chapter -8_-_organizing_the_business1.0

Introduction to Business

ORGANIZING THE BUSINESSORGANIZING THE BUSINESS

Chapter # 8

Shafayet Ullah

SECTION: A3 and A4

ORGANIZEORGANIZE

Organizing is the management

function of assigning activities and

grouping people (Designing and

Developing a Blueprint or structure) so

that the firm’s objectives can be

accomplished.

Organization Organization StructureStructure

The arrangement of work to be done in a business.

Managers need to keep the following issues in mind when

organizing the business :

Clear Objectives

Clearly stated, meaningful, specific, and challenging.

The objectives must give meaning to the business and what it is attempting to accomplish. The objectives could be multiple (Like, profit, market share, human resource development) of a business that provides the direction for those organizing the firm.

Coordination

Coordination must be in Organizational, Departmental, Subunit and Individual Objectives. They all must fit together.

Team Work must be there. Should not underestimate the group members.

Formal OrganizationThe management designed official structure of the business. The formal organization is displayed in the organization chart, the graphical representation of the formal structure of the business.

Informal OrganizationThe network of personal and social relationships that emerges when people work together.

Formal and Informal Formal and Informal OrganizationsOrganizations

Formal AuthorityFormal Authority

Formal Authority: The right to give orders

Delegation

Is the process by which authority is distributed or pushed downward in an organization.

That is, giving an employee at a lower level in the organization, the responsibility for a given task as well as the authority to carry it out.

Formal AuthorityFormal Authority

Line AuthorityEach position in the managerial hierarchy has the line authority or unquestioned direct authority to make decisions and take actions.Example: At Pizza Hut, the manager has authority over the sales people and the cooks.

Staff AuthorityAn advisory authority in which a person studies a situation and makes recommendations but has no authority to take action.

Centralization and Centralization and Decentralization Decentralization

Centralized BusinessAn organization in which all or nearly all authority to make decisions is retained by a small group of managers and hold most of the power and authority.

Decentralized BusinessAn organization in which a significant amount of the authority to make decisions is delegated to lower- level managers.

Organization Chart Organization Chart

A graphic blueprint, or map of positions, people and formal authority relationships in the organization.

Top Manager

President

Middle ManagerDirector of Engineering

Legal Counsellor

Line Manager with direct

Line Authority

Staff Position – expert in law

Staff AuthorityProject AEngineer

Supervisor

Project BEngineer

Supervisor

Team of Three

Engineers

Team of Three

Engineers

ORGANIZATION CHART : LINE AND STAFF AUTHORITY

Principles of Organizing Principles of Organizing

PrinciplesThe guidelines that managers can use in making decisions. Some principles are used exactly as they are stated: other times they are modified or completely ignored.

Division of LaborA principle of organization that a job can be performed more efficiently if the jobholder is allowed to specialize.

Unity of commandThe principle of organization that no employee should report to more than one superior. Subordinates should know from whom they receive the authority to make decisions and do the job.


Scalar PrincipleThe principle of organization that authority and responsibility should flow in a clear unbroken line from the highest to the lowest manager. Because managerial levels are arranged in a hierarchy, the importance of the scaler chain from Top to Bottom is obvious.

Downsizing Cutting out entire layers of management.


Span of ControlThe principle of organization that limits the number of subordinates reporting to a supervisor. There is a limit to the number of subordinates one superior should supervise.However, some supervisors can handle more subordinates than others. The minimum span of control depends on many factors, such as type of skill and the experience levels of subordinates, the nature of the job, the supervisor’s skill in handling the subordinates, the situation and the time available to do the job.

How to Organize a How to Organize a BusinessBusiness

Functional StructureA structure in which each unit or departmenthas a different set of activities and

responsibilities.


Functional StructureAdvantages:

Specific set of activities

Day by day become skilled

Stable improvement


Functional Structure

Disadvantages: De-emphasizes the exchange of ideas and cooperation with other departments Each department only concentrated on their own department activities If necessary the coordination, the situation becomes obstruction Lack of flexibility Slow in reacting

END OF CHAPTER # 8