Defining and Importance of Organizing

Defining Organising

• Organising involves grouping activities and assigning duties to individuals or departments.
• Aims to allocate and coordinate resources for implementing plans and achieving goals.
• Goal-directedness: Achieving the organisation's goals and objectives.
• Differentiation: Identifying and classifying activities into different processes and tasks.
• Grouping: Organising activities into manageable sections like teams or departments.
• Assigning/Delegating: Assigning groups to supervisors/managers with authority.
• Dynamic: Constantly evolving due to changes in internal and external environments.
• How resources/activities are organised varies based on the business's size, strategies, and culture.

The Importance of Organising

• Managers allocate activities and resources effectively.
• Organising involves analysing work and resources comprehensively.
• Workload is separated into manageable tasks.
• Encourages productive resource allocation.
• Similar tasks are clustered into specialised departments (finance, marketing, HR, operations).
• Creates a mechanism that coordinates activities into a unified unit.

Fundamentals of Organising

• Job design: Establishing work-related responsibilities for each employee.
• Departmentalisation: Grouping employees into teams/departments based on commonalities.
• Organisational relationships: Establishing reporting relationships and authority distribution.
• Coordination: Designing systems for effective inter-departmental coordination.

Job Design

• Involves systematically allocating job tasks to teams, groups, and individuals.
• Essential for reliable, efficient, economical, and safe job completion.
• Work is divided into separate jobs and tasks, known as the division of labor.
• Specialisation allows employees to focus on specific activities.

Job Specialisation

• Organising activities into sections managed by individuals or teams.
• Overall task is divided into smaller, specialised tasks.
• Advantages: Efficiency, simplified jobs, clearer roles, saved transfer time, specialised tools.
• Disadvantages: Boredom, time-consuming, higher costs, underutilisation of skills.

Job Rotation

• Employees are systematically moved from one job to another.
• Employees work on different tasks of similar skill/knowledge requirements during specific periods.
• The job itself does not change, only the employee assigned.

Job Enlargement

• Increasing the number of activities an employee performs.
• Results in employees performing different activities.

Job Enrichment

• Involves varied job content, higher knowledge levels, greater responsibility, and autonomy.
• Increases both the number of activities and the employee's control over them.

Work Team

• Employees design their work system as a team.
• Conduct interconnected activities.

Departmentalisation

• Grouping employees, tasks, and resources into organizational units.
• Facilitates planning, leading, and control processes.
• Types include functional departments, divisions, projects, and matrix.

Functional Departmentalisation

• Common in small to medium-sized organisations.
• Employees are grouped by comparable skills and task similarity.
• Based on primary functions like marketing, production, finance, and HR.
• Advantages: Direct CEO access, functional manager access, specialisation, CEO can resolve inter-functional challenges, simple structure.
• Disadvantages: Difficult to implement in large organisations, slow information flow, insufficient consideration of lower-level challenges, potential task exaggeration, difficult to manage varied activity levels, inter-departmental conflicts.

Divisional Departmentalisation

• Used by larger organisations with more assets, employees, and customers.
• Structures the organisation into smaller, self-managed divisions accountable for performance.
• Divisions can be based on products, location, customers, or processes.

Product Division

• Organisation is structured according to product lines.
• Appropriate for large organisations selling different products to different customers.
• Separates the organisation into small business units focusing on specific products.
• Managers head functional sections, with final authority resting with the product manager.

Customer Division

• Enables catering to different classes of customers.
• Similar structure to product division.
• Each division is headed by a manager knowledgeable about the customers they serve.

Location or Geographical Division

• Suitable for big organisations selling products in different geographic areas to respond to local customer needs.
• Separates the organisation into small business units focusing on different markets.
• Characterised by decentralisation of authority. Regional managers control and coordinate regional activities.

Process Division

• Required if products move through several production steps.
• Each process division has its support functions.
• Managers control and coordinate activities within their divisions.
• Advantages: Prompt decision-making, specialised employee knowledge, easy group measurement.
• Disadvantages: Higher financial costs due to repetition of support functions, requires suitable managers, potential focus on divisional needs over organisational needs.

