
three
significant
manufacturing technologies; small batch, mass and
continuous process manufacturing. The differences
among these technologies are called as technological
complexity. The degree of tecnological complexity
determines the organizational structure.
 Departmental Interdependence;
The degree to
which departments depend on one another for
organizational resources in their task accomplishment
Type of Departmentalization
 The grouping of tasks and positions into departments
and departments into organization is called as
departmentalization.
Tridational Approaches to Departmentalization
 There are two main type of deparmentalization in
traditional approaches.
 Functional departmentalization; The grouping of
people and taks is made and put together in
departments according to their common skills,
experiences and work activities.
President
Operations
Finance
Marketing
 Divisional Departmentalization; In this approach,
diverse departments are brought together to create selfcontained units for producing a single organizational
output.
 Some common divisional structures are as follows:
 Departmentalization by Product; The departments are
grouped into seperate self contained product.
 Departmentalization by Geographical
Regions; The
departments’ grouping into self- contained divisions serving
customers who are physically dispersed in spesific
geographical regions.
 Departmentalization by Customer; divisional structure
groups the departments into self-contained units to serve
various needs of different customer groups
Modern Approach to
Departmentalization: Matrix Structure
 Matrix structure blends the functional and divisional
departmentalization. The most typical arrangements
are product- function matrix, project-function matrix
and product – region matrix.
 In matrix structure, there is a dual command system in
which subordinates have two bosses to report to.
 It is more flexible than traditional structure.
Contemporary Approach to
Departmentalization
 The new contemporary approach do not rely on vertical
chain on command.
 Organizational structure are set up based on competitive
global and fast changing environment
 There are two types of structure
 Team-based organization; the organization establish series
of teams to achieve specific tasks. Organization structure are
set up based on these teams
 Network organization; the organization’s disaggregating its
major fuctions, activities and resources into seperate
companies that produce the goods and services for them.
Marketing
Company
Accounting
Company
Design
Company
Core
Company
HRM
Company
Manufacturing
Company