Unit 3: Organizing

Organising is the process of identifying and grouping the work to be performed, defining and delegating responsibility and authority, and establishing relationships so that people work together effectively (Louis Allen).

• Importance: benefits of specialisation, clarity of working relationships, optimum use of resources, adaptation to change, effective administration, development of personnel, expansion and growth.

Organisation structure is the framework within which managerial and operating tasks are performed — the pattern of relationships among positions.

• Span of management (control): number of subordinates a manager can supervise effectively. Narrow span → tall structure; wide span → flat structure. Graicunas' formula shows relationships grow rapidly with each added subordinate.

Departmentalisation is grouping activities and people into departments.

Other bases: process (spinning, weaving, dyeing in a textile mill), time (shifts), number (army platoons).

• Line authority: direct command over subordinates in the chain of command; staff authority: advisory and specialist support (HR, legal, finance).

• Reducing conflict: clear definition of authority and responsibilities, involving line in staff projects, functional authority where needed, training and mutual respect, holding staff accountable for advice.

• Authority: the right to give orders and expect obedience.
• Responsibility: the obligation to perform the assigned duties.
• Accountability: answerability for results to the superior.
• Parity principle: authority must be commensurate with responsibility.

Delegation

Delegation is the entrustment of responsibility and authority to a subordinate and the creation of accountability for performance.

• Principles: delegation by results expected, parity of authority and responsibility, absoluteness of accountability (cannot be delegated), unity of command, authority level principle, scalar principle.
• Barriers: fear of losing control, lack of confidence in subordinates, subordinates' fear of criticism, lack of incentives.
• Power vs authority: authority is legitimate, position-based right to command; power is the broader capacity to influence (legitimate, reward, coercive, expert, referent).

Span of control is the number of subordinates who report directly to a manager.

Factors determining span

• Ability of the manager and subordinates.
• Nature of work — routine work allows a wide span.
• Degree of delegation and planning.
• Communication techniques and staff assistance.
• Geographical dispersion.
• V.A. Graicunas' formula: relationships = n (2^(n−1) + n − 1), where n is the number of subordinates — with 5 subordinates there are 100 relationships.

• Delegation vs decentralisation: delegation is a process between a superior and a subordinate; decentralisation is the systematic delegation throughout the organisation — a philosophy.

Staffing is filling and keeping filled the positions in the organisation structure (Koontz).

Recruitment

Recruitment is the process of searching for prospective employees and stimulating them to apply.

Selection process

• Recruitment is positive (attracts many applicants); selection is negative (rejects unsuitable ones).

Coordination is the orderly arrangement of group efforts to provide unity of action in pursuit of a common purpose (Mooney and Reiley).

• Features: integrates group efforts, ensures unity of action, continuous, pervasive, deliberate function, responsibility of all managers.
• Types: internal and external; vertical and horizontal.
• Techniques: sound planning, clear structure, effective communication, committees, chain of command, liaison officers, leadership, MBO.
• Principles (Follett): direct contact, early beginning, reciprocal relationship, continuity.