ORGANISING
Introduction
Planning, the first fundamental element of the management process has been defined as the setting of objectives and the development of a plan of action to achieve these as productively as possible. Planning is only however, a component of the bigger picture, thus management process and alone it can’t guarantee that the aims of the organisation will be accomplished.
Ø Thus there must be a framework or structure within which an in accordance with which management sets about putting the strategy or plan into operation to fulfill the purposes- hence the saying ‘structure follows strategy and that’s where organising comes in.
Ø Organising means management have to develop mechanisms to put the strategy or plan into effect
Ø Arrangements have to be made about what activities will be carried out, what resources will be employed and which persons will perform the various activities.
According to Stoner and Freeman (1992) an organisation is a pattern of relationships through which people under the direction of managers pursue common goals.
An enterprise consists of a group of people who work together in a coordinated fashion to realize the objectives of the enterprise.
Ø Organising entails grouping together activities necessary to attain common goals as well as allocating each group of activities to a person with necessary authority to supervise those responsible for performing the activities.
Ø It is a process of specializing, departmentalizing, delegation, decentralization and coordination together of organizational activities with the necessary span of control (these processes are regarded as the basic principles of organising).
Importance of organising
- organising entails a detailed analysis of work to be done and resources to be used to accomplish the aims of the organisation
Ø Its through organising that the range of tasks and resource and methods or procedures can be systematized.
Ø I.e. every one should know their duties, authority and responsibility as well as procedures they must follow or the methods they have to adopt and the resources they can use.
Ø Proper organising ensures that the joint and coordinated effort of management will have a much greater and more effective result than the sum of the individual effort.
- Organising divides the total work load into activities that can be comfortably performed by an individual or a group. Tasks are allocated according to the abilities or qualifications of individuals, ensuring tat nobody in the organisation has neither too much or too little to do
Ø The ultimate effect is higher productivity
- Organising promotes the productive application and utilization of resources.
- The related activities of individuals are grouped rationally is specialized departments such as marketing, and fiancé, in which experts in the particular fields carry out their given duties.
- The development of an organizational structure results in a mechanism that coordinates the activities of the whole organisation into complete, uniform harmonious units.
Ø NB successful organising makes it possible for a business to achieve its goals and objectives – it coordinates activities of managers and subordinates so as to avoid unnecessary duplication of tasks and obviate possible conflicts.
It also reduces the chances of doubts and misunderstandings
The basic principles of organising
The process of organising thus the way in which tasks and resources are distributed among individuals or departments to set a plan or strategy in motion is based on two principles
1stly Specialization
is the basic principle underlying organising is that of specialization or the way in which a task is broken down into smaller units so as to take advantage of specialized knowledge or skills to improve productivity. Best example of specialization or division of labour is still the assembly line – Henry Ford.
Justification for specialization
Ø Individual ability
If an individual concentrates on some simple small task, he/she acquires a certain degree of skill in that area and he/she can perform that task as a specialist quicker and beta than anybody else with obvious advantage for the business
Ø Reduced transfer rate
A worker who does several jobs loses time when he/she switches from one job to another. Specialization eliminates such no-productive transfer time
Ø Specialized equipment
Specialization leads to specialized equipment, which increases the productivity of each worker
Ø Reduced transfer costs
Division of labour reduces the costs of training, because a worker is trained in a particular part of the task.
2ndly Departmentalization
The second principle underlying organising is the formation of departments, it’s a result of specialization on the one hand and promotes specialization on the other hand for the logical grouping of activities that belong together necessitates this.
The advantages of and reason of departmentalization are therefore inherent in the advantages of specialization and the pressure in a growing business to split up the total task of management into smaller units.
Basic Forms of Organisations
Functional organizational structure – is the most basic structure, in which the activities belonging to each management function are grouped together.
This is a structure or design that groups together on the basis of their common expertise and experiences or because they use the same resources.
It is the bedrock of horizontal differentiation. An organisation groups \tasks into functions to increase the effectiveness with which it achieves its principal goal: providing customers with high quality goods and services at reasonable process.
As functions specialize, skills and abilities improve and the core competences that give an organisation a competitive edge emerge.
Advantages
Ø It provides people with the opportunity to learn from one another and become more specialized and productive.
When people with skills in common are assembled into a functional group, they can learn the best way to solve problems or the most efficient techniques for performing a task from one another.
Ø People who are grouped together by common skills can supervise one another and control each others’ behaviours.
Ø People in a function who work closely with each other over extended time periods develop norms and values that allow them to become more effective at what they do. They become team members who are committed to organizational activities.
Disadvantages
Control Problems
Functional structure facilitates the development of functions and allows organisations to mange an increase in specialisation and the division of labour most efficiently.
However as an organisation continues to grow an differentiate functional structure creates problems;
Ø Communication Problems
As more organizational functions develop, each with its own hierarchy they become increasingly distant from one another.
They develop different sub-unit orientations, which cause communication problems.
Ø Strategic problems
Top managers may spend so much time trying to find solutions to everyday coordination problems that they have not time to address the longer term strategic problems facing the organisations.
