UNIT-2 (ORGANIZING & STAFFING)

BY: Dr. Niharika Singh

 Syllabus
Organising & Staffing- Types of organization, Organization structure, delegation and decentralization
of authority, Meaning of staffing, Recruitment, selection & placement, Training & development..
Directing & Controlling- Principle of directing, Essence of coordination, Different control techniques,
Management by exception. Case Studies.
WHAT IS organizing?

"Organization is the process of

identifying and grouping of the
works to be performed, defining
and delegating responsibility and
authority and establishing
relationships for the purpose of
enabling people to work most
efficiently".
- Louis A. Allen
FUNDAMENTAL CONCEPT OF
organizing:
DIFFERENTIATION: It means that an organization is
composed of units that work on specialized tasks using different
work methods and requiring employees with unique
competencies.
INTEGRATION: It means that the various units must be put
back together so that work is coordinated.
 NATURE OF organizing:

1.Group of Persons
2.Common Objectives
3.Division of Work
4.Cooperative Efforts
5.Communication
6.Central Authority
7.Rules & Regulations
8.Dynamic Element
 NATURE OF ORGANIZATION:
Group of Persons: An organization is a group of people
working together for the achievement of common objectives.
The group may be large or small. An organization is a system
of cooperative relationships of two or more persons.
Common Objectives: Every organization has a common
objectives distinct from personal objectives of the members.
The common goal is the basis of cooperation among the
members. The objectives of the organization are usually are
made explicit
Contd:
Division of Work: An organization comes into existence
when the total task is divided into the members of the group.
Division of work is necessary not only because one
individual cannot do all the work but specialization results in
efficiency and effectiveness.
Cooperative Efforts: The members of an organization are
willing to help each other for the achievement of desired
goals. Cooperative relationships are stabilized both vertically
and horizontally among different units of the organization:
 Contd:
Communication: People who form an organization
communicates with each other in order to integrate or
coordinate there efforts. The structure must be such that
people can perform together efficiently.
Central Authority: In an organization, there is a central
directing authority which controls the concerted efforts of
the group. The chain of authority- responsibility
relationships is known as the chain of command.
Rules and Regulations: For the orderly and systematic
working of the members, rules and regulations are laid
down and enforced by the central authority.
The Dynamic Element: An organization is not a mere
mechanical structure but a living organism arising out of
the sentiments, attitudes, and behavior of people. The
people are the material of construction that holds the
structure together and gives it vitality.
 PROCESS:

IDENTIFICATION GROUPING OF
OF ACTIVITIES ACTIVITIES

2.

1. 3.

4.

ASSIGNMENT OF DELEGATION OF
DUTIES AUTHORITY
 Process of organizing:
1.Identification of Activities: First step is to determine the
tasks that must be performed to achieve the established
objectives. Activities and jobs are building blocks of any
organization. The activities to be performed depends upon
the objectives, nature and size of the enterprise.
2.Grouping of Activities: The various activities are the
grouped into departments or divisions according to similarity
and common purpose. Such grouping is necessary for the
purpose of specialization, coordination and control. It may be
grouped on various basis i.e. functions products, territories,
customers etc depending on requirements.
 TYPES OF ORGANISATION
Line Organisation
oLineorganisation is the simple and oldest type of
organisation followed in an organisation. Under line
organisation, each department is generally a
complete self-contained unit.
oA separate person will look after the activities of
the department and he has full control over the
department.
 Line Organisation

oThe same level executives do not give or receive

orders amongst themselves. But they receive orders
from their immediate boss and give orders to their
subordinates. Hence, all the heads are responsible to
the general manager, the general manager, in turn, is
responsible to the shareholders who are the owners.
oThis type of organisation is followed in the army on
the same pattern. So, it is called military organisation.
Under type of organisation, the line of authority flows
from the top to bottom vertically. So it is called line
organisation.
Advantages and Disadvantages
of
Line Organisation
Functional organisation

