PCU ONLINE LEARNING MODULE

1. Organizational Structure
A. Designing organizational structure
B. Types of organizational structures
Organizing
Module 3 Topics C. Factors affecting organizational design
2. Human Resource Management
A. Recruitment and selection
B. Training and development

Organizational structure delineates the formal arrangement of roles, responsibilities, and hierarchical relationships within a company, guiding how tasks are
coordinated and information flows. It influences efficiency, communication, and decision-making processes. Human Resource Management (HRM) is
Overview dedicated to recruiting, developing, and retaining employees, aligning their roles with organizational goals. HRM encompasses key functions like hiring,
training, performance management, and compensation. Together, organizational structure and HRM ensure that employees are effectively positioned and
managed to optimize their contributions, fostering a productive and cohesive work environment.
Duration Week 2

Learning Objectives
• explain fundamental management principles, including planning, organizing, leading, and controlling, and how these principles are applied in
various organizational contexts.
• demonstrate the ability to develop strategic plans and make informed decisions by analyzing internal and external business environments,
Course assessing risks, and leveraging organizational resources effectively.
Intended • exhibit effective leadership and teamwork skills by demonstrating the ability to lead, motivate, and collaborate with diverse teams to achieve
Learning organizational goals.
Outcome • apply critical thinking and problem-solving skills to identify, analyze, and develop solutions for complex management issues, using appropriate
tools and techniques.
• understand the importance of ethical behavior and social responsibility in management practices, and will be able to evaluate the ethical
implications of managerial decisions and actions in a global context.
1. How does the organizational structure impact communication and decision-making within the company?
Essential
2. What strategies can HRM employ to align its functions with the organizational structure to enhance employee performance and satisfaction?
Question/s 3. How can changes in organizational structure affect HRM policies and practices, and what steps can be taken to manage these changes effectively?
Learning Upon completion of this module, you should be able to:
Target/s A. identify and describe various organizational structures (e.g., functional, divisional, matrix) and understand their implications on organizational
efficiency and effectiveness.

1
 B. evaluate how different organizational structures influence HRM practices, including recruitment, training, performance management, and employee
relations.
C. design HRM strategies that align with the organization’s structure and objectives, ensuring that HR practices support overall business goals and
enhance organizational performance.
D. gain skills to handle changes in organizational structure, such as restructuring or mergers, by developing effective HRM policies and practices that
facilitate smooth transitions and maintain workforce stability and productivity .

UNLOCKING CONCEPTS

Organizing
Organizing is the process of arranging resources and tasks in a structured manner to achieve the organization's objectives. This involves defining roles,
responsibilities, and relationships, as well as establishing coordination mechanisms to ensure efficient and effective workflow.

A. Organizational Structure.
It defines how tasks are divided, resources are allocated, and teams are coordinated within an organization. Designing an effective organizational structure is critical
for achieving business goals and ensuring efficient operations. This lecture will cover designing organizational structure, types of organizational structures, and the factors
affecting organizational design.

1. Designing Organizational Structure

1.1. Objectives of Organizational Design

• Efficiency: Streamlining processes to reduce waste and increase productivity.
• Effectiveness: Ensuring that the organization can achieve its goals and respond to changes in the environment.
• Flexibility: Creating a structure that can adapt to new challenges and opportunities.
• Accountability: Clarifying roles and responsibilities to ensure accountability and performance.

1.2. Steps in Designing Organizational Structure

• Define the Organization’s Objectives: Establish the short-term and long-term goals.
• Identify Activities: Determine the essential activities needed to achieve these objectives.
• Group Activities into Jobs: Create specific roles by grouping related activities.
• Assign Roles and Responsibilities: Allocate jobs to individuals or teams.
• Establish Reporting Relationships: Define who reports to whom to ensure clear lines of authority.
• Design a Hierarchy: Create a structure that defines the levels of authority and responsibility.
• Coordinate Activities: Implement mechanisms for coordination, such as committees or cross-functional teams.

1.3. Principles of Organizational Design

• Unity of Command: Each employee should have one direct supervisor to avoid confusion.
2
 • Span of Control: The number of subordinates that a manager can effectively manage.
• Division of Labor: Splitting tasks into smaller jobs to increase efficiency.
• Authority and Responsibility: Clearly defining who has the power to make decisions and who is accountable for the outcomes.
• Centralization vs. Decentralization: Determining the degree to which decision-making is concentrated at the top levels or distributed throughout the
organization.

2. Types of Organizational Structures

2.1. Functional Structure

• Description: Groups employees based on specialized roles or functions, such as marketing, finance, and production.
• Advantages: Encourages specialization, increases efficiency, and simplifies management.
• Disadvantages: Can create silos, limit cross-functional communication, and reduce flexibility.

2.2. Divisional Structure

• Description: Divides the organization into semi-autonomous units or divisions, each focused on a specific product, service, or geographic region.
• Advantages: Enhances focus on specific markets or products, increases flexibility, and improves accountability.
• Disadvantages: Can lead to duplication of resources and efforts, higher costs, and potential for internal competition.

