PRINICIPLES OF MANAGEMENT

BHM ,1ST SEMESTER

TRIBHUWAN UNIVERSITY(TU)

MR.NARAYAN PRASAD SAPKOTA

M.COM,DBM,DUCBM
LECTURER,OXFORD COLLEGE,
BUTWAL
 Unit 5

Organizing
 Introduction
• Organizing is a process of arranging and allocating work,
authority and resources among an organization’s members
so that they can achieve organizational goals.
-Stoner, Freeman and Gilbert.
• It involves the assignment of function and the tasks to
group and to individual employee. It includes delegation of
authority to subordinate managers and operating
employee so that they can properly carry out their duties.
• It establish pattern of interrelationship observed by all
members of the organization.
• Structuring the work system.
Division of work: Dividing total workload of organization
into tasks & sub- task.
Departmentation: Dividing task which are similar in nature.
Hierarchy: Establishing reporting relationships between jobs.
Coordination: Coordinating activities among jobs units and
other activities.
Allocation of resources: Material & equipment need to be to
allocated at the right place & time to produce goods &
services.
 Process of organizing
• Identify organizational goals and work
activities.
• Classify and group the necessary work
activities.
• Establish relationships.
• Delegate authority.
• Provide for coordination and control.
 Principles of organization
• Clarity About Objective
• Division of Works
• Unity of Command
• Scalar Chain
• Span Of Control
• Departmentation
• Decentralization
• Separation of line and staff functions
• Authority and Responsibility
• Simplicity
• Flexibility
 Forms of organizational design
• Tall and flat structure
• Functional structure
• Multidivisional structure
• Matrix structure
• Geographical structure
 Tall and flat organization
• A tall organizational structure is one of the most popular
types of business structures because it is time-tested
and effective.
• This structure allows you and the top-level leaders of
your company to make major decisions regarding
operational strategy and then communicate those
decisions to upper-level and midlevel managers who
develop methods to turn your vision into reality.
• The word “tall” implies a vertical system in which
decision-making and communication flow from the top
of the power chain down to the rank-and-file employees
• A flat organization refers to an organization structure with few or no
levels of management between management and staff level
employees.
• The flat organization supervises employees less while promoting
their increased involvement in the decision-making process.
• It elevates the employees' level of responsibility in the organization.
• It removes excess layers of management and improves the
coordination and speed of communication between employees.
• Fewer levels of management encourage an easier decision-making
process among employees.
• Eliminating the salaries of middle management reduces an
organization's budget costs.
Tall Vs Flat organization
• Functional (U-Form) Design: an arrangement
based on the functional approach to
departmentalization
– Unitary form
– Members and units in the organization are
grouped into functional departments such as
marketing and production
• Divisional or M-form (Multidivisional) Design:
An organizational arrangement based on multiple
businesses in related areas operating within a larger
organizational framework; following a strategy of
related diversification.
◦ Activities are decentralized down to the divisional
level; others are centralized at the corporate level.
◦ The largest advantages of the M-form design are
the opportunities for coordination and sharing of
resources.
• Matrix Design:
– An organizational arrangement based on two overlapping bases
of departmentalization (e.g., functional departments and product
categories).
– A set of product groups or temporary departments are
superimposed across the functional departments.
. Geographical Structure
– The geographic structure is one of several organizational designs.
– This particular structure brings workers together in geographical
divisions.
– The divisions establish themselves in the geographical area they
serve, creating regional, national or international operations.
 Responsibility

• Responsibility is an obligation to the work that is assigned.

