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ORGANIZING

ReviewLegal Forms of Organization:

Proprietorship, Partnership, Corporation, and Cooperative

Organizing Proess

Comparison of s!"division logis #$epartmentalization%

&pan of Control, nat!re of line, staff and servie relationships

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'ffet of tehnolog( on organization str!t!re

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ORGANIZING

Legal Forms of Organization

&ole ProprietorshipOwned and operated by one person

Simple to organize and shut down

Has few legal restrictions

Owner is free to make all decisionsProfit is taed only once !in "S#$

"nlimited responsibility for debts

%ifficult to raise capital for growth of business

%uration of business is limited to the life of proprietor

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ORGANIZING


Partnership#ssociation of two or more partners

Has relatively few legal restrictions

Permits the pooling the managerial skills and &udgements

%ivided decision making and authority might cause problemsPartners have unlimited liability for debts

'n a limited partnership( there must be at least one general partner

Limited partners are limited only to the etent of their investment

)ost ommon form of "!siness organization

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ORGANIZING


CorporationsLegal entities owned by shareholders

Shareholder has no liability beyond loss of the value of stock

Have perpetual life as long as submitting necessary reports

Raising money for growth is easy)asiness in transfer of ownership and change management

*ore difficult and epensive to organize

Sub&ect to many rules and regulations

*ore taing is applied

)ost large organizations are orporations

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ORGANIZING


CooperativesSpecial type of organization owned by users or customers

)arnings are usually distributed ta free

+oard members managing cooperative are elected by all members

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ORGANIZING

Organizing

*o +or effiientl( in a team, mem"ers need to no+ the parts to pla(#roles% and ho+ these roles relate to one another-

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$esigning and maintaining these s(stems of roles is alled organizing-

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ORGANIZING

Organizing

Organizing involves

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.- Identifiation and Classifiation of Re/!ired Ativities

0- Gro!ping of Ativities to O"tain O"1etives

2- Assignment of a manager to eah gro!p +ith the a!thorit(

3- Provision for Coordination horizontall( and vertiall(

Top Level

Middle-Level

First-Line Managerial Level

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ORGANIZING

Organizing by ,ey #ctivities

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'ffetive organizing m!st first onsider "asi mission and

long4range o"1etives esta"lished for the organization and

the strateg(-

*herefore, e( ativities have to "e onsidered first

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ORGANIZING


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As three /!estions to identif( e( ativities

.- In +hat area is e5ellene re/!ired to o"tain the ompan(6s o"1etives

0- In +hat areas +o!ld la of performane endanger the res!lts7

2- 8hat are the val!es that are tr!l( important to !s in this ompan(7

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ORGANIZING


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After esta"lishing e( ativities,

t+o additional +ors are s!ggested:

.- $eision Anal(sis 8hat deisions are needed to o"tain effetiveness in e( ativities7

#F!t!rit(, effetiveness on the f!ntions, fre/!en( and res!lts

are addressed%

0- Relations Anal(sis 8ith +hom the person in harge of an ativit( +ill have to +or7

Find the r!ial relations for s!ess and effetiveness- *hese

relations sho!ld "e eas(, aessi"le, and entral to !nit-

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ORGANIZING

Patterns of %epartmentalization

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P r i m i t i v e O r g a n i z a t i o n

T o m D i c k M a r y

Y o u

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ORGANIZING


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Functional Departmentalization

President

Finance

Manager

Production

Manager

Sales

Manager Designer

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#cctg Prodn- *ktg Pers-

ORGANIZING


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President

Finance R.%*arketingProduction

%isk +o %iv-/% /abinet %iv


Prod!t $epartmentalization

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ORGANIZING


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President


)astern %ivision0estern %ivision


Geographi $epartmentalization

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'ndustry Sales /onsumer Sales

ORGANIZING


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President


0estern Sales/% /abinets

Parts #ssembly Finishing

)i5ed $epartmentalization

%isk +oes )astern Sales

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ORGANIZING

Span of /ontrol

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$efines n!m"er of &!"ordinate )anagers

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Control of &pan for 3

#needs 09 managers%

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ORGANIZING

Span of /ontrol

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$efines n!m"er of &!"ordinate )anagers

/)O

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Control of &pan for

#needs managers%

* * * *

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ORGANIZING Span of /ontrol

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/)O

* * * *

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Multiple Levels can increase communication and decision timeNarrow spans of control (tall organizations) are expensive (we have more managers)

Wide spans leave managers with inadequete times to supervise the activities.

Narro+

&pan

8ider&pan

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Fators $etermining 'ffetive &pans

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ORGANIZING

N!m"er of relationships that e5ists "et+een managerand s!"ordinates individ!all( and in vario!s om"inations,

and among the s!ordinates themselves-

0

50000

100000

150000

200000

250000

00000

1 2 ! 5 " # $ % 10 11 12 1 1! 15

Number of Subordinates

Relations

hips

N!m"er of relationships +ith n s!"ordinates

n12!n34$5n346For n;., . relationship

n;0, < relationships

n;2, . relationships

O GA G

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Follo+ing Conditions affet a manager to effetivel( s!pervise people

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ORGANIZING

Dr.B.G.Cetiner

&!"ordinate *raining

Nat!re of 1o"s &!pervised

Rate of Change of Ativities and Personnel

Clarit( of instr!tion and delegation

&taff Assistane

ORGANIZING

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C!rrent *rends in &pans

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ORGANIZING

Dr.B.G.Cetiner

*o inrease the spans of ontrol #dereases n!m"er oforganizational levels%

Res!lts of 8ider &pans

.- &ignifiant red!tion of administrative osts

0- )ore effetive and effiient organization omm!niation

2- Faster $eisions and loser interation "et+een organizational levels

3- Re/!irement for more personnel training for all levels

=- >etter leadership at all levels

ORGANIZING

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Classifiation of Companies

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ORGANIZING

Dr.B.G.Cetiner

.- ?nit: prod!tion aording to the C!stomer orders #1o"4shop%

0- )ass Prod!tion

2- Proess

ORGANIZING

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Impat of Information Revol!tion

Red!tion of n!m"er of +orers, more silled +orers, re/!ires

monitoring a"ilities rather than ph(sial one-

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ORGANIZING

Dr.B.G.Cetiner

.- @is!alization #a"ilit( to manip!late mental patterns%0- Conept!al *hining #or a"strat reasoning%

2- ?nderstanding of proesses s!h as mahine f!ndamentals

and mahinematerial interations

&ills Re/!ired

3- &tatistial !nderstanding #trends, and meaning of data%

=- Oral and @is!al Comm!niation

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Impat of Information Revol!tion

R'&?L*

Little f!t!re in ind!str( for the !ned!ated emplo(ee

cetinerg@itu edu tr

ORGANIZING

Dr B G Cetiner

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