2.3. Matrix Structure

• Description: Combines functional and divisional structures, where employees report to both functional managers and project or product managers.
• Advantages: Promotes flexibility, better resource allocation, and enhanced communication.
• Disadvantages: Can create confusion in reporting relationships, increase complexity, and lead to potential conflicts.

2.4. Flat Structure

• Description: Has few or no levels of middle management, promoting a more horizontal approach.
• Advantages: Encourages employee involvement, faster decision-making, and reduces costs.
• Disadvantages: Can lead to overburdened managers, lack of clear authority, and potential for chaos.

2.5. Network Structure

• Description: A more decentralized and flexible structure where the organization outsources many of its functions to other companies.
• Advantages: Reduces overhead costs, increases flexibility, and allows the organization to focus on core competencies.
• Disadvantages: Can lead to loss of control over outsourced functions and dependency on external partners.

3. Factors Affecting Organizational Design

3.1. Strategy
• Description: The organization's strategic goals influence its structure.

3
 • Impact: A company focused on innovation may opt for a more flexible structure, while a company emphasizing efficiency may prefer a more hierarchical
structure.
3.2. Size
• Description: The number of employees and the scale of operations.
• Impact: Larger organizations typically require more complex structures to manage increased coordination and control needs.

3.3. Technology
• Description: The type and complexity of technology used in operations.
• Impact: Advanced technology can facilitate flatter structures with more decentralized decision-making.

3.4. Environment
• Description: The external conditions, including market dynamics, competition, and regulatory landscape.
• Impact: Stable environments may benefit from hierarchical structures, while dynamic environments may require more flexible and adaptive structures.

3.5. Culture
• Description: The values, beliefs, and norms shared by members of the organization.
• Impact: A culture that values collaboration may support a flatter structure, while a culture that emphasizes control may favor a more hierarchical approach.

3.6. Workforce
• Description: The skills, experience, and expectations of employees.
• Impact: A highly skilled and autonomous workforce may thrive in a decentralized structure, while a less experienced workforce may need more guidance and
a centralized structure.

3.7. Leadership Style

• Description: The approach taken by the organization's leaders.
• Impact: Leaders who favor empowerment and delegation may implement a more decentralized structure, whereas leaders who prefer control and direct
oversight may choose a centralized structure.

B. Human Resource Management

Human Resource Management (HRM) is a critical function within organizations, responsible for managing people to ensure their optimal contribution to the
achievement of organizational goals. This lecture will focus on two key aspects of HRM: Recruitment and Selection, and Training and Development.

Recruitment and Selection

1. Definition and Importance

• Recruitment: The process of attracting, identifying, and encouraging potential candidates to apply for positions within an organization.
• Selection: The process of evaluating and choosing the most suitable candidates from those who apply for the job.

4
 • Importance: Effective recruitment and selection ensure that the organization hires individuals with the right skills, qualifications, and cultural fit, which can
lead to improved performance, reduced turnover, and higher employee satisfaction.

2. Recruitment Process
• Job Analysis:
o Description: Understanding the requirements of the job, including the tasks, responsibilities, and necessary skills.
o Outcome: Creation of job descriptions and specifications.
• Sourcing Candidates:
o Internal Recruitment: Promoting existing employees or moving them into different roles.
o External Recruitment: Attracting candidates from outside the organization through job postings, recruitment agencies, social media, and
campus recruiting.
• Employer Branding:
o Description: Creating a positive image of the organization to attract potential candidates.
o Strategies: Highlighting company culture, values, benefits, and career growth opportunities.

3. Selection Process
• Screening Applications:
o Description: Reviewing resumes and cover letters to shortlist candidates who meet the basic qualifications.
• Preliminary Interviews:
o Description: Conducting initial interviews to assess candidates' fit and interest.
• Assessment Tests:
o Types: Aptitude tests, personality tests, technical skills tests, and situational judgment tests.
• In-Depth Interviews:
o Types: Behavioral interviews, panel interviews, and case interviews.
o Techniques: STAR method (Situation, Task, Action, Result) to evaluate candidates' past experiences.
• Background Checks:
o Description: Verifying candidates' employment history, education, and references.
• Decision Making:
o Description: Comparing candidates' performance across all selection stages and making the final hiring decision.
• Job Offer:
o Description: Extending an offer to the selected candidate, including salary, benefits, and other terms of employment.

4. Challenges in Recruitment and Selection

• Attracting Qualified Candidates: Finding individuals with the right skills and experience.
• Bias and Discrimination: Ensuring a fair and unbiased selection process.
• Cultural Fit: Evaluating whether candidates align with the organization's values and culture.
• Retention: Selecting candidates who are likely to stay and grow with the company.

5
Training and Development

1. Definition and Importance

• Training: The process of enhancing employees' skills, knowledge, and competencies to perform their current job effectively.
• Development: Focuses on the growth and future performance of employees by preparing them for new roles and responsibilities.
• Importance: Training and development are essential for maintaining a competitive workforce, improving productivity, fostering innovation, and ensuring
employee satisfaction and retention.