Divisional Structure
Is a structure in which functions are grouped together according to the specific demands of products, markets or customers.
Types of divisional structures
Production Departmentalisation
This is a divisional structure in which products are grouped intro separate divisions, according to their similarities or differences.
Departments are designed in such a way that all activities concerned with the manufacturing of a product or service provision or group of products/services are grouped together in product/service sections this means that all the specialists associated with particular products are grouped together in product sections.
The rational for this is that the marketing, financing and personnel needs will differ in the production of different products. It’s a logical structure for a large organisation providing a wide range of products.
Advantages
- The specialized knowledge of employees is used to maximum effect.
- Decisions can be made quickly within a section.
- Performance of a group can be measured separately.
Other types
Location Departmentalisation
This is a divisional structure in which divisions are organized according to the requirements of the different locations in which an organisation operates.
Customer/Market Departmentalisation
This refers to a divisional structure in which functional skills and activities are grouped with the needs of different customer groups.
Each customer group has a different marketing focus and the job of each group is to develop products to suit the needs of its specific functions. Each group makes use of centralized support functions.
Matrix Structure
This is a structure that groups people and resources in two ways simultaneously by function and by product.
Ø Was created to combine the advantages of functional and product structures and is suitable for adhoc complex projects
Ø Or may be paramount for example in car manufacturing where there are continual developments of certain models as projects or in construction companies.
It’s a rectangular grid that shows a vertical flow of functional responsibility and a horizontal flow of product responsibility.
Two boss employees
This refers to employees who report to two supervisors, the product team manager and the functional manager.
Advantages of a matrix structure
Ø The use of cross functional teams is designed to reduce functional barriers and overcome the problem of sub-unit orientation.
With differentiation between functions kept to a minimum, integration becomes easier to achieve.
Ø It opens up communication between functional specialists and provides an opportunity for team members from different functions to learn from one another and develop skills.
It facilitates technological progress because of the interactions of different specialists produce the innovations that give a company its core competencies.
Ø It enables an organisation to maximize its use of skilled professionals, who move from product to product as needed.
Disadvantages
Ø There are role ambiguities and role conflict for example the functional manager focused on quality and the product manager focused on cost, often have different expectations of the team members leading to role conflict.
Team members become unsure of what to do on a structure designed to promote flexibility may actually reduce it if team members become afraid to assume responsibility.
Ø Lack of a clearly defined hierarchy of authority can also lead to conflict between functions and product teams over the use of scarce resources i.e. coordination problems.
Ø Overtime people in a matrix structure are likely to experience a vacuum of authority and responsibility and move to create their won bureaucracy to provide themselves with some sense of structure and stability. Informal leaders emerge within teams. These people become increasingly recognized as experts or as great “team leaders’. A status hierarchy emerges within teams, team members often resist transfer to other teams in order to remain with their colleagues.
Ø When team managers do not get the results that they want they sometimes try to increase their control over the matrix and to increase their power over decision making. In this regard the structure becomes bureaucratized and centralized and less flexible.
Ø Divided authority as both leader and departmental head can exercise authority over the same subordinates
- The unit of command is therefore affected
- The position of subordinates having to satisfy two bosses may be difficult
Authority
Ø Allocation of task to sections and members of staff also entails the allocation of responsibility and authority to each post in an organizational structure.
Ø This further entails the creation of organizational relations i.e. stipulating the persons from whom a subordinate receives instructions, to whom he/she reports or to whom and for what he/she is responsible.
Responsibility
Ø It is a particular obligation or commitment on the part of a manager (specially middle or lower) or, to a more limited degree, a subordinate, to carry out a task in accordance with the instructions he has received.
Authority
Ø It is the right to commercial or to give orders. It also includes the right to take action to compel the performance of duties and to punish default or negligence.
Delegated Authority
Ø Is formal authority passed downwards from above the hierarchy,
Ø However according to the acceptance theory, authority originates from lower levels because no-one has any authority unless subordinates accept instructions and carry them out.
Ø Responsibility and authority go hand in hand.
Line Authority
Ø It is the authority delegated down through the line of command in the organizational structure the Managing Director has line authority over the Financial Manager and so on downwards.
Ø The managers in this line are directly responsible for achieving the aims of the organisation.
Staff Authority
Ø It is an indirect and supplementary authority. Individuals or sections with staff authority e.g. legal adviser, market research analyst, their source of authority is usually their special knowledge of some particular field.
Coordination
Ø Organising means the dividing up of the total task of the enterprise into smaller units so as to take advantage of specialization. However this presents the problem of co-ordination or the co-ordination of the divided tasks and the various objectives which the various departments are working towards as an integrated whole to achieve the primary objective of the organisation
Ø Without co-ordination and departments individuals may lose sight of the primary goal and pursue self interests
Ø Co-ordination is the synthesis of the separate parts to form a unity and it’s the binding factor in the managerial process
Ø It means the integration of objectives and tasks that all levels and of all departments and functions enable the organisation to work was a whole.
Span of management
Management levels