Organizing is the managerial
function of arranging people and resources to work toward a goal. The purposes
of organizing include but are not limited to determining the tasks to be
performed in order to achieve objectives, dividing tasks into specific jobs,
grouping jobs into departments, specifying reporting and authority
relationships, delegating the authority necessary for task accomplishment, and
allocating and deploying resources in a coordinated fashion.
Henri Fayol first identified
organizing as a function of management in his classic monograph General and
Industrial Administration. This book was published in France in 1916 but
was not translated into English until the 1920s, and it was not published in
the United States until 1949. Fayol's monograph has had a profound effect on
the teaching and practice of management in the years since. Early
"principles of management" texts published in the 1950s generally
were organized around management functions, including organizing, as are most
basic management texts in the late 1990s.
Organizing plays a central role in
the management process. Once plans are created the manager's task is to see
that they are carried out. Given a clear mission, core values, objectives, and
strategy, the role of organizing is to begin the process of implementation by
clarifying jobs and working relationships. It identifies who is to do what, who
is in charge of whom, and how different people and parts of the organization
relate to and work with one another. All of this, of course, can be done in
different ways. The strategic leadership challenge is to choose the best
organizational form to fit the strategy and other situational demands.
ORGANIZING
DECISIONS
When organizing, managers must make
decisions about the division of labor and work specialization,
departmentalization, chain of command, span of management, centralization, and
formalization. Collectively, these decisions are often called organizational
design.
DIVISION
OF LABOR OR SPECIALIZATION.
More than two centuries ago Adam
Smith concluded that division of labor contributes to increased productivity
and efficiency by allowing workers to specialize and become proficient at a
specific task. This principle, coupled with technological advances, made
possible the tremendous productivity of industrial companies during most of the
twentieth century. By the 1940s most manufacturing jobs in developed nations
were highly specialized, with workers performing specific, standardized, and
repetitive tasks. This resulted in reduced staffing, training, and compensation
costs, since highly skilled workers were often not necessary. In addition,
since employees were doing the same task repetitively, they tended to become
very good at it.
Despite the improvements in
productivity made possible by the division of labor, managers must be aware of
the negative aspects of specialization: fatigue, stress, boredom, low quality
products, absenteeism, and turnover. Such problems have led to programs geared
toward job enlargement and job enrichment.
DEPARTMENTALIZATION.
After the work to be completed is
organized into identifiable jobs through a process of dividing labor, jobs are
then combined into logical sections or departments. Doing so allows for
effective coordination of effort. There are many ways to departmentalize, each
of which has important advantages and disadvantages. One of the most common
forms is functional departmentalization, which involves grouping similar jobs
into a common department, such as accounting, sales, human resources, and
engineering. Another form is product departmentalization, which involves
organizing around an enterprise's various product lines. Other ways of departmentalizing
include organizing by customer and by geographic territory. In practice, most
large companies use a hybrid form of departmentalization, which means they
combine one or more of the above methods to form their organizational
structure.
CHAIN
OF COMMAND.
The chain of command is a line of
authority extending from the top to the bottom of the organizational structure.
Classic principles of organizing emphasize that one must be aware of the need
to define the extent of managers' responsibility and authority by specifying
their place in the chain of command. Another principle of organizing related to
the chain of command is called the unity of command, which states that a person
should have only one superior to whom he or she must report.
SPAN
OF MANAGEMENT.
The span of management, often called
the span of control, is the number of individuals who are directly responsible
to a particular manager. A classic principle of organizing suggests that there
are definite limits to the number of subordinates one manager can supervise
effectively. When organizing, managers must keep these limits in mind. Wide
spans of management lead to flatter organizational structures with fewer layers
of management, and are thus considered more efficient. However, if spans become
too wide managers may not be able to provide adequate direction to
subordinates. Narrow spans of management lead to tall organizational structures
with many layers of management. Although narrower spans of management allow for
closer supervision of subordinates they have many drawbacks, including cost,
communication problems, and difficulty in developing the initiative and
autonomy of subordinates.
In general, the trend is toward
wider spans of management, with an accompanying decrease in management hierarchy.
Technological advances in information processing and communication have made
wider spans of management more feasible.
DEGREE
OF CENTRALIZATION.
Another organizing decision is the
degree of centralization in the organizational structure. If decision-making
authority in an organization is highly centralized, then most major decisions
are made at the upper levels of the structure. Conversely, if decision-making
authority is decentralized, important decisions are often made at lower levels
of the hierarchy. The degree of centralization that is appropriate for a given
organization depends upon many factors, including the nature of the
environmental conditions that face the enterprise, the characteristics and
abilities of lower-level employees, and the size of the enterprise. Many
organizations are favoring a greater degree of decentralization of their
decision-making authority.
FORMALIZATION.
The degree of formalization in an
enterprise refers to the degree to which there are standardized rules and procedures
governing the activities of employees. A company with a high degree of
formalization is characterized by detailed job descriptions and clearly defined
policies and procedures covering a wide variety of employee behaviors.
Conversely, a company with a low level of formalization is characterized by
non-structured jobs and fewer explicit policies and procedures.
As companies grow larger, a certain
amount of formalization is inevitable. Employees require some direction in
their job responsibilities and in the procedures required for consistency
within the organization's production schema. When organizing, however, managers
should be aware of the costs of excessive formalization, which may include
stifling employee creativity and innovation as well as slowing the
organization's responsiveness to critical issues and problems.
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