Under line organisation, a single person is in

charge of all the activities of the concerned
department. The person in charge finds it
difficult to supervise all the activities efficiently.
The reason is that the person does not have

enough capacity and required training. Under

functional organisation, various specialists are
for various functions performed in an
organisation. These specialists will attend to
the work which is common to different
functions of various departments. Workers,
under functional organisation, receive
instructions from various specialists.
Functional organisation

oThe need for functional organisation arises out of:

oThe complexity of modern and large-scale
organisation
oA desire to use the specialization in full and;
oTo avoid the work-load of line managers with

complex problems and decision-making

Advantages and Disadvantages
of Functional Organisation
Line and staff organisation

oThe line officers have authority to take decisions

and implement them to achieve the objectives of
the organisation.
oThe line officers may be assisted by the staff
officers while framing the policies and plans and
taking decisions organisation.
 Line and staff organisation

oThe authority flows from top level to the

lower level of the organisation through
the line officers while the staff officers
attached to the various departments
advise the departments. The staff officers
are not in a position to compel the line
officers to follow the advice by them.
Each department is headed by a line
officer who exercises full authority
regarding the planning.
 Types of organizational structures
Formal structures 
The structure of the organization in its official
state.
An organization chart is a diagram describing
reporting relationships and the formal
arrangement of work positions within an
organization.
An organization chart identifies the following
aspects of formal structure:
 The division of work.
 Supervisory relationships.
 Communication channels.
 Major subunits.
 Levels of management.
Informal structures 
A “shadow” organization made up of the
unofficial, but often critical, working relationships
between organization members.
Potential advantages of informal structures:
 Helping people accomplish their work.
 Overcoming limits of formal structure.
 Gaining access to interpersonal networks.
 Informal learning.

Example: an employee instead of reaching out to manager for

problem, may take help of his colleague, or employee may
have direct relationship with people from other departments
that facilitates quick communication. 22
Informal structures
Potential disadvantages of informal
structures:
 May work against best interests of entire
organization.
 Susceptibility to rumor.
 May carry inaccurate information.
 May breed resistance to change.
 Diversion of work efforts from important
objectives.
 Feeling of alienation by outsiders.

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the major types of organization
structures?
Functional structures
People with similar skills and performing similar tasks are
grouped together into formal work units.
Members work in their functional areas of expertise.
Are not limited to businesses.
Work well for small organizations producing few products
or services.

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Functional structures in a business, branch bank,
and community hospital.

25
Management - Chapter 10
Potential advantages of functional structures:

Economies of scale.
Task assignments consistent with expertise and
training.
High-quality technical problem solving,
In-depth training and skill development.
Clear career paths within functions.

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Potential disadvantages of functional structures:

Difficulties in pinpointing responsibilities.

Functional chimneys problem.
Sense of cooperation and common purpose break
down.
Narrow view of performance objectives.
Excessive upward referral of decisions.

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Divisional structures

Group together people who work on the

same product or process, serve similar
customers, and/or are located in the same
area or geographical region.
Common in complex organizations.
Avoid problems associated with
functional structures.

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Divisional structures based on
product, geography, customer, and
process.

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Management - Chapter 10
Potential advantages of divisional structures:
More flexibility in responding to environmental
changes.
Improved coordination.
Clear points of responsibility.
Expertise focused on specific customers, products,
and regions.
Greater ease in restructuring.

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Potential disadvantages of divisional
structures:
Duplication of resources and efforts across
divisions.
Competition and poor coordination across
divisions.
Emphasis on divisional goals at expense of
organizational goals.

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Types of divisional structures and how they
group job and activities:
Product structures focus on a single product or
service.
Geographical structures focus on the same
location or geographical region.
Customer structures focus on the same
customers or clients.
Process structures focus on the same processes.

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Matrix structure
Combines functional and divisional structures
to gain advantages and minimize
disadvantages of each.
Used in:
 Manufacturing
 Service industries
 Professional fields
 Non-profit sector
 Multi-national corporations

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Matrix structure in a small business
firm.

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Management - Chapter 10
Potential advantages of matrix
structures:
Better cooperation across functions.
Improved decision making.
Increased flexibility in restructuring.
Better customer service.
Better performance accountability.
Improved strategic management.

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Potential disadvantages of matrix
structures:
Two-boss system is susceptible to power
struggles.
Two-boss system can create task confusion

and conflict in work priorities.

Team meetings are time consuming.
Team may develop “groupitis.”
Increased costs due to adding team leers to

structure.
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Organizing viewed in relationship with
the other management functions.