Project Structure

• Utilised for specialised, long-term projects.
• A special unit is created from existing organisation to avoid interrupting normal operations.
• Project leader at the middle management level reports to the CEO.
• Managers/employees are drawn from functional departments and return upon completion.
• Advantages: Project manager has authority and responsibility, focuses on timely completion, doesn't interfere with normal structure.
• Disadvantages: Potential resentment from functional managers, disturbs stability of functional departments, interrupts employees' specialised skill development.

Matrix Structure

• Specialised employees from different departments work on projects full-time under a project manager.
• Combines advantages of independent project organisation and functional specialisation.
• Employees have two supervisors: a line manager and a project manager.
• Relevant for organisations relying on contractual project activities.
• Advantages: Sourcing of specialised employees, flexible structure, speedy information sharing, project managers source only necessary staff, offers opportunities for developing skills.
• Disadvantages: Employees unsure of their manager, concurrent engagement can compromise project management, potential communication struggles.

Organisational Relationships

• Elements include chain of command, authority, and span of control.

Chain of Command

• Vertical lines in the organisational structure.
• Shows the line of authority from highest to lowest position, clarifying who reports to whom.
• Includes unity of command and the scalar principle.
• Unity of command: employee reports to only one supervisor
• Scalar principle: clear, unbroken vertical line from bottom to top.

Authority

• Legitimate power to demand action and anticipate compliance.
• Granted by the organisation and acknowledged by employees.

Line and Staff Authority

• Line authority: Direct and clear lines of authority from top to lower levels, giving managers direct control.
• Staff authority: Provides support services and specialised advisory to line managers.

Degree of Centralisation

• Refers to where decisions are made.
• Factors to consider: speed of change, size of organisation, managers' willingness to give up authority, geographic dispersion, employees' willingness to accept authority.

Centralised Authority

• Most decision-making is concentrated at the top.
• Advantage: Consistency in decision-making.
• Disadvantage: Lower-level managers feel underutilised, lack decision-making skill development, top management might lack access to critical information.

Decentralised Authority

• Decision-making is spread throughout the organisation.
• Advantage: Top management can focus on higher-level tasks.
• Disadvantage: Lack of synchronisation between divisions, potential competition between divisions.

Delegation of Authority

• Entrusting work to subordinates.
• Goes hand in hand with responsibility, authority, and accountability.
• Responsibility: the duty to perform a task.
• Authority: the power to make necessary decisions.
• Accountability: being held responsible for performance.
• Authority and responsibility descend, while accountability ascends.

Span of Control

• Number of subordinates who report directly to a manager.
• Number of layers between top and lowest managerial levels.
• Should be kept to a minimum for effective supervision and control.
• Two types: wide and narrow.

Wide (Flat) Span of Control

• A manager supervises and controls many employees simultaneously.
• Organisation has fewer hierarchical levels ("flat").
• Simple and effective communication.
• Allows only general supervision due to limited time.

Narrow (Tall) Span of Control

• Multiple levels of supervision.
• Allows managers to exercise close supervision, control.
• Disadvantage: Information takes longer to reach lower-level employees, complicated and expensive communication.

Advantages and Disadvantages of Narrow and Wide Spans

• Narrow: High control, manager familiarity, immediate feedback (more expensive, slower decision making, top management isolated, discourages employee autonomy)
• Wide: Increased efficiency and reduced costs, quicker decision-making, greater flexibility, employee empowerment (less control, lack of familiarity, inability to provide support, lack of coordination).

Factors Influencing Span of Control

• Ability of employees.
• Ability of the manager.
• Extent of decentralisation.
• Nature of the work.
• Efficiency of the organisation.
• Availability of time for supervision.
• Support staff.

Coordination

• Ensures inter-departmental cooperation.
• Combined departmental performance determines overall organisational performance.
• Mechanisms include organisational charts, committees, budgets, policies, and procedures.