PRINCIPLES AND PRACTICES OF MANAGEMENT

UNIT 2

ORGANIZINGPh.D., Assistant Professor, PIMG

Rahul Pratap Singh Kaurav

Organizational RolesFor an organizational role to exist and be meaningful, it must incorporate:

(1) verifiable objectives, which, are a major part of planning

(2) a clear idea of the major duties or activities involved and

(3) an understood area of discretion or authority so that the person filling the role knows what he or she can do to accomplish goals

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Organizing involves(1) the identification and classification of required

activities

(2) the grouping of activities necessary to attain objectives

(3) the assignment of each grouping to a manager with the authority (delegation) necessary to supervise it

(4) the provision for coordination horizontally (on the same or a similar organizational level) and

vertically (for example, corporate headquarters, division, and department) in the organization structure

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Definition of OrganizationOrganization implies a formalized intentional structure of roles or positions.

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Formal And Informal Organization

Formal organization pertains to the intentional structure of roles in a formally organized enterprise

The informal organization is a network of personal and social relations not established or required by the formal organization but arising spontaneously as people associate with one another

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

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Levels are:

• Expensive• Complicate Communication• Complicate Planning and Control

Problems with Organization Levels

Organization with Narrow Spans

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Organization with Wide Spans

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The Operational-Management PositionA Situational Approach

The principle of the span of management states that there is a limit to the number of subordinates a manager can effectively supervise, but the exact number will depend on the impact of underlying factors.

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Widening spans and reducing the number of levels may be the answer in some cases; the reverse may be true in others.

Need for Balance

The Logic of Organizing

Six steps of organizing process:1.Establishing enterprise objectives

2. Formulating supporting objectives, policies, and plans

3.Identifying, analyzing, and classifying the activities necessary to accomplish these

4.Grouping these activities in light of the human and material resources available and the best way, under the circumstances, of using them

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

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

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Departmentation by Enterprise Function

Departmentation By Enterprise Function

There is no generally accepted terminology:A manufacturing enterprise employs the terms "production," "sales," and "finance"; a wholesaler is concerned with such activities as "buying," "selling," and "finance"; and a railroad is involved with "operations," "traffic," and "finance“

Functional departmentation is the most widely employed basis for organizing activities and is present in almost every enterprise at some level in the organization structure

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Departmentation by Territory or Geography

Departmentation based by territory is rather common in enterprises that operate over wide geographic areas

It is often used in sales and in production, not in finance which is usually concentrated t the headquarters

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Departmentation by Territory or Geography

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Grouping activities so that they reflect a primary interest in customers is common in a variety of enterprises.

Departmentation By Customer Group

Departmentation by Customer Group

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Departmentation By Product

Grouping Activities on the basis of product lines has been growing in importance in multiline, large-scale enterprises

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Departmentation by Product

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Matrix Organization

Matrix Organization is the combining of functional and project or product patterns of departmentation in the same organization structure.

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Matrix Organization

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Guidelines for Making Matrix Management Effective

1.Define the objectives of the project or task

2.Clarify the roles, authority, and responsibilities of managers and team members

3.Ensure that influence is based on knowledge and information, rather than on rank

4.Balance the power of functional and project managers

5.Select an experienced manager for the project who can provide leadership

6.Undertake organization and team development

7.Install appropriate cost, time, and quality controls that report deviations from standards in a timely manner

8.Reward project managers and team members fairly24

Theories of Organization Structure

Classical Organization Theory: Organization is viewed as a machine and human beings are considered as different components of that machine. Therefore efficiency can be increased by making each individual working in the organization efficiently. For example:

F W Taylor: Stressed upon division of labor, standardization of tasks, analysis and measurement of jobs etc. The theory is also called machine or physiological organization theory

Henry Fayol: Gave principles of management also called structural theory

Max Weber: gave the bureaucratic model characterized by specialization, hierarchy of authority, rules, impersonal relations and trained personnel.

Theories of Organization Structure | Cont…

1. Division of Labor2. Departmentalization3. Coordination4. Scalar Chain and

functional processes

5. Structure6. Span of control

The main pillars of classical organization theory are as follows:

Evaluation of classical theory

1. Classical theory takes a static and rigid view of organizations

2. It views organizations as closed system3. Focused attention on technological and

structural aspects of organizations4. Is based on oversimplified and

mechanistic assumptions.

Theories of Organization Structure-Cont…

Neo Classical Organization Theory (Behavioral Theory): Neo classical organization theory is commonly identified as human relations movement pioneered by Elton Mayo and his associates. These experiments revealed that informal organization and socio-psychological factors exercise much greater influence on human beings and their behavior in organizations.

Main prepositions of Neo-Classical theory

1. The organization in general is a social system composed of several interacting parts

2. Within formal organization there exists an informal organization

3. Human beings are interdependent4. Motivation is a complex process5. Human beings do not always act rationally6. A conflict between organizational and

individual goals often exists.7. Team work is essential for effective

functioning of organization.

Evaluation of Neo-Classical Theory

1. The various structures of organization provided by the Neo-Classical theory cannot be applied to all situation

2. Neo-Classical theory lacks a unified approach3. Many of the assumptions on which Neo-

Classical theory is based are not true

Evolution of Neo-Classical Theory | Cont…

Systems Organization Theory: A system is defined as an organized or complex whole; an assemblage or combination of things or part forming a complex unitary whole. Parts of a system are known as sub-system. In systems approach whole is more then the sum of the parts. System can be of two types:

1. Open System2. Closed System

Theories of Organization Structure-Cont.

Contingency Theory: it says that there is no particular managerial action or organizational design that is appropriate for all situations also known as situational theory.

IT focuses on external determinants of organization structure and behavior

Suitable organization design depends upon environmental variables like size, technology, people etc.

It is a complicated theory involving innumerable and organizational variables

Empirical testing of the theory is very difficult It is a reactive theory rather then proactive strategy

Theories of Organization Structure

Basis Classical Behavioral Systems ContingencyFocus Work and economic

needs of workersSmall groups and human behavior

Inter- Relationships Situational Variables

Structure Mechanical and impersonal

Organization as a social system

Open systems view of organization

Environmental determinants of organization

Means Empirically derived principles

Group participation Conceptual skills Environmental scanning

Results Work alienation and dissatisfaction

Satisfied and efficient employees

Systems theory and design

Dynamic management style

Practices Authoritarian and bureaucratic

Democratic and participative

Systems concepts Business environment interface

Main Exponents

F W Taylor, Henry Fayol, Max Weber

Elton Mayo, A Maslow, Douglas Mc Gregor

F E Kast, J E Rosenzweig, R A Johnson

P R Lawrence, J W Lorsch, J Woodward

इति� ति��ीय अध्याय समाप्�म...PlanningDecision makingOrganising

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