2. Training Process
• Needs Assessment:
o Description: Identifying gaps in employees' skills and knowledge.
o Methods: Surveys, performance reviews, and job analysis.
• Designing Training Programs:
o Content: Developing relevant material that addresses the identified needs.
o Delivery Methods: Classroom training, e-learning, on-the-job training, simulations, and workshops.
• Implementation:
o Scheduling: Coordinating training sessions to minimize disruption.
o Facilitation: Using qualified trainers to deliver the content effectively.
• Evaluation:
o Feedback: Collecting participants' feedback to assess the training’s effectiveness.
o Assessment: Measuring the impact of training on performance and productivity.

3. Development Process
• Career Development Programs:
o Description: Structured programs that help employees plan and achieve their career goals.
o Methods: Mentoring, coaching, and career counseling.
• Leadership Development:
o Description: Preparing employees for leadership roles through targeted development programs.
o Methods: Leadership workshops, executive coaching, and rotational assignments.
• Succession Planning:
o Description: Identifying and developing potential future leaders within the organization.
o Methods: Talent assessments, development plans, and leadership training.
• Continuous Learning:
o Description: Promoting a culture of lifelong learning to keep employees' skills up-to-date.
o Methods: Access to online courses, learning platforms, and professional development resources.

4. Challenges in Training and Development

• Identifying Training Needs: Accurately determining the skills gaps.
6
 • Resource Allocation: Securing the necessary budget and resources for effective training programs.
• Engagement: Ensuring employees are motivated and engaged in training activities.
• Measuring Impact: Evaluating the effectiveness of training and development initiatives.

Module 3 Summary:
Organizing and Human Resource Management (HRM) are fundamental to the success of any organization, as they provide the framework and strategies necessary
to effectively utilize human capital. Organizing ensures a clear structure, defining roles, responsibilities, and relationships that facilitate efficient workflow and decision-
making. HRM complements this by attracting, developing, and retaining talent, ensuring that the right people are in the right roles and are continually growing. Together,
these functions create a cohesive environment where employees can thrive and contribute to the organization's goals, fostering productivity, innovation, and long-term
success.

Learning Activity: Designing an Organizational Structure and HRM Strategy

Objective: To develop a practical understanding of organizational structure and HRM practices by designing a comprehensive organizational framework and corresponding
HRM strategy for a hypothetical company.

Instructions:
1. Company Profile Creation:
o Create a detailed profile of a hypothetical company, including its mission, vision, core values, size, industry, and primary products or services.
o Define the company's strategic objectives and key business goals.
2. Organizational Structure Design:
o Determine the most suitable type of organizational structure for your company (e.g., functional, divisional, matrix, flat).
o Create an organizational chart that outlines the hierarchy, departments, and key roles within the company.
o Define the roles and responsibilities for each key position, ensuring clear reporting relationships and lines of authority.
3. HRM Strategy Development:
o Recruitment and Selection:
▪ Develop a recruitment plan that includes sourcing strategies, selection criteria, and a step-by-step hiring process.
▪ Create job descriptions for at least three key positions within the company.
o Training and Development:
▪ Design a training and development program that addresses the skills and knowledge required for the company’s success.
▪ Outline the methods of training (e.g., on-the-job training, workshops, e-learning) and evaluation techniques to measure effectiveness.
o Performance Management:
▪ Develop a performance management system, including performance appraisal methods, feedback mechanisms, and goal-setting processes.
o Compensation and Benefits:
▪ Create a compensation strategy that outlines salary structures, benefits packages, and incentive programs to attract and retain talent.
4. Evaluation and Reflection:
o Write a reflection on the process of designing the organizational structure and HRM strategy, discussing the challenges encountered and the rationale
behind your decisions.
7
 o Evaluate how well your organizational structure and HRM practices align with the company’s strategic objectives and contribute to its success.
Deliverables:
• A detailed company profile document.
• An organizational chart with roles and responsibilities.
• A comprehensive HRM strategy document covering recruitment, training, performance management, and compensation.
• A reflection paper on the design process and its alignment with strategic goals.
Assessment Criteria:
• Clarity and coherence of the company profile.
• Appropriateness and effectiveness of the chosen organizational structure.
• Completeness and practicality of the HRM strategy.
• Depth of reflection and evaluation of the design process.

This activity aims to enhance your understanding of how organizing and HRM functions integrate to support organizational effectiveness and achieve strategic objectives.

Recommended Reading:

• Robbins, S. P., & Coulter, M. (2020). Management (14th ed.). Pearson.

• Daft, R. L. (2021). Management (13th ed.). Cengage Learning.
• Jones, G. R., & George, J. M. (2020). Essentials of Contemporary Management (9th ed.). McGraw-Hill Education.
• Griffin, R. W. (2019). Fundamentals of Management (10th ed.). Cengage Learning.