A manager is responsible for his or her department. Each
staff is responsible for doing his or her work effectively.
• Everyone in the organization is responsible to his or her
job. The chief executive officer is responsible for overall
organization and its objectives. Similarly middle level and
line managers have responsibility for their departments
and units respectively.
• Top level managers have more authority and responsibility
and lower level managers have less of them with more of
supervisory work.
 Authority
• Authority is power that has been legitimized by the
organization. As organizations grow authority is also
distributed among many managers and employees.
• Authority is the right to act and the power to make
decisions, issue orders, etc.
• The authority flows down the vertical hierarchy.
• The authority has to be adequate for the performance of
the task assigned to the executive.
• The authority need to be accepted by the subordinates.
Without its acceptance, authority becomes dysfunctional.
 Authority can be classified into:
Line Authority:
– Employee with line authority are called line manager
– Also known as scalar type of structure
– Each manager is given a complete charge of the work
assigned
Staff Authority:
– Involves giving advice and counsel to line managers to carry
out their operations
– Manager with staff authority is called staff manager
– Used in larger organizations
 Delegation of authority
It is the process by which managers assign a portion of their total
workload to others.
Reasons for Delegation:
– To enable the manager to get more work done by utilizing the skills and
talents of subordinates.
– To foster the development of subordinates by having them participate in
decision making and problem solving.
Characteristics of Delegation:
– it enables a manager to function independently
– The superior does not delegate the total authority
– A manager cannot delegate what he or she himself or herself does not
possess
– Delegation does not mean giving away authority
– The superior, who delegates the authority, cannot escape responsibility
Centralization of authority
 Decentralization of authority
– As organization grows in size and complexity,
decentralization tends to increase.
– The faster the rate of organizational growth, the greater
the need for decentralization.
– When the managers and supervisors at the middle and
lower levels are given considerable autonomy in decision-
making, the organization is considered to be decentralized.
– In a highly decentralized structure, more decisions are
made at lower levels.
– Is important when the business environment is fast-
changing and decisions must be made quickly as well
 Decentralization of authority
cont..
– Helps to lighten the load of top management
– The development of generalists rather than specialist is encouraged
– Familiarity with important aspects of special work is readily
acquired.
– Organizations having widespread units, managers can obtain full
advantage of local conditions
– Risks involving possible losses of personnel, facilities, equipment,
etc. are spread out.
– To make decentralization effective, the employees must be better
trained and educated
– It is time-consuming and cost affair
– Misutilization of power may create problem
 Devolution of authority
• Devolution is the statutory delegation of powers
from the central government of a sovereign state
to govern at a subnational level, such as a regional
or local level. It is a form of administrative
decentralization. Devolved territories have the
power to make legislation relevant to the area.
• The ultimate objective of devolving powers is to
develop a democratic system of governance and
an adequate provision of basic services.
 Advantages and Disadvantages of Devolution

ADVANTAGES
-Makes government more responsible
-Facilitates participatory decision making
-Brings the government closer to the governed
-Accommodates and manages social diversity
-It is an anti-dote for concentration of power
- Balances economic development in the whole of the country

DISADVANTAGES
-Can promote ethnicity
- May lead to exclusion
- It may Compound marginalization of minorities
- Can inflate religious and cultural diversities
- Can lead to decentralized authoritarianism
- Can lead to separation secession
- It may also create rigidity and slow down decision making- process
-It can lead to Unnecessary duplicate of roles
- It is expensive to run especially due to the diversity of roles.
 Emerging concept in organizing
• The team organization
• The virtual organization
• The learning organization
• Boundary less organization
 Staffing
• Staffing can be defined as one of the most important functions of management. It
involves the process of filling the vacant position of the right personnel at the
right job, at right time. Hence, everything will occur in the right manner.
Functions of Staffing
• The first and foremost function of staffing is to obtain qualified personnel for
different jobs position in the organization.
• In staffing, the right person is recruited for the right jobs, therefore it leads to
maximum productivity and higher performance.
• It helps in promoting the optimum utilization of human resource through various
aspects.
• Job satisfaction and morale of the workers increases through the recruitment of
the right person.
• Staffing helps to ensure better utilization of human resources.
• It ensures the continuity and growth of the organization, through development
managers.
 Importance of Staffing

• Efficient Performance of Other Functions

• Effective Use of Technology and Other
Resources
• Optimum Utilization of Human Resources
• Development of Human Capital
• The Motivation of Human Resources
• Building Higher Morale