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Management - Chapter 10
 DIFFERENCE AUTHORITY AND POWER
Authority is the power to Power is the ability to get
enforce law, to take command
the things done by others.
and to expect obedience from
those without any authority.
The principle of power is to
 E.g. a professor has an punish or reward.
E.g. an armed robber has
authority over his pupils but
no power. a power but no authority.
It is the skill of getting In short, it is the ability to

people to willingly do your will force someone to do your

because of your personal will even if they would
influence. choose not to.
Those who have authority Power and responsibility
also have responsibility to do not go hand in hand
discharge. It can go in any direction.
Flows downward.
 DELEGATION OF AUTHORITY
Delegation is process in which a superior assigns
some of the tasks within his jurisdiction to his
subordinate. It enables a manager to concentrate more
on some important matters.
Elements in delegation:

1.Assignment of responsibility to the subordinate.

2.Granting of authority to the subordinate
3.Subordinate becomes responsible to his superior
although the overall responsibility vests in hand of
superior.
 WHAT IS AUTHORITY
Authority is a legitimate right to make decisions to carry
out decisions and to direct others. Managers expect to have the
authority to assign work, hire or fire employees and the
allotment of money. Organizations have a formal authority
system that depicts the authority relationship between the people
and their work. E.g. in case of line organization, superior has an
authority over his subordinates. In case of line and staff, the staff
has authority over the subordinates but they work with the line
managers. Functional authority allows managers to direct
specific processes or policies in other departments.
 WHAT IS RESPONSIBILITY
Responsibility is the obligation to accomplish the goals related
to the position and the organization. In order to enable the
subordinate do his duty well, it is the duty of a superior to tell
him what is expected of him.

Manager at whatever level of the organization have the same

basic responsibilities when it comes to managing the workforce
i.e. direct employees toward objectives, oversee the work effort
of employees, deal with the immediate problems and report the
progress of work to superiors.
 WHAT IS ACCOUNTABILITY
It is the obligation to carry out responsibility and exercise
authority in terms of performance standards. When a subordinate
is given an assignment and is granted necessary authority to
complete it, the final phase is holding the subordinate
responsible for results. However, the extent of accountability
depends upon the authority and responsibility delegated. A
person cannot be held answerable to the acts not assigned to him
by his superior. For effective accountability, performance
standards be communicated in advance to the subordinate and he
must accept it.
 Decentralization

Decentralization is a systematic delegation of authority at all

levels of management and in all of the organization. In a
decentralization concern, authority is retained by the top
management for taking major decisions and framing policies
concerning the whole concern only. Rest of the authority may
be delegated to the middle level and lower level of
management. In other words, it is the diffusion of authority in a
planned way.
 REASONS FOR DECENTRALIZATION
1.Better access to local information: Local managers know
better about the local conditions like strength and nature of
local competition, local labour work force etc.

2.More timely response: In centralized form information sent

to head office and results awaited. In decentralized local
managers can quickly respond to customers demands.

3.Focus on central management: Central management gets

free to concentrate on more important issues.
 REASONS FOR DECENTRALIZATION
4. Training and evaluation of segment managers: it gives a
chance to senior managers to evaluate the capabilities of
subordinate managers.

5. Motivation of segment managers: self esteem and self

actualization needs of the segment managers get satisfied.
Greater responsibility supplies them more satisfaction and
motivate them to exert greater effort.
Nature of Staffing
Staffing is an important managerial function.
Staffing is a pervasive activity.
Staffing is a continuous activity.
The basis of staffing function is efficient

management of personnel.
Staffing helps in placing right men at the right

job.
Staffing is performed by all managers .

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Training is expensive. Without training it is more expensive. -Nehru
Concept Of Training & Development
TRAINING DEVELOPMENT
Definition- Training
Training is the formal and systematic modification of behavior
through learning which occurs as a result of education,
instruction, development and planned experience.
• Its a short term process.
• Refers to instruction in technical and mechanical problems
• Targeted in most cases for non-managerial personnel
• Specific job related purpose
 Development
Development is any learning activity, which is directed towards
future needs rather than present needs, and which is concerned
more with career growth than immediate performance.
• It is a long term educational process.
• Refers to philosophical and theoretical educational concepts
• Managerial personnel
• General knowledge purpose